President Obama once again demonstrated his utter lack of understanding of the basic principles of economics during a meeting with his economic advisors on Monday. He chooses to blindly follow the misguided and discredited theories of Lord Keynes, among others, given him by his advisors. It is also most unfortunate for this country that the entire cadre of the presidents economic advisory team seem incapable of objectively analyzing the Keynesian model that they are so attached to, for if they could only extricate themselves from this “third way” paradigm and experience a few moments of economic lucidity, it is highly possible that even they could begin to fully understand just how utterly disastrous Keynesianism has been for the global economy in general, and our economy in particular. Unfortunately, they ignore the continued warning signs that keep popping up and continue to dig the United States ever deeper into this economic black hole that threatens to suck the very life out of what remains of our economy, and will ultimately take what remains of our liberty with it.

Let me be clear: what we are presently witnessing in the ongoing economic crisis is the natural laws of economics giving their referendum on Keynes. The current national unemployment figure of 10.2% simply underscores the point. In short, Keynesian theory suggested what has been called a “third way,” not fully capitalism and not fully socialism. It sought a system where the government, both through the power of the central bank and intervention through regulation, legislation and manipulation would be able to bring about a condition of perpetual prosperity, an end to recessions and economic cycles of boom and bust, and end to the bubble economy. The problem with the theory is that the very controls and manipulations demanded by Keynesians to “grow” and “sustain” the economy are the very things responsible for the creation of the economic bubbles and the business cycle, precisely because these things violate the natural laws of economics. Mises, Rothbard, Hayek and others have proven this time and again. The natural laws of economics correlate with human thought and action, and these things are wholly incompatible with bureaucratized central planning boards and central banks fixing prices, wages and interests rates at values much different than those the free market would deem proper. Attempting to isolate these things from the reality of the marketplace in essence creates the bubbles that are bound to burst at some point because they are at odds with the market, with the decisions and choices producers and consumers make on a daily basis.

Keynesian theory has been the driving force behind the economic policies of the industrialized world since the early twentieth century. Keynes’ model economy was viewed as having evolved beyond capitalism, thus noted above as being a hybrid between capitalism and socialism. It advocates corporatism. It is therefore by its own admission decidedly not capitalism. Those who prefer to cast the blame for the current economic mess on unrestrained capitalism are flat out wrong and woefully uninformed, because there has been no unrestrained capitalism in the United States – ever. Sure, we came fairly close up until 1913; however, once the Federal Reserve Act and Income Tax Acts were passed and the Constitution amended through the ratification of the 16th Amendment, all hopes for true capitalism were indeed dashed.

Mr. Obama and his advisors like to remind us how they inherited this economic crisis from the previous administration. There is nothing untrue in that statement. However, for anyone, especially a well trained and educated economist, to lay the whole blame for this mess at the feet of the Bush Administration without taking into account the overwhelming number of far more important factors that are truly the root cause, is disingenuous, dishonest, and grossly insulting to those of us who have studied anything other than Keynes, as well as an affront to the common sense of anyone who takes the time to question the current scenario and really think it through. Those economists who regurgitate the official government talking points and try to put a positive spin on the current course of action undermine their own legitimacy in doing so. It is simply incredible that so many of these economic advisors are so quick to declare unrestrained laissez-faire capitalism the root cause of this crisis when they know full well that the prevailing Keynesian school of economic thought that has been driving economic policy for the better part of a century is itself specifically defined as being something that is not capitalism. There is far too much at stake to play semantics and talk out of both sides one’s mouth.  (Continued...)

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.

The 110^th Congress has hit record low approval ratings according to recent Gallup and Rasmussen polls. Gallup recorded a 19% overall approval rating from its poll conducted 9 through 12 June 2008. The results of the Rasmussen poll show that “Congressional ratings first hit nine percent (9%) back at the beginning of July, marking the lowest ratings recorded by Rasmussen Reports. Ratings hit the same low two weeks later. Congress has not received higher than a 15% approval rating since the beginning of this year.” In fairness, Congress typically has the lowest ratings of the three branches polled.

Broken down by party affiliation, Gallup shows Democrats giving Congress a 23% approval rating, with Independents and Republicans coming in at about 17% and 16%, respectively. The Rasmussen numbers differ some, reporting a mere 13% positive rating among Democrats, with Republicans coming in at 8% and Independents giving only 3% approval to the job the current Congress is doing. Regardless of the difference in the percentage numbers, it would appear as though the 110^th Congress has a mighty PR problem on its hands.

