Dishonest Republicans & Democrats

I find it shocking that both Republicans and Democrats, with the total complicity of the news media, including FOX News, have not made it crystal clear to the American people that the sequester does not include any actual cuts in spending.  There are no cuts to domestic spending or to the Department of Defense, none.  The so-called cuts are simply a reduction in the rate of growth.  They are as mythical as the long touted Reagan cuts in domestic spending.  Check the facts for yourself, the domestic budget increased every year under Ronald Reagan.

This is total dishonesty by the White House, the Republican leadership (with the exception of some Republicans like Rand Paul, who have called attention to this lie), and by the Democratic leadership.  This is an intentional distortion designed to confuse the American people.  It's a con called base line budgeting.  Essentially it means that the baseline calls for projected increases in spending.  If Congress spends more than the baseline increase, they call it an increase in spending.  If they spend less than the baseline increase, they call it a cut in spending.  It is bizarre.  Even after the sequester the US government will spend $15 billion more in 2013 than it did in 2012.  Some cuts!

This is Orwellian at best, it is total dishonesty perpetuated by both parties at worst.  This is an incredible kind of double-talk that is a telltale sign of a nation in decline.  When both political parties agree to intentionally confuse the American people by talking about reductions in the increase in spending as draconian cuts that will damage our Republic, the bond of trust between elected officials and the people they are to serve has been severed.

If you are having a hard time making it, running up credit card bills, and unable to take care of your basic needs such as mortgage payments, school needs, heating, and home repairs, you will make cutbacks in your spending.  These will be real cuts, not reductions in the rate of growth in spending.  No matter who you are, you find a way to cut back.  You spend less on food, you quit going out for recreation, you drive less, turn down the thermostat, you do whatever is necessary to make ends meet.  That is what you and I understand as cuts.

If, as I do, you run a business, and you find yourself running in the red, you make serious cost expenditure reductions, i.e. cuts.  You know that you cannot continue in business if you are spending more than you take in.  If you do, you are soon out of business.  I've been in business for nearly 40 years.  During that time I have, on several occasions, had a bad year.  In order to survive, I had to make major cuts, starting with my own compensation.  The last time this happened I had to cut about 10% out of our annual expenditures.  It was painful, but we survived because we were willing to make real cuts in our spending.  When we made these cuts we learned how to do things better and faster for our clients.  And, when we were back on track, we expanded, always keeping an eye on the bottom line, making sure that the amount of money coming in was more than the amount of money going out.  And, unlike the government, we don't borrow money we can't afford to repay.  In addition, we keep a financial reserve to get us through the next difficult time that is sure to come.

What you do to make ends meet and what I do to stay in business is sometimes difficult, even painful.  But, we do it because we have to live within reality, not in the Willy Wonka land of Washington, DC.  What you and I do to survive and to prosper isn't brain surgery, or rocket science, it's just plain common sense.

Unfortunately, there seems to be no common sense in Washington, DC.  Worse yet, candor and honesty seem to be in scarce supply.  The least we should be able to expect out of the President of the United States and members of the US Senate and the US House of Representatives is honesty and truthfulness.  We deserve better than gobble-D-gook, and double talk.  Our representatives in Washington, DC are public servants, something they seem to forget.  They serve at our pleasure.  They work for us, we don't work for them.  They are not Kings and Queens and Princes, or potentates who are to dictate how we live and what we do with our lives and with the money we earn.  It is our money.  The government doesn't have any money (i.e. wealth) that is not taken forcibly from you and me.  Those dollars represent the goods and services that we labored to earn.

Sadly, the men and women in Congress and the man in the White House seem to have either forgotten their role as public servants, or they choose to ignore it and see themselves instead as our masters.  This is not the Republic envisioned by our Founders.  In fact, it is the nightmare they revolted against.  They risked their lives, their fortunes, and their sacred honor to secure liberty for us, and our leaders have betrayed that trust. 

In the 20th century, our leaders rejected our heritage of freedom repeatedly.  Government grew and grew and grew.  It became the all-consuming, all controlling, nanny government that our forefathers fought against.  The Founders saw America as a unique "shining city on a hill", a place where those in need were taken care of by virtuous people who believed that they were their brother's keeper.  They gained their virtue from their Christian faith.  The Founder's ideal was liberty and opportunity for all, regardless of background, or circumstance.  They weren't perfect, but their goals and ideals were grounded in reality and truth.

The Founders understood that there are no guarantees in life.  They understood that a government big enough to do anything was a government dangerous enough to take everything, including wealth and freedom from the people.  But in the 20th century, and now in the 21st century, the wisdom of the Founders has been either rejected or forgotten.  Crafty men and women, who see themselves as wiser, and more benevolent than others, seek to rule our nation as emperors, telling us what to do with our lives from cradle to grave.

For a brief moment, with the election of Ronald Reagan, a Founder's class President, common sense re-emerged.  President Reagan spoke to the American people truthfully and plainly.  He didn't lecture, demand, or disdain the wisdom of the hard working men and women of America.  He spoke once again of America as a "shining city on a hill."  His goal was to unchain and unleash American citizens from the burden of overreaching government.  He sought to reduce and restrain government from intervening in the lives of free citizens.  His understanding of history was in sync with that of Washington, Jefferson, Adams, Madison, Franklin, and Henry.  He respected the people and he respected their right to life, liberty, and the pursuit of happiness.  He never looked down on American citizens and thought them unworthy or unable to run their own lives.  He believed that they had the right to keep and spend the results of their labors.  Ronald Reagan made us proud to be Americans.  He was a man of character, of integrity, and of clear vision. 

He was also a man of great personal compassion, even sending personal checks to those in need who wrote to him.  He understood that charity (love) comes only from individuals, not from some huge government bureaucracy.  He knew that burdening the people with high taxes, unending regulations, and restrictions on their financial capacity to be generous to others was not only wrong and un-Constitutional, but the path to universal misery.

I am sick of the dishonesty in Washington, DC and the sordid complicity of the news media in trying to hoodwink the American people.  Spending more money we don't have will never help the economy.  It is 180 degrees out of phase with common sense, and it is doomed to failure.  Individuals, companies, states, and nations have never and will never spend their way into prosperity.  Intentionally dividing Americans by race, wealth, age, sex, or in any other way is simply wrong.  It is evil.  Great leaders do not divide their nation and create disharmony, they seek to unite a nation.  Those who divide are not leaders, they are destroyers.

Ronald Reagan lifted us all up.  The prosperity of all citizens rose as Ronald Reagan lifted the burden of government from the backs of the American people.  He brought harmony to our land, he united us.  Driven by a love of country and a love for the American people, Ronald Reagan brought us together as Americans.

I sincerely wish I could say the same of Barack Obama.  I really do.  As our first black President, he had a unique opportunity to unite Americans as never before.  He had a chance to be the President of all Americans, but he chose not to do so.  Through hostile rhetoric and endless dividing and campaigning, he has driven the spirit of America down.  His mantra is envy and jealously, not love and compassion.  He has encouraged hostility between races, between sexes, between young and old, between rich and poor, and driven a wedge any place where he sees a possibility for political gain.  He words are often angry, divisive, and dishonest.  It is sad outlook for so young a man who benefitted his entire life from being an American.

