In a speech aimed at further demonizing Wall Street by once again failing to accept that government also bears responsibility for the much of the ongoing financial meltdown, President Obama declared, “I have always been a strong believer in the power of the free market. I believe that jobs are best created not by government, but by businesses and entrepreneurs willing to take a risk on a good idea.”

It is one thing to utter such words in a speech, and yet something entirely different to put them into action; and to date, all of Mr. Obama’s actions relative to the economy have been wholly manipulative and hostile to the idea of free market capitalism. To be fair, Mr. Obama is certainly not alone in his hostility toward true free market capitalism, for since the inception of the Federal Reserve in 1913 U.S. economic and monetary policy have been overwhelmingly interventionist and inflationary, building an faux economy with a fragile basis in easy money, easy credit, fiat currency.  (continued... examiner.com)

Change is coming whether we want it or not.  In fact, it is already here.  The nation’s financial system is in turmoil.   The nine largest banks in the country have all but been nationalized by the federal government, the markets are scared and showing it; and, the possibility of a long and deep recession is beginning to put pressure on average folks who are trying to find what all of this means for them. To be sure, everyone will have to more closely watch his or her finances and strive toward a more frugal, long-term outlook. 

While economists are still in general disagreement as to how long, how deep and how significant this recession will be, we are even now witnessing rising unemployment, a lack of credit, and the Fed leading the charge toward hyper-inflation as they crank up the printing presses and create money out of thin air. And while the miscreants on Capitol Hill speculate, hypothesize and hold hearings and point fingers of blame for the current mess, the specter of authoritarian socialism looms over this republic, but the only people who seem to want to acknowledge this fact are those on the right – and no one, most certainly no one in government – seems to be taking us seriously. Indeed, of those who are even willing to acknowledge where we are headed, few will admit that we have already been on our way, ‘fellow travelers,’ so to speak, for quite some time.

To better illustrate this fact, I shall endeavor to point out the glaringly obvious with the help of Karl Marx. The following are what Marx in his Communist Manifesto deems as 10 essential elements to achieving socialism:

1. Abolition of property in land and application of all rents of land to public purposes.

2. A heavy progressive or graduated income tax.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of all emigrants and rebels.

5. Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.

6. Centralization of the means of communication and transport in the hands of the State.

7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal liability of all to work: Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

10. Free education for all children in public schools: Abolition of children’s factory labor in its present form: Combination of education with industrial production, etc.

Marx also notes:

“Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.”

Certainly no one would be foolish enough to suggest that the United States has already gone full-blown “commie.” But, one would have to be a fool to deny the fact that our government and politicians have been moving us steadily toward socialism by their insistence on more and more social and entitlement programs, giveaways, and interference in the economy and our personal lives. Even a cursory glance at the list above ought to raise a few red flags (no pun intended…). Of course the US has not met all of Marx’s essential requirements to facilitate socialism, but the groundwork has indeed been laid.

That said, here is something the average citizen should understand but does not: government is force, and every time government increases the amount and extent of its interference in the economy, in our social relations, in our commerce, it usurps our liberty little by little. It is unnoticeable at first, as such usurpations seem incremental; until suddenly the nation wakes up to realize that it is no longer free, that liberty has been sacrificed for empty promises of physical and economic security, and that the people have received – and will only receive – nothing for the sacrifice of their liberty. People don’t understand this because they have only been taught that government is good and benevolent and that its most noble purpose is to help the people on their way to success. Over the last several decades the general perception of what government is vis-à-vis what it ought to be has shifted decidedly in favor of bigger government and the welfare/nanny state.

The Federal Reserve and Federal Income Tax Acts both of 1913, the New Deal and Great Society and all the social-welfare programs contained therein, and, yes, the extraordinary consolidation of executive powers through the Department of Homeland Security and the Patriot Act are just some of the more glaring examples of government interference and interventionism. Certainly one cannot omit the government forcing the nation’s nine largest banks to “participate” in its bailout program, by which these banks taken federal money under coercion and the government assumes what it terms as “observer status” with a non-voting seat on the board. This sounds innocent enough, except for the fact that it is highly probable that at future board meetings the “observer” from the government might offer “advice” or “suggestions” to the controlling officers of the institution as to the government’s position on a particular course of action. Such situations easily conjure up images of the Soviet Political Officers or KGB officials inserting themselves into the everyday business of the citizenry.

It is noteworthy that this is not where we are headed – it is where we presently are. So, what of the future? What will define what is rapidly becoming our American Socialism? Will it merely be an iPod and a cell-phone in every child’s book bag, enrollment in the new national healthcare program, and annual re-distribution checks sent out from the Treasury to those too “poor” to contribute, or will it devolve into something even more sinister? 

The great economist Ludwig von Mises wrote a great deal on the subject of government encroachment in the economy of nations, and we and our “representatives” in Washington would to well to heed his warnings. Mises concluded that government meddling in the economy, interventionism, can only lead to socialism, and that socialism cannot subsist unless it takes on an authoritarian nature, which is its tendency. 

In his essay “Middle-of-the-Road Policy Leads to Socialism (1950),” Mises wrote, “There are two methods available for the transformation of capitalism into socialism.” The method by which the US is moving toward socialism is, according to Mises, “…the method of the Hindenburg plan, the originally German pattern of the welfare state and of planning. It forces every firm and every individual to comply strictly with the orders issues by the government’s central board of production management. Such was the intention of the National Industrial Recovery Act of 1933, which the resistance of business frustrated and the Supreme Court declared unconstitutional. Such is the idea implied in the endeavors to substitute planning for private enterprise.”

