Views on the News
Views on the News*
April 9, 2016
The United States is facing the most important election since its founding. Will a leftist President hell bent on fulfilling the Obama Doctrine of depleting our liberties be elected, or, will we elect a President determined to return the USA to its rightful leadership position in a troubled world? Much to our detriment, many challenges are not being seriously addressed by the candidates or the media. President Obama has spent two terms publicly denying our country’s exceptionalism and demeaning its greatness. He has enriched venomous enemies while smugly ignoring, insulting and boorishly lecturing friends. The hallmark of his Presidency is one of trampling on individual rights, greater racial anger, a strange attachment and defense of Islam, denigrating Christianity and guiding the most anti-Israel Administration since its modern day founding. He successfully pursued the Alinsky dream of socializing and damaging America’s health care, increasing national debt to unsustainable levels and obliterated the hopes and dreams of the middle class particularly the African American community. “Sequestration” targeting the military budget was created by Obama’s lack of leadership or disinterest in working with both sides of the Congressional aisle. This has led to a vast reduction in our military capabilities at a time the world’s diabolical regimes have increased theirs. We will soon witness the end of Obama’s White House stay, his multi-million dollar vacations, golf outings and open arms to despots. What awaits the next Administration will require someone of heroic fortitude. Islamic terrorism and one of its many surrogates, ISIS, promises a massive “event” here in the US. They are committing genocide all over the Middle East. Europe, which foolishly opened their borders to millions of un-vetted Islamic immigrants, is now the victim of terror as witnessed in Belgium and Paris. In addition to Islamic terrorism, both American-haters North Korea and Iran regularly test fire long-range ballistic missiles designed to carry nukes. North Korea again last week publicly threatened to murder millions by destroying Washington, D.C. Iran preaches “death to America” while treating the so called Iranian Nuclear Agreement as nothing more than a strategy to appease the naive one’s while pursuing their dangerous arms build-up. Russian and Chinese military aggression grows unabated while our brilliant leaders blab about Climate Control, designed to do nothing more than transfer wealth from great nations to the non-producers. We can expect more and probably worse should a Democrat be elected in November. Imagine the Democrat’s choices for President; a compulsive liar and the worst Secretary of State in modern history and a proud socialist who took from others and never created anything. Surely the tough loudmouth New York Republican businessman would be preferred over that leftist bunch, even if he does make you periodically cringe. The vision of President Hillary Clinton is terrifying. The media pundits, even the conservative ones, seemingly ignore Clinton while thumping Trump. Trump’s carnival-like campaign is the stuff media craves and yet, he is leading, but I wish it were Cruz. At the end of the day, real issues are being ignored and that is worrisome. There is worse than Trump; there is Mrs. Clinton because if she wins, we will all be traveling on the road to tyrannical hell, so don’t help her.
(“Don’t Like Trump? Think About This…” by William Pollack dated April 2, 2016 published by Right Wing News at http://rightwingnews.com/column-2/dont-like-trump-think/ )
Donald Trump continues to lead the Republican presidential contest; Ted Cruz continues to gain ground against the frontrunner; John Kasich continues as the outside chance in the race; and the eventual Republican nominee needs to take something from all three candidates to win. The starting point for the GOP nominee must be principle. America needs a dedicated constitutional conservative in the White House. Otherwise we can expect more of the same. Unfortunately, Republicans as well as Democrats have presided over the vast expansion of government regulation and spending. We can’t afford another wasted Republican presidential term, presiding over slightly slower growth in the welfare state. We need someone who will lead the fight to roll back Washington to the role actually authorized by the Constitution. Ted Cruz best fulfills this role: a constitutional scholar and a dedicated conservative, he understands the need to return to the vision that animated the American Revolution. The federal government should be small but effective. It should protect Americans from foreign threats and create the essential framework for a free society. It should promote justice and provide a safety net, acting only when a free people cannot. For most issues Uncle Sam should be the last, not first, resort. The next president also will need to utilize the talents of conservatives at the state as well as federal level. As Washington shrinks more will have to be done by governors, state legislatures, and local authorities. They all will need to work together, with responsibility passed out of the nation’s capital to elected officials closer to both the people and problems. As Ronald Reagan long ago proposed, Uncle Sam should send both responsibilities and resources back to the states. Even limited devolution helped make the 1996 welfare reform a resounding success. We know that government closest to the people works best, so we should build on what’s been proven to work and get Washington bureaucrats out of the welfare business once and for all. Finally, the next President will need to channel the enthusiasm of his followers. We need a Presidential candidate to speak with passion to ordinary people. They all know how the free market benefits society, despite the nostrums spouted by the Left, and why the Constitution must be interpreted as written, not as people might want it to be. We need a nominee who can explain these and other positions to those voting in November. It’s not enough for the Republican to be the best candidate; he must convince the American people that he is the best candidate. America already has suffered under nearly eight years of Barack Obama. We can’t afford to risk America continuing down the path of failed socialist policies and the erosion of our constitutional freedoms. The next President must understand and respect our Constitution, have solid plans to address our challenges, be willing to devolve federal power to the states, and sell his vision to the American people.
