The end of American capitalism?

So now the Federal Reserve joins with world banks to create a fund to bail out all the banks and the grateful stock market soars. But the German periodical Der Spiegel offers a sobering conclusion:

In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that’s changing. Bear Stearns, Lehman Brothers, Merrill Lynch — overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and — at least in Morgan Stanley’s case — have prepared themselves for the end.

“Nothing will be like it was before,” said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. “The world as we know it is going down.” . . .

The only thing that is certain is that the era of the unbridled free-market economy in the US has passed — at least for now. The near nationalization of AIG, America’s largest insurance company, with an $85 billion cash infusion — a bill footed by taxpayers — was a staggering move. The sum is three times as high as the guarantee provided by the Federal Reserve when Bear Stearns was sold to JPMorgan Chase in March.

The most breathtaking aspect about this week’s crisis, though, is that the life raft — which Washington had only previously used to bail out the mortgage giants Fannie Mae and Freddie Mac — is being handed out by a government whose party usually fights against any form of government intervention. The policy is anchored in its party platform.

“I fear the government has passed the point of no return,” financial historian Ron Chernow told the New York Times. “We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams.”

Friends, this is President Bush doing this! The Republicans! The conservatives! Barack Obama isn’t president yet, but the current administration may be outdoing him. Or, looked at another way, if the Republicans are so little committed to free market capitalism, what will the Democrats do?

Meanwhile, there are signs that the free market actually is working as it’s supposed to. Now that the price of houses in California has plunged, ordinary people can afford to buy their own homes again, so the housing market is booming. Now that the stock market has plummeted, cagy investors such as Warren Buffett are buying up companies at bargain rates. The market destroys but it also builds out of the rubble.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Manxman

    Joan Veon writes –

    The situation we are confronted with did not happen in the last few years, but began in 1913 when a group of cunningly deceitful legislators passed the Federal Reserve Act on December 24 at 11:45 p.m., after those who were opposed went home for Christmas. The entire financial system of the U.S. was transferred from Congress to a private corporation that is NOT accountable to Congress. They create and destroy the business cycle by various means: raising and lowering interest rates. The government of the United States is in bondage to a group of individuals who own the Federal Reserve. The reason why the American people cannot forgive themselves the interest on our debt is because we do not owe it to ourselves we owe it to the Federal Reserve! Every single time since then that the Federal Reserve Act was amended, over 195 times, the Federal Reserve gathered more power over various aspects of our economy. However, they are in the final throes of stripping America of any remaining vestiges of sovereignty as has been laid out in the Treasury “Blueprint for a Modernized Financial Regulatory System.”

    The Blueprint was written under the watchful eye of one of America’s most successful international bankers, former Goldman Sachs CEO Hank Paulson, who is now our illustrious Treasury Secretary. Is this not a case of the fox in the chicken coup? Long time investment sage Marty Whitman commented on his actions, “Paulson thinks he is in Russia and is not giving any value to stockholders. It is outrageous that the Treasury Secretary is not giving any consideration to the shareholders.”

    The Blueprint calls for key components of our financial system, not currently under Federal Reserve control, to be transferred to them. In order to do this, a number of changes will be necessary which Congress will have to approve. First, it recommends changing the banking charter to include all financial institutions, thus effectively transferring control over “national banks, federal savings associations, and federal [and state] credit union charters.” For your information, Washington Mutual is a savings and loan while Lehman Brothers is and Bear Stearns was an international bank. The Fed is to be given authority over the U.S. Payment and Settlement System thereby controlling the settlement process for securities. It will be given the role of Market Stability Regulator and it will have total control over the market. The Blueprint provides for the entire mortgage system of the U.S. to be federalized and to be under the control of the Mortgage Origination Commission. The Federal Reserve will be part of the Commission. Additionally the Federal Reserve will be given a say in the insurance industry which will be federalized and a new Office of Insurance Oversight will oversee its activities. The Federal Reserve will have a place on the Insurance Oversight commission.