Mises continued his remarks on British and German socialism relative to the United States: “The United States embarked later than these other two countries upon this decline, and is today still farther away from its end. But if the trend of this policy will not change, the final result will only in accidental and negligible points differ from what happened in the England of Attlee and in the Germany of Hitler. The middle-of-the-road system is not an economic system that can last. It is a method for the realization of socialism by installments.”

The devolution of a nation into socialism has as much to do with economics as with politics. Government intervention in the market in the interest of enforcing “fairness” or in striving to manipulate such conditions as to create artificial conditions to continue an economic “boom,” leads to ever more widespread encroachment and manipulation to perpetuate artificial “boom” conditions, because it cannot be otherwise. If government implements price controls for one commodity it follows that the new condition will affect the production of that commodity to where its components must be strictly regulated and controlled, thereby expanding government intervention into areas of the economy never intended by enactment of the original policy. This is the law of unintended consequences, which itself is the result of the short-sightedness of policy makers and economists who look to the immediate solution or fix for one aspect of the economy or one class of people (farmers, middle class, etc.) without taking the time to think through the potential long-tem affects of their brainchild, and whether and to what extent those affects would be beneficial or not. 

Government is force and money is power and the two, force and power, should never be allowed to become concurrently subject to the arbitrary whims of government officials, bureaucrats and spineless and corrupt politicians. Should such a thing occur, as it has recently here with government acquisition of the nation’s nine largest banks, a republican form of government and rule of law will not long endure such temptation and tyranny. 

Socialism is coming no matter the outcome of the presidential election, and in many ways it is already here. The only way to stop it is to un-elect it by re-forming the ideological and socio-economic outlook and understanding of the people. In other words, demonstrate to the masses how government deceit, corruption and misguided planning, subsidy, welfare and other interventionist policies set about to ruin a solid free-market system that works best when simply left alone and unencumbered by government nonsense and politics. Given the current state of the economy and the possibility of what is to come with a pro-socialist majority in both Houses of Congress and occupying the White House we can be sure that things will get worse before they get better. Ironically, for that we might actually be thankful soon, for in our need to gather evidence and data to present and make our case against socialism to the people, government will have largely done our work for us. All we need do is present what they provide, which should be sufficient.

Here’s a news-flash you won’t see on CNN, FOX, or any other media outlet of ill repute for that matter: the US Government thinks you are stupid. So do the politicians we continue to elect to “represent” us at the legislative and executive levels. So do the bureaucrats that are appointed and hired by the government. They all think we are stupid, and they might even be right.

Why would I even suggest such a thing, that we the people might just really be as stupid as the politicians assume us to be? Here’s my answer: because we are acting like it. And if we don’t wake up real soon and take some serious action we are going to be jolted awake one morning only discover that we no longer live in a free republic, and all the evidence, coupled with the total economic impact of the events of the last several weeks suggest that we are coming perilously close to that day.

Many, if not most, who are reading this would agree with this assessment, but for the sake of those who haven’t been paying attention to history, have no clue that we have a Constitution that is being knowingly and continually violated with seeming impunity by our elected representatives, bureaucrats and judges, and for those who, being either blissfully ignorant about the truth regarding the economic catastrophe our once-free market has become or who simply nod their heads at the assurance of government that they are working hard to fix the problem and everything is going to be OK, I have some disturbing news for you: the government and the politicians you elected are all lying to you – because they think you are stupid. And if you continue to believe them, then you are stupid.

Here is the ugly truth: In the last month your government has committed to spend approximately $1 trillion to bail out various Wall Street financial institutions, along with Freddie Mac and Fannie Mae. That brings the officially acknowledged federal deficit to roughly $10 trillion. And there will most certainly be more regardless who wins the election: more spending, more promises of programs to help homeowners in over their heads, more debt. The Treasury will have to continue bailing out the FDIC as it (the FDIC) has already paid out the $45 billion fiscal insurance policy it holds to the many banks that have already failed. Amid all this chaos the government officials and elected representatives and candidates for office step up and promise they’ll fix it. One of these reprehensible bulwarks of all that is wrong in the world, Rep. Barney Frank – a man who is at the very least (along with his many Democrat and Republican comrades) complicit if not guilty of gross negligence in facilitating this mess has promised to do “major surgery” on the nation’s financial system. 

If Frank and his compatriots in the Congress hold true to their promise you can bet there will be more bank failures and this current recession will likely devolved into a long depression. Why? Because the whole reason the world’s financial system is on the verge of total collapse is because of government meddling in the economy by trying to manipulate and perpetuate artificial conditions of a growing economy. This is called central economic planning, a long discredited manipulative policy that has been proven unsustainable over time, as we are currently witnessing. You will never hear your Congressman or Presidential candidates speak of this, for to do so would betray the truth, and the truth would set us free, so to speak. 

Speaking this truth would be the equivalent of admitting that our planned and over-manipulated economy is no more a true free market system than was the Soviet economy that imploded in 1991 – and as this ugly truth stares us in face all we hear from politicians and bureaucrats is that “greedy Wall Street CEOs” are the ones to blame. In fact, some in Congress are already holding hearings featuring testimony from CEOs of several of the companies recently bailed out or that have failed. The Congress has the sheer audacity to lay 100% of the blame at the feet of these CEOs, who certainly deserve their share of the blame to whatever degree they jumped on the high-risk bundle bandwagon, while conveniently overlooking their own actions that directly contributed the creation of an environment where such catastrophically stupid business practices were not merely possible but were strongly encouraged. One party accuses the other of deregulating the finance industry as if that were the cause while the other accuses the first party of enacting senseless regulations as if those were the cause – and to an extent, both are correct. What was had prior to deregulation was a lot of bad regulation that was replaced by nothing that would solve the problems the bad regulation created, and most would agree that this is so.

