Campaigns, Contested Conventions and Delegates, Oh My…

Earning and Electing Delegates – and the 2016 Presidential Nomination Process

Hat tip to Donald Trump. Fresh off a significant loss in the Wisconsin primary, and caucuses and conventions in several other states, and coming into the critical NY primary, Trump needed to 1) change the narrative and 2) cast himself, his campaign, and his supporters as victims. Victims of a self-described corrupt, “rigged” process by “establishment insiders”. His target, Ted Cruz and the RNC. According to Mr. Trump, Ted Cruz was and is out there gaming the system and stealing delegates and the RNC rules were stacking the deck against him and the voters.

Trump has played this brilliantly, healthily supported by surrogates, much of the media, and an unfortunately uninformed or purposely misinformed electorate.

But what is this really all about? Is the nominating process “rigged”?

A Little History and Perspective

“One person, one vote” is revered as a democratic principle. It is what democracies are all about. But then, just as the United States is not a democracy, neither is the party nomination process – nor our Presidential elections. Truth is, historically, we didn’t directly elect either our Senators or the President or Vice President. The only directly elected representatives for Federal office are the House of Representatives. In the earlier years of our Republic, it was the various State legislatures who elected the Senators and the President. Populism was not well thought of by the Founders.

Today, in general elections, the states elect the Presidential ticket, awarding their electors through a popular vote. I live in Oklahoma and we have seven electors – one each for our Senators and one each for our five Congressional Districts. We don’t count a whole lot in the general election. Big states like New York, Florida, California, Texas, Ohio, Illinois, Pennsylvania and Virginia tend to rule the day. In each state, it is ‘majority rules’. Fifty percent plus one wins all of that state’s electors. As we know, to win the Presidency, a candidate must garner 270 electoral votes, the majority of the 538 available.

Hypothetically, let’s say that Donald Trump made good on an earlier threat and had left the Republican party and launched an independent run. A three-way race may well have ended in no candidate reaching the critical 270 Electoral College total. Would we ‘award’ the Presidency to say, Hillary Clinton, who won 265 electors? No. In the event no candidate reaches the magic majority number, the Constitution calls for the House of Representatives, the duly elected representatives of the people, to determine the victor. The last time this occurred was 1824. The election of a President is not “one person, one vote” – heck, we have had four Presidents elected that lost the popular vote.

But what about the party nominating process?

This is a little messier, and more confusing to many. It’s probably not a stretch to say that most Americans believe we essentially have 50 state primaries leading up to a Party convention and ‘coronation’ of the winner. Not so.

Let’s start with the fact that a Party is a private institution. The Democrat Party, Republican Party, Libertarian, Conservative, Green or whatever – they are each private institutions that determine their own rules and process. And while the national organizations (RNC, DNC) have significant power, the real power lies in each State, Congressional District, County and Precinct – the voters.

If you have been following the 2016 process, you have no doubt noticed that the parties have different approaches and rules. The Democrats currently have proportional awarding of delegates in all states (and territories). They also have what are known as “super delegates”, mostly party elites and elected officials, numbering 712, or roughly 15% of the delegate total. And they are unbound.

Differing from the Democrat proportionality requirement, in the GOP the states are given far more flexibility. States may opt for a primary process, a caucus, or a convention to determine (elect) their delegates to the National Convention. And the states are free (for the most part) to choose either proportional, winner take all, or a hybrid in awarding delegates. Whatever the individual states opt for, these rules are set well in advance of any voting.

The most recent example of a primary is New York. New York is a bit of a hybrid. If you take 50% plus one statewide, the winner receives all the ‘state’ delegates. Similarly, if a candidate takes 50% plus one in a Congressional District, they get all three of the delegates for that District. If they don’t reach that threshold, the one receiving the most votes is awarded two delegates and the runner up receives one delegate. I won’t get in the weeds on thresholds and the like – you get the idea. So, in the case of New York, Trump won almost all the delegates (89 out of 95), though he only garnered 60.4% of the popular vote – again, not exactly “one person, one vote”.

Next up are caucuses. Here a Party holds caucuses (meetings) throughout the state. Everyone who chooses to participate shows up at the appointed location and time of their caucus. The candidates, or their representatives, are invited to speak and present their case. Electioneering is rampant at these meetings, by both the candidates and your neighbors. Votes are often swayed in the generally several hour process. And votes are cast. Think Iowa or Nevada, among others. Again, votes are by precinct, and then rolled up to counties and so on, and delegates awarded according to the results, whether proportional or winner take all.

And then there are states that have chosen to hold conventions – like Colorado. Colorado previously held a straw poll (election of sorts), but national party rules, more recently enacted, would have forced the Colorado state party to ‘bind’ their delegates with the result of their straw poll. The Colorado GOP didn’t want to do that, and opted for a Convention process.

So Colorado held its series of precinct, county, district and ultimately state conventions. In all, some 65,000 Coloradans participated and voted for their delegates. So were Colorado voters disenfranchised? No.

What is critically important about the Convention process is to understand that every Colorado Republican had the choice and opportunity to participate and have their vote count, by simply showing up. The process (in all states) is open to all registered Republicans. The party locals there, and elsewhere, publicize these meetings and conventions. They want citizens to participate, to get involved in the process. The party understands that those who participate in nominating processes (primaries, conventions, caucuses) are often those who are or become their grassroots supporters, as door knockers, phone bankers, or get-out-the-vote helpers at general election time. The point is that the process is open to all – no special handshake to learn, no dues to be paid, no ‘establishment’ to join. Just show up and vote. Oh, and no corruption or ‘rigging’.

To reiterate, the states set almost all the rules, not the national party or ‘establishment’. And the RNC only sends 3 delegates to the Convention (and each is bound to their state’s primary winner).

In my state, Oklahoma, we hold a primary. In that primary, Ted Cruz won the most votes with 34%, Trump had 26% and Rubio had 24%. We are a proportional state, so Cruz took 15 delegates, Trump 13, and Rubio 12. In Oklahoma, those delegates are bound not only for the first ballot, but also any additional ballots that may occur at the National Convention (if the candidate is on the ballot at the convention). So, as an example, if Rule 40B stays in place at the National Convention, only Trump and Cruz would qualify to be on that ballot for nomination. As Rubio will not appear on the ballot, the Oklahoma delegates bound to Rubio may vote for whomever they choose.

While the primary determined how many delegates would be bound to each candidate, the delegates themselves have not all been selected (elected) yet. Some have been elected at the various District Conventions we have held recently. The balance will be elected at our State Convention in May. At our State Convention, we will also select one man and one woman as our representatives on the Convention Rules Committee – more on that in a minute.

Smart candidate campaigns involve themselves early on to cultivate a slate of delegate candidates. While important in all states, this is especially true for states that bind their delegates to only the first ballot at the National Convention, or don’t bind their delegates at all (like Pennsylvania). Candidates obviously hope to have delegates elected that will remain loyal to them if the nomination process goes to multiple ballots. Doing the ground work early on is critically important, but it is a process that continues through to the District and State Conventions, and the National Convention itself.

Much ado has been made of Ted Cruz’s efforts to win over delegates for second and subsequent ballots that are pledged on the first ballot to another. But this is not a stealth campaign. These delegate candidates run for that ‘office’, and in most states, declare their candidate choice in their campaign. Again, they are elected, not appointed by some party insider, nor are they bought.

The National Convention – July 2016 – Cleveland, Ohio

It looks increasingly likely that we will not have a candidate reach the magic 1237 bound delegates prior to the convention to assure a nominee is chosen on the first ballot in Cleveland in July. Let’s step back for a minute and review the role of the rules committee and Rule 40 (b) specifically.

Prior to the Convention being gaveled in, the Convention Rules Committee will meet to determine the rules for the convention. You can go the RNC site to review the entirety of the rules, but for now let’s look at Rule 40 (b). That rule is probably the most critical one in this process. It states,

Rule 40(b) Each candidate for nomination for President of the United States and Vice President of the United States shall demonstrate the support of a 40 of 42 majority of the delegates from each of eight (8) or more states, severally, prior to the presentation of the name of that candidate for nomination. Notwithstanding any other provisions of these rules or any rule of the House of Representatives, to demonstrate the support required of this paragraph a certificate evidencing the affirmative written support of the required number of permanently seated delegates from each of the eight (8) or more states shall have been submitted to the secretary of the convention not later than one (1) hour prior to the placing of the names of candidates for nomination pursuant to this rule and the established order of business.

Simply put, only Trump and Cruz will qualify to have their names on the ballot. We don’t yet know who will comprise the Rules Committee. Each state and territory will send two delegates to represent them on the rules committee, for a total of 112 members. These rules committee members are selected (elected) at the State Conventions from among the elected delegate field. As Cruz and Trump will likely have about 3/4 of the delegates coming into the Convention, they should have the controlling majority, making it very unlikely that Rule 40b will be changed.