(“Principle, Federalism, and Passion: GOP Needs All Three to Win and Govern” by Ken Blackwell dated April 3, 2016 published by Town Hall at http://townhall.com/columnists/kenblackwell/2016/04/03/principle-federalism-and-passion-gop-needs-all-three-to-win-and-govern-n2142629 )
One thing I ardently desire is that America continue to be great, which is born of a patriotism of which I am not ashamed. I am proud to be an American and so I desire the best for my country. Contrary to the prevailing conventional wisdom, I do not believe America has lost its greatness. However, I realize that this greatness is seriously threatened by the course we have set for ourselves. Its survival hinges on the decisions that we will now make. The key question before us is determining what we mean by greatness. There are those who associate greatness with bigness, power, or quantity. Thus, America is great because of her vast size, massive economic production or unmatched military might. These can truly be characteristics of great nations but they are not what make a nation great. There are others who believe the foundation of our greatness is based on the many opportunities to enjoy life in America. They point to our American way of life in which people are encouraged to enjoy life to its fullest. Still others interpret greatness as the freedom to do whatever one pleases. All these goals often reflect legitimate self-interest, but do not necessarily confer greatness upon a nation. For the greatness of nations is not found in things, quantities, or delights, but in the character of its people. Indeed, true greatness, that which endures the test of time, is born of a willingness to go beyond the common and ordinary. It calls us to excel, to take heroic action and to serve causes that take us beyond ourselves. America is great because there have always been, and still are, those who are willing to take up the challenges of going beyond the easy and comfortable. As long as such Americans may be found at all levels in society, we will continue to be great. So I believe America is great because there still exists dedicated fathers and loving mothers who sacrifice together to give their children strong character and instill in them the difference between right and wrong. America will be great as long as there are those generous self-sacrificing American who step up to the plate, assume responsibility and become leaders in their communities, businesses, and institutions. As long as honor holds a place in our hearts, we will produce heroes with the courage to fight for what we know to be true and right. We will even have those who will make the sublime sacrifice of offering their lives for their country. America will be great as long as we strive to be truly good. True goodness means placing God in the center of society, holding to His commandments as the rule of life and defending this higher law in the public square. We can be great, and expect God’s blessing, only if we remain faithful to a God that is almighty and great. Such Americans are what makes the nation great. For them words like courage, honor, justice, and duty still resonate in their hearts. They still hold dear their ties to God and His law. They grieve over the course the nation has taken. The number of these Americans is fast dwindling as everything is being swept away by intemperance of a society that thrives on instant gratification and spectacle. They are replaced by shallow people, devoid of honor and character, who seek only to turn life into a huge carnival of fun and delights. I ardently yearn for America to be great, but if that greatness be not true, and comes at the price of virtue, duty and honor, I prefer that we as a people say “no.” If our “no’ brings upon us the fury of those who promise the false greatness of the world, then so be it. For in that act of collectively saying “no,” America will have achieved a true greatness. The questions that need to be addressed today are not those of taxes, jobs, economy or benefits. Although they are all important issues, they can more easily be resolved when sanity returns to the nation. We now enter a critical time when we must choose the path of true greatness over false, honor over money, God over the world. What will decide America’s future will be what has always decide her future - the character of her people.