However, while enacting laws for the purpose of regulation of commerce is a legitimate function of the Congress, enabling the Federal Reserve to secretly enact policy of its own, and for which it is unaccountable and un-auditable, specifically designed and intended to manipulate the money supply and interest rates to create and perpetuate a false prosperity nicely contained in a bubble that is an anomaly of free market operation, is not. In fact not only does the existence of a central bank go against the advice of the Founding Fathers of our country, it essentially violates all of the core principles upon which the Constitution is founded.

The Founders knew all too well the pitfalls of a fiat currency, that is, a currency of paper money that derives its “value” by the arbitrary authority of government declaring it’s worth, as it is in reality not backed up by any tangible assets. During the Revolutionary War, the Continental Congress financed itself partly by its self-produced Continental currency – paper money like we use today – that was not backed up by gold or anything else of any intrinsic value. The people were forced to use it, and the government simply was able to produce more of it by printing it, until they had printed such an overabundance of it that the currency itself became entirely worthless. Unfortunately the geniuses in government and those at the fed have not correctly understood the warnings of the Founders, because we have been doing the same thing since 1971 when Nixon took us of the gold standard. Either that or they know exactly what they are doing, which would be even more disturbing.

The fact of the matter is that those running the Fed are not stupid – everything they do is calculated. So why would they deliberately choose to destroy the dollar, because that is exactly what our government’s economic “rescue plan” or bailout will achieve if it continues the current charted course. They are destroying the dollar because the fundamental element of this “rescue plan” is the infusion of massive amounts of cash into the monetary system. The problem is that the treasury has none, and so it is left to the Fed to print it. With each new dollar that gets printed and injected into the system, the value of all the other dollars out there is diminished so they become worth even less on the market; therefore the buying power of individuals is likewise diminished as the value of the dollar goes down. The more currency produced, the less value it has. 

This is “inflation 101” and everyone on Capitol Hill and in Washington ought to know that. But, then again, these are by and large the same folks who signed on to creating the conditions that ultimately brought about this catastrophe, so it is not entirely surprising that they would sign on to allowing massive amounts of money to be printed and injected into the system. My dark theory on this is that in doing so they are inviting hyperinflation, which is when so much fiat currency is produced that it becomes essentially worthless (take Italy, for example, where you would pay 10,000 Lira for a pack of cigarettes). Perhaps they know this. Perhaps they don’t care. At the very least, they’d tell us, they are working hard and doing something to “fix the problem. 

But that is exactly the root of the problem in the first place, and so here is where the idea of individual responsibility and self-government comes in. The people are running like sheep in whatever direction the government leads – even if it is off a cliff- and unfortunately they have become so conditioned to looking to government to solve their problems that to do otherwise is often not even an afterthought. The people are not asking the right questions either – if they’re asking them at all. But, they are demanding that government “do something.” If they were living up to their civic responsibilities in the first place they would have been paying attention and seen this coming and would have been able to put enormous pressure on their elected representatives to stop the insanity before the crash became inevitable. 

The fact that this is happening in a Presidential election year makes the idea of individual self-government all the more important. The people are panicking as they see a long and deep recession looming, the politicians are panicking because they are afraid they’ll not be re-elected, and no one wants to tell the truth about how we got here in the first place. And now with the totality of the erosions of our Constitutional liberties having been much accelerated in recent years and the government nationalizing massive segments of industry, taking over individual home mortgages to presumably have courts renegotiate rates or perhaps dictate them, a complacent and uninformed electorate is only weeks away from electing a relatively unknown, unprepared, and untested politician who has spend the vast majority of his life immersed in the world of radical socialist ideology while pretending not to be. Our economy, our nation, our republic is being handed to him like John the Baptist’s head on a platter.

The people are crying, “Do something!”   Be careful what you ask for, because now that the government is doing something everything is going to get worse. You don’t believe that? Then name something outside of the realm of military action or law enforcement that the government does well. Incidentally, the national defense and law enforcement are really the only useful Constitutionally mandated obligations of the Federal Government, aside from the construction of roads, and the legitimate regulation of commerce. 

Also of note is Article I, Section 8. Under the title “Power Granted to Congress,” paragraph 5 reads: “To coin money, regulate the value thereof, and of foreign coin and fix the Standard of Weights and measures.” Note that nowhere in this paragraph is there mentioned an entity known as “The Federal Reserve,” nor is the authority to coin money and fix its value given to a single principal in the person of the Chairman of the Federal Reserve. Furthermore, it is important to note that the Constitution as written is binding as the Supreme Law of the Land, except where amended and ratified. No amendment created the Federal Reserve; rather, by the Federal Reserve Act of 1913 did the Congress unconstitutionally give charter to the Federal Reserve and illegally abdicate its obligation to coin money and set its value. Indeed, as if the creation of the Fed as an illicit central bank wasn’t bad enough, think for a moment of the sheer audacity and arrogance in thinking that one person with even the best and brightest minds to assist them, could ever permanently manipulate the forces of the free market to create a condition of permanent prosperity. And that is a major part of the problem.

If the markets were left to themselves there would indeed be periods of growth and periods of correction; however, absent mountains of poorly defined or ill-scoped regulation and meddling politicians abusing their lawful authority to implement self-serving policies pandering to their own constituencies and thereby exerting massive, undue influence and encroachment on the machinations of the free market, those corrections would be comparably mild and sort-lived. Yet those very persons responsible for creating those conditions encouraging greed and corruption are now the same who demand of us still more of our money and our trust. The talking heads on the TV, with few notable exceptions, tell us repeatedly that as unfortunate as it is, we have no other option. 

