Prophets and Losses: A Look at The Federal Reserve

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Now that the federal government is playing an ever-larger role in the economy, a look at Washington’s track record seems to be long overdue.

The recent release of the Federal Reserve Board’s transcripts of its deliberations back in 2007 shows that their economic prophecies were way off. How much faith should we put in their prophecies today — or the policies based on those prophecies?

Even after the housing market began its collapse in 2006, Federal Reserve chairman Ben Bernanke said in 2007, “The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”

It turned out that financial disasters in the housing market were not “contained,” but spread out to affect the whole American economy and economies overseas. Then Chairman Bernanke said: “It is an interesting question why what looks like $100 billion or so of credit losses in the subprime market has been reflected in multiple trillions of dollars of losses in paper wealth.”

What is an even more interesting question is why we should put such faith and such power in the hands of a man and an institution that have been so wrong before.

Read more from this story HERE.

NRA’s LaPierre Singles Out Violent Chicago, Calls For 1,000 Federal Agents To Patrol Its Streets

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On Fox News Sunday, National Rifle Association’s Wayne la Pierre came out with both barrels blasting, singling out the gun violence in Chicago.

Chicago, a city with one of the nation’s strictest gun control laws, is also one of the nation’s most violent, leading it in death by gunfire.

LaPierre took on the violence in Chicago and noted that if federal gun laws already on the books were enforced, instead of putting even more restrictions on gun legal ownership, it could help solve the city’s violence problems.

“We are all obsessed with the Taliban and we ought to be. What about the gangs?” “They are ruining neighborhoods all over the country? We need a federal task force, if it takes 500 agents; if it takes a thousand agents, go into Chicago.”

“Every gang member on the street of Chicago, starting tomorrow morning, let’s pick ’em up, we’ve got a federal law to get them off the street and put them in prison, and that would cut crime and we’re not doing it.”

There seems to be a lack of will to enforce existing gun laws. New York for example, has a mandatory law requiring prison time for anyone found with an illegal gun in his possession…Yet the law is full of loopholes and less than half of those arrested for illegal gun possession face any prison time.

There are over nine thousand gun laws on the books already. Perhaps it’s time for existing gun laws to be enforced, before any new laws are proposed.

Several years ago a city in the San Francisco bay area was suffering from a massive wave of violence. East Palo Alto was becoming a shooting gallery; so violent it was dangerous for the thousands of motorists who used its main artery daily to travel to other parts of the bay. Shootings, rapes, armed robbery, arson, carjacking and open drug dealing were the norm. The local police department was not up to the task to protect its citizens and put a halt to the crime.

To combat this unprecedented crime wave, communities in the San Francisco bay area & the state of California pitched in with extra police forces to swarm the city. They soon had rounded up gang leaders and the violent individuals who were creating much of the crime. They had a task force that instantly responded to crime and aggressively hunted down the criminals. Existing laws were enforced and soon the streets of this city were relatively safe. The criminal element had been broken.

LaPierre’s suggestion for federal intervention in Chicago is a good one. Bring in federal police forces to help patrol the violent streets. Make it a national priority to protect the law abiding citizens of Chicago. When the criminals are taken off the streets, the percentage of gun violence will be drastically reduced.

This same formula should be used to target other crime and violence plagued cities. Disarm and jail the criminals who use guns, enforce the existing gun laws.

Why Is Government Stockpiling Guns, Ammo?

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Photo Credit: WNDIs the U.S. government getting ready for a war we don’t know about?

And, if that’s why Washington is stockpiling massive amounts of ammunition (hollow points, by the way), why is Homeland Security doing the buying instead of the Defense Department?

I have some theories.

Many of you will remember a story I broke a long time ago – about presidential candidate Barack Obama’s little-noticed announcement that, if elected in 2008, he wanted to create a “civilian national security force” as big, as strong and as well-funded as the Defense Department.

Here’s what he actually said at a campaign stop in Colorado July 2, 2008: “We cannot continue to rely only on our military in order to achieve the national security objectives we’ve set. We’ve got to have a civilian national security force that’s just as powerful, just as strong, just as well-funded.”

See video:

Could what we see happening now in the Department of Homeland Security be the beginning of Obama’s dream and our constitutional nightmare?

Read more from this story HERE.