He has spoken plainly of his desire to transform America, but America doesn't need to be transformed from the vision of our Founders, it needs to return to that vision.  We don't need a monarch that rules over our lives, we need a leader like Ronald Reagan who respected the greatness of America, the goodness of America, and the promise of America.  We need a President who sees Americans as a people who are compassionate, caring, hard-working, industrious, and freedom loving.  We need a President who will minimize government intervention into our lives, and thereby maximize freedom and opportunity for all of its citizens.  We need leadership that bases policies on traditional moral values of hard work, fairness and decency.  We need leadership that defends and protects life.  And, above all, we need and deserve truth and honesty from all of our leaders.

It's time for a new American Revolution, one that springs not from the cartridge box, but from the ballot box.  It's time for freedom loving men and women all across our nation to stand up and be counted.  We won a great, historic victory in 2010, but it was just the beginning.  It's time to quit licking our wounds from our losses in 2012, and kick the rascals out in 2014.  This is not about us, it's about our children and our grandchildren.  It's about preserving the heritage of liberty that was passed along to us by our forefathers.  It's about pledging our own lives, our own fortunes and our sacred honor to re-creating the vision of the Founders, so that our children and grandchildren can live in freedom.  Can we do any less?

Justice

Almost everyone will say that they seek justice or fairness, as we often refer to it.  In many cases however, both public and private, what people really seek is revenge.  They are not motivated by a love of justice, but rather by a desire to get even, to punish those with whom they disagree.  The concept of justice originates with God.  God is just; in fact, he demands justice, and that's why he had to create a plan of salvation to save fallen man.  He cannot let an imperfect person join him in a perfect heaven.  If he did that, heaven would no longer be perfect.  That's why he sent his only son, Jesus, to take our sins on himself and impart his righteousness to us so that we can enter heaven as perfect in God's sight.

I bring up the Christian plan of salvation not to write a theological treatise, but to establish an understanding of justice, and an understanding of the imperfection of man as it was understood by the Founders of our nation.  The reason they worked so hard to create a government with very limited powers was their concern that corrupt man, if left to his own devices, and given unlimited power (over others), will always use that power to his own corrupt benefit.  It was ironic that men like Washington, Henry, and Jefferson had this foundational understanding, while still being slave holders.  Yet they did.  They were blind to the evil of human slavery.  In fairness, slavery was an institution they inherited, not one they created.  And, in fact, both Patrick Henry and George Washington voted to end the slave trade while serving in the Virginia House of Burgesses, well before the advent of the American Revolution.  It was King George who vetoed the bill passed by the Burgesses because he was personally profiting from the evil business.  But it was not until their death that most of the Founder's slaves were actually set free.

Clearly the Founders were not perfect men, but rather they had a correct understanding of human nature as well as an understanding of the nature of God.  These were well-read men.  They had studied history and they had not only read, but studied the Bible.  With nearly half of the signers of the Declaration of Independence having had formal seminary training, the Founders were not unknowledgeable in regard to the nature of man and the nature of God.  They understood God to be perfect and holy, just, all knowing, all powerful, yet merciful and loving.  The writings of George Washington make it clear that he understood the God of the Bible as a personal God.  Even Thomas Jefferson, who later in life was angry at God, as President, urged Congress to appropriate funds to distribute Bibles to the Indians.

Washington, Benjamin Franklin and John Adams made clear, forthright statements that the new government they had created under the United States Constitution was designed exclusively for a virtuous people, i.e. a people who strived to live in concert with the laws of the land and the laws of God (Ten Commandments).  They knew that a Republic can exist only if its citizens voluntarily exercise self-restraint.  They understood that if citizens and those in government chose to only obey those laws with which they agreed that chaos would ensue.  And if that happened, government would, of necessity, expand its police power to maintain order at the cost of diminished individual freedom.

Today people talk about all kinds of justice—fairness, social justice, equality, etc.  In most cases, they simply have no idea what they are talking about.  They rely solely on human wisdom as their "foundation" for making such judgments.  And they confuse education and intellect with wisdom.  If what you have been taught and have learned is simply not true, then you cannot have wisdom.  If you are less than brilliant, but follow God's precepts, you will gain wisdom.

There is no argument that there is much injustice in the world.  It has always been that way and it will always be that way.  Fallen, imperfect man is incapable of anything approaching perfect justice.  He can strive for justice and should strive for justice, but he will always fall short.  Justice is something a society and a nation should seek, and indeed that is what the Founders sought. But when you read about the debates at the Constitutional Convention that finally delivered the United States Constitution, you begin to realize that it was a document of compromises.  The abolitionists wanted to abolish slavery, the big states wanted to dominate, some wanted a very powerful chief executive, and there were arguments for and against states having more or less power.

But the two things that held them together was their fear of foreign military intervention, and the fear of an all-powerful government that taxed and regulated them to the point that individual freedom would no longer exist.  Their memory of the iron rule of King George III was fresh in their minds.  They wanted a government powerful enough to repulse external powers and strong enough to maintain order, but no more!  They sought minimalist government and minimalist taxes, so that opportunity would be both widespread and unlimited. 

But how did they see justice?  Their guidebook was the Bible.  That's why there were so many references to Divine Providence in their commentary and in their writings and debates.  They saw God as just and wanted to emulate his commands and advice.  The God of the Bible was their model of justice.

Today, some argue that Jesus was an adherent of social justice.  It's hard to know what exactly is meant by social justice, but in today's world, it often refers to using government to redistribute wealth and income.  If this is the meaning of social justice, those who claim Jesus as an adherent don't have a leg to stand on.  But, let's deal with two stories from the Bible that are often quoted as evidence of Jesus' and God's support of socialism or Marxism.  However, before we do, we can simply cite Jesus' oft repeated reminder that his mission was to "…seek and to save those who are lost."  Yes, he displayed his love and his power and his compassion by healing and feeding those in need, but that was not his primary mission.  He was fulfilling God's plan of salvation and in feeding and healing the multitudes, he was not only showing compassion, but setting an example for us as his followers.

In Acts 2:44 it describes the Christian Church in Jerusalem after Pentecost, "All the believers kept meeting together, and they shared everything with each other."  There was great harmony and enthusiasm among the believers at this point in time.  They understood that everything that they had came from God and in joy they voluntarily shared everything they had with others.  There was no compulsion involved, it was all freely and joyously given.  Ananias and Sapphira were struck down by God not because they did not share all or because they did not share enough, but because they lied.  There was no law or demand that in order to be a follower of Jesus you had to share everything with everyone else.  It was simply the freedom that comes from the knowledge that they were forgiven, and the knowledge of God's sovereignty over the earth that caused these early Christians to joyfully put all their goods and wealth in a common pot.

The parable of the workers all being paid the same is cited by both free marketers and by socialists as evidence of the fact that Jesus agreed with them.  Neither group is right.  Here is the entire parable taken (with permission) from God's Word to the Nations version, Matthew 20:1-16…

"The kingdom of heaven is like a landowner who went out at daybreak to hire workers for his vineyard. After agreeing to pay the workers the usual day's wages, he sent them to work in his vineyard. About 9 a.m. he saw others standing in the marketplace without work. He said to them, 'Work in my vineyard, and I'll give you whatever is right.' So they went.