To those who suggest as much I say this: economic freedom and liberty are inseparable – you cannot have the one without the other. If the market can be so easily manipulated by the arbitrary will of government for the benefit of the few, then the market is not free and neither are those who participate in it. If, on the other hand, the market is allowed to dictate unto itself and to its participants the worth of goods and services and the worthiness of those who seek them, then all are able to prosper to the extent that they wish to share in that prosperity. Such is free-market capitalism is spared undue meddling of government. That is our other option, indeed our only option; for if we do trust these power hungry fools again, the hegemony of the government, then we are exactly as stupid as they think we are, and we deserve the misery that shall most certainly befall us. If not for liberty we would only then have no other option but follow along like sheep and give to government all that it demands. We are now at a crossroad in the history of this nation, and the decisions to be made and the actions to be taken in the immediate future will have a profound and perhaps irreversible impact on our lives and those of our children. 

Let us not fool ourselves: we have been asleep at the wheel for far too long, and if we don’t immediately wake up and grab the wheel we run the very serious risk of driving right off the cliff. If you don’t believe in the possibility of an authoritarian socialist regime in the United States you are either very naïve or ignorant of history, because the possibility is not only very real but is staring us in the face. Right now our system is still the best in the world, albeit imperfect. It would be even better and we would be returned to great prosperity if our representatives and government were actually abiding by the Constitution. They will not do so unless we the people force them too.

It could be argued that we are in the beginning stages of tyranny, of the proverbial “benevolent dictatorship.” The government is moving now, through the Fed, to take over controlling interest in even more of the banks in the US. The government is also planning on purchasing mortgages and will thus become the largest homeowner in the world. As they “loan” billions to the auto industry and then, doubtless, to others they will likewise require oversight, if not “public ownership” in those companies. Does “public ownership” sound familiar?   Once government encroaches on a segment of the private sector it will not extricate itself unless the people force it to do so. Remember, the New Deal was sold to the people on the premise that it was a temporary measure to meet the needs of an extraordinary crisis. This same line is being sold to us today. Don’t believe it.

At a time when government encroachment into the private lives of citizens at the federal and state level is at an unprecedented level, where state executives and legislatures usurp the rights of parents by mandating that children receive certain “vaccines,” where the Federal Government is pursuing a course to take over massive segments of the economy, where private sector jobs are being lost while government jobs are being created, and where the most likely winner of the upcoming Presidential election will seek to force state run health care, “world” taxes payable to the UN, and the elimination of the right of Americans to keep and bear arms, complacency is not an option. We must be organized and united starting today, for we must take back control of our government and make it work for us and not against us. Government encroachment into areas heretofore left to the individual self-government and personal responsibility of each citizen is out of control, and if left unchecked it will consume us. Keep this in mind: our Founding Fathers sacrificed their very lives for the liberty we are letting the government illicitly usurp piece by piece. So, as you witness these current events continue to unfold, keep asking yourself this question each day: “Am I sovereign or a subject?” Wake up, America, before it’s too late.

What is the true cost of the proposed government bailout?  While most of America was enjoying the last weekend of summer and watching football, our unelected and unaccountable bureaucrats at the Treasury Department and the Federal Reserve were busy working on how to “solve” the financial crisis that seems to grow bigger and worse by the day. The “initial” solution that they came up with will cost between $700 billion and $1 trillion. That is the initial estimate of the cost. You can bet it will go much higher.

Wall Street has essentially collapsed and its geography has been forever change due to the deadly combination of greed, ineptitude of oversight, and government interference in the form of too much bad regulation. All this coupled with the Fed eternally manipulating interest rates and printing money in a vain attempt to affect a positive outcome and stave off the looming crisis as it simmered only served to compound the problem, and we are seeing the results. The result is an economic collapse or meltdown.  It is primarily due to government manipulation and meddling in something it has neither the authority nor the tools nor the competence to be meddling with. It is the result of “command economics” and central planning. Central planning is always bad for an economy, and in this case really, really bad planning results in a really, really bad problem

Admittedly, there was a certain degree of satisfaction watching the likes of Nancy Pelosi, Chris Dodd, Harry Reid, Barney Frank and the rest of the criminals on Capitol Hill standing there like deer in the headlights, with the shock and awe clearly displayed on their faces after their conference with Treasury Secretary Paulson and Fed Chairman Bernanke. One has to wonder, though, if the looks of grave concern were precipitated by the fact that they had just been told that the economy would imminently collapse if AIG were allowed to fail, or if it was because they understand that they are complicit in this financial catastrophe and are terrified that they will be found out. 

Sadly they have no real cause for concern, though, because the only pseudo-mainstream publications that actually report the truth of this mater and name who is complicit in creating the conditions and ignoring the signs that allowed this financial meltdown to occur are your usual “right-wing conspiracy” theorists like the editors and reporters at the Wall Street Journal, Portfolio, National Review, Weekly Standard, Investors Business Daily and the like. Guaranteed you won’t hear Katie Couric and Charlie Gibson bringing up names like Donna Shalala, Jamie Gorelick, James Johnson or, heaven help us, William Jefferson Clinton.

A remarkable thing is occurring before our very eyes in Washington, though – Republicans and Democrats seem to be genuinely working together to implement a solution as quickly as possible to calm fears and the markets. Certainly there are many differences being voiced, but in general they are all in agreement and the final product will be a matter of hammering out the minutia, so to speak. This is actually more frightening than the actual financial crisis. Why? Because these are the folks that got us into this mess in the first place due to their own narrow self-serving interests, incompetence and corruption, and purposeful lack of oversight of the Leviathan wherein this meltdown began – Freddie Mac and Fannie Mae.

The solution as it stands would give at present would give Treasury Secretary Henry Paulson extraordinary, unprecedented and essentially dictatorial authority to essentially do what he pleases with $ 1 trillion in taxpayer money. The Wall Street Journal called it for what it is: “Lots of money. Lots of power. Naked, ugly dictatorial power.”

The actual language in the proposed bailout Act as written by Treasury lawyers doesn’t inspire comfort either: “Decisions by the Treasury pursuant to the Authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” This language is self-explanatory. And it is frightening.

And this is most likely only the beginning, the tip of the proverbial iceberg. On Monday former President Bill Clinton called for a bailout for all those homeowners who can’t afford to make their mortgage payments. The auto industry in Detroit is lining up for handouts to the tune of $50 billion minimum, a deal that has all but been cut between Detroit lobbyists and Speaker Pelosi. One can be sure that credit card debt will mushroom sooner rather than later and all those banks holding that debt will be demanding their share of the taxpayer-funded pie. The airlines won’t be far behind as they are being crushed by unprecedented fuel prices. And on it goes with no end in sight, and that is precisely the problem with government bailouts on such a massive scale; once they begin they do not end.

Right now it is difficult to assess whether we are still at the crossroads or if we have turned a corner toward authoritarian socialism, but is the language in the proposed plan is any indication suffice it to say that things to not look good for the future of a free market or for liberty in the US. And this is unconscionable.

In undertaking to engage in the extraordinary practice of massive government bailouts and nationalization of the most fundamental sector of the economy the US government has stepped into territory unknown since before the Revolutionary War. In fact, it was this exact type of arbitrary government authority that was the reason for fighting the Revolutionary War. While the talking heads on TV and radio speak of entering into “uncharted territory,” the brutal fact of the matter is that this is far from uncharted territory for this same unchecked and arbitrary government power was seen, understood and resisted the Founding Fathers of our republic as they were not afraid to call it for what it is. It is called tyranny.  

It is no secret to anyone who has read the Constitution of the United States with even a modicum of understanding that al three branches of the Federal Government have been violating their Constitutional authority for quite some time now. However, the actions taken by the government over the course of the last week are truly unprecedented. No branch of the government has any Constitutional authority whatsoever to takeover operations of a private business. No government authority is granted by the Constitution to appropriate public fund for such purposes. And certainly no Constitutional authority exists to allow for granting dictatorial powers to a cabinet secretary to run and attempt to manipulate the economy as he sees fit. It is unprecedented and entirely unconstitutional.

And yet knowing it is unconstitutional, out of fear this Congress will overwhelmingly approve this illegal action. And they will hope and pray that it works. And if it doesn’t? It this plan doesn’t work – and keep in mind that there is no Plan B because this is Plan B – amid all the uncertainly that would follow such events, the one thing you can be assured of is even more invasive and strict government intervention. But to what end? Government issued and approved credit becoming mandatory and the sole acceptable manner of conducting commerce? Government seizure and control of all banks and credit issuing agencies? Where does it end?

And what if it does work? What if those administering the government later decide that the government should remain in total control of the financial sector and through still more illegal Acts of Congress continue to "renew" the contrived authority to seize and maintain private companies in conservatorship? What then? 

Perhaps most frightening is that no one in government is listening to anyone who is raising these concerns because that is what happens when fear rules the day, and more alarming still is the known fact people will accept anything that promises even temporary security when real fear is being held over their heads. Hitler, Stalin and Mao did not rise to power because people were happy and comfortable and felt secure politically and economically. Fear is a dangerous weapon and history has shown time and again how fear, when employed and exploited by government, always proves fatal to liberty. And when government moves quickly to address a problem, even a well-intentioned solution will result in some very foreseeable repercussions that no one in Washington wants to acknowledge, much less address.

When a people willingly sacrifice their liberty – as is about to occur here – they are no longer sovereign, but subjects, for a republic exists only when a free people willingly submit to a governmental authority de jure, that is an established and mutually agreed upon system of government that by law may operate only with clearly defined limitations, purpose and intent. Should said government exceed any or all of those limitations, thereby exceeding its constitutional authority, it is the responsibility of a free people to take what power with which it is vested – that is all real power – and bring an abrupt end to government abuses of authority. 

In a republic, government exists and operates at the pleasure and by the authority of the people. That is what is meant by government de jure – government by and of legitimate law. When government abuses its power and acts outside of its legally defined authority it acts arbitrarily and becomes a government de facto, that is government by decree or imposition. In such a case citizens are no longer sovereign, but subjects; and, so it almost goes without saying that given the purpose of government being control, thus it’s natural tendency to encroach on liberty and thereby necessitating a clear legal definition of its valid scope of authority, once government exceeds said limitations of authority with impunity it will continue to do so. And in doing so it will continue to encroach upon and usurp individual rights and liberty unless the people fulfill their own obligations as a free people and stop it. 

In a republic such as ours, all true, valid and legitimate power and authority is vested in the people, not in the government. That is unless or until the people relinquish that power either by action or inaction to the government. Such is our present predicament.

As stated above, we all know that all three branches of our government have been exceeding their legitimate authority for many, many years now, encroaching on liberty and violating the Constitution. With this latest government incursion and illegitimate execution of authority it does not have the stakes have become frighteningly high and all too real in a vey short span of time. Now is the time for the people to decide: subject or sovereign, courage or cowardice. This action now being undertaken by the US Government takes the idea of sanctioning the violating of the Constitution to an unprecedented and very dangerous level. This time the politicians and bureaucrats have not only arrogantly wiped their hind-sides with the Constitution, but once they are finished wiping they intend to rub it in our collective faces – but only if we let them. 

If we rise up and let our voices be heard, they will respond, for nothing motivates career politicians like fear, especially in an election year and with the elections a little over a month away. We have a choice: we can make our collective voices heard now, loud and clear and force them to respond, or we can wait and see what happens. The problem with the latter choice is that the next time the people decide to rise up in the face of tyranny they may have to do it with torches and pitchforks and rifles.

So what is a trillion dollar government bailout really worth? What does it really cost? The true cost of the thing is liberty and a free market economy. The price we will eventually pay is subjection to tyranny.

Have you seen the news? Have you been watching the financial sector self-destruct? Did you hear about the latest $85 billion bailout of AIG? Did you hear Dana Perino’s briefing from the White House today? Here’s a little exchange that caught my attention:

Begin transcript

“Q And to the people who say, you know what, AIG should have failed so that you clean out the system and you don't delay whatever recovery -- you have a bottom and you start to move up. What do you say to that?

MS. PERINO: Well, we remain concerned about other companies, and that's why the Secretary of the Treasury continues to work with the team to see if we can stem any other losses.

But they're -- as I said, they're taking this on a case-by-case basis, and we will have to continue to do so; at the same time, looking at what we do to make sure that the taxpayers, to the greatest extent possible, are protected. But the considered judgment here was that if you don't take the recommendations of the senior economic advisors, who are very experienced and have decided on decisive action that can help stem the tide of broader economic damage, that that's the best thing that we can do to try to help protect all taxpayers in the long run.

[W]e are dealing with very challenging times and Secretary Paulson -- I'm sorry, the Fed Chairman, Ben Bernanke, and the President's economic advisors had determined that there were some -- some of these companies were so big that to allow them to fail would have caused even greater harm and damage to the economy.

So the goal has been to take action where necessary to promote stability and strength in the marketplace, so that we can prevent or limit more damage to the broader economy. In all cases, the President has wanted to make sure that the taxpayers are kept foremost in mind. In these agreements, if you look back, the shareholders have been wiped out. A lot of employees have lost their jobs. Management has been replaced. And the taxpayers will be paid back first.

While no one would have liked to have ended up in this situation, you have a government that is willing to lead, act where appropriate, and govern, to make sure that we limit broader financial harm to the economy.

Q You say taxpayers will be paid back first. They may not be paid back at all.

MS. PERINO: Well, that is true. And that is why we take great care in making sure that President has asked a lot of questions, to make sure that his economic advisors have thought things through, have made the best determination and have moved forward. But I think the tax -- I think the argument is that the taxpayers might be harmed even worse if the economy was -- if we allowed it to just have a lot broader damage.

And we think that the actions that have been taken were appropriate ones. I believe that Treasury thinks that they will be able to pay the taxpayers back. But it's just going to take us some time to work through this crisis.

Q Where does it stop? (The Bailouts)

MS. PERINO: You know, I would be misleading you if I knew. What we are doing is taking this on a case-by-case basis, evaluating each one carefully.

Then there was this exchange that really caught my attention:

Q Dana, what do you say to Americans who are looking at the AIG deal and saying, we don't have a free market economy; how can you call this a free market economy?

MS. PERINO: We do have a free market -- the free market is alive and well, and we have systems in place here in our country to be able to deal with shocks to the system like this. And Secretary Paulson and the Fed Chairman have taken action where they think necessary in order to prevent broader shocks to the economy.

Look, the market has had a lot of information to digest over the past several days, and it's going to take a little bit of time for us to see where this goes. But I think the considered judgment -- the collective judgment of most people today is that the action they took last night on AIG was the right move.

Q And to the people who say, you know what, AIG should have failed so that you clean out the system and you don't delay whatever recovery -- you have a bottom and you start to move up. What do you say to that?

MS. PERINO: Well, we remain concerned about other companies, and that's why the Secretary of the Treasury continues to work with the team to see if we can stem any other losses.”

End Transcript

Is it just me, or is everyone in Washington kind of sticking their collective heads in the sand and pretending that waving the flag around and pontificating on what little they know of the Constitution and the actual limits and constraints upon governmental authority relative to the economy, they will be able once again to bamboozle the people into thinking that big-daddy Uncle Sam will make everything OK?

It is disgusting, it is unconstitutional and it is very, very disturbing. And I am one very, very pissed off American today. I don’t usually use such language on this blog, but I just don’t know any other words to describe how I feel – OK I do, but if I use them they’ll throw me out of here.

I am pissed off that everybody in DC says they didn’t see this coming, but the evidence shows otherwise.

I am pissed off that every branch of the government is deliberately exceeding its Constitutional authority and doing whatever it feels like with impunity, because they think that the people are so apathetic that if they just throw us a bone here and there we’ll simply ignore their gross transgressions.

I am pissed off that these politicians and bureaucrats pretend like there is nothing wrong with calling our system a "free market" economy while at the same time they are messing with it from the Fed and thereby making it anything but free.  The fundamentals of a strong economy are indeed ther, and it would work if only government would let it instead of trying to constantly manipulate it.

I am most pissed off that no one will speak the truth in DC! How stupid do they think we are? Am I the only one who feels insulted? 

When you look at the players in this meltdown and trace the money and people, you get back to Clinton’s pandering to minorities and the poor and pushing that multiculturalism nonsense that the progressives love so much. You also inevitably get back to Freddie Mac and Fannie Mae – two unconstitutional quasi-government agencies that cost taxpayers a bundle and make rich bankers richer and hook up members of Congress with a money machine that is akin to an ATM, so that these behemoths will never die, cause no one wants to turn off the money spigot.

I have no problem whatsoever with people getting rich, but not on my dime - not at the public trough.  And, I want to know why the former executives of Freddie and Fannie are still getting paid to stay on for the "transition."  Only in Washington DC can you ruin the financial sustem of the nation and get rewarded for it.  Freddie Mac’s Richard Syron and Fannie Mae's, Daniel Mudd are still getting paid, even though they knew what was going on.  You and I both know that if they worked for a true privately held firm, they'd be persona-non-grata and awaiting indictment and trial.  But there will be no trial.  Probably no hearings either.  nancy Pelosi is a big fan and recipient of Fred and Fan's lobbying money.  Imagine that!

You also have career political hacks that would sell their souls for money, dark amoral people who can smile and put on a look of concern and lie right to your face and mean it at that moment. People like Bill Clinton, Nancy Pelosi, Jamie Gorelick, Franklin Raines, et al.

You have people who do not give a crap about people like you and me because they are better than us – they work in DC. They are members of Congress. They are bureaucrats.

They are all liars!

You have a guy like Obama who’s bemoaning greed and avarice on Wall Street, and talking nonsense like this: “’Since this turmoil began over a year ago," the Illinois senator said, "the housing market has all but collapsed. Fannie Mae and Freddie Mac had to be effectively taken over by the government. Three of America's five largest investment banks failed or have been sold off in distress. Yesterday, Wall Street suffered its worst losses since just after 9/11.’ He said McCain and President Bush subscribe to the same approach: ‘support ideological policies that made the crisis more likely, do nothing as the crisis hits and then scramble as the whole thing collapses.’”

Wow! Suddenly he’s outraged about Freddie and Fannie. Gee, he didn’t seem too upset over the fact that he has accepted $126,349 in lobbying money from Freddie and Fannie since 2004. In fact he’s the Number Two recipient of money from those two abominations. And let me put it in the proper context for you: the list at opensecrets.org was compiled from 1989 to 2008. Obama is second on the list. Chris Dodd is Number One, having received $165,400 since 1989. Obama received $126,349 in just four years, and half of that time he’s been running for President.

Why the hell isn’t anyone except those of us on the blogs talking about it? Why won’t McCain bring it up? I don’t know – maybe he has, but I haven’t heard about it.

This stuff isn’t secret – it’s all public information.

And now McCain goes and disappoints me terribly by flip-flopping on the bailouts in just 24 hours. Yesterday at this time he was against them. Today he says it was the right decision. Helloooooo! How the hell is tacking $85 billion onto the taxpayer’s tab to bail out foreign interests the right decision? Oh, you didn’t know that? Yeah, AIG is a multinational corporation whose holding company, which was the entity bailed out, is backed 85% by foreign central banks. Where is the outrage? Where does it stop?

It’s wrong and it’s unconstitutional! McCain ought to know better!

Where does it stop? It won’t unless the people make them.

This has prompted me to do something different: I am writing several articles in various parts not only about this financial meltdown, but also on my take on our economy and the Constitution. I’ll be posting them in several parts, each with a disclaimer, because it is possible that without first reading the preceding parts, a current post may not make much sense. 

To my readers, I thank you for reading and I apologize for my ranting format – and language. I would also ask that, if you can, to please let me know when I post these multi-part articles if they flow and work for you – if they are coherent and lucid, so to speak. 

Until tomorrow, I’ll be pissed off and writing…

With the economy in a shambles, the government rescuing banks from liquidation and the housing market all but collapsed, it might be a good thing that Pelosi and the rest of her minions are on vacation. Seriously. They are the ones responsible for getting us into this mortgage mess in the first place – can you imagine how completely screwed up it will be when they go back to “work” and try to “solve” the problem? I mean, we all know how great the Federal Government is at fixing things and getting stuff done in a timely manner and on-budget. Yeah, right. Budget –a word that nowadays seems even more elusive to our increasingly incompetent representatives in Washington. The sad thing is that when they come back from vacation they will try to fix the mortgage problem. Guess how? Yup! You guessed right! – They’ll just do what they always do and what never works: they’ll more money that the Treasury doesn’t have at a couple of the primary culprits, Freddie Mac and Fannie Mae. 

The more I learn about these two institutions, the more upset I become. I’ll only deal with Freddie Mac in this post, because the two are, for all intents and purposes, identical. The following comes from the Freddie Mac website:

Freddie Mac “is a stockholder-owned corporation established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac raises capital on Wall Street and throughout the world's capital markets to finance mortgages for families across America. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.” [Emphasis mine]

“As a government-sponsored enterprise with an important public mission to make housing finance more accessible and affordable, Freddie Mac is unique. We have special responsibilities to the American people. It's incumbent upon us to carry out these responsibilities to the best of our abilities.” [Emphasis mine]

This part of a letter from Richard F. Syron, Freddie Mac's Chairman and CEO is almost comical, in a very dark way, in light of what is going on in the housing market:

“Freddie Mac plays a critical role in financing homes for America's families and providing strength and resiliency to America's economy. I aspire to no greater legacy than to build public trust in an institution chartered by Congress to ensure the stability, liquidity and accessibility of the nation's mortgage markets.” [Emphasis mine]

All of this leads to several concerns.   First and foremost, since when does the Congress actually have the Constitutional authority to charter an institution to ensure the stability, liquidity and accessibility of anything? This is not the function of Congress, it is the function of the market – you remember, the FREE market, where people set prices they think people will pay for stuff they think people will want to buy, all without government rushing in to “fix” things that would balance themselves anyway? As a student of government I was blissfully unaware that the government had any obligation or authority to “raise capital on Wall Street and throughout the world's capital markets to finance mortgages for families across America.” Aha! So, this is how Freddie Mac is simultaneously a stockholder-owned corporation established by Congress as well as a government-sponsored enterprise. Wait a minute – I think I get it! 

Correct me if I am wrong, but my understanding of this example of a “public/private partnership” goes something like this: A bunch of Congressmen and Senators get together with some representatives of banking and mortgage lending special interests [yes, really] and figure out that they can: 1. violate the limitations on governmental authority and scope set forth in the Constitution; 2. Set up a “corporation” with private money and private investors to engage in high risk loans and activities that could potentially turn a tremendous profit, but that no one would be foolish enough to undertake unless, of course, the investment was guaranteed by the Federal Government; 3. Use this new “corporation” as a place to reward their political hack buddies with nice, high paying jobs. Wow! That really takes the risk out of “high-risk” now, doesn’t it?