(“What It Means for America to Be Great” by John Horvat II dated April 3, 2016 published by American Thinker at http://www.americanthinker.com/articles/2016/03/what_it_means_for_america_to_be_great.html )
Debt drives the economy, from short term business cycles to long term secular trends. Debt cycles are the logical progression of events that repeat themselves due to human nature and the framework of our monetary system. There are three economic forces that work together to generate this progression:
· Long Term Productivity Growth - The long term average productivity growth rate of our economy is 2% a year. This 2% is a mixture of our society's increase in knowledge and subsequent efficiency gains. The economy becomes more productive over time, and real gross domestic product per capita increases as a result. GDP tends to increase by about 2% a year, too, but that 2% is just an average. Our actual GDP growth rate oscillates around that level because of credit. Credit enables us to pull forward our future consumption by taking on debt. So instead of accepting only 2% a year, we juice up on debt to accelerate the growth rate. If you pull future consumption forward, you eventually reach that "future," and that consumption you pulled forward will be gone. At that point, growth falls below the average. Essentially, if you want higher economic growth today, you'll have to pay for it with lower growth tomorrow. These cycles of higher and lower growth around the 2% productivity trend line are called debt cycles. They consist of leveragings and de-leveragings of debt. A leveraging happens when debt spending increases over time. This debt spending is what pulls future consumption forward. It causes a brief surge over the 2% productivity trend line. Eventually this debt escalates to a point where the costs of servicing it get too cumbersome. Interest payments hamper demand for debt, causing it to decline. This is when the deleveraging process starts and we dive under the 2% productivity trend line.
· The Short Term Debt Cycle - The short term debt cycle, also known as the business cycle, occurs every five to seven years. It's largely dependent on the Federal Reserve's actions to ease and tighten the money supply through interest rate manipulation. When the Fed lowers rates, we get the boom part of the cycle, and when it raises them, we get the bust. Lower interest rates result in cheaper credit. Cheaper credit spurs people and businesses to borrow more. The increased borrowing, in turn, boosts demand as everyone has more money to spend, and since one person's spending is another's income, incomes rise, further boosting demand. At the same time, lower interest rates mean a lower discount rate at which businesses and financial assets are valued. A lower discount rate increases the present value of the asset, making it more attractive for investors to bid up. The entire process is reflexive. An increase in demand (and a lower discount rate) inflates asset prices (stocks, housing, etc.) which in turn increases people's net worth. A higher net worth results in a robust credit profile. A stronger credit profile means one can borrow more. Increased borrowing leads to greater spending, which boosts demand and sparks the loop all over again, and the cycle keeps churning. Eventually the cycle gets out of control. Producers can't produce fast enough to match the credit fueled demand. At this point, we end up with excess money chasing after scarce goods. This is when prices start to rise and we get demand pull inflation. This inflation grabs the Fed's attention. One of the central bank's mandates is to keep inflation in check, so when Fed policymakers see it rising too fast, they take action and raise interest rates. The higher rates then reverse the reflexive loop. Higher interest rates make debt more expensive. It's not as easy to get new credit. People and businesses end up borrowing less, which causes spending and demand to fall. Because one person's spending is another's income, incomes drop, further decreasing demand. Asset prices fall and cause credit standings to drop, which means less borrowing and even less demand. The cycle continues until the economy halts, which is when the Fed cuts rates again. This time the Fed has to cut rates even lower than before. Debts have grown since the last time rates were cut, meaning total costs to service debt have gotten bigger. To account for the increase in total debt over multiple short term cycles, rates have to hit a new low to enable people to still service it. This cycle repeats until rates can no longer be lowered (they reach zero or negative). At this point, a pivot occurs in the long term debt cycle.
· The Long Term Debt Cycle - When you compile short term debt cycles, you get the long term debt cycle. The long term debt cycle operates on a much larger time scale and only becomes apparent at turning points. These usually occur once every generation, or every 25 to 50 years. Contained in these larger secular trends are a number of cyclical short term debt cycles, but over time, total debt accumulates. Notice that total debt in 1929 peaked at 260% of GDP. Today, total debt is 334% of GDP. Debt can only snowball to a certain point. Interest rates hit a lower bound and can't go any lower to keep the borrowing churning. Debt levels become way too high and servicing costs much too large. The snowball gets too big and it crushes the wallets of consumers, as people are no longer able to borrow anymore.
This is not just a cute analogy; this is our current situation. The debt system can only bear so much as we approach the zero bound in interest rates. What this means is that we're near the pivotal turning point of the long term debt cycle. The last time this shift occurred was in the 1930s... during the Great Depression. So now we need something to cleanse the system, and that is a massive deleveraging. De-leveragings are painful, and are not pretty. Demand is shattered as the economy recalibrates and debt is cleared. This is surfacing at the same time as our short term business cycle turns. Our current business cycle is the third longest in history without a recession, so a correction is near, perhaps as soon as fourth quarter of this year. What's more catastrophic this time though compared to the 1930s is that most of the world is right in the middle of a deleveraging. Global debt levels have reached new highs, and the world is more interconnected than ever before. Things have the potential to get really ugly. This is why global growth has slowed. It also explains the meager inflation we're seeing. With demand this weak from massive debt levels, it's hard to reinvigorate price increases. The volatility we're seeing in the markets is only the tip of the iceberg, and the bear will be coming out of hibernation to feed for the next couple of years, so be sure your risk control is tight to survive the onslaught.