"He went out again about noon and 3 p.m. and did the same thing. About 5 p.m. he went out and found some others standing around. He said to them, 'Why are you standing here all day long without work?'

"'No one has hired us,' they answered him.

"He said to them, 'Work in my vineyard.'

"When evening came, the owner of the vineyard told the supervisor, 'Call the workers, and give them their wages. Start with the last, and end with the first.'

"Those who started working about 5 p.m. came, and each received a day's wages. When those who had been hired first came, they expected to receive more. But each of them received a day's wages. Although they took it, they began to protest to the owner. They said, 'These last workers have worked only one hour. Yet, you've treated us all the same, even though we worked hard all day under a blazing sun.'

"The owner said to one of them, 'Friend, I'm not treating you unfairly. Didn't you agree with me on a day's wages? Take your money and go! I want to give this last worker as much as I gave you. Can't I do what I want with my own money? Or do you resent my generosity towards others?'

"In this way the last will be first, and the first will be last."

This parable has nothing to do with economic philosophies whatsoever.  It's not an argument to pay everyone the same, no matter how many hours they worked.  It's not an argument on behalf of property rights of an owner.  It's not about contracts.  It's a message much more important than that.  It's about God's amazing grace.  Your entry into heaven doesn't depend upon when you became a believer, nor is your joy less if, like the criminal on the cross, you gain entry at the very last hour of your life.  As Jesus' words in the parable make clear, gaining access to heaven is solely a gift of God.  There is no political or economic ideology contained in this parable.

Today's liberals like to refer to taxes as "contributions", but that description is not only flawed, it's silly and just plain wrong.  Contributions are something that an individual freely and willingly gives, and taxes are always compulsory.  They are ultimately collected at the point of a gun and if you don't believe that, try not paying your income taxes.

The Bible emphatically rejects the idea of compelling someone to give to help others.  In 2nd Corinthians, chapter 9 verse 7 the Apostle Paul says, "Each of you should give whatever you have decided.  You shouldn't be sorry that you gave or feel forced to give, since God loves a cheerful giver."

It is true that when God directly intervened in the lives of the Israelites of the Old Testament he created spiritual laws, ceremonial laws, and civil laws.  Of course, at the time of Christ's sacrificial death, God created a new covenant with the followers of Jesus, the long promised messiah.  He made it clear that the ceremonial laws of the Old Testament no longer applied by ripping in half the curtain in the temple that shielded the Holy of Holies from the people.  Nevertheless, the civil laws that were given to the Israelites are still instructive when it comes to understanding God's justice.  God, after all, is the only perfectly just being in the universe.

What were God's laws concerning support of the temple and of the government of Israel?  He demanded a tithe of 10% from everyone.  If you were very poor, you still were required to give 10%, and if you were very rich, you were expected to pay a tithe of 10%.  No one was exempted among the nation of Israel.  Of course, if you were very rich, 10% was a lot of money, but you still had much left to spend and invest and thus employ others.  If you were poor, 10% was not very much, but you were still doing your part to support the temple and the government.  This is the point that Dr. Ben Carson was making at the National Prayer Breakfast to the President of the United States.

It is neither smart nor moral for government to redistribute income.  It is especially evil if the policy is driven by envy or jealously that seeks to divide Americans.  It is wrongheaded also.  Such policies drive the general economy downward, destroying jobs and opportunity.  They saw off the first rungs of the ladder of success and are especially hard on the poor and minorities.  Similarly, businessmen and women who do not appreciate that their success is a blessing from God and who do not use their plenty to assist others and to create more jobs, do damage to the engine of America's economic prosperity, our free market capitalist system.

The idea of taxing the rich at 75% as they now do in France is not smart, fair or just. It is a clear example of man putting himself on par with God.  It is foolishness that leads to economic misery for all.  Only when a nation is led by men of Godly wisdom do the people live peacefully and in prosperity.

Trick Question

OK, so you are a well-informed person who watches the nightly news and reads newspapers and obtains news from the Internet.  So, here's my trick question for you:  "How much will the Sequester cut from the federal budget?"

The gray lady, i.e. the New York Times, wrote on February 2, 2013, "Unless lawmakers act by March 1, the budget sequestration process will start cutting government spending automatically — reductions that would amount to $1.2 trillion by 2021. "

Now, the NYT is considered a pretty authoritative paper, so I read this to mean that there will be cuts in spending to both social welfare programs and to the Department of Defense.  Is that how you would understand it?

If a big company cuts its annual expenditures for marketing and sales by $500,000, that means that they will be spending $500,000 less on TV ads, radio ads, newspaper ads, etc., right?  Let's say that you have run up your credit card bills, so you are going to cut back on spending by $200 per month.  What does that mean?  It means you are going to spend $200 less each month.  Seems simple enough to me.

And, if the federal government is going to cut income taxes across the board by 10%, it means you get to keep 10% of your money that the government would otherwise be taking.  A cut is a cut is a cut.

But in Willy Wonka land, a cut is not a cut.

There has been much moaning and wringing of hands in government over the huge cuts that will be imposed on the government if the Sequester is allowed to go into effect.  We are told of huge cuts in the military budget, massive slashes in welfare spending, but the Sequester does not cut or reduce government spending in any way.

The reality is that the so called Sequester merely reduces the rate of increase in spending for the government, including the military.  Let me say it again, the Sequester includes no actual cuts in spending.  This is how Republican Senator Paul put it in his response to the President's State of the Union message broadcast by the Tea Party Express…

"The President does a big "woe is me" over the $1.2 trillion sequester that he endorsed and signed into law.  Some Republicans are joining him.  Few people understand that the Sequester doesn't even cut any spending. It just slows the rate of growth.  Even with the Sequester, government will grow over $7 trillion over the next decade."

In other words, even with the Sequester in place, government spending will automatically grow $7 trillion over the next ten years!

Another question I might ask is…"Are our Congressmen idiots, or do they simply think we are idiots?"

There is not lack of intelligence in Washington, DC, but there is certainly a lack of common sense.  What's wrong with these people—Republicans and Democrats?  Don't they understand the difference between slowing the rate of growth and making actual cuts in spending?

Have you ever heard of the "Penny Plan?"  This proposed piece of legislation calls for a 1% reduction in actual spending by the government.  The details are found at www.onecentsolution.org and they are worth reading.  Essentially, it calls for the government budget (excluding payments for interest on the national debt) to be reduced by 1 cent for every dollar spent.

I'm in business, so I know it is possible to make big cuts in your budget when the circumstances dictate it.  One year we cut our budget by nearly 10%, because we were operating in the red.  It saved us from going out of business.  That's what businesses do, small and large, when they are threatened with financial insolvency.  Boeing did it a few years ago.  It helped to save Boeing and made it possible for them to be much more successful in the years to come.

Families do the same thing.  If you are spending more than you are taking in, you cut expenditures, if you do not have the option of increasing revenues.  And, generally speaking, cuts are a lot more than 1%.  If a family is taking in $5,000 a month after taxes, a 1% cut would be only $50 per month.  Any family could do this if it had to, and usually, the cuts are closer to 10% than they are to 1%.