According to Rasmussen, 63% percent of voters identifying themselves as not affiliated with either main political party showed the most discontent with the Congress saying it is doing a poor job. According to the Gallup polls, the general disapproval rating for this Congress is hovering at around 75%. Based on it’s own historical tracking data for Congress, the Gallup report said that these rating are “the worst Gallup has measured since it began tracking Congressional job approval in 1974.”

The Rasmussen report states further that just “12% of voters think Congress has passed any legislation to improve life in this country over the past six months. That number has ranged from 11% to 13% throughout 2008. The majority of voters (62%) say Congress has not passed any legislation to improve life in America.” In fact, the 110^th Congress has passed over 1900 “symbolic resolutions,” such as designating National Watermelon Month and National Funeral Director and Mortician Recognition Day. This Congress has also just recently resolved to issue a formal apology for slavery.

An article published 30 April 2008 in the New York Times stated: “Americans are pumping their paychecks into their gas tanks, and the economy is in a stall. Food scarcities threaten governments overseas and spur hoarding at home. Foreclosures are up, home sales are down. Progress in Iraq and Afghanistan is halting… Frustration is building as lawmakers see a major disconnect between the everyday anxieties of people back home and the Washington agenda.”

Indeed the frustration is real among American voters, as evidenced by the polls. The big question now is, “how will this frustration pan out in November?” Will the growing discontent with the direction of the nation and the seeming ineptitude of Congress translate into any action? If this last session most recently adjourned coupled with Speaker Pelosi [25% overall approval rating] and Congressional leaders on both sides of the aisle’s reluctance to even address those issues voters find important is any indication of what is to come, suffice it to say that November could prove very interesting indeed. One can only hope that Madame Speaker will make good on her promise and motto and, now having proved that the politics as usual attitude has been an abysmal failure, at least try a New Direction.  Perhaps she will.  After all, Madame speaker has already stated her approval for a bailout for the auto industry to the initial tune of $50 billion, and won't rule out Congressional approval for more taxpayer funding for other ailing industries.  So she's really not lying, right?  Because, after all, socialism and nationalization of industry is certainly a New Direction. 

 

A reflection on Isaiah 3:1-15

They say that mixing politics and religion is like mixing alcohol and guns. So, here goes nothing.

Last Monday morning as I was praying the Office of Readings the first reading from Scripture was Isaiah 3:1-15. I was struck by the relevance of this passage to our modern condition, and the prophet Isaiah clearly shows the consequences for a nation that turns its back on God. 

Isa.3 Verses 1 to 15

A few of these verses really jumped out at me:

[8] For Jerusalem has stumbled,

and Judah has fallen;

because their speech and their deeds are against the LORD,

defying his glorious presence.

[9] Their partiality witnesses against them;

they proclaim their sin like Sodom,

they do not hide it.

Woe to them!

For they have brought evil upon themselves.

I have been reflecting upon these words all week. Isaiah and many of the other prophets and, indeed, our Lord Jesus, tells us time and time again of the inevitable and imminent consequences resulting from our disobedience to the natural law and commandments established by God for our own good. God does not condemn us or condemn the nations for such disobedience – we condemn ourselves by our actions or inaction. Indeed, neither does God “punish” by bringing evil down upon us – He is all-good and does no evil. He does, however allow such evil to exist and to influence the world. He does not send down evil upon His creation; rather, He leaves us to our own devices to deal with the consequences of our choices, and this, it can be argued, is far worse. 

Can anyone argue that there is not a constant attack upon the foundation of our society by the radical Leftists and “progressives” looking to redefine everything from “relationships” to “marriage” to “family?” Is it not obvious that they would have us all to believe that little children being promiscuous because they have been educated by Planned Parenthood is just fine? Can we all not see through their efforts at rewriting textbooks to “normalize: same-sex parenting and relationships, and sexual relationships even among children? Have we not noticed a marked increase in the number of lawsuits filed to “equalize” and “normalize” what cannot, by natural law, be on equal par with the traditional family? Have we not seen these attacks aimed at the schools - at our children in order to indoctrinate them into the globalist, relativist ideology where nothing is “wrong,” and everything is OK? In California, homeschooling by parents was declared unconstitutional by the courts. Why? Not because the state was overly concerned about parents having the proper and suitable “credentials” to teach their own children, but because of what these children were being taught. It is because these children were being taught the truth about virtue, values and morals, and unadulterated history; and, by virtue of their avoidance of the California government school system were exempted from the socialistic agenda and radical secular humanism and relativism being pushed by some very influential people in that state and indeed around the country. Let me be clear: the agenda is NOT to educate our children, but to re-educate them, and kudos to those who have entered the teaching profession to fight this nonsense and get schools back on track to doing what they are meant to do – teach academics. 