Once the Convention is gaveled in and the rules voted on and accepted by the majority of the Convention delegates, those two names, Donald Trump and Ted Cruz, will be placed in nomination and voting will begin. States will be called on to cast their votes, each according to their state rules governing the first ballot. For my state the wildcard will be those 12 delegates awarded to Marco Rubio. Will they choose Trump or Cruz? While not bound, most have indicated a preference for Cruz. Similarly, in other states, many of those delegates won by Rubio, Carson and so on, will be free to cast their votes for either Trump or Cruz, as will the 150 or so coming into the Convention unbound (like the majority of the Pennsylvania delegation). Should Trump enter the Convention within say 50 – 100 delegates short of 1237, he may find the balance needed from those unbound delegates. If not, the voting continues to the second ballot, where the vast majority of delegates will become unbound. Back to Rubio, only 37 of his delegates are free to vote their conscience on the first ballot and 96 on the second. Rubio could, of course, release his delegates in advance. Though there are a few states that preclude their delegates from being released.

In all likelihood the Republican Party should have a nominee via either the first or second round ballot, though a third is certainly possible. But balloting will continue until one candidate achieves the magic majority of 1237.

At the heart of this whole process is a bias toward state’s rights, representative governance, and protection of the party brand and platform. The party’s eventual nominee will, win or lose, be the de facto leader and face of the party for four years, as well as its key spokesperson. So they have a strong interest in that nominee being reflective and supportive of the platform and values held by the party and its registered members.

And, at the heart of the discussion over whether or not the process is fair, open and inclusive, hopefully you see that it indeed is – if you are willing to show up and be counted.

It will be interesting to watch it all unfold.

 

 

 

 

 

 

 

 

 

 

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Can The Idea Of America Be Saved?

 

By almost any measure one could say that America’s best days have passed. We are hopelessly mired in debt. Millions of able-bodied Americans are unemployed and nearly half our population is now on the government dole in one way or another. We are today as politically polarized as I have seen in my lifetime. We are suffering under the boot of an oppressive regulatory and tax environment. Our fourth estate, the media, has withdrawn from any pretense of journalism or truth seeking. And our moral compass, our ‘firm reliance on divine providence’ appears all but forgotten.

Should I mention that more than 50 million American lives have been snuffed out in the name of ‘women’s rights’? Or that we incarcerate more per capita than any developed nation? That nearly a third of our children are being raised without a father (15,000,000) and another five million without a mother?

Wherever you look – whether public education, government institutions, the political climate, big business, the family unit or the faith community – we are failing.

So how is it that our ‘shining city on a hill’ has lost its luster?

To understand our failures we must first understand the causal drivers of our success – what enabled the experiment to work. In the simplest terms, America succeeded due to its embrace of family, faith and freedom.

The colonies were populated, in large measure, by those seeking religious freedom. Quakers, Puritans and others established themselves and their governance around Biblical principles and mores. From the Mayflower Compact to the governing documents of the original colonies, all were informed by Judeo-Christian values and truths.

Our Founders fully embraced this heritage with its articulation of the laws of nature and of nature’s God as the vital threads in defining how man should lead his life and interact with his fellow citizens. The framers’ worldview was that these rights were unalienable and universal. They belonged to man, having been gifted by nature’s God. The Declaration of Independence expressed a finite definition of these rights. It focused on five principles of the laws of nature and of nature’s God. They are:

  1. That all people are created by God, and that by virtue of this circumstance are entitled to be treated equally before the law
  2. That all people are endowed by God with certain unalienable rights.
  3. The people are also endowed with the right to govern themselves according to their written consent.
  4. The people retain the right to alter or abolish an unlawful form of government as an exercise of self-government.
  5. The people are free to organize the civil government’s powers in such a way as to secure their happiness (property).

The Constitution embodied this view and served to construct a civil government capable of sustaining these rights. Federal powers were enumerated (limited and finite) and those not specifically granted belonged to the states and the people.

This was the idea of America – self-reliance, self-government – a free people secure in their rights to life, liberty and property. The idea of America was the recognition that man was meant to live free to pursue his best and that the role of government was to protect and defend the rights of the individual.

The Founders knew that it was the nature of governments to ever creep toward tyranny. They had lived it. And so they went about the work of setting up roadblocks to forestall that eventuality – unalienable rights, enumerated powers, vesting of powers to the states and the people, separation of powers and co-equal branches. But the Founders were equally foresighted to know that the framework they set up through the Constitution was only adequate if the people were good and moral. As John Adams stated, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”

Fast forward a few hundred years and answer the question – are we still that ‘moral and religious people’ and, if not, how and why did we lose this critical societal and cultural lynchpin?

While governmental erosions of liberty intermittently occurred, most notably during the tenures of the dynamic duo of Woodrow Wilson (the income tax and the Federal Reserve) and Franklin Roosevelt (where do I start?), one could argue that while we were less free, we were in essence still those ‘moral and religious people’ in the 1950s and into the 1960s. But the seeds of our decline were being sown for all that to change. Civil society was about to convulse.

Our nation was in turmoil. Race relations had taken center stage and America needed to come to grips with its second-class citizenry, the blacks. Much of the South remained segregated. The Ku Klux Klan terrorized any blacks that didn’t know their place. Jim Crow laws ruled. As Congress debated and eventually passed the Civil Rights Act and the Voting Rights Act, two competing movements were bubbling up, the peaceful civil protests of Martin Luther King and the violence and anarchy of the Black Panthers.

At the same time, America was facing an exceedingly unpopular war in Vietnam. The anti-war movement was growing, mushrooming out from our colleges and universities. Coverage of sit-ins, demonstrations and riots filled the airwaves, as did the daily body counts from Vietnam. From Berkeley to the streets of Chicago to Kent State, the intensity of this struggle escalated along with the race war. The Students for a Democratic Society (SDS) and the Weather Underground (of Bill Ayers fame) splashed on the scene, railing not only against the war but also violently rejecting the very institutions and mores of civil society. Their calling was violent revolution, foreseeing some 25 million deaths to achieve their ends – some convoluted, quasi-socialist state. Ayers and his ‘Alinskyites’ were trying to recruit the more radical and violent elements of the race struggle into their fold (Black Panthers, Malcolm X) to rise up and take the government down.

Fear, confusion and division had gripped the country as it watched or read the news. President Lyndon Johnson reacted with his ‘Great Society’ and ‘War on Poverty’ initiatives. But Johnson, a staunch opponent of the Civil Rights Act, and not exactly a friend to blacks, was building, through these programs, an ever-faithful voting block (the blacks and the poor), a permanent underclass. Johnson succeeded in putting the blacks back on the plantation, only this time a government plantation. Reliance on government and the victim class were born and being well fed. Too, our contemporary race baiters (Jesse Jackson, Al Sharpton, Louis Farrakhan) were getting their legs.

Perhaps the greatest tragedy in those years was the fact that Martin Luther King was succeeding, the right way, by showing the good people of America the injustices perpetrated against his race and appealing to their humanity. Tragically, King’s dream of equality and lifting up his people (and all people) was subverted by others who saw more power and fortune in fomenting, twisting and sustaining that victim status.

Yes, the sixties gave us the ‘Summer of Love’; a rising counterculture; the hippies; flag, draft card and bra burning; a budding feminist movement, a lot of dead bodies, and a rapidly growing government. But it also burned into the progressive ‘bible’ the effectiveness of playing the victim card and tugging on the good nature (or guilt) of the American people.

This cabal has been effective in convincing Americans that abortion is only an assertion of ‘women’s rights’, that ‘fairness’ means taking from a producer to redistribute to a ne’er do well, that marriage only between a man and a woman is discriminatory, that indiscriminate sex for teens is just fine, and that God has no place in the public square.  Their god is moral relativism, entitlement and government. Their goal (as was the case with communism and fascism) is to bury Christianity and morality, to undermine the church and the family, and replace their traditional roles with a behemoth government.

They viewed the government as the giver of all things, the moral authority, the definer of values, and the great societal leveler.

They have been spectacularly successful. Today a valedictorian that dares utter a word of praise to God or Jesus has his or her mike turned off. Christians are belittled and mocked for their faith. The successful are scorned. Profit is evil. Returning soldiers or those espousing the Constitution are to be put on a terror watch list. Illegal aliens are undocumented aliens. “I’m from the IRS and I am here to help”.

Face it, folks, our world has been turned upside down, by design. And as it has taken several generations to get us here, it will also likely take the same to reverse.

To find the solution, I look to the targets of the Progressives – the churches, the traditional family unit, academia and media. The battle is lost in Washington, D.C. And while we must still engage and fight in this arena, the real battle is local.