It's just commonsense, but I guess that's why the members of Congress, or at least most of them, just do not get it.

Let's face it, government is always a lot more bureaucratic and inefficient than a private business.  There's lots of fat and lard that can be easily cut.  The productivity of government workers is just a small fraction of that of workers in the free market.  The federal government could easily sustain a 10% across-the-board cut in expenditures, even at DOD.  Believe me, anyone who has served in the military (as I have) can tell you that DOD is just as bureaucratic and inefficient and full of waste as any other branch of government.  That's what I'd like to see, but if we can't do that, we can certainly cut spending (real cuts, not a reduction in the increase in spending) by 1% across-the-board.

Here is the Penny Plan as it is described at their web site…

The One Cent Solution is beautifully simple: If the government cuts one cent out of every dollar of its total spending (excluding interest payments) each year for five years, and then caps overall federal spending at 18 percent of national income from then on, we can:

• Reduce federal spending by $7.5 trillion over 10 years.
• Balance the budget by 2019.

Moreover, instead of using inflated budget "baselines" to claim nonexistent spending "cuts" a common practice in Washington, the One Cent Solution calls for real cuts.  Under the One Cent plan, the sum of all discretionary and entitlement spending will have to go down from one year to the next, by one percent or more.

Sadly, a large majority of the members of Congress (of both parties) are so isolated from reality that they cannot see their way clear to support such commonsense legislation, even though it has substantial support in both the US House of Representatives and in the US Senate.  They just can't turn loose of the idea of spending more money—for our good, of course.

Let me give you a small example of a boondoggle that is taking place in my area that was instituted by two Republican members of Congress who boast of what they are doing for their constituents.  Both of these Congressmen are good, well-intentioned men, but they do not understand that their actions actually hurt, not help their constituents.

Frank Wolf and Tom Davis pushed hard to extend the Metro system in the DC area all the way to the Dulles airport.  They want to reduce air pollution, and reduce congestion on the roads.  Their "gift" to their constituents will do neither.  And, worse than that, it has the net effect of reducing the standard of living of all citizens in their Congressional Districts.  Davis is now retired, but his misguided plan lives on.

The new "Silver Line" as it is now called, will begin operation in 2013, and finally reach Dulles Airport a few years later.  The construction costs will run into the billions, and the automobile drivers are forced to bear that cost via tolls on highways whose capital cost has already been paid.  But frankly, the cost of construction, as bad as it is, is only the tip of the iceberg.  At least the capital cost of construction will come to an end.

The annual revenue shortfall to operate the Silver Line is estimated at more than $170 million!  And knowing the consistent inaccuracy of cost estimates by politicians and bureaucrats, I think that we can safely say the overrun in costs will approximate $200 million or more, with the shortfall rising in future years.

The reality is that the Wolf-Davis boondoggle will lower the standard of living of all citizens in their districts, and be especially painful for the lower income workers.  Wolf and Davis are poster boys for what is wrong in Washington, DC.  They have consistently voted for bills that are unconstitutional, but which they believe are justified because they help people.

The problem with Congress stretches far beyond the Democratic Party.  The Republican Party is equally to blame for ignoring the Constitution and going along with calling reductions in increases in spending, cuts.  This foolishness has to stop.  Our children and grandchildren deserve better.

We sent them a message in 2010, but they have not listened.  It's time to send them another message in 2013 (off, off year elections) and in 2014.  The Tea Party must rise again!  If you and I don't act, we will have betrayed our children and our grandchildren.

Chicago Thuggery

I laughed out loud when I read the headline in The Wall Street Journal on Monday, February 5, 2013.  It read "U.S. to Sue S&P Over Ratings."  Supposedly the reason for this suit was because S&P gave good ratings to bad lenders, causing the 2008 financial crisis.  It's a great case of those in government trying to blame those in the free market for the problem they caused.  But frankly, as S&P and everyone else knows, this lawsuit had nothing whatsoever to do with the 2008 financial meltdown.  In reality, it was a message as subtle as the horse's head placed in the bed of fictional Hollywood director Jack Woltz, who refused to cast Johnny Fontane in his new war film.  It was a "we know where you live" gift from mob boss Don Corleone to intimidate Woltz into reconsidering his choice.  This lawsuit is dirty Chicago style at its best (or worst).  Obama and his White House cronies don't hesitate to use the Department of Justice (DOJ) to play political hardball.

The other big ratings firm is Moody's, but it was not hit with a similar lawsuit even though it, too, gave good ratings to lenders who later became insolvent.  Such a lawsuit is unprecedented and without any substance, but frankly, the government already accomplished its real goal.  The suit not only hurt the value of S&P stock (and thus stockholders), but also sent a stern message to S&P, Moody's, and the other ratings firms . The suit was a warning that if you mess with the Chicago thugs in the White House by downgrading US bonds (the real reason for the suit), you will pay a heavy price.  Essentially, S&P had a horse head placed in their bed by the Chicago thugs at 1600 Pennsylvania Avenue.  It was payback time for S&P who downgraded the US credit rating, due to the irresponsible spending and borrowing practices of the current administration.  Everyone knows that the situation has only gotten worse since the S&P downgrade (from AAA to AA+) in August, 2011.  Anticipating another downgrade in 2013, the DOJ lawsuit was simply a preemptory move to scare off any further downgrades, and/or to discredit S&P.  Nothing, absolutely nothing, is beyond the bullies in the Obama White House.

The Obama lawsuit against S&P would make Hugo Chavez and Fidel Castro proud.  The United States of America is fast becoming a banana republic under Barack Obama.  The O man and the Chicago thugs he has assembled as his White House team ignore Congress, ignore the rule of law, and ignore the United States Constitution.  Whatever they say goes and to hell with the law and the Constitution.  Sadly, they do it with the full compliance and cover of the robots in the so-called mainstream media.

But there is one more aspect to this matter.  It is another case of rewriting history, of blaming others for what they are clearly guilty of—causing the current financial mess.  How about a little timeline to set the record straight…

1977—At the urging of then President Jimmy Carter, a Democrat controlled Congress passes the Community Reinvestment Act (CRA), an act supposedly designed to help low income families obtain low cost mortgages, among other things. It was signed by President Carter on October 12, 1977. 

1992-93—It is later modified to make lending easier for low income families under President Bill Clinton, with leadership in the Senate provided by Christopher Dodd, and in the House by Barney Frank.  This was the first step in saddling low income families with houses funded by loans that they could not afford. 

2001—President George W. Bush issues a warning to Congress of an impending financial crisis.  However, the Democrats controlling Congress deny there is any danger and refuse to act to rein in Fannie Mae and Freddie Mac, who have become corrupted by the political process.

2005—Barney Frank, chairman of the House Finance Committee, states, "There is no housing bubble!"  You can watch him declaim any danger from a housing bubble at www.youtube.com/watch?v=3HhOh5lTahI

2000-2008—The Wall Street Journal begins sounding warnings—week after week, month after month—that a housing bubble was in the making and a crash was imminent.  Congress continues to ignore these warnings.