It Took America’s Oldest President To Make Her Feel Young Again

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Photo Credit: REUTERS/Chas CancellareRonald Reagan’s birthday will be commemorated this week. He took office just a few weeks shy of his 70th birthday in 1981 making him the oldest man elected to serve as our Chief Executive and Commander-in-Chief, that is until he stood for re-election in 1984. In fact, one of the most well-known lines in Presidential debate history came in response to Reagan being questioned whether his age would be an important factor in his re-election campaign. Reagan, in his famous Irish wit, said, “I am not going to exploit for political purposes my opponent’s youth and inexperience,” which drew a roar of laughter from the crowd and even his opponent, Walter Mondale. Reagan won the election 49 states to 1.

The irony is that it would take America’s oldest President to remind her what it means to be young again. The lessons he taught hold some key insights into not only renewing the American economy (showing strong signs of lethargy), but the American spirit.

A youthful spirit, which Reagan clearly possessed in great measure, has been described as “a quality of the imagination, a vigor of the emotions; it is the freshness of the deep springs of life” and manifests in a “temperamental predominance of courage over timidity of the appetite for adventure over the love of ease.” The former California Governor displayed this vitality when he made his announcement that he would seek the Presidency in 1980. He exhorted, “Someone once said that the difference between an American and any other kind of person is that an American lives in anticipation of the future because he knows it will be a great place.”

But, Reagan contrasted, “There are those in our land today, however, who would have us believe that the United States, like other great civilizations of the past, has reached the zenith of its power; that we are weak and fearful, reduced to bickering with each other and no longer possessed of the will to cope with our problems.” He continued, “They tell us we must learn to live with less, and teach our children that their lives will be less full and prosperous than ours have been; that the America of the coming years will be a place where – because of our past excesses – it will be impossible to dream and make those dreams come true. I don’t believe that. And, I don’t believe you do either. That is why I am seeking the presidency.”

Read more from this story HERE.

Counting The Ways The Media Lies About The Economy

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Photo Credit: John NoltePop quiz: What was the biggest news story this week? And I don’t mean, what was the biggest news story according to Obama’s media.

Obviously, it was the economy taking a nosedive into negative territory last quarter, along with the fact that hardly enough jobs were created last month to keep up with population growth. Oh, and the unemployment rate increased. Of course the economy is the biggest story; it affects the most people and Obama’s doing it wrong.

But not only is the media never-minding the economy, much of the media coverage related to economic bad news is forever being spun into good news. A few examples…

Politico saw the jobs numbers as something that “could soothe some of the renewed economic anxiety in Washington[.]”

The AP saw the jobs numbers as proof “[t]he U.S. job market is proving sturdier than expected” and “mostly encouraging.”

Read more from this story HERE.

Senate Republicans Complicit in Arming Muslim Brotherhood

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Photo Credit: National ReviewI’m done grumbling about how President Obama is empowering America’s enemies. After all, it is not just Obama. When it comes to abetting the Muslim Brotherhood, Republicans are right there with him.

Not all of them, of course. This week, for example, Senator Rand Paul proposed an amendment that would have prohibited our government from transferring F-16 aircraft and Abrams tanks to Egypt’s Muslim Brotherhood–dominated government. This lunatic plan is not just an Obama initiative. It is also a GOP brainstorm — of a piece with 2011’s Libya debacle, in which Republican leaders cheered as Obama, upon consulting with the Arab League, ignored Congress and levied war on behalf of the very jihadists who, quite predictably, have since raided Qaddafi’s arsenal, besieged northern Africa, and massacred Americans in Benghazi.

A few weeks back, the John McCain & Lindsey Graham roadshow made its way to Brotherhood Central in Cairo, with newcomer Kelly Ayotte in tow. Senator Ayotte appears to have filled the void created by Joe Lieberman’s retirement — after all, when you have Republicans, who needs another Democrat? The former trio is best remembered for its Tripoli triumph of late 2009, when the three kicked back in the Qaddafi compound and toasted our newly cozy relations with the dictator. The bipartisan solons then winged their way home in time to second the Obama State Department’s increase in funding for the Libyan dictator’s regime. After all, they reasoned, Qaddafi was our hedge against Libya’s jihadists. As is their wont, though, the solons soon dazzled us with a 180, suddenly deciding that what we really needed to do was back Libya’s jihadists in their war against Qaddafi. The rest, as they say in Mali, is history.

So the GOP brain trust now brings this Midas touch to Egypt, rallying behind Obama’s cozy relations with the new “Islamic democracy.” That would be the Brotherhood’s rapidly unraveling sharia basket case, into which our own bankrupt government has so far sunk nearly 3 billion U.S.-taxpayer dollars, with more billions soon to come through U.S.-backed IMF loans and, yes, sophisticated U.S. weaponry. Any moment now, as it was in turbulent Libya, the ground in Egypt is certain to shift, or crater. When it does, who knows whose side the senators will have us on . . . and who knows what American enemies may be wielding that U.S. weaponry?