Prescription #1

We need to awaken our preachers and pastors and enlist them to stand up for nature’s God and the laws of nature. We must not allow them to any longer cower in fear of the IRS and their tax-exempt status, or their fear of losing congregants by speaking out against moral relativism and immoral governmental actions. Talk with your feet if your place of worship doesn’t align itself with the principles and intent of the Constitution. Let them know why and learn from the experience. The churches have the reach to help turn the tide. And they have an inherent duty to support and defend the principles, as does every citizen. Support the Black Robe Regiment!

Prescription #2

Should the current trends continue in the public education system, we could soon be facing an army of little brown shirts. The schools, the textbooks, and the curriculum need to be continually vetted and called out positively or negatively as appropriate. I am also old fashioned enough to think that the Pledge of Allegiance should reenter the schools as should the opportunity to pray (purely optional for my agnostic and atheist friends). Shouldn’t citizens of a country founded on the laws of nature and nature’s God be permitted (not required) to pray in school?

And is a show of respect and allegiance to the symbol of our Republic so distasteful? School Boards and teachers are all locals. Get to know them, or be one. Stop sending your hard earned dollars to the Progressive cesspools that so many of our ‘institutes of higher learning’ have become.

Prescription #3

The mainstream media has abandoned the pursuit of truth and are willingly aiding and abetting the Progressive agenda. Supporting trusted voices is a start. But as pervasive as the media misinformation cartel is, the more directly and personally we communicate with others the better. Blog, speak up and fight the lies.

Prescription #4

Get together with others locally that share traditional American values. There is strength in numbers – evangelize. We keep each other informed and aware – there is far too much going on for one person to keep up. Be a force in your local precinct/county group. That’s where the political action takes place. This is a cultural war and we must assert and defend the values we cherish.

Prescription #5 – My legislative Dream List

Get on board to: Abolish the IRS and enact the FairTax; end the Fed; repeal Dodd-Frank and Obamacare; substantially reform Medicare/Medicaid and Social Security; abolish the Departments of Education, Homeland Security, Labor, EPA, and shake up the rest, redefining their goals and stripping out any activity not supportive of those goals; term limit Congress, and end crony Capitalism.

So, can the idea of America be saved? Yes, as long as it remains in the heart of one citizen. But restoring our nation will take a generation.

Oh, and can we please have a President that believes in, and treasures, the Idea of America.

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Immigration Reform And Sequester – Dual Hoaxes

We’re Being Had Again. Any day now the U.S. Senate will unveil its comprehensive immigration bill. Senator Charles Schumer has recently given us a glimpse of what they will be proposing. First up will be legalization for the 11 or 12 million immigrants that have either overstayed their visas or simply crossed our still porous southern border. Following the blanket legalization will be stage two – working on tightening border security. Stage three – a path to citizenship.

Hopefully, the juxtaposition of legalization and border security jumped out at you as it did me. For those of us of an age who remember the amnesty granted under President Reagan in the mid-eighties, a red flag presents itself. Then, as now, promises were made to secure the border. As we know, 11 million times over, the promised (and legislated) border security plan circa 1986 never materialized. Once again we will be asked to trust our government officials that they will indeed follow through and secure the border. Fool me once, shame on you, fool me twice, shame on me.

Recently, amidst these discussions in Congress, illegal border crossings have doubled – no big surprise. Univision and Telemundo are following and reporting on the immigration ‘battle’ with vigor.

I think it’s safe to say that most Americans welcome immigrants (arriving legally) and certainly empathize with the offspring of illegal immigrants who have essentially grown up in this country. Further, most of us would prefer to not break up these families, by deporting the parents for their illegal activity. We are a forgiving, generous and humane people. We want to do what is right.

So what do we do? How do we resolve this continuing and growing problem?

I am not smart enough to offer up a comprehensive solution. But I am smart enough to know that if a water pipe bursts in my house, the first thing to do is turn off the water at the source. Trying to vacate the water in the house while it’s still flowing in makes no sense. One would think any reasonable person could understand this simple concept.

So why would the Senate (with the President’s blessing) promote this approach?

The answer is that they know such a bill will necessarily die in the Republican controlled House. And when it does, the liberal voices can continue their calls of racism, obstructionism and Hispanophobia. And then they can collect up the Hispanic votes as well as others who buy their vitriol come the 2014 mid-term elections.

The real goal is control of the House, not actually passing comprehensive immigration reform – and finally solving the problem. Had Mr. Schumer and Mr. Obama wanted to pass immigration reform, they would have done so (as Obama promised on the campaign trail) when they had super majorities in both houses. They want this to remain an election issue.

A similar motivation has been at work regarding the Sequester. Even in our ‘low information voter’ times, I would wager that almost every adult American knows that White House tours were suspended and blamed on the sequester budget cuts. Secretary of Education Arne Duncan was out stating that teachers were being laid off due to sequester. He later had to recant as his statements were false. Department of Homeland Security chief Janet Napolitano warned us of long lines and delays at airports due to TSA and Customs officials cuts. Odd that at the same time DHS placed an order for thousands of new uniforms for TSA – to the tune of about $1,000 per new TSA agent (uniform, sweater, jacket…). Oh, and they are made in Mexico.

Fact is, about every department head in the President’s administration was out front and center screaming that the sky was falling as a result of Sequester. Several underlings queried their bosses suggesting more reasonable approaches to administering the cuts and were rebuffed by their superiors (and there are inter-departmental emails to prove it). The message was loud and clear – make every effort to make the cuts as visible and painful as possible.

Why take this approach? Again, the goal is to paint the Republican House as extreme and uncaring – and tilt the 2014 elections toward the opposition.

Last week MarkWayne Mullin (U.S. Congressman – District 2) spoke at the Okemah Historical Society. He spoke of the need to subordinate party to country. He went to Washington to represent his constituents (all of us), and help solve problems, not instigate division. There are others in Congress like him on both sides of the aisle. But he also told of those (no names) that like their jobs there too much – the perks, the power, money, whatever. And to stay there they must put party ahead of the American people. Follow your leader (Pelosi, Boehner, Reid, McConnell) and funds will pour into your campaign coffers and reelection is easy.

Folks, we are all being duped and taken for suckers. We are being had. And while both parties play this game, the Progressives (again in both parties) have elevated it to an art form. War on women? War on blacks? War on gays? War on immigrants? I don’t think so. We are all Americans  – and we see others as just that, with no ‘hyphens’ involved or necessary.

What we need now is a war on all self-serving government, political, and media types who choose to pit us one against the other, instead of doing their jobs and serving the American people. And no, I don’t mean a shooting war.

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A Bridge Too Far

Yesterday the three judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled that President Obama’s recess appointments to the National Labor Relations Board were unconstitutional.

On January 4 of 2012 Mr. Obama announced four recess appointments – three to the National Labor Relations Board (NLRB)  – the fourth being Richard Cordray to head up the new Consumer Financial Protection Bureau (CFPB), an outgrowth of Dodd-Frank. The Cordray case is on a separate track through the courts.

While recess appointments date back to George Washington, with recent presidents making such appointments in large numbers (both Clinton and Bush 44 exceeded one hundred), Mr. Obama chose to overreach his Constitutional authority – and recent practice – by declaring the Senate in recess when it was in Pro Forma session. These appointments took place during his fevered “We Can’t Wait” assault.

The Court’s decision reflected ‘a straw on the camel’s back’ frustration with this Constitutional usurpation and clearly rebuked the President’s move. Article II, Section 2 deals with recess appointments. It states:

The President shall have power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

Here the Court is putting the Genie back in the bottle. Obama’s ‘bridge too far’ was his declaration that the Senate was in recess, while the Senate said no it was not. It is not in the President’s purview to make such a declaration.  Additionally, these vacancies did not arise while the Senate was in recess, another requisite to invoking the clause.

The Framers chose to set up three co-equal branches of government to distribute and balance power. Relative to certain high level appointments they instituted the ‘Advice and Consent’ clause holding that such appointments are a joint responsibility of the Senate and the Executive. Further the recess appointments clause clearly states “the recess“, meaning the time between sessions of Congress, not referring to such breaks as the Senate may take from time to time during a session. Alexander Hamilton deals with this issue in Federalist No. 67.

This president’s history of ruling by Executive Order and trampling over Congressional authority speaks to his clear disdain for Constitutional limits to his power. Many may remember his pining on several occasions over the ability of Chinese rulers to move decisively without the entanglements or restraint imposed in a Constitutional Republic. Should the Supreme Court uphold the Circuit Court’s decision, which one would expect it to do, at least Obama, and future presidents, will be restrained in this one important area.

While the impact on the NLRB agency and the Cordray/CFPB appointments are significant in themselves, the retroactive impacts of this case will also loom large. Hundreds of decisions have been handed down by the NLRB over the past year, including such notables as jurisdiction over charter schools, dues checkoff and “micro-units”, and all of these decisions may be deemed invalid should the Court’s decision be upheld. At issue here is that the five member NLRB must have a quorum to rule (three members) and absent these appointments no quorum was possible.