2008—The housing bubble bursts, saddling taxpayers with more than a trillion dollars of debt and pushing the US into a deep recession that continues to this day.

2011—Reckless Endangerment is published by New York Times financial editors Gretchen Morgenson and Joshua Rosner, exposing the corrupt relationship between the Democrats in Congress and Fannie Mae and Freddie Mac.  The authors describe in detail the willing manipulation of members of Congress.  A willing participant in the process is Barney Frank, who looked the other way as sub-prime loans were pushed to generate huge bonuses for his friends at Freddie Mac.  Fannie and Freddie push bundled loan packages that include high risk loans that are likely to default.  They do this with a wink and a nod that the federal government will cover any losses. 

Now, of course, the Democrats and their robotic friends in the mainstream media (MSM) blame Bush and the Republicans for the mess they created.  The problem is supposedly not enough regulations, even though the facts show that it was cronyism between a Democrat-controlled Congress and Freddie and Fannie that initiated the massive economic crisis.

Well, as Shakespeare said, "The truth will out."  Lies have a way of indicting those who speak them.  The more brazen and outrageous the White House becomes in flaunting the law, circumventing Congress, and generally engaging in corrupt practices such as "Fast and Furious", the more likely it is that their house of cards will come tumbling down.  Stay tuned…

An Odd State of Political Affairs

It's a bit hard to understand what the American people are thinking today.  Sixty percent of the states have a Republican governor, and far more states have Republican majority legislatures than Democratic legislatures.  Republicans have strong control of the US House of Representatives, yet the Democrats have firm, but marginal control of the US Senate, and of course the White House.  Don't forget that Obama is the first President since Woodrow Wilson to run successfully for a second term and get fewer votes.  That's not what you call a ringing endorsement from the American people.  He is still in office and still a threat to freedom and to the US Constitution, to be sure.  To paraphrase Charles Dickens, it is the best of times, it is the worst of times.

It appears that the situation will continue down the same path, getting both better and worse at the same time.  President Obama spoke out on Sunday, January 27, complaining that the news media wasn't giving him a fair break.  In an attack on both Rush Limbaugh and FOX News, he sounded like Hugo Chavez complaining that anyone who didn't agree with him should be silenced.  All pretty incredible stuff when you consider that this President has nearly universal backing and support of the main stream media (MSM).  They love him, they love him, they love him.  But, it's still not enough.  Clearly he wants a media that totally reveres him, with no dissidents.  Talk about thin-skinned and having an other worldly view of reality!  It would be weird and outlandish anywhere but in the Willy Wonka world of Washington, DC.  I'm sure the MSM all nodded their heads in agreement and will henceforth be even more biased and supportive of him.  You could almost hear them chanting, "Down with the First Amendment!  Down with the First Amendment!"

Obama may have the MSM marching in lockstep, but all is not bright and sunny in Obamaland.  In a stunning victory for commonsense and for the United States Constitution, the US Court of Appeals ruled unanimously that the recess appointments of Obama to the National Labor Relations Board (NLRB) (while the US Senate was still in session) were illegal.  Yes, it wasn't a typical session of the Senate, but every day it was called to order and therefore, following the letter and spirit of the law, the Court ruled that the appointments were illegal. 

The MSM tried to paint this as some Neanderthal move by the Court and noted that many previous Presidents had made recess appointments.  However, the MSM carefully neglected to note that no previous President had made any recess appointments when the Senate was procedurally called to order—not one.  The gutless Republican Senators didn't have the courage to file a lawsuit challenging the appointments, but one was filed by Noel Canning, a family-owned Yakima, Washington bottling company, which complained the NLRB unfairly ruled in favor of Teamsters Local 760 during contract negotiations.  What courage and what cost this family had to file this lawsuit.

As you may recall, the NLRB was stacked by Obama, through recess appointments, appointing union lawyers like Craig Becker to serve on the NLRB board.  The NLRB has not always been fair handed, and the reason for its existence is doubtful, but Obama is the first president to stack the deck with union radicals bent on punishing businesses and bypassing Congress.  How radical is Craig Becker?  Becker has argued that workers should not have any right to opt out of union representation, period.  In the past, he served as legal counsel for a local union founded as a subsidiary of the corrupt Association of Community Organizations for Reform Now (ACORN).  Among the outrageous rulings by the Obama NLRB is one giving unions the right to organize a company in secret and then giving just a few days for the company to respond before a vote to unionize must be held.  The Board also endeavored to eliminate secret ballots for unionization, thus allowing workers who would otherwise choose not to join a union to be intimidated.  Such intimidation is no idle threat. 

My father was forced to join a union, but when the union went on strike, he and a few others chose to continue working.  Trash was thrown in the yards of those who continued working and they were verbally abused and threatened.  The only people who oppose a secret ballot are those who want to physically and verbally intimidate workers from having free choice.

As an aside, it is worth noting that the ruling also throws into question the legality of the appointment of Richard Cordray, the head of the new Consumer Financial Protection Bureau.  Obama used the same type of recess appointment to install Cordray.  His appointment is being challenged in a separate lawsuit.

So now that the US Court of Appeals in Washington, DC has ruled unanimously you and I can assume that the President and the NLRB have ceased to issue rulings, right?  Wrong!  The White House was silent for several days, but the word is now out that they feel the Court of Appeals was wrong, so they intend to ignore the ruling!  Similarly, the NLRB, that has issued more than 200 rulings illegally, plans to continue hearings as if nothing has happened.

Of course, ignoring the law, ignoring the Constitution, and ignoring the Courts is nothing new for this Administration.  Whatever it doesn't agree with, it simply ignores or even attacks, as in the case of the State of Arizona enforcing federal laws against illegal immigration which Obama's Department of Justice (DOJ) refused to enforce.  The list instances this Administration has defied the Constitution and the law is quite extensive.  Obama didn't agree with the Defense of Marriage Act passed by Congress, so his DOJ argued against it at the US Supreme Court.  Never mind that the President took an oath of office to uphold and defend the Constitution and the laws of the land.  When Congress refused to enact the radical "Cap and Tax" legislation, the President sought to create his imaginary green utopia, bypassing Congress, and having the Environmental Protection Agency (EPA) issue edicts accomplishing the same end.  It's boring and repetitive to state the obvious, but President Obama has total disregard for the rule of law and for the US Constitution.  He has made it clear that he feels it is just a "negative" document that tells government what it cannot do to the people, instead of a positive document that should say what the government can do for people.  The fact is that when the leader of Government advocates and practices lawlessness, the people will follow suit. 

But the good news is that a panel of Appeals Court judges, appointed by both Democrat and Republican presidents, has unanimously ruled in favor of the Constitution.  Now the Supremes will have their say.  Unanimous rulings by the US Court of Appeals (except for the screwball Ninth Circuit Court) are rarely overruled by the US Supreme Court.  The Democrat appointees are just political ideologues who promote their liberal agenda with total disregard for the United States Constitution to which they took an oath of allegiance.  It would certainly be refreshing to see just one of these partisans show enough character and respect for the Constitution by sustaining the ruling of the Appeals Court, but don't hold your breath.  I believe we are justified in holding out hope that commonsense and sound jurisprudence will prevail.