    By the time Congress votes on the Blueprint, there will be so many reasons for them to transfer the last vestiges of our financial sovereignty to the Federal Reserve that they will not even have to read the prepared legislation. So far, we have the bailout of Freddie and Fannie by giving Treasury a blank check to act; the Federal Reserve worked all weekend to find a buyer to Lehman, another international bank, their next project might be to rescue Washington Mutual, a savings and loan, and the Fed has been given initial powers to act as the Market Stability Regulator. The only component that is missing is the demise of an insurance company, AIG anyone?

    For the record, at the heart of the Blueprint is changing our financial/banking and securities regulatory system from a national system to an international system to bring America into the world governmental system that functions above the nation-states. I have maintained that in order to get Congress to go along, we would have to have a huge problem which would allow Congress to be convinced that they need to act, however, the truth of the matter is they no longer have the power they once had because the majority has been transferred to the Federal Reserve.

    History will determine how the final stage was set but I believe it started in 2000 with the Crash of the Nasdaq. Who would have ever thought that a stock would drop 90% in value? About $7T vanished from the balance sheets of investors. But we did not have to worry, as a result of 9/11, the Federal Reserve started to reduce interest rates to 45 year lows to get Americans to support the economy by buying the dream home. We bit the bait. It was the Roaring 20s all over again. At one point in the housing boom, one out of four jobs was created by the housing industry. No one asked if they could afford the debt, they only asked if they could afford the payment: a big difference. They did not ask the right questions about their mortgage because the mortgage industry was not required to disclose to them, when it should have. At one time the mortgage industry was run on honesty and integrity, but that changed too and people have been caught in a terrible snare.

    The Bailout of Freddie and Fannie provide us with the latest excitement in the diabolical saga of the raping, robbing, and pillaging of America. Interestingly enough it took place 13 months after the beginning of the credit crunch. Lastly, I have maintained since the beginning of the credit crunch last August that it was planned and managed destruction in order to accomplish the final transfer of America’s financial sovereignty. All of the above only confirms my original suspicion. Sadly, only the strong will survive, only those who did not use their house as a checking account will survive, only those who turn to the Creator of the Universe, the Lord God who created heaven and earth, and His Son, Jesus, will survive in the midst of the Great 2008 Transfer of Wealth.

  • fw

    In fairness, there is probably little else the republicans really could do.

    This is really about the idea that markets do not need the rule of law (also known as regulation. that the “unseen hand” of adam smith is sufficient.

    The argument is therefore made or implied that anyone who favors government regulation is anti free market.

    now the horses are outta the barn and the republicans are merely trying to round up those horses.

    The Glass Steagall that created the Fed reserve did three things. Deposit insurance, mandatory reserve requirements for commercial banks , and a strict mandatory separation of commercial banking from securities trading. I suspect that this was mainly done so that unsophisticated investors (95% of us) could know the relative risk of “financial products” were were buying based simply on the class of the institution we were dealing with(transparency).

    These three things now seem, almost nostalgically so to me, to be really great measures that were undone.

    Morgan Stanley was originally both and was split up back then.

    Globalization really has driven this. I wouldn´t be quick to blame anyone, be it clinton, or bush or congress or whoever. Alot of this was an attempt to allow our financial institutions to be competitive in the global market.

    and of course greed. which must always be bridled by the rule of law yes?

    The ultimate solution will need to be something global arrived at by international agreement (we bailed AIG I read because European central banks had alot of exposure.)

    We americans don´t like this, because it means we become interdependent and not as independent as we would like. We need to deal with reality here I think. Our government never has had complete control over our economy. It is good to be dis-illusioned.

    no rule of law here.

    I DO hope that people stop talking about The Rule of Law in the form of government regulation of financial markets as somehow wrong headed rather than UTTERLY NECESSARY.

    The question is rather what laws are best.

    Transparency seems like one noble goal.

