"The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with chance for each agreeing to capability or achievement. It is a difficult dream for the European upper classes to construe adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of public order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position."
--Historian and writer James Truslow Adams in his 1931 book Epic of America.
Dc Motor Theory
Mr. Adams penned these words in the midst of the Great Depression, the worst economic crisis in our history. It is timely to reflect on these words, as it appears that the American Dream is slipping additional out of reach for most Americans. If the dream of a better life for our hereafter generations is lost, it will truly mark a turning point for our great Republic. The theorize the American Dream is slipping away is due to the actions of politicians running our government and bureaucrats running the Federal Reserve. Those with capability who have earned a better life straight through their hard work, intelligence and integrity should be attaining a higher position in the public order. Instead, our government is rewarding those Americans who have taken unwarranted risks, made brainless decisions, and willingly chose the procedure of inordinate debt to climb the public ladder.
As the politicians scurry to "save" capitalism straight through the use of communist measures, more Americans are becoming disheartened. The definition of communism agreeing to Webster's is:
A system in which goods are owned in tasteless and are ready to all as needed.
George Bush, Henry Paulson and Ben Bernanke have decided to seize money from the vast majority of Americans who lived within their means, utilized debt sparingly, and worked hard to get ahead, and give it to the most appalling failures in our society. They have shoveled billions to banks that operated their businesses like gambling parlors. They have shoveled hundreds of millions to citizen who bought houses with no money down, interest only mortgages and fraudulent loan applications. They are now rewarding automakers who made the wrong vehicles, pay 30,000 workers per year to not work, and have only been able to "sell" cars by giving them away with 0% financing to anything who could sign on the dotted line. These acts fit the definition of communism. We are now more communist than China.
Now, commercial developers are trying to pony up to the taxpayer trough. These egotists used gigantic amounts of short term debt to overpay for malls, office towers, hotels and apartment complexes. The rental earnings could never cover the interest expense on the debt. The only way they could maybe make money was if the next moron developer was foolish enough to overpay for the same assets. The shop was flying high as the Mba geniuses on Wall street were able to work their magic by slicing this debt into tranches, getting it rated as venture grade paper by criminally negligent Moody's and S&P, and reselling it to gullible investors throughout the world.
The jig is up. agreeing to the Wall street Journal, 0 billion of debt will come due in the next three years, with 0 billion due in 2009. Of course, in the America of today, your bad firm decisions of yesterday that enriched executives like Steve Roth of Vornado Realty and who received accolades from the firm press are cast aside. Just use the "Too Big to Fail" excuse and all is well. The American taxpayer will come to the rescue. The American taxpayer gets screwed no matter what we do. As Americans do the right thing and cut their spending, retailers, malls, and hotels will lose money and developers are already request for bailouts. Our communist government will take the money from the innocent taxpayers and give it to the rich negligent developers.
Home-builders are lobbying for a ,000 credit for new home purchases. It actually makes sense to encourage new homes to be built when there are 2.5 million vacant houses and an 11 month supply of existing homes for sale. I await the hereafter bailout demands of Rolex retailers, Porsche dealers, and caviar makers.
My parents believed that they could supply a better, richer and fuller life for their three children. They worked hard, sacrificed for their kids, deferred their gratification, saved, put us straight through Catholic school and put us straight through college. Hard working blue collar middle class parents from South Philly were able to progress their children upward in the American public structure straight through their determined efforts. I have serious doubts about either my three boys will live a better life than myself. I'm sure that my grandchildren will not live a better life than myself.
My parents wisely comprehended that shiny new cars and high wages were not what determined who achieved the American Dream. My Dad toiled for 42 years as a truck driver for Arco, bought used cars his whole life, and never earned more than ,000 in a year. My parents bought a three bedroom row home in Delaware County in 1955 and methodically paid it off over 30 years. They never borrowed against the house. We didn't eat out three times per week. We didn't go on exotic vacations. Two weeks at the Jersey shore was just fine. My parents had high school degrees, but were able to supply the chance for myself, brother and sister to get college degrees and take the next step up in the American public order.
The American Dream was not founded upon wealth and materialism. It revolves nearby achieving a better life based on the merits of your intelligence, hard work and gift to the society of all Americans. There is a moral aspect to the American Dream that has been lost over time. James Truslow Adams addressed it in an essay he wrote in 1929:
There are obviously two educations. One should teach us how to make a living and the other how to live. actually these should never be confused in the mind of any man who has the slightest inkling of what culture is. For most of us it is requisite that we should make a living...In the complications of contemporary life and with our increased accumulation of knowledge, it doubtless helps greatly to compress some years of caress into far fewer years by learning for a single trace or profession in an institution; but that fact should not blind us to another-namely, that in so doing we are learning a trade or a profession, but are not getting a liberal instruction as human beings.
