The Coming Civil War – Who, What, Where, When, and Why

Are we becoming Greece? Perhaps, but I believe there is a better example somewhat closer to home – The Civil War of 1861-1865.

No, I’m not saying that half the country will soon secede, or that we are headed for mass casualties. This will be different. But, it will also be the same in many respects.

•  Did you ever wonder why the South waited until 1860 to secede? Why not 1858 or 1863?
•  What was the precipitating event that made push come to shove at that exact moment?
•  Why was it that our political system could not resolve those issues peacefully?
•  What was it about slavery and states rights that rendered the political system useless?
•  Is it even remotely possible that we have some of the same types of issues today?

Again, I’m not suggesting that violence is a given. After all, there have been bloodless revolutions throughout history. But, if there is going to be another civil war, peaceful or otherwise, here is the Who, What, Where, When, and Why, using 1860 as a roadmap.

Why?

     1st parallel: Entitlement Economics

When you think about it, The Civil War was fought nominally over slavery and state’s rights, but at its core the issue was economics. The South did not secede from the union because they liked abusing Africans and wanted to continue doing so! They seceded because they were married to an economic system based on slavery. To the South, slave labor had become an entitlement, and they were afraid of losing it.

For generations, slaveholders and their economic counter-parties had enjoyed outsized living standards based on their slave labor entitlement. As they saw it, these plantation owners were not doing anything particularly radical for their time. Slave owning had been going on uninterrupted throughout history. It was their birthright, and it was legal. They didn’t create the system. They were born into it.

The economics and morality of our entitlement system today are essentially the same as the slavery entitlement in 1860. Have you not heard credible analysts say we are enslaving our heirs? That is not to imply any equivalence with the treatment of black slaves, only that we are making a similar claim on the labor of others. Has it not occurred to you that this is as morally wrong today as it was then?

Despite the above, how many times have you heard your contemporaries say: “I paid into the system, I played by the rules, and I broke no laws. Now you want to tell me the money’s run-out, and I have to sacrifice?”

How is that different from what the Southerners were saying? “Slavery is legal, I didn’t invent the system, my family fought for this country, and we played by the rules. Now you want me to sacrifice, and give it all up?”

Put in those terms, our issues today are eerily similar. Slave owners were living an unsustainable lifestyle off the labor of their slaves. We are living an unsustainable lifestyle off the future labor of our heirs.

Mandate Mania!

That stupid Constitution of ours is so obnoxious!  With all its checks and balances and limitations on what one man can do, it’s enough to drive an aspiring dictator crazy!  Luckily, we’ve found a nifty way around all that, and it’s called “The Mandate”.

How cool is The Mandate?  Take The Mortgage Mandate from the 90’s.  This was a mandate on banks to provide mortgages to anyone who could fog a mirror.  No obvious tax increase needed.  No contentious new laws passed.  There would not even be any resistance from the banks, once they were promised two escape hatches:  Fannie and Freddie.  

The Mortgage Mandate was pure genius.  It delivered millions of votes for Democrats, didn’t cost taxpayers a dime (initially), didn’t raise any suspicions at the time, and when it finally blew-up, the stink all landed on…Republican, George W. Bush.  It was the perfect crime!        

Bill Clinton knew that he could not provide subsidized mortgages to his voters the Constitutional way.  No, that would require a huge tax increase and legislative (bipartisan) action.  That would have been way too messy, and could easily take longer than sex with an intern.  But, through the magic of The Mortgage Mandate, it was a discreet quickee, all done behind the back of that annoying document from Philadelphia.  

Ditto Obama’s brand new Contraception Mandate;  Barack Obama knows the key to his reelection is white women.  He kicked butt among white women last time and, this time around, it’s just not clear that they hate Mitt Romney as much as they did John McCain. 

Obama really needs white women.  He needs white women more than Otis Day and the Knights.  So, what better way to win support among white women than the promise of government subsidized orgasms?  That’s right, under Obama’s free birth control mandate, every woman can have unlimited sex at no cost to herself!  How cool is that?  Who would vote against that? 

Well, the fans of that pesky document from 1787 for one, but they didn’t vote for Obama in the first place.  Also, strict Catholic white males who are similarly useless to an Obama re-election campaign.  And who get’s to pay for this?  Nobody.  It’s magical and free! 

This whole debate about the so-called “individual mandate” is another matter entirely.   Regardless of how one feels about the constitutionality at the state or federal level, at least the individual insurance mandate is a tax levied on voters, despite Obama’s denials.   The Mortgage and Free Sex Mandates do a handy end-run around those pesky balloteers, as do nearly all the other mandates in that monstrosity known as Obamacare.  The Obamacare Mandates make The Mortgage Mandate look insignificant in comparison.      

I used to believe that the Supreme Court would never let us slip into anarchy; that they would ultimately defend the Constitution and preserve The Rule of Law.  Experience has taught me otherwise.  The People are the last line of defense, but tragically, The People can be cheaply bought for the false promise of free McMansions, Free Sex, and Free Healthcare.   

(If you got here by searching for Kate Upton, my apologies.)  

                    

If Mitt Romney had a Sense of Humor

Have you heard the one about the Liberal, the Conservative, and the Moderate who walk into a bar?    The bartender says: "Hi Mitt!"

Never mind that Mormons don't drink,  if Mitt Romney had a sense of humor, he'd come back with this joke:

"A Marxist, a Dictator, and a Golfer walk into a bar

...and somehow, it's Bush's fault!"

 

A Bumper Sticker for Our Time

Our Constitutional Right to Free Food

If free contraception is a "health care right", what about food?  Seriously, what's more important for health - nutrition, or birth control?  I say all health insurance plans must provide free food for everyone!  

If we did this, we could end the Food Stamp Program and save taxpayers a fortune!

Free food for all!    

Why Conservatives Suck - by Bill Whittle

Dear Mr. Eastwood...

Dear Mr. Eastwood,

With all due respect, for Chrysler’s bond-holders it is not “Half-Time in America”- no, for those unlucky victims of President Obama’s bailout, it is actually “game over”.  

Let me tell you a story worthy of a Hollywood script.

One week before my father-in-law died at 88, he confided in me that a chunk of his life’s savings had been wiped-out when Chrysler’s secured bondholders were bypassed in Obama’s bailout.  Unlike you, Robert W. Scisco Sr. did not play a tough guy in the movies, instead, he actually fought real Nazis in North Africa, up through Italy, and eventually earned a Purple Heart in France.  This was not a man prone to showing fear, yet at the time he told me about his Chrysler bonds, he seemed afraid - afraid of his own government!   

You see, President Obama did not follow the normal bankruptcy route when he imposed the Chrysler bailout on us.  Instead, he decided to bypass the secured bondholders, who were first in-line, wiping them out, and delivered the company unencumbered to Fiat, the US Government, and the UAW.  This was an unprecedented redistribution from secured creditors to the President's supporters.   Unlike you, Bob Scisco understood this, and was wise enough to envision the full implications for him, his heirs, and the future of economic liberty in the country he had fought to defend.
   

For Chrysler’s bondholders like my father-in-law, Obama’s bailout was a knife in the back.  Within a week of him telling me this, with fear in his eyes, he was dead.

Obamaball

In light of the recent celebration surrounding the drop to 8.3% unemployment, I am reposting "Obamaball" which first appeared 12/21/11.   

Have you seen the movie “Moneyball” or read the Michael Lewis book by the same name?  To make a long story short, it is a true story about winning baseball games without superstars by taking a deeper look at the statistics and analyzing them in a better way.  Baseball and economics share a fondness for statistics so the question arises, could economic statistics reveal a similarly undiscovered strategy for the economy like what Oakland General Manager Billy Beane did in “Moneyball”?  Moreover, could the President's economic plan, “Obamaball”, be that strategy?  

Baseball stats and economic stats are not all that comparable.  In baseball there have always been nine members on a team, ninety feet has always been the distance between bases, sixty feet six inches has always been the distance from the mound to the plate, the bat is always wood, there are three outs, three strikes, four balls, nine innings, and so forth.  Therefore, an ERA has always been an ERA, an AVG has always been an AVG, and R, H, and E have always been R, H, and E.   

If only things were as simple in economic statistics, especially since the big ones all come from the government.  Unlike baseball, the government is always changing how they measure and what they measure.  Sometimes the statistics change because of an unintended consequence from a change in a law.   Sometimes it is for practical reasons.  And sometimes it just seems political.   After all, government economic stats come from the very government they sit in judgment of!

Here are four key statistics which form the basis for much of the economic rhetoric heard today.  In all four cases these statistics fail the baseball test.   

•       Inflation (CPI)– Not only has the Bureau of Labor Statistics changed the way it measures inflation over the years, notably in 1980 and 1990, but they cannot avoid relying on prices for manufactured imported goods which tell us more about foreign labor markets and regulations than they do about our own currency.  When these changes are backed-out, the actual inflation rate is about 2.5% higher than what is reported.  What makes inflation so problematic is that all other measures of economic performance are “inflation adjusted” and thus dependent on an accurate inflation number to start with.  Even corporate earnings must be weighed against an accurate inflation measure.

•       Economic Growth and Recession  (GDP) – GDP numbers are all adjusted for inflation too and thus suffer the effect of any inflation inaccuracies.  That is why a 2.0% annual growth rate based on a “GDP Deflator” which is under-measured by 2.5% feels exactly like, well, a -.5% growth rate.  That is how GDP can be reportedly rising by 2% yet polls can show most people believe we are still in recession.  The people are probably right.

•       Unemployment (U3) – You’d think that “unemployment” would be a cut-and-dried statistic:  “The number of people not employed as a percent of the labor force”.  But that’s not how the government does it.  In fact, if every single person in the US was collecting unemployment, disability, welfare, food stamps, or some other form of assistance but not actively seeking a job, the official unemployment rate in the US would be…0%!  The way we measure, we could have no one working and still have zero unemployment.  If we corrected for just this issue and undid the error back to Barack Obama’s inauguration, the real unemployment rate would be 11%.  If all the nonsense is removed, the actual number is close to 23%.    

•       Income Inequality (1% vs. 99%) – Much of the recent rhetoric about the 1% vs. the 99% is based on a CBO report from October of this year, which has numerous issues.  In order to measure income inequality, the CBO used a government measure based on income tax returns from 1979 to 2007.  Not 2010, which should have been available, but 2007, right before the financial meltdown in the midst of a bubble!  Second, many returns in the top brackets include corporate pass-through income, which is a recent phenomenon and makes income tax returns meaningless for measuring changes in personal wealth.  Moreover, tax rates changed constantly from 1979 to 2007 making any trends difficult to discern.  These are just a few of the problems making this CBO report useless for analyzing trends.

And then there’s the economic analysis.  Here are four big economic issues and the current administrations analysis along with some questions.    

•       Arguably the biggest economic issue of our time is the financial crisis of 2008 and its aftermath.  According to President Obama’s analysis, greedy fat-cat bankers largely caused the whole thing.   Isn’t that like blaming a plane crash on gravity?  Aren’t gravity and greed constants?  Are bankers today greedier than they were, say, in the 1950s?  Were there any sub-prime loans back then?  Where did sub-prime loans come from?  Wasn’t the President part of the chorus demanding sub-prime mortgages in the 90’s and didn’t he then protect and subsidize the dangerous practice through his support of Fannie Mae and Freddie Mac as a US Senator?

•       Once the analysis points to greedy bankers, it’s a short leap to blaming the continued malaise on the same class, which the President has made the theme of his re-election campaign.  So what has prevented Obama from stopping the greedy and the rich from continuing the malaise?  Didn’t he have two solid years of filibuster-proof control of the entire federal government?  Didn’t they pass Dodd-Frank?  How then can he explain MF Global and Jon Corzine (D-NJ), the newest example of greedy fat-cat banking failure?  Why did Obama and the Democrats keep the Bush tax cuts “for the rich” back in 2010 when they were set to expire?  How does this all add-up?  

•       If greedy bankers caused a financial crisis, what better way to fix it than to go on a 5 Trillion dollar spending and borrowing binge, right?   Who will pay for the extra 5 trillion in borrowing? Does that even matter as long as the inevitable collapse is timed to occur after the Obama reign?  Can “the rich” possibly make-up the difference if the top 10% of the country earn 40% of the income and pay 70% of the income taxes already?

•       If the financial crisis was due to greedy rich bankers, then the healthcare crisis must also be caused by greedy rich insurance companies and greedy rich doctors, right?   What better way to fix it all then to put the federal government in-charge of the whole thing?  Aren’t Medicare and Medicaid both disasters from a sustainability standpoint?  How can putting the same government in-charge of the entire industry be a good thing?  How can Obama claim the “free market” has failed in healthcare when it hasn’t been involved in healthcare since WWII when employers got to deduct premiums but individuals did not?      

So this is it in a nutshell:  President Obama, the General Manager of our team, has looked at the statistics, done his analysis, and believes he has saved us from a Great Depression, free markets don’t work, greedy rich people caused all the problems in the first place, the government’s job is to re-distribute wealth, and borrowing 5 trillion is OK as long as it blows-up on someone else’s watch.  

Welcome to “Obamaball” where all the stats are rigged and all the analysis is wrong.

Dear Facebook Friend,

What She Said...

"Three Cheers for Romneycare" by Ann Coulter