Now if only we could get Congress and the courts to challenge Mr. Obama’s proclivity to undermine Congressional authority and intent, as in his ‘Dream Act’ executive order, EPA carbon ruling, or the ‘deemed to pass’ Affordable Care Act.

Well, we can always dream.

 

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Our Lawless White House Occupier

Americans have always had spirited disagreements regarding national policy. We get that. And laws are written by Congress and either affirmed or vetoed by the President. We get that, too. That’s how our Constitution was written – separation of powers and co-equal branches were specifically designed as roadblocks to tyranny.

Unfortunately, our President and his agency minions don’t seem to get that, or more accurately, just don’t care. Further, as the election looms closer this President’s lawless behavior has accelerated.

Shortly after taking office, instead of opting to go the lawful orderly bankruptcy course,  Mr. Obama chose to essentially nationalize GM and Chrysler. Unions were rewarded with substantial ownership. Taxpayers became unwitting stockholders. Bondholders, the top of the food chain legally, were decimated.

We all know about the New Black Panthers polling place intimidation in the 2008 election. Hard to forget the uniforms and nightsticks. Despite clear video and audio evidence, Eric Holder’s “Justice Department” ignored this blatant violation of civil rights.

More recently, the Justice Department ignored taped calls by the head of the New Black Panther Party to go out and kill George Zimmerman. No investigation was begun and no charges were brought.

Following the BP Oil disaster, the Obama administration chose to falsify findings by a group of scientists and engineers, affixing their signatures and reputations to a statement regarding the drilling ban parameters. Later, both Justice and Energy ignored a Federal District Court order overturning the ban.

With Solyndra entering bankruptcy, the Department of Energy subordinated the taxpayers’ claims to those of two major investors, including George Kaiser (The Kaiser Foundation), a major Obama supporter and advocate for the Affordable Care Act. Obama chose to protect his billionaire campaign bundler instead of taxpayers. This subordination of financial claims was clearly in defiance of existing law and regulations, including the Energy Department’s own rules.

Speaking to La Raza (a radical, activist Hispanic organization) amidst calls for the DREAM Act, the President had this exchange (July 25, 2011):

President Barack Obama: “Now I know some people want me to bypass congress and change the laws on my own”

Obama: “Believe me, and…(smile) and, and, and believe me right now dealing with congress…the idea…”

Crowd erupts saying: “Yes You Can! Yes You Can!”

Obama laughs and smiles

Crowd gets even louder: “Yes You Can! Yes You Can!”

Obama: “But, but, but believe me…uh…believe me the idea of doing things on my own are very tempting”.

Crowd laughs

Obama: “I promise you, not just on immigration reform…”

Crowd laughs

Obama: “But that’s not how…that’s not how our system works…”

Lady in the crowd: “Change it!”

Obama: “…that’s not how our democracy functions.”

A year later, in keeping with his “We Can’t Wait” (for Congress to act) theme, Obama moved administratively to implement the DREAM act, under the cloak of limited resources to enforce existing immigration laws. Though Congress and the people said no to the DREAM Act, Obama unilaterally said yes. More Hispanic votes.

Then there is DOMA, the Defense of Marriage Act. Duly enacted by Congress and an existing law of the land, Mr. Obama’s Justice Department simply chose not to defend the act in the courts, again in defiance of Congress, the law, and the people. More gay votes and contributions.

Cap and Trade failed to pass Congress. So the EPA chose to enact a reasonable facsimile administratively. More support from environmental groups.

No Child Left Behind was enacted during the Bush Administration and was the law of the land. The Obama administration didn’t like the law so it initiated waivers to the states to ignore the law.

Mr. Obama has even thwarted his own signature legislation, the Affordable Care Act, issuing many hundreds of waivers, with a majority of the waivers going to unions.

And we all know what happened to Boeing when they worked toward opening a manufacturing facility in a Right To Work state. The NLRB (National Labor Relations Board) pulled out all the stops to block their efforts. More union support.

This administration has filed and pursued lawsuits against states that are supporting enforcement of U.S. Immigration laws, yet the Justice Department, Homeland Security and the INS totally ignore Sanctuary cities – cities openly defying U.S. immigration law.

The aforementioned are but a few of many examples of the lawlessness of this administration – actions more in keeping with an imperial presidency or a banana republic.

And now, just this past week, we have another example. Sequestration, the ‘kick the can further down the road’ agreement in Congress enacted last year calls for Defense Department cuts of some $500 billion beginning January 2013. Existing law requires employers (with more than 100 employees) to provide 60 days notice to employees prior to layoffs or firings. Known as the WARN Act (Worker Adjustment and Retraining Notification Act), it was enacted by the Democratically controlled Congress in 1988. In 2007, then Senator Barack Obama, with Sherrod Brown and Hillary Clinton proposed the FOREWARN Act, designed to strengthen and expand the reach of the WARN Act and extending the notification period to 90 days. That measure failed.

Potential layoffs as a result of sequestration would likely number between 500,000 and 1,000,000 defense department contractor employees (OMB has estimated 1,090,000 job losses) beginning January 2, 2013. In accordance with the WARN act, layoff notices would have to, by law, be sent out on November 2 – just four days before the elections. Not a positive development for the Obama reelect group.

Enter, stage left, the Obama Labor Department issuing written guidance stating that companies, including defense contractors anticipating sequestration, ‘are not compelled to issue advanced notice of layoffs stipulated under the WARN Act’. Problem solved? Unfortunately for Obama, no. The WARN Act is enforced through the courts, not the Labor Department, so should these defense contractors act on Labor’s guidance to ignore the law, they would open themselves up to myriad lawsuits by any employees that are fired or laid off without receiving their lawful notice.

Two conclusions should be clear from the above-mentioned examples. One, this administration cares little for law or the Constitution when it stands in the way of implementing their agenda. And two, they seem to care even less when it could stand in the way of Mr. Obama winning a second term. And with three months to go before the 2012 vote casting, I feel sure we will witness more lawlessness and more usurpation of power emanating from 1600 Pennsylvania Avenue. Stay tuned.

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Dear Governor Romney:

Prepare yourself for another armchair quarterback – me. Blame my dad for he put me up to this. He should be the one writing this, not me. He enjoyed a highly successful career, rising to the position of President of a major corporation and, in fact, personally experienced Bain at its best. And his years provide more wisdom than I profess or possess. Nevertheless, he felt my activities earned me a place to speak out – so I shall.

Briefly, I am a small media business owner – a telephone directory publisher. I sit down with 30+ business owners a week on average. They own retail establishments or service businesses, or they may be doctors, lawyers, dentists, community bankers or tax preparers. In short, I speak with ‘main street’ everyday. They know me and I know them. I call on them several times every year and I have, with many, a very healthy and often personal relationship. We talk. I listen.

I am also active with several Chambers of Commerce and serve as Vice President of our local Chamber. I sit on the Board of the ECWIB – Workforce Oklahoma. I am active in politics, serving as Precinct Captain locally and as Vice Chair of our County GOP group.

I consume a lot of books, articles, blogs, and news daily. I don’t miss too much.

I mention all of this only to demonstrate that I am informed and in touch with ‘everyday’ Americans – everyday.

There is seldom a day that goes by that I am not asked what I am hearing out there relative to the local economy, to how people are feeling, or for my outlook. So, despite the fact that you have not asked, here goes a distillation:

People are scared, frustrated and angry. Most are generally afraid that what lies ahead, in terms of the economy, will be far worse than the 2008 financial crisis. Their fears are centered on our government institutions’ lack of courage or honesty in dealing with any of our myriad problems – debt, deficits, entitlements, monetary policy and more. Few I speak to trust either party. No one I have spoken to trusts or respects Congress as an institution. Most view the institution and its occupants as corrupt, spineless and mostly only interested in being reelected and continuing to enjoy their privileged status, not doing the people’s business.

Many also fear the future in terms of moral and cultural decay. This area hardly requires any further comment – morals and ethics seem out of favor wherever you look. Our country has lost its foundations – in faith, family, community and self-governance.

Our heritage of freedom; of the exalted individual reaching for his or her dreams, of responsibility for being an informed, good citizen, of a benign and benevolent government, are largely in the ash heap of history – not to mention the Constitution itself.

None of the business owners I speak with wish to place their lives and dreams on hold until they regain their trust and vision of the future, yet that’s exactly what most are doing. Most are on hold, waiting for some sanity to show up in our institutions.

And they are afraid of some of their neighbors – the uninformed, the looters and the moochers. They know these people vote and they suspect that they are now the majority. They fear a repeat of 2008.

Now on to you, Mr. Romney – and the aforementioned armchair quarterbacking:

I had heard some sound bites from your Irwin Pennsylvania speech and later watched the entire talk. Both there and in Ohio you spoke as many Americans feel. Outstanding messages delivered with the passion they deserve – heartfelt, sound and inspiring. I/we want to believe you.

