May reason reign over emotion. May educated choices shape the world of tomorrow as opposed to passionate impulse.
I am a young law student, & try to view the world rationally, I believe strongly in the supremacy of the individual, & this is my blog sharing ideas.
Thanks for visiting.
Big Boi, the Grammy award winning rapper of the OutKast duo, went onto a radio station recently to speak about being the victim of "subtle" racism. He tells a story of how a woman, right after Obama won reelection, told him "congratulations on ya'll win last night." Big Boi's classic response, "Bitch, I voted for Gary Johnson."
Recently, in an interview with Pitchfork Media, Big Boi stated he is not "pro-government," he is "pro-people." He went on to state "Our freedoms are getting taken away every day with things that people aren't aware of, like the NDAA." The NDAA of course is in reference to the defense authorization act passed in 2011 and signed into law by President Obama which included an amendment permitting the executive branch the power to indefinitely detain American citizens anywhere in the world, including Guantanamo Bay, without a trial by jury.
Big Boi could not be more right. Strip away the partisanship and the politics and the lies, and you can start to see the system for what it is, openly corrupt. Big Boi recognizes that. He sees it. He is not libertarian, you cannot classify him, but what he is, is open. Open to ideas and facts. He is not preconditioned to oppose what one side says and blindly support another. As Big Boi says, it doesn't matter "who's black or who's white or who's Republican or Democrat," you have to vote for the betterment of the people."
Surgery Centers in Oklahoma have become more prevalent. They have a very different business model from the large hospitals. They are more efficient, they do not exorbitantly overcharge like larger hospitals do, and they have all their prices for different operations listed and available to the public right on their website.
They often charge half or even 6 times less than what the large hospitals charge! How do they do it? Insurers are eliminating employee healthcare deductibles if they choose to go to the surgery centers. It is so efficient, everyone saves money, the insurer and the patient.
Great video below describing the healthcare process below. Video by Reason.com
Insurance has no market controls. Hospitals have every incentive to be wasteful, to over-prescribe, over care, and over recommend for costly surgeries. This isn't good for patients, who often have to pick up a large portion of the tab.
I am a patriot. I love the United States. I would get goosebumps when the national anthem played before my high school football games. I have an American flag with the name of every person who died in the 9/11 terrorist attack, I have a Gadsden flag hanging proudly next to my bed. I dressed in a full-body blue spandex suit and wore an American flag as a cape for Halloween. I am a patriot. Every time I walk into Suffolk University Law School, I look up at a massive American flag which hangs in the atrium and am filled with pride.
I do not say these things in an attempt to say "I am more of a patriot than you," or to imply that there is something wrong or un-American about not having six American flags at your house. I get frustrated when ad-hominim attacks are made on people saying they are not patriots, it is often a tool used by people to diminish other people's arguments without actually addressing the argument.
I say these things to you to say that I am a patriot even though I do not support President Obama, I am a patriot even though I do not support the wars, the bombing of Yemen, Libya, or Pakistan, I do not support the our government killing American citizens or torturing Bradley Manning. The United States flag does not represent blind nationalism to me, although that seems to be the typical view it invokes.
WHAT IS PATRIOTISM?
PATRIOTISM is defined as "love for or devotion to one's country." What is our country? Our country is not President Obama and was not President Bush. Our country is not our elected representatives. Our country is not the physical land upon which we all live. Our country is not government. Our country is "we the people." Our country is the Constitution. The Constitution which ended monarchy and oppression, and gave the people the right to rule themselves instead of be ruled. Patriotism is devotion to "we the people" under the Constitution.
The highest form of patriotism is dissent. The government is not "we the people." Patriotism is is not allowing your rights to be violated, patriotism is voting, patriotism is speaking the truth when the truth is ignored and criticized.
A professor at my law school sent out an email to the University and student body opposing donations to the troops. It was a large public relations mess and made national news. People lambasted the letter for being unpatriotic. Also, in the letter the Professor mentioned his views on displays of nationalism and patriotism.
"We need to be more mindful of what message we are sending as a school. Since Sept. 11 we have had perhaps the largest flag in New England hanging in our atrium. This is not a politically neutral act. Excessive patriotic zeal is a hallmark of national security states. It permits, indeed encourages, excesses in the name of national security, as we saw during the Bush administration, and which continue during the Obama administration. Why do we continue to have this oversized flag in our lobby?" Source
The Professor's opposition to a national security state is patriotic. He also cited nationalism as being dangerous. Indeed, a blind support for the "nation," i.e. the government, no matter what actions the nation takes, is not patriotic. It is dangerous. It is how "we the people" become ruled by the nation, not the other way around. Do not let this view of patriotism, this "patriotic zeal," be what patriotism is defined as. You do not have to agree with someone for them to be a patriot. A patriot is not an ally, a patriot is not someone whose views align with the majority or align with your views or mine. A patriot fights for "we the people."
DISPLAYS OF PATRIOTISM
Congressman Ron Paul is a patriot. A patriot who has dedicated 26 years of his life to make this Country freer and more prosperous. Congressman Ron Paul exhibited brave patriotism when he spoke of peace and non-interventionism in the Republican primary debates for the 2008 Republican presidential nominee. He was booed by the crowd and attacked by the other nominees for speaking the truth. (go to 1:40)
Senator Sanders, the independent (socialist) senator of Vermont is a patriot. He fights for the people. His 9-hour filibuster speech on the Senate floor was patriotic.