If we continue to blur the lines of reason, especially for the children, telling them that “good” is “bad” and vice-versa; if we continue to allow government sponsored promiscuity –education to be forced upon our children just because Planned Parenthood tells them it is OK; if we continue to allow government to play a central role in desensitizing children to sexual promiscuity, to violence, to the abuse of women through a pop-culture that celebrates these things, and if we continue to treat lies as truth and call truth a lie - is this not our nation turning it’s back on God, the same God who conceived it and blessed it for over two-hundred years? 

If we continue to allow judges to legislate from the bench and remove God from the public discourse because non-believers are offended, what will become of us? The more we exclude God then the greater the degree to which we exclude ourselves from His grace and blessings – and make no mistake about it: American ingenuity and workmanship and ethics were and still are something marvelous to behold, but without God being included as a real partner in the mission of America, there is nothing of permanent worth that will be accomplished and our standing in the world will suffer, and we will continue to suffer from division from within.

[12b]O my people, your leaders mislead you,

and confuse the course of your paths.

[13] The LORD has taken his place to contend,

he stands to judge his people.

Until Truth is once again recognized as Truth and acknowledged as such we shall continue to remain divided and suffer. What is needed is leadership – and at present there is very, very little in the way of meaningful leadership that will unashamedly and boldly proclaim the Truth about America with conviction and from the heart; that America was meant to be a virtuous nation, a beacon of light and hope to a world enslaved by oppression and tyranny. For a very long time we were that beacon, but once we began to lose our moral compass, that light began to dim, and as we steadily hurled our nation toward the abyss of rampant immorality and licentiousness that light somewhere along the way has seemingly extinguished, and we now suffer the consequences of this: scandal, lies, perversion, war, usurpation of rights, the evils of globalism and socialism pounding as a battering ram at America’s door. The rampant and wonton immorality becoming ever more acceptable and normalized in this country is the greatest threat to our national security that can be conceived.

[4] And I will make boys their princes,

and babes shall rule over them.

[5] And the people will oppress one another,

every man his fellow

and every man his neighbor;

the youth will be insolent to the elder,

and the base fellow to the honorable.

You see how we are? You know also that it was not always so. Once there was a middle ground called virtue. Once we had leaders who rose up and brought this nation with them to great heights. Once we endeavored, now we wait. Once we made our voice heard, now there is apathy. Once we ran Washington, now Washington runs us. Once we were citizens of liberty, now slaves to licentiousness. Once we were untied, now divided, and you know what is said about a house divided. A moral collapse begets a culture of excess that always precedes an economic collapse, and throughout history an economic collapse will always bring about a political and structural collapse, and necessitate a rebuilding – like the New Deal. 

You know that as a republic of laws, built upon the bedrock of a Constitution which itself seeps of the natural moral law and acknowledged as such by its Framers that as long as we have that Constitution, no matter how bad things may become, there will always be a flicker of hope to re-kindle the flames that once burned so deeply in the very heart of this republic and made it the great nation it was and still is. 

We seem to have lost our moral compass as a nation. It is within our power to undo the foolishness of the past and prepare the way of the future by acknowledging that which our Founding Fathers acknowledged in order to stoke the fires of virtue and promise and plenty in advancing the cause of life, liberty and the pursuit of happiness as envisioned by the Framers. We were established as a nation in the form of a republic rooted in Judeo-Christian tradition and principles. We would do well to remember those principles, for if we do we shall once again endear ourselves to God and show ourselves wanting truly and sincerely for His blessings. Then, and only then, will we have nothing to fear.

[10] Tell the righteous that it shall be well with them,

for they shall eat the fruit of their deeds.

[11] Woe to the wicked! It shall be ill with him,

for what his hands have done shall be done to him.