We desperately want a leader (a President) that understands, values and can communicate core American values. We want a President that honors our Founding documents and that takes seriously the oath of office, swearing to uphold and defend the Constitution against all enemies – foreign and domestic. We want a President who puts United States’ interests and laws ahead of all others – including, and perhaps especially, the U.N.

We want a President that will tell us the truth, treat us as adults and who will work tirelessly to restore this country to its founding principles. We want that restrained, smaller, smarter government that limits itself to its Constitutional role.

We want our businesses to be free to grow and prosper – without the chains, or the ‘help’ of government. We want our local banks to once again be able to act as banks, succeeding or failing based on their own judgment and business acumen, not mired in Dodd-Frank webs of regulations, government edicts or social engineering quotas. These local enterprises are the lifeblood of a community.

We want our fellow citizens, our churches and our community organizations to reclaim their rightful place as the real safety net for those in need of a hand up. We are a generous and good people – we can handle it. And clearly the Federal Government cannot, nor should.

We want our sovereignty back too. That means we don’t wish to hand over any aspect of our governance to the United Nations. The arms treaty (will Secretary Clinton sign this later this month?), LOST (law of the sea treaty), rights of the child, rights of the disabled, financial transaction taxes, Agenda 21 – none of these initiatives in any way advance the needs or interests of the United States or its citizens. The United Nations is a corrupt, ineffective organization that espouses values mostly at polar opposites to our own. Why do we continue to support this organization? And we want our borders secured and our immigration policy to be developed with our interests at heart, allowing in those who choose us for economic and religious freedom. Those who choose to obey our laws, assimilate into our culture, and add to our fabric as a nation. We don’t need to be spending millions of dollars developing programs with Mexico to make sure that those entering our country illegally know how to sign up for government largesse the day they set foot on our soil.

We want our money to be real. We want the printing presses to stop. We want the Federal Reserve to open its books. We cannot continue to monetize our debt. We cannot afford to have the Fed continue to feed off and punish our savers. The Fed has in less than one hundred years destroyed 97 cents of value of each dollar – what will they do to us over the next several years as our debt and deficits demand attention – and faith is lost in America’s future – and its currency?

Governor, what we want is a President who embraces all things American and leads accordingly. You know – the Superman thing – truth, justice and the American way. We want to be left alone as citizens and as businesspeople. For those who stray, we have laws and courts to deal with them. We don’t need any more two thousand-page pieces of legislation. We don’t need another hundred bureaus and agencies to govern every last aspect of our lives and interactions. We just want the rule of law – applied to us equally.

And yes, Governor, we want clean air and clean water and we don’t want to throw ‘granny’ off the cliff. As Americans we can make good choices as individuals. Our entrepreneurs, too, will help us find better solutions. The courts are there to severely punish corporate wrongdoers. You can trust us, and our system, to more positively impact environmental and healthcare challenges than tens of thousands of bureaucrats and myriad laws and regulations. And relative to Medicare and Social Security we know it needs major reform now to remain viable. Just be straight with us and present some good options.

Governor, we trust almost no one. We need to see that you are for real – that you mean what you say – that you will govern conservatively. Will you choose a running mate that is “safe” or will you show us you mean business and pick a Bobby Jindal, a Mike Huckabee or a Marco Rubio? Will you show us that you are serious about education reform (like Governor Jindal) and tap a Michelle Rhee as your Department of Education Secretary? How about your choices for other key cabinet posts? As parents often say, “show me your friends, I’ll show you your future”. Give us a clue as to who you would surround yourself with – we don’t want any more of the likes of Van Jones, Steven Chu, or Eric Holder.

Will you show us you mean business with tax reform and ending corporatism and crony capitalism? Eisenhower warned us about the military-industrial complex – now we have one of those in energy, healthcare, the environment, banking, agriculture and education, to name a few. Will you get government out of these industries? Can we return to simple, effective oversight and regulations, and no picking winners and losers?

Governor, will you stand up for a flat tax or better yet, the FairTax, so all citizens and companies are treated fairly and equally? Yes, we know it’s a risk and easy to demagogue, but it’s the right thing to do and would go far to unleash and grow our economy.

Governor, we are in a world of hurt out here and we have allowed our government to continue its march towards tyranny. Shame on us, we forgot the good citizenship responsibilities. We forgot to keep watch. No longer, we are now awake. Was it Admiral Yamamoto that said, “I fear all we have done is to awaken a sleeping giant, and fill him with a terrible resolve”? Mr. Obama, Harry Reid and Nancy Pelosi and the healthcare fiasco have set off our alarms. Fear not, we are watching, acting and participating now. And we intend to hold every elected official accountable for their promises and their actions. We have chosen one more time to camp out with the Republicans as our best hope. Please don’t let us down.

Governor, I see you as a good man. I look at your family, your accomplishments, and the way it appears you have conducted your life, and I see the American way and the American dream. You are clearly a highly talented, moral, and accomplished man. Heaven knows these are traits we need now more than ever to lead us back to our ‘promised land’.

Only bold, principled, tough action will begin to turn the tide for America. Our Founders pledged their “lives, fortunes and sacred honor” for this Republic – we only want your sacred honor. Will you give us that? Your children and grandchildren deserve no less, nor do we. Will you be our last, best hope, please?

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The “Gig” Is Up, Over And Done

“Government is the great fiction by which everybody seeks to live at the expense of everybody else.” Frederic Bastiat (1848), a man of few words yet much wisdom, offers up his definition of government and sums up our circumstances well.

We have watched this way of thinking playing out across Europe and the United States. Decades in the making, the promises made by our ‘benevolent’ governments can no longer be kept. The unholy alliance between men who desire to consume more than they produce (at the expense of others), and the politicos who promise to fulfill that dream in exchange for votes, is nearing its contemporary endpoint.

Many of us have tagged along for the ride – and it has been a good ride. We have lived well beyond our means for more than a generation, enjoying the borrowed fruits of the labors of the more recently born and yet to be born. It’s been a game of winks and nods. We wink, the politicos nod. And we dig ourselves deeper and deeper into the abyss. Consider that if we had a balanced budget at 2011 spending levels, all personal income taxes would have to be double what they are today.

Truth is, there isn’t enough wealth in the world to pay off the debt that has been accumulated by sovereign nations. Actually, there isn’t even enough wealth in the world just to pay off the debt and unfunded liabilities of the U.S. government.

Let’s look at a few numbers to illustrate our current condition. Our public debt is roughly 15 trillion dollars. For 2011, our interest payments on that debt totals about 230 billion dollars, meaning we are financing that debt at an average rate of around 1.5%. Wish I could get that deal. But what happens if that rate moves up? If our rate moved to 2.5%, our interest payments would increase to $380 billion. At 3.5%, they go to $530 billion. You get the general idea. And, lest we forget, we are adding a trillion plus each year in additional debt (deficit spending).

Now, let’s look at Europe. Many Eurozone nations have spent and borrowed like we have. The Greek crisis is well known. A massive welfare state and bloated, powerful public sector unions enjoying early retirements and big payouts have bankrupted Greece. And even the most recent EU bailout plans (including writing down 50% of their public debt) won’t be enough to save Greece. No big story here, Greece has spent most of its modern history in some form of default or another.

Italy, Ireland, Portugal and Spain round out the “PIIGS” of Europe – those countries facing the financial abyss. Spain has 70% public debt to GDP, while the other three are all over 100% to GDP (U.S. is currently at 75%). In recent weeks, we have seen the bonds of Italy and Spain hit the 6 and 7% levels (Portugal is over 12%). To put some perspective on that, if we (the U.S.) were paying 6.5% on our debt, our interest payments in 2011 would amount to $980 billion dollars. Put another way, our interest payments alone would eat up more than five times what the government collects in corporate taxes, or about 80% of what it collects in individual taxes. The interest payment would be our single largest budget category, a larger expenditure than even defense and two wars. But this is what Spain and Italy are facing with their bond rates now. And unlike Greece, their economies are large. Bailing them out isn’t a two or three hundred billion Euro fix. Expanding the field beyond the PIIGS, France is now also feeling the heat – and as of last week, even the more fiscally conservative Germany. French 10-year bonds auctioned at about a 3.7 rate and Germany wasn’t finding buyers at 2.25, a quarter percent higher than the week before. In short, Europe is imploding. And growth in those economies can’t be found, ranging anywhere from -5% to a high of maybe 2%.

Europe’s only answer, other than default, is for the European Central Bank (ECB) to step in, print trillions of Euros, and buy up the individual nation’s debt. But the bank’s charter expressly prohibits it from doing so. And, to date, Angela Merkel (Germany) has vowed they won’t do that. Germany’s collective memory knows what happens when the printing presses are turned on – they remember Weimar (when hyperinflation translated to a wheelbarrow full of currency to buy a loaf of bread). I wish our Federal Reserve Bank had a similar memory.