Senator Paul, by contrast, has three ideas that seem positively batty to the McCain gang. First, he thinks that American foreign policy ought to be premised on American national interests, not on the shifting notions of “global stability” popular at the Wilson School and the Council on Foreign Relations. Second, he suggests that when we give aid and arms to anti-American Islamists, bad things tend to happen to America. Finally, Paul believes the foundation of American foreign policy is, of all quaint things, the United States Constitution. The Framers gave Congress not merely the authority but the duty to thwart executive excess. On the international stage, that primarily means the power of the purse, which enables the people’s representatives to defund such madness as the arming of Islamic supremacists.

Read more from this story HERE.

The President Shoots??

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Photo Credit: Bruce KrastingAnyway, I know a thing or two about skeet shooting. In this sport you have beginner shooters who don’t really know what they are doing, you have amateurs that are “regular” shooters who take it seriously, and you have guys and gals that shoot 25 out of 25, again and again.

The following is a picture of a person who has not shot skeet before. This person doesn’t know how to hold the gun properly. This person is going to get a big recoil in the arm that will hurt. No one has bothered to show this person how to hold a gun. This person has not been taught how to position the body to make a successful shot. This person has no chance of hitting a moving target. This person is not wearing the proper clothing for a skeet range (padded vest that has pockets for 25 shells). This person is pretending to shoot skeet. This is a photo-op:

I don’t mean to make fun of the President’s shooting skills. New shooters are always welcome on skeet ranges. I’m glad to see the Prez give this sport a shot, so to speak.

But the spin from the White House on this story is that Obama is banging away every weekend and he is an avid shooter. The president was quoted:

“I do it all the time”

Read more from this story HERE.

Ravens’ Ray Lewis on Double Murder He Was Implicated In: “God Has Never Made a Mistake”

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Photo Credit: Keith AllisonIn an interview played before the Super Bowl, Shannon Sharpe asked Ray Lewis questions about the double-murder Lewis was connected to before the Super Bowl in Atlanta 13 years ago.

Many people in America have wondered abut this for years as well, especially since Lewis was initially charged with murder, and later a $10 million wrongful death suit was filed against him.

Lewis, 24 at the time, reportedly lied to cops the next morning and hid or destroyed his blood-stained shirt.

As the previous link reports, Lewis pleaded down murder charges in exchange for testifying against his friends.

He later reached a financial settlement with one of the victims’ daughters, with the amount undisclosed, but let’s just say it probably was a healthy amount. Note that gun laws would not have stopped these murders where knives were apparently the murder weapon.

While Lewis is correct that God has never made a mistake, he fails miserably elsewhere in his understanding of God (not to mention in his application of this principle regarding the murders).

It is also especially odd that his comment to the families of the murdered men – by someone involved in the incident – is that “God doesn’t make mistakes. That’s just who he is.” I doubt this is much comfort to the families. Lewis hides behind (his version of) theology to avoid answering the question everyone wants to know, which is, “What WAS your role, Ray ?” We would also likely be especially entertained with Lewis’ answer as to why awful things like this happen if God is a loving God. Perhaps with Lewis’ retirement, he can ponder that and provide us with an answer.

Ray gives us a clue as to his role when he “proves” his innocence by saying a man told him “We know you didn’t do this, but you’re going down for it anyway.” Perhaps he didn’t actually plunge the knife into the decedents, but let’s just say he didn’t have an alibi for the time of the murders. His defense is “a man said I didn’t do it.”

It’s also odd that in discussing the murders of two men, Lewis says that “the saddest thing that ever was [was] that a man […] told me in my face, ‘We know you didn’t do this’ “. Really ? This is “the saddest thing that ever was” ? Nothing else ?

Now, here’s where Lewis goes off the rails in his theology. In attempting to prove his innocence, he (indirectly) points to his success on the football field, with the principle that “[the way] God works, he don’t use people who commits anything like that for His glory. No way. It’s the total opposite.”

Hmmm. I’m guessing that Ray hasn’t studied up on Israel and Judah being conquered by their enemies, Assyria and Babylon, respectively. God in fact used these enemies of his chosen people as a hammer to punish the nation of Israel for their wickedness – from the priests to the rulers to the people. But it was the leaders who led the nations astray. And this punishment, by Israel’s enemies, WAS done for his glory, as the Israelites eventually returned home and rebuilt the Temple and the walls.