There is more good news.  On Friday, January 18 the US Circuit Court of the Seventh District issued a ruling based on commonsense, the law, and the US Constitution, rejecting claims of the Wisconsin Education Association Council (along with six other state government unions).  The unions argued that Governor Scott Walker had violated the Equal Protection clause and the First Amendment.  A part of the plaintiffs argument was that the elimination of the requirement that the State of Wisconsin automatically deduct union dues violated the First Amendment!  The reality or the union argument is summed up clearly in an editorial in the Wall Street Journal…

"Wisconsin's failure to automatically subtract union duties from paychecks endangers free speech because it requires organized labor to persuade its own members that its activities are valuable enough to contribute to voluntarily."

Wow!  How such an outrageous claim could pass muster from a lower court is breathtaking, but it did.  The Unions simply found two lower court judges who ruled on the basis of their liberal ideology, rather than on the basis of logic and the US Constitution.

Will the ruling of the Seventh District Court stand?  I think the answer is quite likely.  Even an Obama appointed judge joined in the decision in part and dissented in part.  This is going to be a very hard one to pass muster at the US Supreme Court.

All in all, it's been a pretty good start to Obama's second term.  These two legal setbacks are historic and very important.  Arrogance encourages overreaching and overreaching creates setbacks and scandals.  I'm confident there will be plenty of both in Obama's second term.  This could be fun.

Hanging by a Thread

There is a political party in America that is hanging by a thread, a fiber even.  It has had recent successes and, indeed, controls one house of Congress.  However, its relevance and future success is imperiled by the fact that it exists only as long as it perpetuates a myth.  As Abraham Lincoln said, "You may fool all the people some of the time, you can even fool some of the people all of the time, but you cannot fool all of the people all the time."  Sure, it helps when the media provides cover for your fabrication.  Getting the truth out is like your eyes trying to penetrate a thick cloud to see reality.  It's very hard to do.  Plus, if the other party generally cooperates in perpetuating the lie, it's even harder to get at the truth.  If that party fails to strenuously rebut the lie and becomes a patsy for the other side, the lie becomes fact in the minds of the undecided. 

In this case, the party being lied about has within its means the power and the opportunity to effectively demolish the lie.  But, through tradition, inertia, and perhaps a false sense of guilt, they allow the lie to not only survive, but to be embellished and expanded.  After a number of years, the lie becomes fact in the mind of those who have not searched for the truth.  That's where we are today.

What is the myth?  What political party is the target of the myth?  It's the stupid party, of course, the Republican Party.  The me-too, squeamish Republicans who too often rise to positions of leadership within the party are, apparently, unable to stand up for the truth.  Or maybe they actually believe the lie.

The myth, the lie, is of course that the Republican Party is the party of racism.  There is no evidence of this.  In fact, the facts show clearly that the party of racism is the Democratic Party.  More than that, it is the progressive (liberal) wing of the Democratic Party that originated and fostered racism in the form of Jim Crow policies and segregation.  It is the Democratic Party that provided a comfortable home to US Senators who openly participated in the KKK.  It is the Democratic Party that blocked civil rights laws for decades.  And it wasn't just southern Democrats who voted to block such legislation, it was Democratic Senators from the north who joined with them.

Most folks think that open housing legislation was proposed and passed by the Democrats, but, in reality, it was President Richard Nixon who proposed such legislation.  And while President Harry Truman, a Democrat, issued an order to integrate the Armed Forces, it was a Republican President, Dwight Eisenhower, who actually implemented integration. 

Segregation was the brainchild of the intellectual left.  Progressive founder Richard T. Ely, along with his compatriots on the left, decided that black Americans had not sufficiently "progressed" to a point where they should be integrated with white Americans.  Ely and a blatantly racist President (who often used the "N" word) segregated the south and Washington, DC, as they gained power.  Woodrow Wilson, considered the founding father of modern liberalism, re-segregated the US government when he became president.  It's not too surprising when you consider that as a 12 year old, living at the time in Georgia, he cheered for the victory of the Confederacy.  Wilson remained throughout his life an unrepentant racist.

But the Democrats and the Progressives didn't stop with segregation.  They passed bills like the Davis-Bacon Act that is still law today.  It was passed with the express purpose of denying black Americans an opportunity to enter and compete in building construction trades.  A reading of the Congressional Record during the debate in Congress over Davis-Bacon makes one cringe.  It's a record of Democrat after Democrat, North and South, airing their racist comments and deploring the fact that newly skilled black workers are displacing white workers.  The Davis-Bacon Act was an undisguised attempt to bar black workers from competing with white workers in building and trades.  At that time, black workers were denied the opportunity to join unions, so the racist, Democrat controlled Congress passed a bill that specified that only union workers could be employed in government construction projects.

In his book, Chesapeake, James Michener, deplores the fact that skilled black tradesmen in nearby Maryland (on the Eastern shore of the Chesapeake) are denied the opportunity to work on construction of the Bay Bridge.  Michener, a proud liberal, never mentions whose fault this is (he may have been ignorant of the source), but he implies it is the fault of the Republicans.  In truth, it is simply the Davis-Bacon Act passed by a racist, Democrat controlled Congress that blocked black workers from working on the bridge.

Where did the early gun laws originate?  They were conceived and executed by white Democrat racists and were designed to keep guns out of the hands of black Americans.  Where did the racist policy of eugenics originate?  It originated with a group of progressive intellectuals, led by Margaret Sanger, who sought to curtail the births of black Americans.  Who were the first proponents of abortion?  You guessed it, a group of white, racist progressives who saw abortion as an opportunity to limit the number of children born to black Americans.

It is a matter of record that it was the Republicans who supported Civil Rights legislation over the objections of the "progressive" Democrats.  But the myth of Republican racism is so pernicious and widespread today that Republican President Abraham Lincoln is described as a Whig, not as a Republican.  Commentators and even history textbooks go to great lengths to point out that Lincoln ran as a Whig candidate for US Senate, and that he was a Whig longer than he was a Republican.  Duh!  He was assassinated by a racist, Southern Democrat, John Wilkes Booth, denying him the opportunity to live a normal life span.  And, of course, Lincoln was the second Republican nominee for President of the United States, the first being John C. Fremont, the famous trail blazer.  And it was Lincoln who issued the Emancipation Proclamation and, shortly before he died, advocated the enfranchisement of black Americans.

Today, of course, white conservatives are continuously smeared by the national news media.  Everything they do is denounced as being racist.  According to the news media, the Tea Party was and is racist, even though there is disproportionate black leadership in the Tea Party.  Using all sorts of contortions and illogical twists and turns, the progressive/liberal left identifies every policy of conservatives as racist.  Lower taxes are racist.  Smaller government is racist.  A strong national defense is racist.  Constitutional government is racist.

But, if you think it is tough to be a white conservative, think again.  The left reserves their most poisonous venom for black conservatives like Supreme Court Justice Clarence Thomas.  Who can forget the famous article in USA Today by Julianne Malveaux who expressed hope that Justice Thomas would succumb to an early death?  Or even the attacks on liberal journalist Juan Williams, who had the temerity to appear on FOX News and to express his concern about turban wearing Middle Eastern men boarding an airplane he was riding on after 9/11?  And let's not forget about the attacks on comedian Bill Cosby, when he spoke out about welfare moms who did not control and discipline their children?  And we can't ignore the scathing attacks on Walter Williams and Thomas Sowell.