  • Bryan Lindemood

    This is perhaps the main reason I don’t want to vote for a republican or a democrat. I want an actual fiscally conservative (3rd) party to grow in prominence. I too realize that this horse has been out of the barn for a while. But I hate how the Republicans continue to not produce (or face) the facts about their fiscal liberalism in order to tempt my vote. The Republicans are in fact money whores.

  • fw

    #4 money whores.

    is there any OTHER kind of whore?

    I have alot of personally repentance to do in that area, so I won´t throw stones…..

    Do I worry when money is tight? You bet I do big time!!!

    Worry is the liturgy to false gods. false gods literally eat their devotees in this act of worship.

  • Anon

    There is a distinction to be made between the rule of law – which means God’s Law, historically, and that no man, not even the king or congress, is above the law, and economic manipulation by the civil government.

    Fiat money and gambling on the stock exchange are the mediate causes of this crash. Sin is the root cause.

    Solving a similar problem in Weimar by simply printing more money didn’t work out so well, yet that is what the Fed is doing now.

    American independence can be maintained. If necessary, we can defend our borders and airspace, repudiate all international debts, and return to the rule of law and hence specie rather than fiat money.

    Arguing against American independence fits somewhere between treason and sedition, does it not, were it to go beyond merely discussion?

  • Bryan Lindemood

    That seems to be the only solution our elected and unelected officials are willing to entertain lately: print more money. Was there ever a society which pimped and murdered the next generation(s) as much as America does now through unaccounted spending and abortion on demand? Could a less sensible policy ever be dreamed? What a nightmare!

    Good thing our trust is in Christ and His kingdom and not in money or the rule of man.

    But really, can’t today’s politicians at least be a little more creative in the solutions they devise at least for the sake of their own children and grandchildren?

  • fw

    I DO wish in the context that Obama and McCain would stop talking about tax cuts.

    the past 8 years of war spending and tax cuts combined with the largest expansion of the federal government , possibly in history…. needs to end.

  • Peter Leavitt

    American capitalism, while dented by this mortgage credit debacle, will be alive and well for a long time to come.

    This mortgage credit crisis was caused basically by a combination of unwise loosening of banking regulations and the Fed easy money policy during 2001-4 that Greenspan unleashed to stave off the dot com market collapse and slight recession.

    For an excellent summary of the cause of the Mortgage credit dbacle read Congress Tries To Fix What It Broke: As the financial crisis spreads, denials on Capitol Hill grow more shrill. Blame an aloof President Bush, greedy Wall Street, risky capitalism — anybody but those in Congress who wrote the banking rules. including:

    Only, the risk-taking was her idea — and the idea of all the other Democrats, along with a handful of Republicans, who over the past 30 years have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans to unqualified borrowers in the name of diversity.

    They were the ones who screamed — “REDLINING!” — and sent banks scurrying for cover in low-income neighborhoods, where they have been forced to lower long-held industry standards for judging creditworthiness to make the subprime loans….

    In other words, nobody up and down the line — from the branch office on main street to the high-rise on Wall Street — analyzed the risk of such ill-advised loans. But why should they? Everybody was just doing what the regulators in Washington wanted them to do.

    So everybody won until everybody lost, including the minorities the government originally mandated the banks to serve.

    The original culprits in all this were the social engineers who compelled banks to make the bad loans. The private sector has no business conducting social experiments on behalf of government. Its business is making profit. Period. So it did what it naturally does and turned the subprime social mandate into a lucrative industry.

    Of course, it was a Ponzi scheme, because they weren’t allowed to play by their rules. The government changed the rules for risk.

  • Peter Leavitt
  • Don S

    To be fair, Der Speigel is probably more rooting then reporting. The market is still there, market capitalization is still essentially intact, some entities are gone, others will take their place.

    It seems that there are certain sectors of the economy which engorge themselves and lose all sense of proportion during the boom times, then crash during the inevitable correction. The real estate market from 2002-06 was out of control. It increased 50-100% in CA, for example. Anyone with a brain knew that was unsustainable, because, ultimately, real estate prices need to remain roughly aligned with income.