The crux of the qoute is that Americans, with a strong sense of morality and caring about what is right and wrong, are no longer steering the American ship. Thomas Jefferson declared that Americans had the right to "Life, liberty and the pursuance of happiness" in the proclamation of Independence. The government's enforcement is to safe the life and liberty of its people. Representative Ron Paul bluntly speaks the truth about our government:
The obligations of our representatives in Washington are to safe our liberty, not coddle the world, precipitating no-win wars, while bringing bankruptcy and economic turmoil to our people.
Our current system of incentives is inconsistent with the equal rights of others. I was taught the contrast between right and wrong by my parents. The pursuance of happiness by Americans is where the American Dream has gone off the track. The pursuance of inordinate wealth, power, influence, luxury automobiles, McMansions, and electronic devices has substituted for happiness in the world we live in today. anything means requisite to perform this bastardized American Dream (Nightmare?) has been the mantra of the "Me Generation". Every disgraced Ceo of the last year was part of the Baby Boom generation. Parents, schools, corporations, media and government have taught Americans how to make a living, but have done a horrific job in teaching Americans how to live. The government and Federal support have encouraged the warped American Dream straight through the use of insane tax, fiscal, and interest rate policies.
Federal support Fraud
Thomas Jefferson, a wise man by most accounts, understanding central banks were not a very good idea.
If the American citizen ever allow hidden banks to operate the issue of their currency, first by inflation, then by deflation, the banks and the corporations that will grow up nearby them will deprive the citizen of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. The contemporary theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating.
We did not heed Mr. Jefferson's prudent advice. The supervene for the American citizen has been persistent inflation that has destroyed the purchasing power of the Us dollar. It takes .00 to buy what cost 5 cents in 1914, a 95% loss of purchasing power since the creation of the Federal Reserve. Most of this loss in purchasing power has occurred since 1971. "Tricky Dick" Nixon took the country off the gold standard in 1971 and uncorked the bottle and let the inflation genie out. The unchecked issuance of debt by our government, facilitated by Federal support policies since 1971, has brought our great country to the brink of financial disaster. The assosication that caused the problem, did not see this crisis looming, and has utterly failed in stemming the damage, is now taking actions wholly outside of its mandate, while telling the public they have the answers. They have duped the American public for 85 years straight through the insidious use of inflation, and now they are trying to dupe the world into holding their Ponzi scheme going for a while longer.
The Federal support was created in 1913 with the dual purpose of maximizing employment and preserving stables prices. New York Senator Elihu Root, in voting against the creation of a Federal Reserve, saw a vision of our bleak future:
Little by little, firm is enlarged with easy money. With the exhaustless stockroom of the Government of the United States furnishing easy money, the sales increase, the businesses enlarge, more new enterprises are started, the spirit of optimism pervades the community. Bankers are not free from it. They are human. The members of the Federal support board will not be free of it. They are human....Everyone is development money. Everyone is growing rich. It goes up and up, the margin between costs and sales continually growing smaller as a supervene of the operation of clear laws, until ultimately person whose judgment was bad, person whose capacity for firm was small, breaks; and as he falls he hits the next brick in the row, and then another, and then another, and down comes the whole structure.
The understanding of forming this central bank was to stop bank panics from happening. So far, they are 0 for 2. They were in payment in 1929 while the most bank panic in history. Their actions in the 1930's exacerbated and prolonged the Depression. Alan Greenspan and the Fed are the chief cause of the current disaster. The absurdly low interest rates of the early 2000's and the complete lack of oversight of bank lending practices caused the most debt bubble in history. while September and October, the country experienced an electronic bank run. Americans rightfully lost trust in all financial institutions and began withdrawing their money. The Federal support has done the only thing it knows how to do. Print money. It has doubled its equilibrium sheet to .3 trillion.
The Federal support is a confidentially controlled custom that is essentially under the direction of the biggest banks in the country. Whose best interests do you think it is looking out for? Zero interest rates penalize senior citizen savers in order to save reckless borrowers.
The only competent Federal support Chairman in the last 40 years, Paul Volcker, had this to say about the actions of Ben Bernanke in the last year.
The Federal support has judged it requisite to take actions that enlarge to the very edge of its lawful and implied powers, transcending in the process clear long-embedded central banking system and practices. What appears to be in substance a direct change of mortgage and mortgage-backed securities of questionable pedigree from an venture bank to the Federal support seems to test the time-honored central bank mantra in time of crisis: lend freely at high rates against good collateral; test it to the point of no return.
Since these words were spoken by Mr. Volcker, the Federal support has gone way beyond their lawful and implied powers. Look at its equilibrium sheet as of last week. It has more than doubled its equilibrium sheet in the last few months. As you can see they have been busy development loans to financial institutions throughout the world. These loans are being made with your money.
The Federal support is supposed to be protecting the citizen of the United States. Transparency is requisite for financial systems and democracies to function. Instead, Ben Bernanke is withholding which banks have borrowed from the Federal support and what collateral was put up for the loans. They have lent out over trillion of your money with no accountability to the American taxpayer. Bloomberg News has sued the Federal support to get this facts under the leisure of facts Act. They are outside up their actions because they know that the collateral they have standard is worthless. These are criminal actions with the intent to deceive the American public. The government and Federal support work for "We the People", not vice versa.
Thank You Sir, May I Have Another
Last week the Federal support decreased its reduction rate to .25%, the bottom in history. They also announced they would use any means requisite to re-inflate our bubble economy. Deflation is not a bad thing for most Americans. Cheaper gas is nice, Cheaper food is nice, Cheaper cars are nice, and flat screen Tvs are nice. For citizen and countries without debt, deflation is just fine. That does not communicate U.S. Consumers or the U.S. Government.
Deflation when you are a country that has .6 trillion in debt will annihilate the debtor. Therefore, Mr. Bernanke has chosen to try and inflate us out of this mess. As an devotee on the Great Depression, Ben believes that fiscal and monetary expansion will save the country. There is one requisite difference. When the crisis hit the U.S. In1929, total U.S. Debt as a percentage of Gdp was about 200% and we were a net exporter nation. We enter this crisis with total U.S. Debt exceeding 350% of Gdp and we have a trade deficit of 0 billion.
The Federal support and Obama management are about to add trillions of debt when we already have description amounts of debt. The great James Grant sums up the dilemma:
If the Fed is going to generate boatloads of depreciating, non-yielding dollar bills, who will discharge them? Who will finance the Obama administration's looming mammoth fiscal deficits? Who will finance America's each year surplus of consumption over yield (after 25 more or less continuous years, roughly a national trait)? Inflation is a kind of governmentally sanctioned white-collar crime. Every crime needs a dupe. Now that the Fed has announced its plan to deceive, where will it find its victims? Today's procedure makers allow, there are risks to "creating" a trillion or so of new currency every few months, but that is tomorrow's worry. On today's program is a deflationary abyss.
Foreigners have been buyers of 70% of our newly issued debt in the last few years. Does Ben Bernanke actually believe that foreigners will be willing to accept 2% interest for 10 years on bonds while we are printing trillions of new dollars? The all out charge on deflation will work. It will work so well that it will lead to a crash in the Us dollar as foreigners begin to shun the debased currency. A hyperinflationary bust ala Argentina and the Weimer Republic is in our future. There is one thing for sure. anything happens will take the Fed by surprise. They didn't see the credit crisis arrival and will not see the inflation tsunami before it washes over us. Economist Irwin Kellner knows this will not end well. "While virtually no one is raising prices in today's depressed economy, all this liquidity will soon come to be an crisis looking for a place to happen."
The last 85 years of allowing our currency to be manipulated by a hidden bank has been a series of crisis, failure, and mismanagement. Ron Paul clearly articulates why the Federal support has helped destroy the American Dream and needs to be abolished:
Abolishing the Federal support will allow Congress to reassert its constitutional authority over monetary policy. Though the Federal support procedure harms the median American, it benefits those in a position to take benefit of the cycles in monetary policy. The main beneficiaries are those who receive entrance to artificially inflated money and/or credit before the inflationary effects of the procedure impact the entire economy. Federal support policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American citizen ahead of the special interests and their own appetite for big government.
Government in Action
We've created a behemoth government department called Homeland protection at a cost of .5 billion per year, employing 203,000 citizen as our response to the 9/11 tragedy. How much would it have cost to have installed a .99 Wal-Mart deadbolt lock on every cockpit cabin door of every plane in the world before 9/11? There are roughly 20,000 commercial airplanes in the world. The cost would have been 0,000 and 9/11 would have been averted. Based on the government's outstanding description of fiscal management (,200 toilet seats), we could actually assume that it would cost ,000 per cockpit door, rather than .99. In that case, the bill would have been million.
For a million venture we would have averted 3,000 deaths at the Wtc, 4,500 deaths of American soldiers, 30,000 wounded American soldiers, countless thousands of innocent Iraqi deaths, 0 billion of taxpayer funds spent on the War on Terror, and the billion per year we spend on a vast government bureaucracy that is not development our lives safer or better in any way. Our government had the power, the funds, and the capability to install a uncomplicated deadbolt lock. They did not. Government fails because it is corrupt, incompetent, mismanaged, and self serving.
We are about to caress the largest government outlay in the history of our glorious Republic. President elect Obama and his team of economic masterminds are establishment to borrow and spend the country back to prosperity. Mr. Obama wants to generate 3 million new jobs in 2009. Considering that there are only 1.5 million citizen unemployed in the construction field, it is uncertain how he will employ all of the cashiers, burger flippers, and Wall street paper shufflers in the infrastructure build out of our country. The Obama plan to spend trillion to stimulate our Cheaper has the 17,000 lobbyists in Washington Dc swarming like voracious locusts over a field of crops. It will be the biggest pig roast in the history of our country. These lobbyists will use the billion per year they spend (bribe) to "influence" policymakers like there is no tomorrow. "The ever-increasing cost of the yet-to-be-seen stimulus is like chum in the water for lobbyists circling to snap up some taxpayer cash for their clients," said Steve Ellis of Taxpayers for tasteless Sense, a watchdog group.
Examples of the kind of stimulus we can look transmit to, agreeing to the La Times, are as follows:
Rather than rebuilding highways, a nonprofit group called Reconnecting America wants the government to focus on a "21st century national transportation system" of mass transit and walking and bike paths.
The National Assn. Of compel Passengers is pushing for billion for intercity passenger rail projects.
The firm society is seeking a series of tax breaks that it says will take care of growth and return money to the federal Treasury. It favors, among other things, a tax rebate to middle-class taxpayers, a mammoth reduction in the corporate capital gains tax and a sharp reduction in the tax rate on earnings that firms in the United States get from foreign subsidiaries.
The housing commerce wants all buyers to receive a tax credit for a home purchase and to have the government subsidize mortgage rates straight through a "buy-down" program lowering borrowing costs.
The National retail Federation proposes that sales tax holidays be held while March, July and October 2009, each persisting 10 days. The cost of this program would be billion.
The National Automobile Dealers Assn. Is seeking a tax break encouraging more citizen to buy cars and a "cash for clunkers" program that helps citizen trade in older vehicles for new, more fuel-efficient ones.
"The catfish commerce is on the verge of collapse," said Marty Fuller of the Catfish Farmers of America, citing high feed prices and an growth of imports. About 6,000 jobs are at stake, mostly in economically depressed areas in states such as Arkansas, Mississippi, Alabama and Louisiana. Officials are talking about seeking million in aid as a stimulus.
Now that I know the catfish commerce is safe I can sleep better at night knowing the trillion won't be wasted on anything frivolous. You can be sure that the more outrageous projects are not even being discussed openly. They will slide straight through on page 895 of the arrival bill. Every congressman, except Ron Paul, will be bought off with goodies for their district.
Everybody Knows That the Captain Lied
Poet and singer/songwriter Leonard Cohen captures the current mood of the country in his song Everyone Knows. The financial and political game is rigged against the good guys. The poor will stay poor and the rich will get richer. The captain is your political leaders, fat cat Ceos, and venture professionals. The American ship of state is leaking.
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died
I'm now convinced that the only qualification to be a Ceo of a U.S. firm is to have guts. How else could you construe John Thain's inquire that he receive a million bonus from Merrill Lynch (Mer) after leading that prestigious firm to losses of .4 billion in the old four quarters? Steve Roth, the Ceo of Vornado Realty (Vno0, raked in .8 million last year in compensation. His firm has ridden the wave of cheap debt for the last eight years. He brilliantly doubled the debt of his firm from .2 billion in 2005 to .9 billion in 2007. The firm's leverage ratio exploded from 54% to 68%. He did deals that didn't make sense from a cash flow standpoint. His firm plan was based on the greater fool theory. Now, he is the greater fool. His stock price has plummeted 46%. No bank is willing to lend a commercial developer a dime. The commercial development Ponzi scheme will collapse next year. But, not too worry. Steve and his fellow incompetent gamblers want the U.S. Taxpayer to bail them out. In the America of today, the taxpayer will again be screwed and the rich ruling elite will support their place in the public order. The government has chosen to make you the greater fool.
Thomas Friedman in a modern Nyt description correctly assesses the corrupt financial system we are stuck with:
I have no pity for Madoff. But the fact is his alleged Ponzi scheme was only slightly more outrageous than the 'legal' scheme that Wall street was running, fueled by cheap credit, low standards and high greed. What do you call giving a worker who makes only ,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a 0,000 home, and then bundling that mortgage with 100 others into bonds, which Moody's or standard & Poor's rate Aaa, and then selling them to banks and pension funds the world over? That is what our financial commerce was doing. If that isn't a pyramid scheme, what is?
The dice are loaded and the fight is fixed. Those who played by the rules, lived within their means, went to work every day, didn't flip condos, or use home equity to lease a Mercedes, will pay for those who lied, cheated, and cut corners. This is how the American Dream has turned into the American Nightmare.
American Dream Redux - Patriots Needed
Below is an email I received this week from a lady named Cindy with regard to my last description about Bernie Madoff:
Mr. Quinn...I just completed reading your description and could not agree with you more...Possibly a word of advice will ease my pain...I am a single mom with 3 children, 23, 19, 16....I am 52, self made, and worked my entire life to perform a comfortable level of success for my family...For years I ran side by side accounts with Paine Webber, Merrill Lynch and Bernie Madoff. Amazingly, I met an associate of Madoff's at a Church in Fort Lauderdale and entrusted him with ,000 16 yrs ago....Nothing posh...Simply good.....In the last 5 yrs Madoff out performed all, so plainly I moved my accounts and fed my Madoff feeder...Now, .7M later I am destitute...I will begin fore-closure on 3 of my venture properties and loose [sic] my customary home for I can no longer afford it....Why should a little guy like me have to suffer the consequences of an Sec over site...Ohhh...I'm sorry, we will do better next time???
Why is it Ok for Madoff to sit in his M apartment out on bail, watching Tv and playing on the Internet?...Why is it Ok for him to afford the most mighty old Sec attorneys now in hidden custom that will delay his trial for 3-5 yrs...How can our government allow this to happen...How is Ok to bail out Wall St with 0B while I stress out and cry like a baby over my loss....
How is it Ok for Obama to be spending Christmas in Hawaii with his house staying at a M mansion, while my sickly mom flies from Nc to Fort Lauderdale to hold and ease her daughter....How is it Ok that we have no Xmas tree or gifts this year?...How is it Ok that my and my children's trust in mankind has been shattered....
I suppose we will survive, but how we don't know....
The evil perpetrated by Bernie Madoff and his kind on Wall street have disillusioned the American public and have driven another stake into the heart of the American Dream. The greed, false promises and fraudulent schemes by venture professionals and bank Ceos has shattered the dreams of millions. The immoral vision of gigantic wages, mammoth power, and elite public status has driven many to cheat the innocent.
As my father crosses the threshold into the final stages of his ultimately losing ten year battle with Alzheimer's disease, I can't help but contrast the compassion, care, empathy and love that my Dad has experienced from nurses, doctors, aides, and ambulance drivers, with the coldness, selfishness, materialism, egotism and narcissism exhibited by Wall street scam artists, power hungry politicians, and pompous government bureaucrats. Dedicated caring nurses are paid a few thousand dollars per year. Criminally incompetent bank Ceos are paid hundreds of millions per year. Who benefits society more?
I'm convinced that the majority of Americans are decent human beings. They want a richer and fuller life, with a legitimate chance for advancement. The last 25 years of materialistic psychosis was a temporary deviation on the road towards the American Dream. If the authorities would let capitalism run its procedure and allow the painful deleveraging that is needed, we could get back on course. If it takes a depression to perform this required deleveraging, so be it. We've survived depressions before. It is time to resist the Federal support criminality and government abuse of power. Ron Paul's call for new patriots must be our rallying cry to reclaim the American Dream:
The customary American patriots were those individuals brave enough to resist with force the oppressive power of King George. I accept the definition of patriotism as that attempt to resist oppressive state power. The true patriot is motivated by a sense of accountability and out of self-interest for himself, his family, and the hereafter of his country to resist government abuse of power. He rejects the understanding that patriotism means obedience to the state.
Many citizen are looking for an easy write back to the tyranny that is being imposed upon us by the oligopoly of government, corporations, and media. There is no easy answer. The customary patriots struggled for 14 years to free themselves from British tyranny. Failure meant the hangman's noose. Our politicians, corporate Ceos, and media pundits will supply comforting "solutions" that have been crafted by Pr maggots. Their crafted talking points are lies. They have no idea what they are doing. The only inquire is either rational change will come when the existing system collapses under the weight of its lies, or we take back the country straight through grassroots efforts and spreading the truth straight through the internet.
What Happened to the American Dream