Why?  Why are African American conservatives subject to such wild and histrionic attacks by the left?  Why do liberals become unhinged when a conservative black American speaks out or gets elected to public office? 

The answer is simple—survival.  There is no group of Americans that threaten the survival of the Democratic Party more than black conservatives.  That's why liberals and Democrats reserve their most vicious and mean attacks for black conservatives.  Quite simply, black conservatives threaten the monolithic political grip that the Democrats have on the black community.  And while that grip is huge—more than 90% of black Americans vote for Democrat candidates—is survives by a thread.  That thread is the lie that Republicans hate black Americans and that they are at their core, racists.

I found it intriguing that even after the most outrageous and foul attacks on Clarence Thomas, his support in the black community remained near 60%.  The Democrats have a right to be terrified.  If they lose just 20% of the black vote, they are dead as a duck.  They have no hope of victory, nationally.  They are finished as a national party.

But, the Republicans, as normal, have ignored this opportunity.  They ignore the fact that on many issues the black community is with the GOP.  Black Americans care about quality education and they know that their children are getting a lousy education because they have been sold out by Democratic allegiance to teacher's unions.  When black Americans have an opportunity to experience the benefits of school choice (school vouchers in any form), they embrace it wholeheartedly.  The polls also show that black Americans support a return to prayer in schools, and they want inexpensive fuel and power—something that the Republican Party has historically supported.  Black Americans want a minimum of regulations and licenses that bar their entry into the marketplace.  Throughout the years, black Americans have started new businesses in numbers disproportionate to their population.  Democrats offer a hand out, Republicans offer opportunity.  Liberals favor abortion and gay marriage, two policies that the black community opposes by wide margins.  Democrats embrace a "new" morality, while African Americans hold on dearly to traditional moral values.  While Democrats deny black Americans the right to own firearms to protect themselves, Republicans support the 2nd Amendment.  On these and so many other issues, black Americans and conservatives have much in common, but on election day, conservative candidates typically get no more than 5% of the black vote.

Why, because the big lie that conservatives are racist keeps black Americans from even considering the idea of voting Republican.  Yet, it's only a matter of time until the dam bursts, and that is what scares the living daylights out of liberals.  White liberals know it is a lie and that's why they are so terrified.  The Democratic Party simply cannot survive if 20% or more of the black vote goes to the GOP.  That's a thread that is already frayed.

How scared are the Democrats?  They are terrified.  That's why they targeted Allen West and spent several million dollars to defeat him.  They targeted one candidate, not because he was the most conservative in the GOP, but because he was both black and conservative.  His very existence as a United States Congressman was a threat to their myth that all conservatives are racists.

So what's the answer?  Because of the far left media that aids and abets this terrible lie, the Republican Party will never penetrate the fog and get the truth to the black community.  That's a fact of life that conservatives and Republicans must accept.  This lie is guarded by the left like the crown jewels of England.  It is their kryptonite.  They die politically if the truth comes out.

But the solution is not nearly as difficult as it seems.  If the GOP will simply attack this problem by recruiting black conservatives to run for office at every level, they can demolish this myth in short order.  That's why the appointment of Tim Scott to the US Senate by South Carolina Governor Nikki Haley was so powerful and so threatening to the Democrats.

Just imagine what would happen if the GOP abandoned its tradition of letting candidates work their way up in the Party and instead openly recruited conservative black Republicans like Allen West to run in winnable Congressional districts.  It is either this or continued failure on election day.

And the same thing holds true for Hispanic Americans.  That's why my ticket for 2016 is Rubio-Scott.  Both Marco Rubio and Tim Scott are products of the Tea Party movement and both are rock-solid conservatives.  If you want to see the Democratic bosses squirm and pee in their pants, then this is just the ticket for 2016.  The Republicans can deny being racist until they are blue in the face, but it won't make any difference.  The only way to demonstrate that they are not racist is to nominate and elect both African Americans and Hispanics with solid conservative credentials to public office.  

There is always a tipping point in any argument.  The tipping point in this long, ugly debate is to simply nominate and elect conservative blacks and Hispanics to Congress in numbers previously unheard of.  Once the numbers are so large that they cannot be ignored, the death watch for the Democratic Party can commence.

Encouraging News for the Western Hemisphere

Just as the old year was coming to a close, I read a very interesting and encouraging article in the Wall Street Journal (the editorial section, not the disappointing news section) by Mary Anastasia O'Grady.  Ms. O'Grady writes frequently in the Journal about economic and political matters in Latin America.  Her piece, titled "A Canadian Rock Star and the Pacific Rim Fab Four" caught my eye.  Perhaps I was interested because I recently traveled to Guatemala to speak to NGO representatives in that area about fund raising for their organizations.  I spoke at the Universidad Francisco Marroquin, an amazing university dedicated to academic excellence and to free market economics.

I was curious if Guatemala was one of what O'Grady called the "Pacific Rim Fab Four."  It was not, and I was not too surprised, knowing a little bit about the situation there, including the negative influence that the United States and the European socialist nations have exerted on Guatemala. 

The Canadian "Rock Star" was, of course, Canada, our neighbor to the north that has eschewed many of the illogical economic policies of the Obama administration.  Canada has neither the dangerous debt situation of the US, nor any hesitancy to exploit the natural resources with which it has been blessed.  While Canada may be a basket case when it comes to medical care and a candidate for the asylum as far as political correctness is concerned, it has pursued commonsense economic policies.  In short, the Canadian economy is booming and the people are prospering.

Of course there are some very elemental policies that are necessary for the economic success of any nation, including low tax rates, a stable currency, civil order, minimal regulations, an educated work force, and a free and open marketplace.  These elements are especially important for emerging economies that must have capital investment in order to grow and prosper.  They are, of course, very important to any nation that seeks to not only bring prosperity to its citizens, but also make that prosperity accessible to everyone in the land.

The top down socialist model works well for those in the political system and their cronies who keep them in power.  In other words, the Jeffrey Immelts of the world prosper because they are directly subsidized by the government.  I emphasize directly because, in the Orwellian world in which we live, leftists often sophomorically refer to tax breaks as a subsidy.  That is foolish on its face.  A tax break can only be a subsidy if the government owns all the money and they just let us have some.  In a free society, all money (which simply represents goods and services produced in the private sector) is owned by the people.  They earn it through hard work, ingenuity, and risk taking.

In the failed socialist model, only the politicians, the bureaucrats, the crony capitalists like Immelt and the union bosses (not the workers) benefit.  Everyone else suffers.  In socialist societies you find a rich upper crust of the aforementioned reprobates and the poor.  There is no middle class.  In stark contrast, a free society is comprised of a whole bunch of people and a whole bunch of economic ladders.  People are continuously going up and down those economic ladders as they succeed or fail, but the opportunity to ascend one of those economic ladders is open to everyone no matter where they start in life.  There is no shortage of ladders, because there is no shortage of opportunities.