    In a true market economy, we would just let these institutions fail, and let those who were invested in them take their lumps. However, the Great Depression changed our course in that respect. Because of the misery caused by that event, we will always be biased to bail-outs. I suspect the government will not come out of this that badly however. It has picked up some substantial assets relatively cheaply. When the S & L crisis occurred, the government ultimately made money, as it gradually sold off or developed, through the Resolution Trust Corporation, the real estate assets it has acquired.

    As for Republicans involving themselves in this process, are you surprised? Did you see how they were defamed and vilified because of Katrina? Do you think they would get a fair shake in the press if they let people suffer because of the current crisis? That’s why Republicans aren’t really Republicans anymore.

  • Sam

    “In a true market economy, we would just let these institutions fail, and let those who were invested in them take their lumps.”

    Don, I take it you’ve never lost your life savings due to the collapse of a saving and loan or bank?

    “Do you think they would get a fair shake in the press if they let people suffer because of the current crisis? That’s why Republicans aren’t really Republicans anymore.”

    You have an amazing gift for summing up Republican principles. “let people suffer.”

  • Don S

    Sam @ 11: And you have an amazing gift for taking someone’s comments totally out of context and reading the worst into them.

    I never once said that I thought we should just let everything collapse or just let people suffer. I was merely remarking that we long ago decided, for better or worse, that we were not going to be a true market economy. If you read my comments on other threads, you will see that I have supported much of what has been done to respond to the current crisis.

    Why do you have such an antipathy for Republicans, anyway? Have you been hurt by Republican governance or policies? If so, how? I would be interested in hearing your story and how you arrived at the political viewpoints you seem to hold with passion.

  • Don S

    Sam @ 11: I don’t want to leave an impression, by my post @ 12, that I favor all bail-outs, so let me explain further. I distinguish those who lose assets because of foolish speculation or an imprudent investment from those who lose assets through no real fault of their own. Example: if someone buys a home in an overheated real estate market, with too little equity and too little income to be able to support the mortgage payments, and then loses the home because of a downturn in the market or economy, then they lose the home. Lesson learned. The same with someone who invests a substantial portion of their assets in a junk bond trader or subprime mortgage lender. This is a high risk investment — you may reap huge rewards or you may lose your shirt.

    On the other hand, folks prudently keeping savings accounts at WaMu, or holding stock in Bank of America, are not making what would be thought of as risky investments. For this reason, Federal Deposit Insurance for bank accounts is a great idea, and if a bank like Bank of America is threatened with going under, a bail-out is more palatable. Several reasons — one, a lot of innocent people will be hurt if the bank fails, and two, confidence in the banking system will be destroyed, resulting in huge long-term consequences to the economy.

    Now, let me turn the question around on you. Does your apparent policy Not to “let people suffer” ever allow you to accept that some folks will inevitably suffer economic losses? Are there lessons to be learned from setbacks in life? Should risk taken knowingly sometimes result in loss? Can you think of any circumstance where government should not step in and initiate a bail out to prevent suffering? If a person chooses to live in a dangerous geographic area (risk of flooding, tornadoes, earthquake, fire, etc.), should the government pull out all stops to make them completely whole should the inevitable catastrophe occur?

  • Sam

    http://www.thenation.com/doc/20081006/greider

    Don, here’s what I like. The link is above; a paragraph follows. It’s not a long article.

    “More important, if the taxpayers are compelled to refinance the villains in this drama, then Americans at large are entitled to equivalent treatment in their crisis. That means the suspension of home foreclosures and personal bankruptcies for debt-soaked families during the duration of this crisis. The debtors will not escape injury and loss–their situation is too dire–but they deserve equal protection from government, the chance to work out things gradually over some years on reasonable terms.”

  • Peter Leavitt

    Sam, quoting Nation:More important, if the taxpayers are compelled to refinance the villains in this drama, then Americans at large are entitled to equivalent treatment in their crisis.