Should Germany (and thus the ECB) remain steadfast in their resolve to not meaningfully intervene, the capital markets in Europe will lock up soon, much as ours did in 2008 following the Lehman collapse. And without a lender of last resort infusing capital like our Fed did (to the tune of trillions), the great banks of Europe will fall (or be nationalized) one by one as the contagion spreads. Europe’s 500 million people will slide into a depression.

Strangely, because of all this turmoil in Europe, the Dollar, and U.S. Treasuries, have been the safe haven assets investors have been flocking to – further holding down our interest rates. The U.S. has the distinct honor of being the prettiest house on a very ugly block, for now.

But we, too, are nearing that tipping point, despite our reserve currency status and our printing presses running full steam. Collectively, our local, state and federal governments are spending $7 trillion a year; our federal government is running a 10% to GDP deficit ($4 billion a day), and our population is aging and retiring. With 11,800 Boomers retiring each day, they are moving from productive workers and savers to Medicare and Social Security recipients, and sellers of assets (stocks, bonds, 401Ks), rather than buyers. Additionally, we have an anemic economy with 25 million unemployed or under-employed existing on food stamps and unemployment payments, despite $1.3 trillion in deficit spending. And a significant portion of a generation has emerged from, or is soon to emerge from college with few job prospects and massive student loans. Due to these circumstances, most graduates are not forming new households. They are the boomerang generation, returning to their parents’ homes. So while Boomers are retiring and downsizing, the Boomerangs are returning to the nest to lick their wounds and whittle away at their debt. So much for an imminent housing rebound leading us out of ‘recession’.

Further eroding our prospects for growth at home are two additional factors, 1) tight lending by the banks and 2) strangling anti-business policies and attitudes emanating from Washington, D.C.

So where are we today? Housing prices and the Dow stand at their 1999 levels, while food and energy prices have risen substantially, wages have remained flat, and the dollar’s value (buying power) has fallen. Yes, most of us (the 99%?) are regressing economically.

Through this summer we witnessed the failure of Congress to pass a budget deal (we’re in our third year without a Federal budget), and just this week we saw the utter failure of the Super Committee to address our deficits, once again punting on taking any responsible action to right our course. And the Super Committee was only charged with reducing the rate of increase in debt by 10% against the baseline (current trajectory is an increase of about 11 trillion in additional debt over ten years).

Right now the bond vigilantes are focused on the European sovereign debt crisis. Europe is the raging, out of control fire. But once contained (or post-implosion) the attention will turn to the United States. Be prepared for more debt monetization by the Fed and Treasury – QE3 (quantitative easing).

The meltdown at both sides of the Atlantic is imminent. Like a major fault line, the pressure builds and builds until finally it is overwhelmed and the result is a catastrophic earthquake. Should that occur in Europe, the resulting tsunami will reach our shores.

The central bank zombies and politicos may well find and implement another stopgap measure to delay the inevitable recognition of bankruptcy – we have since 2008. But the day of reckoning cannot be denied forever. Frederic Bastiat’s ‘great fiction’ will be exposed to the light of day. We will have to eventually live within our means and dispose of our accumulated debt either by overt default or stealth default the Weimer way (hyperinflation). Standards of living will fall precipitously throughout the western democracies. Draconian budgetary cuts will be made of necessity at every level of government and the impacts will be deeply felt. Taxes will skyrocket.

As I have written before, we still have a small window to affect a more controlled landing. But even beginning that process will take a very different Congress than we have today and a strong President willing to take very bold action. That work was begun in 2010 and must be followed through with similar results in 2012. Should we fail to elect conservative, responsible leadership in both houses of Congress and the Presidency in 2012, the bond vigilantes will surely visit our shores and we will be forced to pay debt service rates that more accurately reflect our risky financial condition.

I cannot predict the fallout of such a scenario. What I do know, though, is that if annual debt service is eating up a trillion dollars (the interest payments at a rate of 6.5%), something will have to give. Consider again that we are talking about extracting $750 billion from other areas of our Federal spending. To put that number in perspective, consider that we currently spend about $700 billion on defense and $800 billion on Medicare and Medicaid. Added together, these three categories would exhaust every payroll and income tax dollar currently collected. That would mean that there would be no funding for federal income supports (earned income tax credits, supplemental security income, food stamps, unemployment insurance, child care and child tax credits, child nutrition, foster care), education, housing, Social Security and more.

Think about the looting, property destruction and violence in London when the British government proposed college tuition increases and other moderate austerity measures. How would our citizens react to the elimination of the safety net expenditures listed above? My guess is it wouldn’t be pretty.

To date, demonstrators here at home (like OWS or the OneNation crowd) seem content to lobby government zombies to do the dirty work and take more from the producers to feed their needs and bellies. But government, under this scenario (more normalized interest rates), will be unable to extract enough from the “haves” to meet the demands of the “have-nots”.  Will they (the have-nots) then choose to take it themselves? Will civil unrest, roaming gangs, and flash mobs become the new norm? And if such ugly possibilities begin to surface (as they have in countless societies in the past), how will our government react? What extreme measures might our leaders take?

I offer all this up only to encourage some heavy thinking about our future, about what may befall our country, and how all this may impact our individual lives and our family’s security. Might the government choose to confiscate all 401Ks and IRAs and replace them with a National Annuity Payment program? Such a plan was floated in the Clinton era. Or perhaps they would enact a one-time wealth tax to stem the bleeding?

Again, I cannot envision what further devastation our government is capable of or willing to do. Your guess is as good as mine. But one way or another our lives will change dramatically within the next few years, or next month, and it seems to me only prudent to plan for and prepare for a different American landscape.

As a final note, I will say I remain very cautiously optimistic that the American people feel and see the impending doom facing us, and may react responsibly and in sufficient numbers at their polling places in 2012. I pray we do. Perhaps with enough honest, constitutionally constrained and literate representatives in government, and a true leader in the White House, we can begin to restore some sanity to governance and fiscal policy – and avoid a total collapse of our system. For now, it is still up to us.

Posted in 2012 Elections, America's Financial House, Entitlements, Inflation and the Fed | Tagged , , , , , , , , , , | Leave a comment

Why “Occupy Wall Street” Matters

Taking it to the streets. What began with dozens of ne’er-do-wells on Constitution Day (September 17th) is now a multi-continent event. With the “Day of Rage” on October 15th we witnessed thousands in the streets across Europe, and thousands more at home. In Rome, the demonstrators assaulted police and private property with bricks and stones, causing police to respond with tear gas and water cannons. Some groups of demonstrators in Germany were masked and carrying clubs – their purpose clearly not a peaceful protest.

In New York, “Occupy Wall Street” morphed into a march on Times Square. Many thousands of students, union members and their ‘paid for protesters’, the unemployed and a smattering of ‘professional demonstrators’, anarchists, and even Ron Paul supporters added their voices to the cause – or causes. And, perhaps not coincidentally, Reverend Al Sharpton and his National Action Network (NAN) held their “Jobs and Justice” rally and march in Washington, D.C. the same day. Co-sponsors and affiliated groups included AFSCME (the government employees union), SEIU, AFL-CIO, Planned Parenthood, and the NEA (the powerful teachers union), among others.

The media has been frenzied for weeks, each laboring to put a label on the demonstrators and trying to discern their message and future direction. But the crowds and their varied interests and causes seem to confound definition.

However, the seeds of OWS, brainchild of AdBusters, a Vancouver based not for profit activist group, were sown months ago by founders Kalle Lasn and Bill Schmalz.

But to what purpose or end did they make this call to action? Looking to their foundation’s mission statement is perhaps instructive:

“We are a global network of artists, activists, writers, pranksters, students, educators and entrepreneurs who want to advance the new social activist movement of the information age. Our aim is to topple existing power structures and forge a major shift in the way we will live in the 21st century.”    (AdBusters Media Foundation, emphasis mine)

AdBusters was founded in 1989 and boasts a circulation of 120,000 for its bi-monthly magazine. Its international editions span Australia, Sweden, France, Norway and Japan. Community organizers going global, I guess. But these are serious, creative, thoughtful people who have gained a significant following both in North America and abroad.

That last sentence no doubt caught your attention as it did mine, “Our aim is to topple existing power structures and forge a major shift in the way we live in the 21st century”. To me, it sounded a lot like Mr. Obama’s pre-inaugural warning (or promise), “We are five days away from fundamentally transforming the United States…”

Statements like these give me pause. Toppling existing power structures or fundamentally transforming a nation seem to line up well with the Occupy Wall Street messaging.

Over the past several weeks I have watched hours of livestream video, seen many “occupiers on the street” interviews, and have read countless tweets sent to and from protesters in New York and elsewhere. Together they have forged a montage of revolution in the making – an anti-capitalist rebellion. And while their numbers are not yet significant, their reach and influence is becoming so as the media laps up every action and nuance.

The 99%, as they call themselves, have at least one common theme, their hatred and distrust of the big banks and brokerages. Many among them extend these feelings to multi-national corporations and the rich (the 1%), in general, and some to the corporate/government cronyism.

What brought each individual to New York and elsewhere, though, spans the ridiculous to the sublime. Many are university students or graduates calling for forgiveness of their student loans. Many there are demanding jobs, or a “living wage”, or an end to foreclosures, or free anything and everything. And there are those who just want to stick it to the rich, either through higher taxes or through confiscation. And some are there because they just don’t know where else to turn.

It is a shame really, that because so many of the participants are such ultra fringe, that some reasonable complaints and cases of real suffering are lost due to the messaging and messengers. We are indeed in a world of hurt in this country. The OWS crowd view capitalism, big banks, and corporate greed as the cause. Unfortunately, we are what we teach. For decades, our students have been fed a steady stream of Progressive thought. From grade school through the universities, we are beginning to see that a different set of values and a corrupted view of our history and principles is being taught and cemented in the minds of our youth.

This worldview is supported by much of the media and the Progressive leadership in Washington, D.C., not least our own President. When you consider each of the protesters concerns or complaints, it is easy to find examples of the same sentiments from Mr. Obama. Bank-bashing, talk of corporate greed, the haves and the have-nots, the millionaires and billionaires not paying their “fair share”, and a desire for equality of outcomes. With a presidency that began with a worldwide apology tour, Mr. Obama has railed against almost every major industry in the United States, faulting big pharma, big oil, big insurance, big banks and others for our economic malaise. With his redistributionist philosophy and anti-capitalist rhetoric, is it any wonder that these people are now in the streets echoing this mantra?

Many others in academia, government and media have added their voices to the chorus. The aforementioned Reverend Sharpton made this statement on Tom Joyner’s Morning Show, “We cannot sleep through the revolution…because those students, those young people that started a movement that’s now spread over the country are right about the distribution of wealth and the 1% controlling the country.”

MSNBC analyst Donny Deutsch recently spoke about the “clarifying moment” of the 1960s movement and “its most stirring image” – Kent State. He almost seemed to yearn for “a climax moment of class warfare somehow played out on screen that articulates the clash.”

Illinois State Representative Jesse Jackson, Jr. in a press interview this week called on the President to “declare a national emergency” and “take extra-constitutional action administratively” and have the Federal Government directly hire the 15 million unemployed at an average salary of $40,000. He also called on the President to erase state and local government debt.

Arun Gupta, Editor of New York’s Indypendent News, a part of IMC, was interviewed this week at OWS and was asked about the Occupied Wall Street Journal, the newspaper that quickly appeared on the streets of New York. His answer as to how it came into being – it was a group effort, a coming together of Naomi Klein (linked to AdBusters), Code Pink, Michael Moore and Anonymous, among others. Gupta’s organization, IMC, has been a beneficiary over the years from George Soros’ Tides Foundation and Open Society Institute ($376,000 in grants). His characterization of the movement – “this is a social media revolution…global capitalism is the problem”.

Seemingly echoing the thoughts of Jesse Jackson, Jr., Mr. Obama , speaking of his frustration with Congress and his “Jobs Bill”, said this, “But we’re not going to wait for Congress…I’ve instructed (jobs council members)…to scour every corner and identify all those areas where we can act administratively without additional Congressional authority, and just get it done.”

And then there is Van Jones, president of the “Rebuild the Dream” group, and former White House Green Jobs Czar, who has put together a coalition of more than 70 progressive, union, and socialist organizations. Their goals mirror FDR’s infamous Second Bill of Rights. Van Jones appears near daily on one or another liberal talk show expressing his support and solidarity with those occupying Wall Street and speaking of his “Progressive fight back”.

Similar expressions of support and solidarity with the cause have been heard from Nancy Pelosi, Joe Biden, Debbie Wasserman Schultz (head of the DNC) and many other Democrat legislators, all yearning for their version of the Tea Party.

It is clear to see that all the “usual suspects” are circling the wagons with the OWS crowd. Coupling these far flung groups and organizations, pundits, politicians and union leaders, I am reminded of the Madison, Wisconsin movement earlier this year, only on a much grander scale. Notably and thankfully, to date, both the OWS protesters and the police have shown restraint and violent behavior and property damage have been minimal.  I pray it remains that way. Make no mistake, though, the likes of Donny Deutsch are many, pining for that “climax moment”, that Kent State event,  to stir the masses and define the movement.

Occupy Wall Street is the culmination of a deteriorating economy, widespread fear and frustration, and a convoluted and misunderstood or mischaracterized cause and effect view. This movement is sure to have some legs with the widespread support of the aforementioned parties and a potent, progressive media endeared to the causes.

On one thing I agree with Donny Deutsch. He has wrapped up the OWS group cause as leading to a call for corporate social responsibility – a nice sounding term. But behind it, effectively he is seeking a socialist/fascist political system that will hold major businesses under the thumb of the Federal Government, governing hiring, wage, and employment practices.

In recent weeks and months, we have witnessed the NLRB dictating to Boeing (our largest exporter), we have seen Dick Durbin on the Senate floor calling on Bank of America customers to run on the bank, and we have heard the relentless class warfare rhetoric from our President. Is there any doubt as to the direction we are moving as a country?

Nikolai Lenin, founder of modern Communism, told us long ago, “give me your children for four years, and the seed I plant will never be uprooted.”  Supported by our liberal media and dumb-downed by our schools, our children and young adults have bought the socialist view hook, line and sinker. They have been weaned on “The Story of Stuff” and “the Rainbow Fish”, then steered in our institutions of “higher learning” by the likes of Bill Ayres, Bernadine Dorn, Frances Fox Piven and Ward Churchill. Lenin only required four years. Remember the Nazi youth? We have given over our children for a generation or more.

As I wrote earlier, we are what we teach. Occupy Wall Street is simply the latest manifestation of our education system, our failure to teach our American history, values and principles. The underpinnings of our civilization have been lost. Our Founders knew their experiment in self-government and individual liberty could only exist with a moral and educated people. We are failing on both counts.

We see the results in the lack of personal responsibility, the moral degradation in our society, the decay of the traditional family unit, and the gangrenous infection that has gripped the government/big business complex.

The Occupy Wall Street crowd has rightly identified some of the symptoms of our decaying society. Now we need to attack, with vengeance, the real disease.

I am saddened by what I see occurring in our country and by the stresses and heartaches felt by so many families and individuals across America. Many feel helpless, hopeless and angry. Few families in America have been left untouched. For those who, through no fault of their own, have lost jobs or homes, or have seen their savings devastated, one cannot help but be moved. There are some demonstrating on Wall Street that fall into this group, and their frustration and anger is warranted, though partly misdirected.

If the jobs, debt, and economic crisis weren’t enough to face, we also clearly have an enormous deficit in education and values. These deficits are evident with many protesters on Wall Street, and for that matter, in the halls of Congress. There is no understanding of very basic economics, no understanding of business – how it works and the benefits that accrue to all through their success. Our core values of faith, family, hard work and personal responsibility have been undermined, forgotten or ignored.

Occupy Wall Street may be a small, forgotten footnote a decade from now, or it may turn out to be the tipping point for America, defining our next generations. Which it will be, I can’t foretell. But as with the rise of the Tea Party and 9/12 movement, and now OWS, it is clear America is grappling with a momentous decision. Will we restore the Founders vision of America or will we fully embrace the Progressive/Socialist vision? Again, no crystal ball. But I will pray for the former.

Posted in Education, Entitlements, Unions | Tagged , , , , , , , , | Leave a comment

Occupy Wall Street, Van Jones & Obama 2012

It is a tale of two Americas. Obama’s opaque alternate re-election campaign is going on in New York and now Chicago, Los Angeles – and coming soon to a town near you. Occupy Wall Street, which has attracted everyone from Susan Sarandon, Michael Moore and Frances Fox Piven to many Ron Paulers, has tapped into many populist frustrations and sources of anger. Truth told, most Americans would likely agree with at least one of their gripes. Who likes corruption, unemployment, falling wages, the Federal Reserve Bank or bailouts?

I have been following the organizers’ websites for the past several months to get a handle on what it’s all about. I also cast a net over the “usual suspects”, those groups that would likely support such an action. Generally, one only has to copy a list of the logos belonging to the groups supportive of Barack Obama’s 2008/2012 election bids and you have the list. For a refresher, you can go to Van Jones group – Rebuild the American Dream (rebuildthedream.com), scroll down and see the players. For those unfamiliar, Van Jones was Mr. Obama’s former Green Jobs Czar and an avowed communist. He has been closely associated with STORM (Standing Together to Organize a Revolutionary Movement), Green for All, Center for American Progress and many other socialist and progressive organizations, and has emerged as a key leader across the environmental, social and economic justice causes. This man is smart, creative and charismatic and one to watch. He is currently in Washington, D.C. as the keynote speaker for their multi-day Rebuild the American Dream forum. Look for their associated groups joining with the Occupy Wall Street protesters. According to Van Jones, “October is going to be the turning point when it comes to the Progressive fight back.”