Lewis further solidifies his innocence (in his own eyes) based on the financial settlement with the families. His settlement was “for the kids” (it’s always for the children, no?). Even though “my name was used the wrong way”, he wouldn’t let that stop him from helping the kids of the murder victims. He lumps the murdered victims’ families in with the “thousands of families” he’s helped.

The interview did nothing to stem the belief that he was directly involved in two men being murdered. In fact, it solidified the view that he was directly involved, yet he preaches the false message that his success on the field could not have happened if he had been involved.

Baltimore barely came away with the victory tonight over the San Francisco 49ers in an exciting game. Lewis has definitely reached the end of his career, as today’s victory showed him to be slow and past his prime. But no doubt he has inspired his team, especially this year as he dealt with a severe injury in the middle of the season.

In post-game comments, he again rightly stated a biblical principle, that is, “When God is for you, who can be against you ?” While, true, it rings hollow from a man who reportedly hid a blood-stained shirt and proclaims his innocence much in the same way that OJ Simpson did.

Shannon Sharpe did a credible job in the portions of the interview that were shown. But it would be extremely informative to see the entire interview.

I tend to agree with Boomer Esiason who said, “I’m not so sure I buy the answer.” Actually, I’m quite sure.

One Hundred Years of Income Tax

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Sunday, February 3, is the 100th anniversary of the ratification of the Sixteenth Amendment, which makes it the one hundredth birthday of the income tax. It has grown rather ill-tempered in its dotage.

Americans for Tax Reform commemorated the occasion by publishing a few fun facts about the income tax. Among other interesting statistics, the initial top tax bracket was only 7 percent, and it didn’t kick in until income reached a whopping $11.6 million in 2013 dollars. Only 358,000 people had to fill out 1040 forms at first, because the standard family deduction was an adjusted $93,000.

Over the past hundred years, the tax code has swelled from 400 pages to almost 74,000. The top rate is 39.6 percent; add in state and local taxes, and you’ve got the government soaking up over half of every marginal dollar earned by the Evil Rich. And the top bracket crashes down on those who earn over $450k, which is the new functional definition of a “millionaire.” Every new tax – from the income tax itself, to the Alternative Minimum Tax and its prospective stepchild, the “Buffett Rule” – is sold as a small levy on the vast wealth of millionaires. The AMT was only supposed to affect a couple of hundred people when it was implemented in 1969, but now it’s on the verge of grabbing 50 million taxpayers, if it’s not “fixed.” In the early years of the income tax, Americans were likewise assured that it would only slip a few dollars from the bulging wallets of the wealthy.

Allowing the government to sink its feeding tubes into the veins of American income has fueled astonishing government growth. That first itty bitty tax levy brought in a paltry $16.6 billion in revenue, adjusted for the past century of inflation. Today the income tax brings in $2.7 trillion. Government inevitably grows to fill, and exceed, the space made available for it.

Perhaps the biggest problem with this tax is the way it is collected. As we were all reminded during the row over presidential candidate Mitt Romney’s remarks about the “47 percent,” the “progressive” tax system has moved an increasingly large cohort of Americans out of the system entirely, while placing an ever-greater share of the burden upon a dwindling group of high wage earners. Remarkably, this group is perpetually accused of “greed” and refusing to pay its “fair share,” even though the relationship between its tax burden and the amount of income it earns has long since exceeded any reasonable definition of “fairness.” Even before the new Obama tax increases kicked in, the Heritage Foundation noted that the top 10 percent of income earners were carrying 71 percent of the federal income tax burden, even though they earned only 43 percent of all income. The bottom 50 percent, meanwhile, earned 13 percent of all income but paid only 2 percent of the income tax.

Read more from this story HERE.

‘Creative Accounting’ at the Federal Reserve?

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As the story goes, the Federal Reserve”made” $91 billion dollars last year, sending $89 billion of that to the U.S. Treasury. Until 2008, about the only earning assets the Fed owned were U.S. Treasury bonds.

Let’s stick with that for the moment.

The interest the Fed earns on those bonds is paid by the U.S. Treasury! The Fed keeps 1 percent of the earnings to pay its rent and sends the rest back to the Treasury. So every dollar the Treasury pays to the Fed is returned, less a 1 cent handling cost. So the interest cost the Treasury incurs is magically turned into Treasury income!

There is no limit in principle to the amount of Treasury debt the Fed can buy so it can makes lots of money!! The Fed has increased its assets by over $2 trillion since 2007, a real money-maker!

Yes, the Fed has also purchased a lot of mortgage backed securities, but those have a Treasury guarantee, so same deal, in terms of who bears the risk, but of course mortgage holders are paying the interest and giving it to the Treasury (that lent them the money in the end).

Read more from this story HERE.