    The purpose of the Bernanke and Paulson proposal is to refinance the “villains;” it is to contain a contagion in the financial markets that could lead to a seizing of credit markets, propel ling the economy into a deep recession or worse. Altready the shareholders of Bear Stearns, Fan and Fred, Lehman, and AIG have taken been essentially wiped out. Anyone who knows how Paulson- known in the finance world as the “hammer”- operates cabn be sure that the holders of these toxic assets will get close to the bottom dollar and, as was the case with some 3,000 S&ls, in past years, many of these firms shareholders will get clobbered, though in an orderly way that prptects the broad interests of the economy.

    I should suggest that you don’t believe everything you read in the Nation, a notoriously partisan leftist rag.

  • Peter Leavitt

    Sorry, in the above first sentence I meant to say …is not to refinace the villains…

  • Don S

    Wow, Sam @ 14, that is a pretty radical proposal. First, the author wants to establish a central authority to control all of the bankers, threatening them with no bailouts if they don’t knuckle under. I guess I don’t see much point in this. The damage has been done, what could this central authority possibly do in the short term to turn around the fortunes of these banks and investment houses? Second, the author wants to set up a “new deal” type agency to be the direct funder of credit in the future. No more banks or investment houses at all? All I can say is “wow”. Not even Red China or the Soviet Union, at their most communistic, were that Marxist.

    Third, the author wants to place a moratorium on all personal home foreclosures and personal bankruptcies for the “duration of this crisis”. This is the provision you say you particularly like. Presumably, this moratorium occurs without regard to circumstances. So, a $500,000 per year attorney who overextended to buy his fifth apartment house gets to hold onto it without paying the mortgage, collecting rent, until the crisis is over. A person who ran up $150,000 in credit card debt taking lavish vacations and buying expensive cars is off the hook for the duration of the crisis. A person who makes $80,000 per year, but is upside down on a house they bought two years ago with no money down can simply decide to stop making payments and live in it for free because he can’t be foreclosed upon for the duration of the crisis. In the meantime, because banks can’t use any leverage to collect mortgage payments or personal debts, delinquency rates skyrocket from about 1 or 2 % to 20 %, clinching an utter failure of the banking system. Whew, I think this proposal needs a bit of fine tuning, don’t you?

    Peter stated it well, above. The purpose of these bailouts is not to make the greedy bankers whole. It is to protect the little guy from ruin when the big guy goes down. The bad guys are not cleaning up on these deals. As Peter said, the shareholders are being wiped out, and management fired. The Fed took an 80% equity stake in AIG in exchange for a two year $85 bill. loan. Fannie & Freddie were already quasi-gov’t. agencies. Bear Stearns was forced to sell its shares at about 5% of their value two months prior. Lehman filed Ch. 11 and its shareholders lost everything.

    Let me put it in a more personal way. Say you were a relatively risk-averse investor, and invested your life savings of $50,000 in a passbook savings account, fully insured by the FDIC, in Mellon Bank at 1.5% interest. On the other hand, I didn’t want to make a measly 1.5%, so I invested in a rental property, putting $10,000 down, and put the other $40,000 in mortgage derivative bonds, earning 9% interest. The market goes south, I am in default on my mortgage on the rental house, and my bonds become worthless, because of the foreclosure crisis. Even though you were the prudent investor, are you willing to pay additional taxes to fund a deferral of the foreclosure on my rental home, so that I can collect additional rent without paying the mortgage? Are you willing to also pay taxes so that I can be made whole on the worthless mortgage derivative bonds I foolishly purchased? That would mean that, not only did you not get rewarded for making the more prudent investment, but you actually paid a price because you had to be further taxed to fund making me whole. Ultimately, what we have to remember is the government has no money of its own. All of its money comes from you and me and the other taxpayers.

  • http://www.popfremont.org wilsonpop

    Those who are well-off and practice good fundamentals can take advantage of the current situation; thus the rich get richer. Those who are less well off but practice good fundamentals (e.g., emergency fund, good stewardship, etc.) can survive. I’m more in the 2nd group, and though I’d love to take advantage, no one is offering easy credit to do so at the moment!

    re: California homes being affordable — not quite! Yes, prices have plunged, but our home is still 15% more valuable than 7 years ago, and $480k for 1400 sq ft isn’t exactly cheap!

    Check out this article on WSJ – I think it’s worth the brief slog, “Maybe the Banks are Just Counting Wrong”: http://online.wsj.com/article/SB122186515562158671.html

  • Michael the little boot

    I must admit I haven’t read all the comments here yet, but I wanted to comment on something Dr. Veith said in the original post. “Now that the price of houses in California has plunged, ordinary people can afford to buy their own homes again, so the housing market is booming.” I noticed the article you linked was an AP article out of Los Angeles. I happen to live in Northern CA, in an area that was one of the worst hit in the nation by the mortgage crisis. The housing market is NOT booming, despite what people might say. It may look like it, since investors such as Buffett are picking up companies like nerds pick grass on the football field (speaking from experience :) ). The prices have gone down, but that hasn’t changed the income level, nor the gas prices, the food prices, etc. So, while people may have been able to afford houses if they were at these prices years ago when their salary or wage went farther, now the economic reality is different. Most people in California don’t live in LA.

    Hey, since you mentioned Warren Buffett, anyone catch THIS interesting quote from the NY Times? “There’s class warfare, all right,” Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” It’s nice to know SOMEONE can still afford to be honest in the U.S. At least he’s saying this in light of how BAD it is (just to give context). He had everyone that works in his office make up a fraction based on their income and the percentage of this income they pay in taxes. News flash: Buffett, who makes astronomically MORE than everyone in his office paid considerably LESS than the others. He wasn’t happy about it, from what the article said. Not that he’s doing anything to CHANGE it…

  • Don S

    Wilsonpop @ 18 and Michael @ 19: I live in So. Cal. and agree with both of you that all the CA market has done has correct back down to historical norms. It is still ahead of where it was in 2002, and homes are still expensive, though a lot more affordable than they were 2 or 3 years ago.

    Re Warren Buffett — I have never really been impressed with him because he is all talk. There is no rule against paying extra taxes voluntarily, and he is welcome to do so since he thinks he is so undertaxed. Guys like him also tend to lump themselves in with folks who are well off, but not extravagantly rich. I’m thinking of families that make $200,000 or $300,000, which is certainly a nice income but by no means puts such a family in a category with a billionaire like Warren Buffett. Yet the Buffetts of this world always want to jack up those families’ taxes along with their own, without even asking them. I think we should look into imposing a much lower and flatter income tax and supplement it with a wealth tax, taxing a percentage of the assets of folks like Buffett that have over a certain number of million dollars. That would give these guys a chance to put their money where their mouths are.

  • http://www.toddstadler.com/ tODD

    Don (@20), do you have any basis for saying of Buffett, “Guys like him also tend to lump themselves in with folks who are well off, but not extravagantly rich”? I’ve never heard him say anything like that.

    Also, you seem to want a “flat” tax that is progressive. That’s not flat.

  • Don S

    tODD @ 21: All I meant by that statement is that when ultra-rich guys like Buffett say they don’t need all the money they have, and should be taxed more, whenever they sign onto tax increase proposals, the “wealthy” they are really talking about increasing taxes on are those making $200,000 and up per year. I don’t think it’s fair or right to equate a guy like Buffett with a guy making $200k. It’s not the same kind of “wealthy”. Do you have evidence that Buffett only proposes tax increases on the super-rich? Maybe I’m wrong on this. Also, maybe you have information that he does voluntarily pay additional taxes, since he is always complaining that he doesn’t pay enough?

    I don’t understand your second comment, but I think it reflects the fact that you didn’t understand mine. I was throwing out there the idea of a wealth tax. In other words, it would be a tax based on what you have, not what you earned in the past year. I don’t know that it’s a policy I would really support (I haven’t thought enough about its implications), but the idea would be to lower and flatten income taxes, and substitute for the progressive taxes on upper incomes a tax on wealth for those having more than $X million in assets. A way to get these guys like Buffett who are always complaining they don’t pay enough under the current system.