(“The Stock Market Will Get Ugly Later This Year, and Debt Cycles Are to Blame” by Alex Barrow dated April 7, 2016 published by The Street at http://www.thestreet.com/story/13522415/1/the-stock-market-will-get-ugly-later-this-year-and-debt-cycles-are-to-blame.html )
The relentless war on carbon is justified by the false assumption that global temperature is controlled by human production of two carbon-bearing "greenhouse gases." The scary forecasts of runaway heating are based on complicated but narrowly focused carbon-centric computerized global circulation models built for the U.N. IPCC. These models omit many significant climate factors and rely heavily on dodgy temperature records and unproven assumptions about two trace natural gases in the atmosphere. The models fail to explain Earth's long history of changing climates and ignore the powerful role of interacting cycles in the solar system, which determine how much solar energy is absorbed and reflected by Earth's atmosphere, clouds, and surface. Several ancient societies and some modern mavericks, without help from million-dollar computers, recognized that the Sun, Moon, and major planets produce cyclic changes in Earth's climate. The IPCC models also misread the positive and negative temperature feedback from water vapor (the main greenhouse gas), and their accounting for natural processes in the carbon cycle is based on very incomplete knowledge and numerous unproven assumptions. The dreaded "greenhouse gases" (carbon dioxide and methane) are natural gases. Man did not create them since they occur naturally in comets and planets and have been far more plentiful in previous atmospheres on Earth. They are abundant in the oceans and the atmosphere and are buried in deposits of gas, oil, coal, shale, methane clathrates, and vast beds of limestone. Land and sea plants absorb CO2, and micro-organisms absorb methane in deep oceans. Earth emits natural carbon-bearing gases in huge and largely unknown and unpredictable quantities. Carbon dioxide, carbon monoxide, and various hydrocarbons such as ethane, methane, and propane bubble out of the ocean floor; seep out of swamps; bubble naturally out of rivers; are released in oil seeps, water wells, and bores; and are sometimes delivered via water pipes into drinking water. They are also released whenever carbon-bearing rocks such as coal and shale are eroded naturally, catch fire, or are disturbed by earthquakes, construction activities, or mining. The vast offshore deposits of frozen methane are released naturally when geothermal heat or volcanic intrusions melt the ice containing the methane. Earth also entombs carbon in sediments and organic matter transported from the land by rivers and buried in swamps and deltas, or swept from the land into the oceans by typhoons and tsunamis. Earth's crust is flexed daily by the gravity-driven Earth tide and this movement opens and shuts joints and pores in rocks and soil and allows Earth gases to be squeezed toward the surface. The crust is also dragged, raised, and lowered by sub-surface movements, which release more trapped gases. Volcanic activity produces large but variable emissions of carbon dioxide, particularly if igneous rocks intrude beds of coal, oil, shale, or limestone. The periodic massive outpourings of undersea basalts along the mid-ocean ridges cause large oceanic degassing. Oceans and the biosphere are wild cards in the carbon cycle. Warming oceans, rotting vegetation, ruminants, and termites all expel large and unmeasured quantities of carbon-bearing gases, and cooling oceans and growing animals and plants take up carbon compounds. If there is more CO2 in the atmosphere, oceans and plants will take up more, thus providing a natural stabilizing effect. Soil carbon comes and goes depending on weather, biological activity, and farm management practices. Earth's total supply of carbon does not change. It just moves continually around the great carbon cycle residing temporarily as gases, liquids, or solids in the atmosphere, oceans, biosphere, and lithosphere. The supplies of carbon dioxide in the atmosphere are recovering gently from record lows. No one knows exactly where it is all coming from, but limited measurements and extrapolations indicate that about 96% of the CO2 added annually to the atmosphere is from nature. The only part of the carbon cycle that is measured with reasonable accuracy is the remaining 4% of atmospheric CO2 produced through man's recycling of coal, oil, and gas. We are asked to believe that we can use dubious estimates and forecasts of this one small component of the carbon cycle as the main input for computer models claimed to forecast future climate for decades ahead, but to use such dodgy forecasts to justify disruptive energy policies is a costly delusion.
(“Carbon delusions and defective models” by Viv Forbes dated April 6, 2016 published by American Thinker at http://www.americanthinker.com/blog/2016/04/carbon_delusions_and_defective_models.html )
There is so much published each week that unless you search for it, you will miss important breaking news. I try to package the best of this information into my “Views on the News” each Saturday morning. Updates have been made this week to the following sections: