I first heard this story on the radio yesterday coming home from work, and it shocked me. The city of Dearborn, Michigan is arresting and jailing Christians for peacefully speaking to Muslims about Christianity and handing out Bibles in public areas. (For those who don't know, Dearborn and other surrounding towns are home to the largest concentration of Muslims in the U.S.) Several of the arrests were caught on video so there is clear evidence that the Christians were not "disturbing the peace" as the police claim. By contrast, after the arrests a crowd of Muslims gathered around and were shouting profanities and violent epithets -- yet none of them were arrested for "disturbing the peace." In one case, the missionaries, including an 18-year-old girl, were thrown in jail overnight. In another, the missionaries were actually brought to trial, but after jurors saw the video of the incident they immediately acquitted them of any wrongdoing. Even after their acquittal, the mayor and other city officials continued to publicly attack them. The full story is here on the website of the Thomas More Law Center, which is bringing a civil rights lawsuit on behalf of these missionaries.
Yes, folks, this is America. We are used to hearing about people arrested and jailed for their faith in other countries. But who would have thought it could actually happen here in America? Essentially the city of Dearborn is unofficially enforcing Sharia law, which prohibits people of any other religion from attempting to proselytize Muslims. And in the process, it is trampling on people's constitutional first amendment rights. Why are city officials doing this? I think it's obvious they are doing this because either they feel intimidated by or they want to curry favor with the large Muslim population in their community, which obviously supports their actions.
We all know that most if not all Islamic countries are governed by repressive regimes that deny even the most basic civil rights to their citizens, including freedom of speech and freedom of religion. What a lot of Americans don't realize is that many Muslims who are living in Western countries are fighting hard against freedom of speech and religion as well. In Europe, many Muslim communities have become islands unto themselves where national laws are not enforced and where the police are afraid to go. Muslims have been rallying in the streets in England and other countries, demanding the adoption of Sharia law. (Sharia law, for those who don't know, is the strict Muslim law code that calls for the utter subjugation of women, draconian punishments for moral violations such as homosexuality or adultery, and denies freedom of speech or religion.) Most people assume Sharia law can't happen in America, but the Dearborn incident demonstrates that it absolutely can if we do not remain vigilent. Kudos to organizations like the Thomas More Law Center that are exposing these incidents.
It's important for all Americans to understand that Sharia law and Muslims who support Sharia law stand for something that is antithetical to our country's values and laws -- in fact they are profoundly hostile to our values. Those who support Sharia law are enemies of freedom and of America's way of life, and we must not allow them to get even the slightest toehold in our country, as they have in many other Western countries. As the famous quote says, "The price of liberty is eternal vigilance."
Saturday, February 26, 2011
Friday, February 25, 2011
Walk for Choice
Abortion supporters are protesting the House's attempts to defund Planned Parenthood by holding "Walks for Choice" accross the country on Saturday, February 26. There will be a prayer vigil in Annapolis, where one of these walks is being held, and I would imagine similar pro-life events will be held elsewhere.What strikes me is the logo for this event (above). The words "We have a voice. We have a choice." appear to me to contradict the image of the faceless woman. The pro-abortion crowd claims that they are the ones who truly care about women and that they are standing up for them and for their rights. However, to me this image of a generic woman with only words for a face implies that individual women with individual personalities and individual needs don't really matter to them, only that they stand for a "woman's right to choose." It saddens me how many women buy into these lies.
Now Who's the Party of No?
You know, I have at times been critical of the Republican Party. I believe in conservative ideals, but I have often thought Republicans tend to be very spineless and weak in fighting for them. I know at one point on this blog I even urged my readers not to give money to the Republican National Committee because of their habit of giving big bucks to some very liberal Republican candidates. I have also said that I am not necessarily pro-Republican; merely (fiercely) anti-Democrat.
However, I have to say that I have been very encouraged lately about what I am seeing from Republican officials around the country. Many of them are showing a lot more leadership and backbone than I expected to see. The Republican governors, especially, are doing both their states and their party proud. When Gov. Chris Christie of New Jersey was first elected at the end of 2009, I expected him to be a typical Northeastern liberal Republican squish. Boy, was I wrong! He has been fierce in taking on the unions and the political interest groups and fighting to get New Jersey back on a solid financial footing. Gov. Bob McDonnell has also done a great deal in only a little over a year to balance Virginia's budget and bring more jobs to his state. Gov. Tom Corbett of Pennsylvania is cracking down on abortion clinics in the state that violate health & safety codes. Not only did he succeed in exposing the disgusting & murderous activities going on in Kermit Gosnell's "abortion clinic" in Philadelphia, but he has also fired numerous state employees who were responsible for looking the other way for years while these violations occurred. Now, I am watching as Gov. Scott Walker and the courageous Republicans in the Wisconsin legislature take on the deeply entrenched public employee unions in the state in order to balance the state's budget. Despite intense pressure, angry mobs, and threats of violence, they are standing tall on their principles and refusing to back down. Other Republican governors are also standing up to the money-hungry unions, including Gov. John Kasich of Ohio.
Then there is the newly-elected GOP majority in the U.S. House of Representatives. They too are courageously standing up to the President. They recently passed a package with $61 billion in discretionary domestic spending cuts, including de-funding Planned Parenthood. Granted, it's small compared to the overall deficit, but at least it's a start -- a start staunchly opposed by the Democrats who want no cuts at all. John Boehner and the Republican leadership in the House have also announced that they intend to take on entitlement reform in their budget coming out in April. This is a somewhat risky thing to do, especially since the President wants to do nothing but use entitlements as a political football to get re-elected -- but it is the right thing to do. It is encouraging to see this new class of lawmakers willing to take on such an important issue that lawmakers have cravenly avoided for decades.
Who knows how everything will happen in the end. Maybe the Republicans will end up caving in the end. Maybe the Democrats will effectively demagogue the spending cuts to worm their way back into power in Congress. But for now, we have every reason to be encouraged at this new generation of Republican leaders. They seem to have principles, and they seem to be willing to fight for those principles. We should pray for them and support them in any way we can. And those "conservative" critics who claim there is "no difference between the two parties" and "all politicians are equally corrupt" should be ashamed of themselves. There is a very clear difference between the parties, and people who think that it doesn't matter whether you vote Republican or Democrat are not paying attention to what's happening out there.
Obama's rhetoric to the contrary, the Democrats do not stand for change. Public employees are not screaming epithets against the Wisconsin governor in the streets because they support change. They are reactionaries trying to defend a failed system that is tetering on the verge of bankruptcy. Democrats have no solutions to our looming financial crisis and our out-of-control deficit spending. I have known for a long time they are cowards -- I saw how they demagogued Bush's sincere attempt at Social Security reform back in 2005. What I have recently come to realize is that many Republicans actually do stand for change. Many of them are sincere about wanting to solve our deficit crisis and tackle entitlement reform. Many of them are willing to take risks and stand up to powerful & corrupt interests to do what's right. I don't put my trust in politicians, but I will say that I've rarely been prouder to be a Republican.
For a great article on this contrast between the parties, check out this column by Charles Krauthammer.
However, I have to say that I have been very encouraged lately about what I am seeing from Republican officials around the country. Many of them are showing a lot more leadership and backbone than I expected to see. The Republican governors, especially, are doing both their states and their party proud. When Gov. Chris Christie of New Jersey was first elected at the end of 2009, I expected him to be a typical Northeastern liberal Republican squish. Boy, was I wrong! He has been fierce in taking on the unions and the political interest groups and fighting to get New Jersey back on a solid financial footing. Gov. Bob McDonnell has also done a great deal in only a little over a year to balance Virginia's budget and bring more jobs to his state. Gov. Tom Corbett of Pennsylvania is cracking down on abortion clinics in the state that violate health & safety codes. Not only did he succeed in exposing the disgusting & murderous activities going on in Kermit Gosnell's "abortion clinic" in Philadelphia, but he has also fired numerous state employees who were responsible for looking the other way for years while these violations occurred. Now, I am watching as Gov. Scott Walker and the courageous Republicans in the Wisconsin legislature take on the deeply entrenched public employee unions in the state in order to balance the state's budget. Despite intense pressure, angry mobs, and threats of violence, they are standing tall on their principles and refusing to back down. Other Republican governors are also standing up to the money-hungry unions, including Gov. John Kasich of Ohio.
Then there is the newly-elected GOP majority in the U.S. House of Representatives. They too are courageously standing up to the President. They recently passed a package with $61 billion in discretionary domestic spending cuts, including de-funding Planned Parenthood. Granted, it's small compared to the overall deficit, but at least it's a start -- a start staunchly opposed by the Democrats who want no cuts at all. John Boehner and the Republican leadership in the House have also announced that they intend to take on entitlement reform in their budget coming out in April. This is a somewhat risky thing to do, especially since the President wants to do nothing but use entitlements as a political football to get re-elected -- but it is the right thing to do. It is encouraging to see this new class of lawmakers willing to take on such an important issue that lawmakers have cravenly avoided for decades.
Who knows how everything will happen in the end. Maybe the Republicans will end up caving in the end. Maybe the Democrats will effectively demagogue the spending cuts to worm their way back into power in Congress. But for now, we have every reason to be encouraged at this new generation of Republican leaders. They seem to have principles, and they seem to be willing to fight for those principles. We should pray for them and support them in any way we can. And those "conservative" critics who claim there is "no difference between the two parties" and "all politicians are equally corrupt" should be ashamed of themselves. There is a very clear difference between the parties, and people who think that it doesn't matter whether you vote Republican or Democrat are not paying attention to what's happening out there.
Obama's rhetoric to the contrary, the Democrats do not stand for change. Public employees are not screaming epithets against the Wisconsin governor in the streets because they support change. They are reactionaries trying to defend a failed system that is tetering on the verge of bankruptcy. Democrats have no solutions to our looming financial crisis and our out-of-control deficit spending. I have known for a long time they are cowards -- I saw how they demagogued Bush's sincere attempt at Social Security reform back in 2005. What I have recently come to realize is that many Republicans actually do stand for change. Many of them are sincere about wanting to solve our deficit crisis and tackle entitlement reform. Many of them are willing to take risks and stand up to powerful & corrupt interests to do what's right. I don't put my trust in politicians, but I will say that I've rarely been prouder to be a Republican.
For a great article on this contrast between the parties, check out this column by Charles Krauthammer.
Thursday, February 24, 2011
Did You Know Your Tax Dollars Are Funding the Democratic Party?
Take a look at this outstanding column by a very thoughtful political analyst, Michael Barone of The Washington Examiner. The whole article is good, but this paragraph in particular caught my attention:
"'Follow the money,' Washington reporters like to say. The money in this case comes from taxpayers, present and future, who are the source of every penny of dues paid to public-employee unions -- who in turn spend much of that money on politics [$400 million in 2008 alone], almost all of it for Democrats. In effect, public-employee unions are a mechanism by which every taxpayer is forced to fund the Democratic party."
"'Follow the money,' Washington reporters like to say. The money in this case comes from taxpayers, present and future, who are the source of every penny of dues paid to public-employee unions -- who in turn spend much of that money on politics [$400 million in 2008 alone], almost all of it for Democrats. In effect, public-employee unions are a mechanism by which every taxpayer is forced to fund the Democratic party."
Monday, February 21, 2011
Disgusting Commentary on our Universities
A war hero who was awarded the Purple Heart after being shot 11 times in Iraq and who spent two years in the hospital recovering from his wounds was booed and heckled when he spoke at a townhall meeting at Columbia University last week in favor of allowing the ROTC back on campus to recruit. Story here. These students don't deserve to have the freedom they enjoy in this great country, thanks to heroes like Sgt. Anthony Maschek. And what a sad, disgusting commentary on the left-wing teachers and professors who have shaped the worldviews of these kids.
Saturday, February 19, 2011
Planned Parenthood Defunding Passes the House
Friday, February 18, 2011
The Contrast Couldn't Be Clearer...
...between those who are real leaders and those who aren't. Definitely in the "not a real leader" category is Barack Obama. His cowardly budget continues the big domestic spending while completely ignoring the massive problem of entitlements which threatens our country with bankruptcy. Charles Krauthammer has a lot more details in his great column here.
In the "real leader" category are two tough, courageous governors: Mitch Daniels of Indiana and Chris Christie of New Jersey. Both of these men are real leaders who taking the painful steps necessary to fix their states' financial problems, all the while being honest with their constituents about what's at stake. Peggy Noonan has a lot more details in her great column here.
In the "real leader" category are two tough, courageous governors: Mitch Daniels of Indiana and Chris Christie of New Jersey. Both of these men are real leaders who taking the painful steps necessary to fix their states' financial problems, all the while being honest with their constituents about what's at stake. Peggy Noonan has a lot more details in her great column here.
Thoughts on the Wisconsin Showdown
As most of you know, there's a showdown going on in Wisconsin, with protestors jamming the state capitol to protest a plan by the new Republican legislature to cut public employee benefits in order to attempt to balance the state's budget. Here are my thoughts on the subject.
1. You'd think, from reading the protestors' signs comparing Wisconsin Gov. Scott Walker to Hitler and hearing union bosses call him the "Mubarak of the Midwest", that he and his allies in the state legislature were pushing something really radical. What they are actually proposing is for public employees to pay 12.6% of their health insurance instead of less than 5%. (Is there ANYBODY who works in the private sector who gets their employer to pay 87.4% or more of their health insurance???) Oh yeah, and they have to pay half of their pension contributions (as opposed to 0% now). I know, I know, can you believe those evil politicians asking public employees to contribute some money toward their own retirement? I mean it's not like non-government employees have to save for their own retirement or anything.
The bill also restricts the power of the unions in other ways. It keeps unions from forcing state employees to pay union dues. And it ends collective bargaining for public employee unions for everything except for wages (with the exception of police & fire), which means that benefit increases would be restricted to the CPI. The reason for this is quite simple. State and local government union employees make, on average, 45% more in total compensation than similar employees working in the private sector. Thanks to collective bargaining, public employee compensation (usually disguised as increased non-wage benefits) has continued to increase significantly despite the dismal economic conditions. Over the past few years, public-sector employment in Wisconsin has continued to increase while private-sector employment decreased. And unfortunately, Wisconsin simply can't afford to pay for it anymore. The state faces a $3.6 billion budget deficit over the next two years. Why shouldn't the unions have to tighten their belt like the rest of us?
Rich Lowry of National Review put it like this: "Walker's reforms, though, go beyond the immediate bottom line. They are aimed at curtailing the power of public-sector unions that feast on the circularity of their relationship with government. The unions work to elect politicians, then sit across a bargaining table from them -- and lo and behold, get what they want." This circular relationship is a big reason why so many states are going bankrupt.
2. The tactics of Big Labor, as always, are appalling. Teachers are walking off their jobs and shutting down schools to attend the protests (bringing their students with them in many cases). I wish I could get the taxpayers to foot the bill for ME to walk of my job to engage in days of political protests. As mentioned before, the governor is being compared to Hitler and Mubarak for having the cheek to try to balance the budget. The protestors have surrounded the capitol, waving vicious signs and shouting vicious things. Republican legislators are getting physical threats against them, and some of them have been forced to get police protection for their homes, businesses, and families. Unionists have actually targeted some of those homes and businesses for protests. They are trying to bully and scare state legislators into doing what they want. It's despicable. And give the Republicans credit for not backing down, at least so far. The behavior of the unions demonstrates just how corrupt and entitled they are and just how badly they need to be reined in.
Jay Nordlinger, as always, has some great thoughts on National Review. He writes, "A great advantage of the Left is that they are organized and determined -- and have a lot of time. Paid time. The taxpayer is funding these 'days of protest,' engaged in by the public-school teachers. They are using their 'sick' leave, provided by the taxpayer, to go rallying. And what are the other citizens of Wisconsin - the majority - doing? What they always do. Going about their business, or businesses; providing for their families. As we speak, some are having to stay home with their school-aged children, who have been locked out of their classrooms by their teachers. Ordinary Wisconsites aren't paid to go rallying in the capital. Besides, they 'ralled' at the polls last November. They had their say then. And now, Governor Walker and the rest are trying to conduct the people's business." Nordlinger also quotes a columnist from a local newspaper saying that union leaders "must figure that if they bring 13,000 shouting people to Madison, they can overrule the election."
3. Speaking of attempting to overrule the election. The Democrats in the Wisconsin legislature have disappeared. Yes, that's right, disappeared. They walked out of the capitol and literally left the state, driving to a hotel in Illinois. This forced the legislature to postpone the vote because there was not a quorum present. Unbelievable. You don't like what the majority of legislators -- democratically elected legislators -- are doing, so you just leave town and shut down the legislature completely. Yes, this is how Democrats operate. They act like two-year-olds and throw a little temper tantrum. What would happen to our system of government if the minority party left town every time the majority tried to pass a bill they didn't like? For the millionth time, Democrats demonstrate why they deserve to be a permanent minority.
1. You'd think, from reading the protestors' signs comparing Wisconsin Gov. Scott Walker to Hitler and hearing union bosses call him the "Mubarak of the Midwest", that he and his allies in the state legislature were pushing something really radical. What they are actually proposing is for public employees to pay 12.6% of their health insurance instead of less than 5%. (Is there ANYBODY who works in the private sector who gets their employer to pay 87.4% or more of their health insurance???) Oh yeah, and they have to pay half of their pension contributions (as opposed to 0% now). I know, I know, can you believe those evil politicians asking public employees to contribute some money toward their own retirement? I mean it's not like non-government employees have to save for their own retirement or anything.
The bill also restricts the power of the unions in other ways. It keeps unions from forcing state employees to pay union dues. And it ends collective bargaining for public employee unions for everything except for wages (with the exception of police & fire), which means that benefit increases would be restricted to the CPI. The reason for this is quite simple. State and local government union employees make, on average, 45% more in total compensation than similar employees working in the private sector. Thanks to collective bargaining, public employee compensation (usually disguised as increased non-wage benefits) has continued to increase significantly despite the dismal economic conditions. Over the past few years, public-sector employment in Wisconsin has continued to increase while private-sector employment decreased. And unfortunately, Wisconsin simply can't afford to pay for it anymore. The state faces a $3.6 billion budget deficit over the next two years. Why shouldn't the unions have to tighten their belt like the rest of us?
Rich Lowry of National Review put it like this: "Walker's reforms, though, go beyond the immediate bottom line. They are aimed at curtailing the power of public-sector unions that feast on the circularity of their relationship with government. The unions work to elect politicians, then sit across a bargaining table from them -- and lo and behold, get what they want." This circular relationship is a big reason why so many states are going bankrupt.
2. The tactics of Big Labor, as always, are appalling. Teachers are walking off their jobs and shutting down schools to attend the protests (bringing their students with them in many cases). I wish I could get the taxpayers to foot the bill for ME to walk of my job to engage in days of political protests. As mentioned before, the governor is being compared to Hitler and Mubarak for having the cheek to try to balance the budget. The protestors have surrounded the capitol, waving vicious signs and shouting vicious things. Republican legislators are getting physical threats against them, and some of them have been forced to get police protection for their homes, businesses, and families. Unionists have actually targeted some of those homes and businesses for protests. They are trying to bully and scare state legislators into doing what they want. It's despicable. And give the Republicans credit for not backing down, at least so far. The behavior of the unions demonstrates just how corrupt and entitled they are and just how badly they need to be reined in.
Jay Nordlinger, as always, has some great thoughts on National Review. He writes, "A great advantage of the Left is that they are organized and determined -- and have a lot of time. Paid time. The taxpayer is funding these 'days of protest,' engaged in by the public-school teachers. They are using their 'sick' leave, provided by the taxpayer, to go rallying. And what are the other citizens of Wisconsin - the majority - doing? What they always do. Going about their business, or businesses; providing for their families. As we speak, some are having to stay home with their school-aged children, who have been locked out of their classrooms by their teachers. Ordinary Wisconsites aren't paid to go rallying in the capital. Besides, they 'ralled' at the polls last November. They had their say then. And now, Governor Walker and the rest are trying to conduct the people's business." Nordlinger also quotes a columnist from a local newspaper saying that union leaders "must figure that if they bring 13,000 shouting people to Madison, they can overrule the election."
3. Speaking of attempting to overrule the election. The Democrats in the Wisconsin legislature have disappeared. Yes, that's right, disappeared. They walked out of the capitol and literally left the state, driving to a hotel in Illinois. This forced the legislature to postpone the vote because there was not a quorum present. Unbelievable. You don't like what the majority of legislators -- democratically elected legislators -- are doing, so you just leave town and shut down the legislature completely. Yes, this is how Democrats operate. They act like two-year-olds and throw a little temper tantrum. What would happen to our system of government if the minority party left town every time the majority tried to pass a bill they didn't like? For the millionth time, Democrats demonstrate why they deserve to be a permanent minority.
Friday, February 11, 2011
"Planned Parenthood Is About Parenthood in the Same Way the American Cancer Society Is About Cancer"
All right, I can't take credit for the title above. Some Dude came up with that quote. I wish I had.
Take a look at this explosive column by Michelle Malkin. Needless to say, she doesn't hold back as she blows out of the water the claim that Planned Parenthood is an innocent organization that exists to help and care for women in need. A more accurate definition would be "an organization that assists in the exploitation of young teenaged women for big financial gains." If you think that's an extreme statement, read the article and watch the videos from Live Action Films. Keep in mind that Planned Parenthood rakes in hundreds of millions of dollars from federal and state governments. Your tax dollars are funding this organization, although if Republicans in the House have their way that will soon change.
Take a look at this explosive column by Michelle Malkin. Needless to say, she doesn't hold back as she blows out of the water the claim that Planned Parenthood is an innocent organization that exists to help and care for women in need. A more accurate definition would be "an organization that assists in the exploitation of young teenaged women for big financial gains." If you think that's an extreme statement, read the article and watch the videos from Live Action Films. Keep in mind that Planned Parenthood rakes in hundreds of millions of dollars from federal and state governments. Your tax dollars are funding this organization, although if Republicans in the House have their way that will soon change.
Thursday, February 10, 2011
Boom-Bust Cycle Explained
Dr. Thomas DiLorenzo testified before a House subcommitee yesterday. Although Congress likely isn't listening, I thought his explanation of the boom-bust cycle was too good to pass over. The text of his testimony is below. It's a bit long, but I hope you can read to the end. Unfortunately many people do not have a good understanding of the economics behind our monetary system, including many politicians.
________________________
Testimony of Dr. Thomas DiLorenzo
Professor of Economics, Loyola University Maryland
Committee on Financial Services, Subcommittee on Domestic Monetary Policy and Technology
Wednesday, February 9, 2011
2128 Rayburn House Office Building
Mr. Chairman and members of the committee, I thank you for the opportunity to address the issue of today’s hearing: "Can Monetary Policy Really Create Jobs?" Since I am an academic economist, you will not be surprised to learn that I believe that the correct answer to this question is: "yes and no." Monetary policy under the direction of the Federal Reserve has a history of creating and destroying jobs. The reason for this is that the Fed, like all other central banks, has always been a generator of boom-and-bust cycles in the economy. Why this is so is explained in three classic treatises in economics: Theory of Money and Credit by Ludwig von Mises, and two treatises by Nobel laureate economist F.A. Hayek: Monetary Theory and the Trade Cycle and Prices and Production. Hayek was awarded the Nobel Prize in Economic Science in 1974 for this work. I will summarize the essence of this theory of the business cycle as plainly as I can.
When the Fed expands the money supply excessively it not only is prone to creating price inflation, but it also sows the seeds of recession or depression by artificially lowering interest rates, which can ignite a false or unsustainable "boom" period. Lower interest rates induce people to consume more and save less. But increased savings and the subsequent business investment that it finances is what fuels economic growth and job creation.
Lowered interest rates and wider availability of credit caused by the Fed’s expansionary monetary policy causes businesses to invest more in (mostly long-term) capital projects (primarily real estate in the latest boom-and-bust cycle), and there is an accompanying expansion of employment in those industries. But since the lower interest rates are caused by the Fed’s expansion of the money supply and not an increase in savings by the public (i.e., by the free market), businesses that have invested in long-term capital projects eventually discover that there is not enough consumer demand to justify their investments. (The reduced savings in the past means consumer demand is weaker in the future). This is when the "bust" occurs.
The economic damage done by the boom-and-bust policies of the Fed occur in the boom period when resources are misallocated in the ways described here. The "bust" period is actually a necessary cure for the economic miscalculations that have occurred, as businesses liquidate their unsound investments and begin to make decisions on realistic, market-based interest rates. Prices and wages must return to reality as well.
Government policies that bail out businesses that have made these bad investment decisions will only delay or prohibit economic recovery while encouraging more of such behavior in the future (the "moral hazard problem"). This is how short recessions can be turned into seemingly endless ones. Worse yet is for the Fed to create even more monetary inflation, rather than allowing the necessary economic adjustments to take place, which will eventually set off another boom-and-bust cycle.
As applied to today’s economic situation, it is obvious that the artificially low interest rates caused by the policies of the Greenspan Fed created an unsustainable boom in the housing market. Thousands of new jobs were in fact created – and then destroyed – giving an updated meaning to Joseph Schumpeter’s phrase "creative destruction." Many Americans who obtained jobs and pursued careers in housing construction and related industries realized that those jobs and careers were not sustainable after all; they were fooled by the Fed’s low interest rate policies. Thus, the Fed was not only responsible for causing the massive unemployment that we endure today, but also a great amount of what economists call "mismatch" unemployment. The skills that people in these industries developed were no longer in demand; they lost their jobs; and now they must retool and re-educate themselves.
The Fed has been generating boom-and-bust cycles from its inception in January of 1914. Total bank deposits more than doubled from 1914 to 1920 (partly because the Fed financed part of the American involvement in World War I) and created a false boom that turned to a bust with the Depression of 1920. GDP fell by 24% from 1920–1921, and the number of unemployed more than doubled, from 2.1 million to 4.9 million (See Richard Vedder and Lowell Galloway, Out of Work: Unemployment and Government in Twentieth-Century America). This was a more severe economic decline than was the first year of the Great Depression.
In America’s Great Depression economist Murray N. Rothbard demonstrated that, once again, it was the excessively expansionary monetary policy of the Fed – and of other central banks – that caused yet another boom-and-bust cycle that spawned the Great Depression. It was not the Fed’s subsequent restrictive monetary policy of 1929–1932 that was the problem, as Milton Friedman and others have argued, but its previous expansion. The Fed was therefore guilty of contributing greatly to the massive unemployment of the Great Depression.
In summary, the Fed’s monetary policies tend to create temporary and unsustainable increases in employment while being the very engine of recession and depression that creates a much greater degree of job destruction and unemployment.
__________________________________
________________________
Testimony of Dr. Thomas DiLorenzo
Professor of Economics, Loyola University Maryland
Committee on Financial Services, Subcommittee on Domestic Monetary Policy and Technology
Wednesday, February 9, 2011
2128 Rayburn House Office Building
Mr. Chairman and members of the committee, I thank you for the opportunity to address the issue of today’s hearing: "Can Monetary Policy Really Create Jobs?" Since I am an academic economist, you will not be surprised to learn that I believe that the correct answer to this question is: "yes and no." Monetary policy under the direction of the Federal Reserve has a history of creating and destroying jobs. The reason for this is that the Fed, like all other central banks, has always been a generator of boom-and-bust cycles in the economy. Why this is so is explained in three classic treatises in economics: Theory of Money and Credit by Ludwig von Mises, and two treatises by Nobel laureate economist F.A. Hayek: Monetary Theory and the Trade Cycle and Prices and Production. Hayek was awarded the Nobel Prize in Economic Science in 1974 for this work. I will summarize the essence of this theory of the business cycle as plainly as I can.
When the Fed expands the money supply excessively it not only is prone to creating price inflation, but it also sows the seeds of recession or depression by artificially lowering interest rates, which can ignite a false or unsustainable "boom" period. Lower interest rates induce people to consume more and save less. But increased savings and the subsequent business investment that it finances is what fuels economic growth and job creation.
Lowered interest rates and wider availability of credit caused by the Fed’s expansionary monetary policy causes businesses to invest more in (mostly long-term) capital projects (primarily real estate in the latest boom-and-bust cycle), and there is an accompanying expansion of employment in those industries. But since the lower interest rates are caused by the Fed’s expansion of the money supply and not an increase in savings by the public (i.e., by the free market), businesses that have invested in long-term capital projects eventually discover that there is not enough consumer demand to justify their investments. (The reduced savings in the past means consumer demand is weaker in the future). This is when the "bust" occurs.
The economic damage done by the boom-and-bust policies of the Fed occur in the boom period when resources are misallocated in the ways described here. The "bust" period is actually a necessary cure for the economic miscalculations that have occurred, as businesses liquidate their unsound investments and begin to make decisions on realistic, market-based interest rates. Prices and wages must return to reality as well.
Government policies that bail out businesses that have made these bad investment decisions will only delay or prohibit economic recovery while encouraging more of such behavior in the future (the "moral hazard problem"). This is how short recessions can be turned into seemingly endless ones. Worse yet is for the Fed to create even more monetary inflation, rather than allowing the necessary economic adjustments to take place, which will eventually set off another boom-and-bust cycle.
As applied to today’s economic situation, it is obvious that the artificially low interest rates caused by the policies of the Greenspan Fed created an unsustainable boom in the housing market. Thousands of new jobs were in fact created – and then destroyed – giving an updated meaning to Joseph Schumpeter’s phrase "creative destruction." Many Americans who obtained jobs and pursued careers in housing construction and related industries realized that those jobs and careers were not sustainable after all; they were fooled by the Fed’s low interest rate policies. Thus, the Fed was not only responsible for causing the massive unemployment that we endure today, but also a great amount of what economists call "mismatch" unemployment. The skills that people in these industries developed were no longer in demand; they lost their jobs; and now they must retool and re-educate themselves.
The Fed has been generating boom-and-bust cycles from its inception in January of 1914. Total bank deposits more than doubled from 1914 to 1920 (partly because the Fed financed part of the American involvement in World War I) and created a false boom that turned to a bust with the Depression of 1920. GDP fell by 24% from 1920–1921, and the number of unemployed more than doubled, from 2.1 million to 4.9 million (See Richard Vedder and Lowell Galloway, Out of Work: Unemployment and Government in Twentieth-Century America). This was a more severe economic decline than was the first year of the Great Depression.
In America’s Great Depression economist Murray N. Rothbard demonstrated that, once again, it was the excessively expansionary monetary policy of the Fed – and of other central banks – that caused yet another boom-and-bust cycle that spawned the Great Depression. It was not the Fed’s subsequent restrictive monetary policy of 1929–1932 that was the problem, as Milton Friedman and others have argued, but its previous expansion. The Fed was therefore guilty of contributing greatly to the massive unemployment of the Great Depression.
In summary, the Fed’s monetary policies tend to create temporary and unsustainable increases in employment while being the very engine of recession and depression that creates a much greater degree of job destruction and unemployment.
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Changing Hearts and Minds, One Life at a Time
As those of you who follow this blog know, the new "late-term abortion" (euphemism for killing viable babies) clinic in Germantown, Maryland, has been the focus of a lot of prayers and concern for those of us who post here. So far, I have been able to attend two prayer walks outside the clinic. Both of them were pretty well attended despite very cold and windy weather, and while the evil of what we are protesting weighs heavily on our hearts, it has been encouraging to gather with like-minded people and stand for the protection of life and for justice for those unable to defend themselves. It has also been encouraging to see some renewed energy in the state capitol in Annapolis for the pro-life cause. Several legislators are introducing legislation to stop late-term abortion in Maryland. With all the negative publicity surrounding Kermit Gosnell's baby butcher shop in Philadelphia, we are praying that more pro-choice legislators will take a closer look at what is going on in the abortion industry and decide to support reasonable restrictions on abortion late in the pregnancy.
I wanted to share a really encouraging story from our community that happened just this week. A group of pro-life people from the community have been holding a prayer vigil every Monday morning outside of the Germantown clinic. This Monday, a woman went into the clinic for a scheduled abortion. While she was inside, the group of about 90 was praying hard for her and her baby. A short time later, she came back outside and told them, "I knew the love was out here and not in there." She also said that the clinic was "disgusting and the people are mean in there." She talked with the pro-life group for awhile and ended up accompanying one of them to the Shady Grove Pregnancy Center, which exists to help women like her who feel like abortion is their only option.
This reminds me a lot of another story I heard from a friend at Grove City College some years ago. My friend had been part of a group of people praying outside the abortion clinic in Pittsburgh when a woman came up and starting talking with a priest who was part of the group. It turned out that the priest had been standing outside the clinic praying a couple of years earlier when she arrived to have an abortion. He spoke with her, but she decided to have her abortion anyway. Now, two years later, she was pregnant again, and she remembered that the priest had demonstrated genuine love and concern for her, while the employees at the clinic had been cold and uncaring. She came and found the priest and told him she didn't want to have another abortion and asked for his help.
Stories like these give me hope that our prayers, protests, and vigils are not in vain. It makes me joyful and thankful to God to hear of these examples where love won out, a baby's life was spared, and a pregnant woman was able to find help and support.
These stories also highlight the vast difference between the pro-life pregnancy centers and the pro-choice abortion centers. Both supposedly exist to help pregnant women, but the contrast could not be greater. The reason these women found the people in the abortion clinics to be cold and unfeeling is because they are doing it for money, pure and simple. Abortionists and abortion clinics make thousands of dollars for each abortion they perform -- it is a multi-million dollar industry. (Abortion providers like Planned Parenthood also get a lot of federal money.) Obviously, anyone working in such a place, given the horrible sights and sounds witnessed every day (like dead dismembered babies being delivered and thrown in the trash), has to detach themselves emotionally and get through the day by mechanically processing each woman who comes in the door. Pro-life pregnancy centers, by contrast, are funded purely by churches and charitable donations and almost all their staff are unpaid. The pregnancy centers exist and are staffed because people care about these women and babies and want to help them so much they are willing to freely give of their time and money. (Unlike the abortion providers, these centers get no government money and often get a lot of harrassment from government entities like Montgomery County, MD.)
I saw this same contrast at the last pro-life walk I attended in Germantown on Sanctity of Life Sunday (the anniversary of Roe v. Wade). The small group of pro-abortion protestors (many of whom apparently were not even from the community) were chanting things like "Pro-life, that's a lie, you don't care if women die" and screaming hateful things and doing everything possible to disrupt our protest. In response to their chants, our group sang "Amazing Grace." They were angry because the police kept them on the other side of the street -- their whole purpose for being there was to get in our faces and disrupt our prayer walk. Yet I saw no one on our side respond with angry shouts. Any objective outside observers (such as people driving by and policemen directing traffic) had to see the contrast plainly.
We must, with God's help, keep up the fight, because those of us who stand for life are making a difference. And let's continue to love people -- because those stories I shared earlier are about how love won out over hatred and indifference. We will never win people's hearts and minds if we don't demonstrate with our words and actions that we really care for them.
I wanted to share a really encouraging story from our community that happened just this week. A group of pro-life people from the community have been holding a prayer vigil every Monday morning outside of the Germantown clinic. This Monday, a woman went into the clinic for a scheduled abortion. While she was inside, the group of about 90 was praying hard for her and her baby. A short time later, she came back outside and told them, "I knew the love was out here and not in there." She also said that the clinic was "disgusting and the people are mean in there." She talked with the pro-life group for awhile and ended up accompanying one of them to the Shady Grove Pregnancy Center, which exists to help women like her who feel like abortion is their only option.
This reminds me a lot of another story I heard from a friend at Grove City College some years ago. My friend had been part of a group of people praying outside the abortion clinic in Pittsburgh when a woman came up and starting talking with a priest who was part of the group. It turned out that the priest had been standing outside the clinic praying a couple of years earlier when she arrived to have an abortion. He spoke with her, but she decided to have her abortion anyway. Now, two years later, she was pregnant again, and she remembered that the priest had demonstrated genuine love and concern for her, while the employees at the clinic had been cold and uncaring. She came and found the priest and told him she didn't want to have another abortion and asked for his help.
Stories like these give me hope that our prayers, protests, and vigils are not in vain. It makes me joyful and thankful to God to hear of these examples where love won out, a baby's life was spared, and a pregnant woman was able to find help and support.
These stories also highlight the vast difference between the pro-life pregnancy centers and the pro-choice abortion centers. Both supposedly exist to help pregnant women, but the contrast could not be greater. The reason these women found the people in the abortion clinics to be cold and unfeeling is because they are doing it for money, pure and simple. Abortionists and abortion clinics make thousands of dollars for each abortion they perform -- it is a multi-million dollar industry. (Abortion providers like Planned Parenthood also get a lot of federal money.) Obviously, anyone working in such a place, given the horrible sights and sounds witnessed every day (like dead dismembered babies being delivered and thrown in the trash), has to detach themselves emotionally and get through the day by mechanically processing each woman who comes in the door. Pro-life pregnancy centers, by contrast, are funded purely by churches and charitable donations and almost all their staff are unpaid. The pregnancy centers exist and are staffed because people care about these women and babies and want to help them so much they are willing to freely give of their time and money. (Unlike the abortion providers, these centers get no government money and often get a lot of harrassment from government entities like Montgomery County, MD.)
I saw this same contrast at the last pro-life walk I attended in Germantown on Sanctity of Life Sunday (the anniversary of Roe v. Wade). The small group of pro-abortion protestors (many of whom apparently were not even from the community) were chanting things like "Pro-life, that's a lie, you don't care if women die" and screaming hateful things and doing everything possible to disrupt our protest. In response to their chants, our group sang "Amazing Grace." They were angry because the police kept them on the other side of the street -- their whole purpose for being there was to get in our faces and disrupt our prayer walk. Yet I saw no one on our side respond with angry shouts. Any objective outside observers (such as people driving by and policemen directing traffic) had to see the contrast plainly.
We must, with God's help, keep up the fight, because those of us who stand for life are making a difference. And let's continue to love people -- because those stories I shared earlier are about how love won out over hatred and indifference. We will never win people's hearts and minds if we don't demonstrate with our words and actions that we really care for them.
Saturday, February 5, 2011
Happy Birthday, Ronald Reagan!
Tomorrow, February 6, 2011, Ronald Reagan would have been 100 years old. Though not perfect, I believe Ronald Reagan was one of our greatest presidents, and certainly our greatest modern president. If only more of those politicians currently in office attempted to live up to the standard set by this man.
There are numerous favorable and unfavorable articles about this man popping up around the internet, but I found this one interesting. About the attempted shooting of President Reagan in his first term when Jim Brady was shot, it offers a brief look at what might have been.
There are numerous favorable and unfavorable articles about this man popping up around the internet, but I found this one interesting. About the attempted shooting of President Reagan in his first term when Jim Brady was shot, it offers a brief look at what might have been.
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