To add another twist to Occupy Wall Street, the hacker group Anonymous had promised to “erase NYSE from the Internet” on October 10th, and then today denied the plan. Unfortunately, this group has demonstrated many times its ability to shut down major networks. Whichever is the case, I imagine bankers and brokers in New York and elsewhere are feeling rather uneasy.

Coming full circle back to the administration and Democratic leadership, we have these two tidbits earlier this week. Dick Durbin on the floor of the Senate calling on Bank of America customers to vote with their feet and close their BofA accounts over the bank’s announcement to charge a $5.00 a month fee for their debit cards (a direct result of the Durbin Amendment to Dodd-Frank, price-fixing the fee banks charge merchants for debit card swipes, reducing them from $0.44 to $0.21 to $0.24). Bank run, anyone? The same day President Obama made the following statement during an interview with George Stephanopoulos. Obama was asked if the government can stop banks from imposing a new debit card fee on their customers.

“Well, you can stop it because … if you say to the banks, ‘you don’t have some inherent right just to — you know, get a certain amount of profit if your customers are being mistreated. That you have to treat them fairly and transparently.’

So what are the protesters and supportive groups after with their Occupy Wall Street actions? Their website has now released their demand list. Let’s take a look:

Demand one: Restoration of the living wage. This demand can only be met by ending “Freetrade” by re-imposing trade tariffs on all imported goods entering the American market to level the playing field for domestic family farming and domestic manufacturing as most nations that are dumping cheap products onto the American market have radical wage and environmental regulation advantages. Another policy that must be instituted is raise the minimum wage to twenty dollars an hr.

Demand two: Institute a universal single payer healthcare system. To do this all private insurers must be banned from the healthcare market as their only effect on the health of patients is to take money away from doctors, nurses and hospitals preventing them from doing their jobs and hand that money to wall st. investors.

Demand three: Guaranteed living wage income regardless of employment.

Demand four: Free college education.

Demand five: Begin a fast track process to bring the fossil fuel economy to an end while at the same bringing the alternative energy economy up to energy demand.

Demand six: One trillion dollars in infrastructure (Water, Sewer, Rail, Roads and Bridges and Electrical Grid) spending now.

Demand seven: One trillion dollars in ecological restoration planting forests, reestablishing wetlands and the natural flow of river systems and decommissioning of all of America’s nuclear power plants.

Demand eight: Racial and gender equal rights amendment.

Demand nine: Open borders migration. anyone can travel anywhere to work and live.

Demand ten: Bring American elections up to international standards of a paper ballot precinct counted and recounted in front of an independent and party observers system.

Demand eleven: Immediate across the board debt forgiveness for all. Debt forgiveness of sovereign debt, commercial loans, home mortgages, home equity loans, credit card debt, student loans and personal loans now! All debt must be stricken from the “Books.” World Bank Loans to all Nations, Bank to Bank Debt and all Bonds and Margin Call Debt in the stock market including all Derivatives or Credit Default Swaps, all 65 trillion dollars of them must also be stricken from the “Books.” And I don’t mean debt that is in default, I mean all debt on the entire planet period.

Demand twelve: Outlaw all credit reporting agencies.

Demand thirteen: Allow all workers to sign a ballot at any time during a union organizing campaign or at any time that represents their yeah or nay to having a union represent them in collective bargaining or to form a union.

These demands will create so many jobs it will be completely impossible to fill them without an open borders policy. (occupywallst.org)

We are indeed living in interesting times. Mr. Obama is crisscrossing the country energizing his base playing his class warfare game to sell his “Jobs Plan”, while subtly feeding the Occupy Wall Street groups with his denigration of the banks and Wall Street types, his “tax the evil rich” fairness message, and his excoriation of all things carbon.

The President seems to be moving toward a campaign theme of “values”, essentially a watered down version of Roosevelt’s Second Bill of Rights, mirroring many of Occupy Wall Street’s demands. Note, too, that many of these same goals are in line with Rebuild the American Dream, the AFL-CIO, SEIU and many others.

Obama’s apparent campaign strategy is likely a good one, offering a clear counterpoint to the Tea Party movement and tapping into the widespread discontent in the country. These opposing views represent the two Americas. One can only hope that Americans will have the opportunity to make their choices known at the ballot box in November 2012, rather than have it determined on the streets of New York and elsewhere.

So far, Van Jones is calling for these efforts to remain peaceful. Let’s hope at least that lead will be followed. We have seen similar demonstrations in Greece, London and elsewhere get very ugly.

Times are indeed tough with one out of four adult males either unemployed or underemployed. And with the schizophrenia coming out of Washington, the collapsing European Union and the slowing Chinese economy the political and economic landscapes are bound to get significantly worse over the next twelve months.

We are all after “change we can believe in”. We can only “hope” that change is for the better. Stay tuned.

Posted in 2012 Elections, Business vs. Government, Entitlements, The Federal Budget, Unions | Tagged , , , , , , , , , | 2 Comments

Twist And Shout!

Well, “Helicopter Ben”, Chairman of the Federal Reserve, announced the widely anticipated Operation Twist. In short, Bernanke is going long. The Fed is buying some $400 billion in longer term bonds and selling a similar amount of shorter term Treasuries. His goal, I gather, is to pressure long-term rates to fall, flattening the yield curve.

I gather this move is supposed to be a boost for housing. Clearly, lower mortgage rates do make housing more affordable, but with 30-year rates already in the decades-low 4% neighborhood, should we expect any material effect on housing demand? Seems unlikely to be much of an incentive.

The markets didn’t seem to be very pleased as the Dow dropped, closing down more than 2% – look for a similar downward move today.

I have written much over the past year about the state of global financial markets – it is a house of cards and the wind is building.

The FOMC statement indicated significant downward economic risk. The International Monetary Fund has been similarly negative this week. And our old friend, spooky dude George Soros sees a very real potential of three smaller European Union nations going into default. Hard to disagree with his assessment. The finances of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) are like the San Andreas Fault – pressure has been building for decades and a release of that pressure is long overdue. Something will give, sooner rather than later.

One would hope that the United States could take a lesson from Europe and realize we are next, unless fundamental changes are made in spending, tax policy and entitlements in short order. Unfortunately, we are unlikely to see any meaningful action coming out of Congress. And the President is in full partisan campaign mode, sharpening his class warfare rhetoric, his tax “fairness” plans, and his “jobs” stimulus program. What’s another half trillion added to our $15,000,000,000,000 debt? Oops, sorry, I forgot he said it is all paid for. No, we are stuck until November 2012. We’ll just have to hope the ratings agencies and, more importantly, the markets, will give us that window to get our act together.

Meanwhile, we are producing zero jobs and near zero growth while spending nearly twice our current revenues. The Euro Zone is imploding, slipping into recession, and China is heading for a hard landing, facing slowing manufacturing activity, significant inflation, and its own banking issues. Can you spell financial contagion and demand evaporation?

The financial collapse of 2008 may be seen in history as just the warning shot before the big battle. The world is staring the great correction in the face, and it is upon us. No matter how many Central Banker frequent flyer miles are racked up, their quiver, as I’ve said before, is empty, as are their respective treasuries. How it will all unfold I don’t have a clue, but unfold it will, and many more trillions in wealth will evaporate. Time to buy Hong Kong dollars.

For me the most frightening aspect of all this is how people generally respond to fear and uncertainty. They look to anyone who says they have a solution, and are all too ready to trade in their freedom for security. I think the 2008 Presidential elections reflected an undercurrent of this penchant. Tyranny is borne of such fears.

So Greece will finally default, hopefully in an orderly way. European banks will continue their slide as they finally realize the bond losses. Credit will freeze up in Europe. Other sovereign defaults will likely follow as will bank failures and consolidations. Global demand for goods will fall.

Maybe George Soros will get closer to his dream of One World Order.

Well, at least we will see lower gas prices – one ray of sunshine in an otherwise stormy forecast.

The truth is, we (the U.S. and Europe) have enjoyed a fifty-year credit expansion, and the attendant asset bubbles. Several of these bubbles have burst. The sovereign debt bubble and the dollar bubble remain in the wings.

The profligate deficit spending and unpaid for entitlement programs are, as we know, unsustainable. As one economist stated years ago, when something can’t continue, it will stop. It is up to us to either put on the brakes ourselves, to maintain at least some control, or we can sit back and ignore the realities facing us, and watch the immutable laws of money pull the emergency brake.

Posted in America's Financial House | 1 Comment