 

 

 

The Underlying Message

Can the U.S. survive their relationship with China? This question is worth pondering for many reasons, the most obvious one being the fact that the Chinese are not going away any time soon. It is also worth pondering because China underwrites a substantial amount of the U.S. national debt. That the Chinese are to be taken very seriously as players on the world stage was the primary message that the state wished to convey via their spectacular opening ceremony for the Beijing Olympics.   True, the Chinese have been players for some time now, but this message was meant to declare something more: “We’re here, we’re a world power, and you’d all better be prepared to deal with us on our terms, because we are the future.”

This is a major problem for the United States because our relationship with China has very significant consequences, domestically and internationally, economically and politically. Possibly the most damaging aspect of our courtship with a brutal, totalitarian regime is the damage done to our credibility in the world, and here at home, our confidence in our government and what it is suppose to represent. Of course, some will thumb their noses at such a claim, reminiscing back to when we were nice to the Soviets – just before their evil empire collapsed. Sure, one could argue that toward the end of the Cold War we were sort of making nice with the Soviets, pretending to have dialogue with Chairman Gorbachev who, by all accounts was far more reasonable and realistic than any of his predecessors; but, one must keep in mind the important fact that at the time we were obliterating them economically, and they knew it. Not only that, but they also knew that there was absolutely nothing they could do about it. Their demise was imminent and so they were diplomatically making the best of a very, very bad situation. Unfortunately, things are very different regarding our relationship with China.

Learning Lessons From Uncle Joe

The Soviets simply ruled with an iron fist, demanding total allegiance, yet offering no incentives whatsoever for mandatory compliance - only the possibility that you might not be sent to the gulags or shot if you were a good and compliant subject. So, when Gorbachev allowed even the slightest economic and political reforms, the entire system collapsed because once the people got a taste of freedom, the fires of liberty were stoked and momentum swung decidedly to the cause of liberty which, of course, quickly overwhelmed the state apparatus almost before it could collect itself to react. It was as if neither side, the state or the people, could actually believe what was happening; but, the deciding factor was that the people, once experiencing even a mere flicker of liberty - were not going to squander their only opportunity for liberation in over seventy years.

Let us be clear here: the Chinese were paying very, very close attention to those events, and as a result the party apparatus in China greatly benefitted from Moscow’s mistakes.   Instead of really granting what we in the west would consider true economic reforms, Beijing allows foreign investors and businesses to enter the Chinese market but under the strictest of terms – they [the Chinese government] dictate the terms, period. Not much room for negotiation. If you want access to 1.3 billion potential customers, you will comply. As for the average citizen, there is no question that their quality of life has, at least on the surface, improved over the last decade. To look at scenes from Beijing or other major cities in China, one might as well be looking at any other major city in the west… that is except for the secret police, phone tapping, government monitoring and control of the internet, the highly visible presence of soldiers and police on every block and, lest we forget, the fact that there are cameras on trashcans, street lights, building facades, inside of restaurants and hotels – which are all bugged – so that the government can ensure compliance and crush dissent. That is, crush dissent as in Tiananmen Square and Tibet, with absolute overwhelming, brute force and no mercy whatsoever. 

A Workers Paradise, To Be Sure

Some economic ventures are run by Chinese subjects [I dare not call them citizens] while most of the larger ones are run by the state or handpicked and very well connected party cronies. But really, one could make the argument that while people “run” these enterprises, it is the state that really “owns” them, because in a totalitarian dictatorship rooted in Marxist despotism, the state really and truly owns everything – even the rights of the people, and the people can do whatever they want to – so long as they get permission from the state via the police.

Imagine yourself a loyal and compliant subject of the Chinese Communist Party, with a nice big picture of Mao at the entrance to your apartment and, of course, an even bigger one of President Hu Jintao, with lots of flowers and such around it like an altar for votive offerings. Say you are a woman and you and your husband would like to have a baby. Great! Now, all you have to do is to fill out the state application and questionnaire, submit to the required tests medical and otherwise, and then visit your friendly local police and have an interview wit a government/party official who will either approve or deny your application. If denied you may reapply, but you must be careful because you could be labeled a dissenter for not gleefully accepting the party’s decision on your behalf and thereby guilty of anti-party and anti-revolutionary activities. This unfortunate label could result in yourself and any number of your family and/or friends being tried, convicted and sent to a “re-education camp” where you will learn all bout the virtues of the great Communist Revolution, etc. After several years of torture, beatings, rapes, and brutal slave labor, like building Olympic venues or factories where products for western consumption will be produced, you might even be fortunate enough to be sent to work in one of those factories. 

The New Balance factories are very nice – modern, roomy, clean. That’s because you don’t get to spend much time in your room that you must rent from the factory located on the “factory campus” because you probably work 12 to 14 hours per day, and then get clean the factory workspaces and then, finally, your room. Of course, your room must be cleaned and inspected before you head down to the cafeteria where you pay for your food. [If your room doesn’t pass inspection, you get fined.] Then perhaps it’s off to a rehearsal for a show being put together to impress a visiting party official and some corporate officers from the U.S. or Europe. You’d better remember when to step and when to hold up the pretty colored signs and when to shout, because if you mess up and ruin the show, it’s back to the “re-education camp” for you! Or, perhaps it’s just easier to take you out by the garbage dump and shoot you in the back of your head – then the state can bill your surviving family [assuming there are any] the 15 cents it cost them for the bullet they had to waste on you. But, I digress.

Let’s assume you have your baby without being an anti-revolutionary criminal. Lets imagine that after a few years you end up pregnant again, unplanned of course, because you would never dream of intentionally having a second child in violation of the party’s one-child per family edict. The state says you must have an abortion. Or, let’s imagine you get pregnant with your first baby without having obtained your government permit to have a child. A friendly policeman notices your bulge and asks for your papers, which, of course, you do not have. You are arrested, and transported to a facility where they murder your baby. Then they may charge you with being an anti-revolutionary criminal – a sworn enemy of the state! Or, imagine you are one of the lucky subjects allowed to run a business. You get to run a McDonalds – that is until the day one of your employees gets angry with you and denounces you to the police, who promptly come and speed you away to the “re-education camp.” 

This is how they treat their own people. Sure, they are allowed to have some creature comforts that make life a bit easier, but these things can be taken by the state away in an instant, because you are only allowed to have these things at the pleasure of the state. 

The party and the state are synonymous, and smart enough to know that people tend to get a bit complacent when they are comfortable. The more stuff they are allowed to have, the more favorable they are likely to view the state – it’s amazing how a few years of “re-education” can make these things so clear! The state is also smart and despotic enough to know that every once in a while it needs to let the people know who is in control. Make no mistake – the people understand this perfectly, and they comply, for what else can they do? Just think of it as a combination of Starbucks and Stalinism.

A Potential Credibility Gap?

Whatever image China wishes the world to see, the fact of the matter is that those poor people are living in fear under a brutally authoritarian despotic regime. Some human rights organization’s estimates of the number of people imprisoned in China run between 1.5 to 3 million, with the number of prisoners executed running between 10 to 15 thousand and some estimates up to 100,000 in 2007. It is likely that the latter number is inclusive of those who died during while engaged in or as a result of forced labor. Most agree that in the years since being awarded the 2008 Olympics, China has sought to re-cast itself as a kinder and gentler authoritarian system. There are even some organizations that estimate the number of executions has dropped almost 40 percent since 2001. This would be a welcome trend if it were permanent, but one must ask honestly what will happen after the next uprising or pro-democracy protest? Keep in mind that China is a nation of 1.3 billion people and that the secretive, authoritarian party, while surely keeping meticulous records itself of the numbers of prisoners and related information, would never allow the actual numbers to be released, so it is safe to assume that the numbers could well be far higher than those listed above. 

One can easily see, then, how close economic ties with such a regime may raise some eyebrows around the world. America is supposed to represent liberty and freedom, while the Chinese regime represents fear, oppression and death. And, if you haven’t heard yet, they underwrite our national debt. Let me say that again: China underwrites our national debt. Once more time for those who need to hear it: a brutal, despotic authoritarian regime that randomly imprisons and executes its subjects, that supports the government of North Korea – you know, that worker’s paradise where their barely sane “Dear Leader” is starving them to death so he can build weapons and just keep them in line – as well as many others oppressive and outright evil regimes throughout the world – they own a substantial portion of our debt. 

This is from the Treaurydirect.gov website: http://www.treasurydirect.gov/instit/auctfund/work/work.htm

“Marketable securities can be bought, sold, or transferred after they are originally issued. The U.S. Treasury uses an auction process to sell these securities and determine their rate or yield. Annual auction activity:

Offers 4 types of securities with varying maturities

Conducts approximately 200 public auctions

Issues more than $4.2 trillion in securities [emphasis mine]

To finance the public debt, the U.S. Treasury sells bills, notes, bonds, and Treasury Inflation-Protected Securities (TIPS) to institutional and individual investors through public auctions. Starting in February 2006, Treasury resumed the auction of Treasury bonds. Treasury auctions occur regularly and have a set schedule.” Their words, not mine.

Visit http://www.treasurydirect.gov/instit/auctfund/work/auctime/auctime.htm for the published schedule of these auctions.

This is how it works: Congress decides yet again that they need to spend far more money than we have because they, somewhat like the Chinese and the Soviets I guess, have come to the conclusion that the government ought to provide everything we need, and even more that we don’t. Bills filled with pork and out of control budgets are passed. The Treasury then has to figure out a way to pay for this, because the people who decided to spend more than we have won’t. Logically, the Treasury auctions off portions of the debt to the bidders who will charge the lowest interest rate. Over 25 percent of the entire debt is presently being financed by foreign interests and of that, over 20 percent is held by the Communist government of China. Nice. So much for heeding the warnings of our Founders about becoming involved in foreign entanglements! If other countries own your debt, and especially countries to whom you are ideologically opposed; if that isn’t foreign entanglement I am hard pressed to understand what is.

Consequences

Ideologically speaking the Communist government of China is our enemy, and yet we have allowed ourselves to become very vulnerable to them. Think about this: what would happen if all of the foreign entities holding portions of our debt called our loan? When the Treasury says it auctions bonds, bills, etc. “to finance the public debt” that is government speak for “to keep the government running.” But what is the true price we pay? Consider that the Chinese Communist government plays a major role in keeping our government financed, and I am sure that the full impact of this situation is not missed on our government officials when they have to tiptoe around the globe consulting with the Chinese to ensure that we do not upset them by our intended actions. What will be the ultimate cost? How can a free people allow themselves to be financed in part by tyrants – tyrants of a magnitude that the Founding Fathers could not even begin to fathom.

It is going to far to say that we are, in a very real way, now beholden to the Communist government of China? Will it be possible to wrest ourselves from their influence in our affairs and our economy? And what of our reputation in the world and the subsequent influence backed up by that reputation? Is it not slightly hypocritical to claim to be fighting to bring freedom and liberty to one part of the world while enabling it to be oppressed in another? Any what will be the ultimate economical impact on our nation and, for that matter, on the world? How long can we sustain such a detrimental trade deficit with China where we cave in to their terms almost on command? What has happened to the America that less than a decade ago was the sole remaining superpower after defeating the Soviet Union? 

And speaking of the Soviets, it appears they’re back – and with a vengeance too. Those old KGB guys haven’t lost their touch – invade your neighbor while the rest of the world is watching the Olympics. Brilliant strategy. Especially when you know that Georgia’s biggest ally, the United States, however much we protest and demand a Russian withdrawal, is more or less impotent when it comes to this situation. The Russians want their Soviet Empire back and they are testing the waters: what will the U.S. do? What can they do? For our poor ally is that with our battle weary and overextended military, a looming economic crisis, a weak dollar and a popular political movement demanding we stick our heads in the sand and pretend that all is well, the unfortunate answer is: not much. And so the future for Georgia is uncertain indeed.

What is certain is that the Chinese are once again paying close attention to what Moscow is doing – and will learn from any mistakes. Make no mistake about it: our relationship with China in its current form is absolutely deadly for us. It is suicide. It is the beginning of our abdication of superpower status at a time when those who most appreciate liberty, like Georgia, are looking to the U.S. for leadership and action to inspire and help them, yet all we can offer is words. And talk is cheap, especially when it is backed up by a plunging dollar, an unconscionable deficit and a government that fails to see the consequences of cozying up to tyrants and preferring to let the U.N. take the lead. Make no mistake about it, Beijing has one eye on Moscow and the other on Taiwan, and we, my follow Americans, have precious little time to take back or government before it signs our death warrant and becomes the cause of our downfall. Can we survive a relationship with China? Our action or inaction over the next several years will be the determining factor. So, either we can work together to pull Washington’s collective head out of its rear, or we can start studying Chinese and Russian. Personally, I prefer the former.