So let's get back to Ms. O'Grady's good news about nations in the Western Hemisphere.  We have already identified Canada as one of the economic bright spots, but the four "Pacific Rim" nations may surprise you.  It's not the US, of course, and it's not the socialist paradise of Cuba, nor is it Hugo Chavez's Venezuela.  Ms. O'Grady rules out Ecuador and Bolivia who she says "fit the loser mold:  left-wing populist politics supporting corporatist, authoritarian states."  It's not "state managed economies" like Argentina where inflation is now close to 25%.  Surprisingly (except for the fact that it is located on the Atlantic Ocean), it's not Brazil, which Ms. O'Grady describes as "…sticking to a closed economic model that tries to preserve an industrial plan from the 1960s…"  She cites the World Bank's "Doing Business" survey that measures the ease with which an individual or corporation may do business in a nation.  In that survey Brazil ranks 130th, Argentina 124th and Venezuela 180th.

Now, let's look at the "Fab Four"—Chile, Mexico, Peru and Colombia!  Chile doesn't surprise me as much as the other three.  It wasn't that many years back that Chile was mired down in a socialist economy with high inflation, low capital investment, and almost nonexistent economic growth.  It looked much like the Venezuela of Hugo Chavez.  But things have changed for the better for the citizens of Chile as it has taken strides toward a free and open economy. 

Chile has an enviable retirement system that makes Social Security pale by comparison.  It is universal and it is private.  It's the type of system that makes sense for citizens of the United States.  The only reason we don't have it is because it takes political leverage away from the politicians.  The Democrats can't promise more or make threats that the Republicans will take away your Social Security if it is a private system.  That's sad, because the performance of the privatized Chilean retirement system far outperforms the returns that US citizens are forced to accept under Social Security.  Moreover, the US Congress and the President can't spend the money you set aside for retirement, as they do with Social Security funds. 

Today, thanks to steps toward an open and free economy, only 11% of the population of Chile is living in poverty.  This compares to numbers double and triple that amount just a few decades ago when it labored under a socialist top down economy.  Moreover, the poverty rate of Chile (according to the US Bureau of Census) is lower than that in the United States, which is 15.1%.  To be sure, the definition of poverty is a subjective number and one to be taken with a grain of salt.  Nevertheless, the low rate of poverty in Chile is a sign of its widespread economic prosperity.  In 2011, Chile was ranked 6th in the world for attracting capital relative to the size of that nation.  That's what free markets do for a nation.  Chile has come a long way and, as long as they stay on the free market path, the best is still yet to come for Chile.

I am more astounded by Mexico being included as a "Fab Four" by Ms. O'Grady than I am by any other nation.  When I think of Mexico I think of a nation wracked by narcoterrorism.  I think of Juarez where people are shot on the streets and members of opposing gangs are beheaded.  There's no doubt that Mexico has a serious gang problem related to illegal drugs.  The incoming President, Enrique Pena Nieto, has made noises about ending the nationalization of oil, gas and telecommunications.  If he is successful in doing that, and with the North American Trade Agreement in place, some believe that the economy of Mexico can be transformed into a powerhouse that passes that of Brazil in the next decade.  If that happens, it will be an astounding turnaround for a nation that has for too long been shackled in a moribund socialist economy.  Mexico has vast, untapped natural resources, but has been, thus far, unable to attract substantial outside capital investments that are key to a growing economy.  The more free market reforms that Mexico enacts, the faster and further its economy will grow.

The other two members of the "Pacific Fab Four" are going down the same free market route as Chile and Mexico.  They are not as far down that path as Mexico and not nearly as far as Chile.  However, both Peru and Columbia are taking the right steps toward an open market economy that is the key to economic growth.  Just 20 years ago, in 1993, 60% of the population of Peru was living in poverty.  In 2010, 31.3% of the Peruvian population was living in poverty, and today that number has dropped even further to 27.8%.  That's still an awfully high number, but the progress is significant and consistent.  Providing Peru stays on a free market course, that number will continue to fall.

The situation in Columbia is much like that of Peru.  It is a stable civil society that has been very successful in attracting capital investment.  A free market approach has been gaining steam in this nation for a number of years.  According to UCLA economist, Sebastian Edwards (as cited by Ms. O'Grady), it deserves to be included in what he calls "the resurgence of the Pacific of the Americas."  Of course, there is always the danger that there will be a political sea change in any of these nations that could drive them off track and back toward a failed socialist system.

While Ms. O'Grady did not mention it in her Wall Street Journal article, I'd encourage investors and Latin America watchers to keep an eye on tiny Guatemala (population 14 million).  Led by graduates of the Universidad Francisco Marroquin (UFM), this nation has the potential to become another economic growth powerhouse.  The university was founded by the late Manuel Ayau with the encouragement of Nobel Laureate, Milton Friedman.  Dr. Ayau's goal in founding the University was to spread free market principles across his nation, then across Latin America, and ultimately across the world.  The current President of Guatemala and many members of its Congress and courts are graduates of UFM.  Through their leadership, Guatemala has been blessed with extensive free market reforms, in some cases in spite of the United States. 

Sadly, US Ambassador Prudence Bushnell, who served under President George W. Bush, endeavored to roll back many of the market reforms enacted by the Guatemalan Congress.  In the high handed manor of arrogant bureaucrats, Ambassador Bushnell openly threatened the Guatemalan Congress and President with damaging economic actions by the US if it refused to enact 28 laws that she provided to them.  Nearly all of these measures were detrimental to a free and growing economy. 

If this wasn't bad enough, Guatemala, which is blessed with mountains and many opportunities to produce hydroelectric power, is being blocked from doing so by outside interference from greens in Europe and the US, using similar economic threats.  The result is extremely expensive and limited access to electric power.  This alone stymies economic growth and perpetuates a high level of poverty in the nation.  Without such interference and sans the very real problem of narcoterrorism, Guatemala could join the small group of Latin American nations experiencing strong economic growth.

The situation here in the US is unfortunate.  The President is a captive of economic inanities that he gained in the academy.  To paraphrase the late Bill Buckley, it's not that he isn't a smart man, it's just that so much of what he believes to be true, isn't true.  In short, he doesn't understand economics 101.  He thinks bigger and more powerful government is the answer, when it is really the problem.  He believes government needs to be more involved in the economy with more regulations, more restrictions and a heavier hand, when just the opposite leads to prosperity and opportunity for all Americans.  Without any rationale whatsoever, he believes that you can create a green economy, even though it has to be subsidized by the government.  Such subsidies, of course, mean that such activity is not marketplace sustainable.  In fact, each and every subsidy lowers the standard of living of all Americans.

Oh well.  Every day that goes by takes us one day closer to his last day in office.  He is a lame duck whose clock is running.  And as each day passes his power diminishes ever so slightly.  While he will continue to do much damage to the Constitution, to the rule of law, to the economy, and to economic opportunity (especially for the poor), his days in office are numbered. 

Let's not let the bad news of President Obama in the White House dampen our enthusiasm for the five nations in the Western Hemisphere who are on the right economic path.  We can only hope and pray that they will continue down that road, providing an example of what course a nation should follow if it seeks prosperity for its citizens.