  • EconJeff

    Don S @ 22: Please, no wealth taxes! That would only provide a disincentive to save. Which is the exact opposite of the issue we have been having the last few decades (i.e., over-consumption). Even if limited to the super rich, a business can be worth $X million dollars. Taxing that every year will simply tax it away, or artificially limit its size.

  • Don S

    EconJeff @ 23:

    Thanks for your comment. Yes, I know there are a lot of problems with wealth taxes, just as there are with steeply progressive income taxes. We already have wealth taxes, however, on certain types of wealth, in the form of real and personal property taxes, as well as business inventory taxes. Certain states, like FL, which don’t have income taxes, have intangible wealth taxes. My comment was borne partially of frustration at guys like Buffett, who spout off about how little taxes they pay, but don’t lift a finger to pay more voluntarily. They are really just advocating for more taxes on a lot of other people a lot less well off then they are, and I am sick of it.

  • Anon

    Bryan,
    But their economic mentor, Maynard Keynes, had chosen the abomination of homosexuality, and therefore in having no *stake* in future generations. Most politicians have not read history, and do not understand economics – but they do believe in the argument from authority, which for many in this country, is Keynes.

    Someone suggests that increasing taxes decreases the power of the central civil government. That does not compute. The central civil government has two primary means of power: military force (such as BHO’s million man internal military force for the squashing of dissent) and taxation. Decreasing the power of the central civil government by reducing taxes does not reasonably have the effect of increasing its power. . .

  • http://www.toddstadler.com/ tODD

    Anon (@25), care to cite a reference (or at least explain what you’re talking about) regarding your claim of Obama’s “million man internal military force for the squashing of dissent”?

    Also, are you claiming that Keynes’ “homosexuality” was the basis of his economic theories? Is your heterosexuality the basis of yours? When Keynes got married after his homosexual dalliances, did this have an effect on his understanding of economics?

  • Anon

    The first matter, Obama’s wanting an internal security force as numerous and well-armed as the military services of this country, is common knowledge. Try Google.

    The second is from Herb Schlossberg’s _Idols For Destruction_ published in the 1980s. IIRC he is a Lutheran.

    You also might want to look into the matters of first principles, and how ideas have consequences, since your response seems to indicate that you do not. Also you might want to look into where babies come from and how they get there, and what impact that has on future generations, as your response also appears to not take that into consideration, either.

  • http://www.toddstadler.com/ tODD

    Anon (@27), it’s silly to call your assertion “common knowledge”. Perhaps to devoted readers of WorldNetDaily (WND), it’s a repeated rumor, but outside of that circle, it is neither common, nor knowledge.

    That said, I did one Google search and found nothing. I have since done a second one, and found references to the rumor you mentioned, nearly all spread via blogs. Sadly, WND was the most … “authoritative” … news source I could find.

    It is clear, however, that there is more than a little paranoia pervading the circles where this “internal security force” is mentioned. I’m sure there are many people who want to see in Obama a new Hitler or Stalin, but the context in which Obama mentioned a “civilian national security force” in one speech is this:

    We’ll send more college graduates to teach and mentor our young people. We’ll call on Americans to join an Energy Corps to conduct renewable energy and environmental cleanup projects in their neighborhoods. We’ll enlist veterans to help other vets find jobs and support, and to be there for our military families. And we’ll also grow our Foreign Service, open consulates that have been shuttered, and double the size of the Peace Corps by 2011 to renew our diplomacy.

    Those groups he mentioned — college tutors, Energy Corps, vet support, Foreign Service, and Peace Corps — are the clear antecedent to the phrase “civilian national security force”.

    I’m near certain you won’t believe me, given how much you love to demonize (literally!) me and those who disagree with you politically. But I couldn’t let such nonsense stand unchallenged here. It’s a thing of mine: not wanting unbelievers to think that all Christians believe such nonsense.

    I’ll ignore the rest of your “response”.

  • fw

    anon. are you really a lutheran?


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