Of major concern ought to be this: Freddie and Fannie are both a stockholder-owned corporations established by Congress as well as a government-sponsored enterprise. That means they are “run” essentially by the government – worse, the Congress, - and are accountable to no one – just like the Congress. It also means that those investors have no risk, for given the fact that these “corporations” were created by Congress, it stands to reason that they would be the largest monstrosity in the mortgage industry. And, given that fact, if either one collapsed then the entire housing market, and then other segments of the economy, would likely be dragged to the bottom. Get the picture? If you have the capital to invest, theoretically you can’t lose – the Government will not let Freddie or Fannie collapse because they can’t. 

Now, given the fact that the housing market has been in an abysmal state for months, if not years, and seems only to be getting worse, there has been speculation over the last several months about what is to be done to correct the situation. Oh, the Fed, you know – our Soviet-style central bank that all the Founding Fathers except Hamilton warned against - tweaked the interest rates again and then didn’t tweak them again, and we all got some of our money back from our dear friends at the IRS, and guess what? It didn’t work! 

Worse yet, there has been much speculation about the possibility of a Government bailout for these two pillars of socialism. In fact, there was an article in the International Herald Tribune [the international edition of the New York Times]:

“Financial conditions are continuing to worsen at Fannie Mae and Freddie Mac, leading some investors to prepare for a government bailout of the U.S. housing giants even as the Treasury Department and the companies say such government intervention will not be necessary.

"The markets are acting like a bailout is inevitable," said Sean Egan, managing director of Egan-Jones Ratings, an independent credit ratings firm.

Egan said he believed the federal government would need to help pump about $20 billion into each company, possibly through a government guarantee rather than through a direct injection of capital.

"We believe Treasury is going to be forced to act within the next couple of weeks," he added. "Probably some time after Labor Day, when investors are back from vacations so that the bailout has the biggest possible positive impact."”

Calls for a bailout by Uncle Sam! Imagine! For those of you who are not yet sufficiently cynical about this kind of stuff, let me assist you on your way to my happy place: This is a classic example of cronyism. It is special interests making deals with our elected officials who, incidentally know they don’t have to be accountable for their actions because even if they get voted out by an angry electorate, there’s always work at Freddie and Fannie. These two bastions of Government waste and excess cannot be allowed to collapse because there are too many politicians and hacks dependent upon them for their living. Now, here’s the best part – at least if you’re a politician who may be in need of a job come November: “With an implicit promise of federal backing, Fannie and Freddie have borrowed money at low rates and used these funds to purchase and hold large portfolios of mortgages and mortgage-backed securities, now totaling $1.4 trillion.” Did you get that number? In case you didn’t, that was $1.4 trillion, as in $1.4 trillion in addition to the massive deficit we are already carrying that is going to bring about the economic collapse of an economy that was once the most vibrant in the world.

Just to make sure you get the idea, here are some excerpts from a piece called Crony Capitalism Meltdown published 18 July:

“Fannie Mae and Freddie Mac are called government-sponsored enterprises. At times, Congress has seemed a Fannie Mae- and Freddie Mac-sponsored enterprise. The companies spent $200 million on lobbying and campaign contributions during the past decade. They lavished dollars on members of Congress, hired key Washington players for lucrative executive positions and extended the largesse to nonprofits through a charitable foundation and to congressional districts around the country through so-called partnership offices.

For a senator or congressman to get on the Senate Banking or House Financial Services committees was a guaranteed ride on the Fannie and Freddie gravy train. With their sharp lobbying elbows, sometimes it was unclear who was doing oversight on whom.

Whatever the question, the answer in Congress was always forestalling significant tightening of Fannie and Freddie’s operations. After the savings and loan debacle in the early 1990s, the institutions fought off meaningful new regulations. After Fannie was caught cooking its books to the tune of $6.3 billion a few years ago, the institutions still escaped reform. With the subprime mortgage market in meltdown lately, Congress has wanted Fannie and Freddie to assume even more risk.

Fannie and Freddie exist to bolster mortgage lenders — and therefore homeownership — by buying mortgages, guaranteeing them and selling them on the secondary market. With an implicit promise of federal backing, Fannie and Freddie have borrowed money at low rates and used these funds to purchase and hold large portfolios of mortgages and mortgage-backed securities, now totaling $1.4 trillion. In short, the government gets the risk, the executives and shareholders get the profits.

“Unlike many well-capitalized savings and loans and commercial banks,” Alan Greenspan warned in 2004, “Fannie and Freddie have chosen not to manage that risk by holding greater capital.” Why would they, if Uncle Sam is underwriting them? Fannie and Freddie kept Congress from limiting their expansion and from tightening their capital requirements. Instead, Fannie and Freddie have been recklessly undercapitalized at debt-to-equity ratios of 20-1 or more, when Bank of America and J. P. Morgan are at roughly 4-1.”

Good stuff, eh? Are you mad yet? You should be, because when Congress comes back into session after their break you can bet that Pelosi will rally her minions – with little opposition from Republicans, I should think – and have the issue of a massive trillion-dollar bailout on the floor for a vote in record time. Then you and I will be charged with yet another couple of trillion dollars we’ll have to pay off – that is, unless the Chi-Coms lend it to us. You know, this could easily surpass the monumental achievements of this Congress in their previous session – even the whole thing about apologizing for slavery. Big stuff.

And so it is. But why? It just doesn’t make sense to me. A Congress with a %14 approval rating, and Madame Speaker with a 9% approval rating. And the people will re-elect them all. And if they do, the people will get exactly what they deserve. Empty promises, flowery rhetoric, and screwed.