"So the first point I would make is that it seems to me to be unconscionable--unconscionable--for my conservative friends and for everybody else in this country to be driving up this already too high national debt by giving tax breaks to millionaires and billionaires who don't need it, and in a number of cases they don't even want it." Transcript found here.
I believe every Occupier who takes time out of their lives to fight corporatism and crony politicians is a patriot. They fight for "we the people."
Those joining together under the Tea Party movement are patriots. They are fighting for all our civil liberties, thy are fighting against the over-expansion of the government ruling over "we the people."
This man videotaping police officers pulling people over without any probable cause to believe they are doing anything illegal is a patriot. (at 4:10 the police bring in DA's to tell him to stop filming and the person shows them up)
PATRIOTISM AND REVOLUTION
Patriots are the final check on government, the check to ensure the government does not stray too far from the Constitution. Patriots are those who embody the second paragraph of the declaration of Independence, who fight for our rights and from time to time, when it becomes necessary, revolt. Patriotism is dissent, not blind support for the military, not a word for FOX News to employ to discredit opposing viewpoints.
President Obama has won the 2012 election against Mitt Romney. He won 303 electoral college votes compared to Mitt Romney's 206 electoral votes. Obama received 50% of the popular vote, Romney 48%. Mitt Romney lost in every single battleground state except for North Carolina. He lost in Iowa, Nevada, Virginia, New Hampshire, Florida, Ohio, etc.
Mitt Romney was not a good candidate. He did not appeal to the electorate, he was not looked upon favorably, he had no pizazz or oomph! He flipped his position on every issue imaginable. He was the ultimate politician.
Yet, Mitt Romney could have won. How? By courting the libertarian element of the Republican party. Libertarians are a vibrant group of young and passionate voters who wanted a candidate. Mitt Romney, instead of adopting them, shunned them. Ron Paul, the most libertarian candidate running in the Republican primary, was ignored by Republicans. His name was not allowed to be mentioned at the Republican Convention! Ron Paul delegates were kicked out of the convention and had their signs torn up before their eyes. Romney adopted no libertarian ideals or principles. Libertarians were left without someone to vote for as a result.
Well, take a gander at this graph below.
As you can see, the number of people who voted for Ron Paul in the primaries is greater than the difference between those who voted for Obama and Romney in the general election in several battleground states. If Romney had won these states listed above, i.e., New Hampshire, Virginia, Florida, and Ohio, Romney would have more electoral votes than Obama and would have won the election.
Note that this assumes a two facts in order to state this shows Ron Paul supporters could have changed the outcome of the election.
1) Assumes all Ron Paul primary voters did not vote for Romney.
2) Assumes significant portion of the Ron Paul supporters would have voted for Romney, ranging from around 45% to almost 100%.
The fact is that a very significant portion of Ron Paul primary voters did not vote for Romney. No way no how. Source? This is the best I could find, stating 66% of Ron Paul supporters intend to vote for Johnson. I will be looking for more data on that though. But, . . . they didn't. Trust me.
See this video of Ron Paul supporters speaking of their future voting intentions.
Furthermore, not many people vote in primaries, and although libertarians are active, many, many libertarians did not vote in the primary. How many? I do not know. But there are more libertarians than just those that voted in the primary for Ron Paul who could have been persuaded to vote for a Republican appealing to their mission of Constitutionally limited government.
Another interesting note. It would appear that other Republicans lost due to their inability to garner libertarian votes. One example would be Representative Guinta (R) of New Hampshire losing to challenger Shea-Porter (D). Former Rep. Guinta lost by 3%, while the Libertarian candidate in that race, Kelly, garnered 4.3% of the vote. Source. (Interesting side-note The governor, all US reps, and the two US Senators of NH are all women). (source= Google it.)
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The Facts:
The Republican party needs to adopt libertarianism principles. Otherwise they cannot win. The Republican party platform is dying. They garnered about 6% of the black vote and 29% of the Latino vote. They virtually give up the entire East and West coast. They have lost credibility.
This video by Reason.com is spot-on. 3 libertarian principles Republicans should adopt to appeal to more people. 1) Welcome immigrants, don't shun them, 2) end the failed war on drugs, and 3) stay out of social issues such as reproductive rights and homosexuality. That is a winning platform.
Here is a video of Rudy Giuliani, former Republican Mayor of New York City and all-around imbecile, admit that the Republican party needs to adopt libertarianism in order to win. Note, he is an idiot, but it shows that even elements of the party know what it must do.
I highly recommend reading Doug Wead's short article on why the Republican party should adopt libertarianism in their 2016 run for the President. Doug Wead is a New York Times best selling author, presidential historian, and motivational speaker. Wead's article. Wead recommends Rand Paul. We will have to see what kind of a Senator he establishes himself as but it is a real possibility.
LESSON:
-- The Republican Party has a dying platform; Libertarians have enthusiasm, far-reaching appeal, and are without a party to vote for. A 3rd party will never win. The conclusion is apparent. The Republican Party can adopt a libertarian-leaning message, and they can win.
Rand Paul at the 2012 RNC National Convention Spoke true and clear: "This explosion of debt is unconscionable and unsustainable. Mr. President, we will not let you bankrupt this great nation. Republicans and Democrats alike though, must slay their sacred cows. Republicans must acknowledge that not every dollar spent on the military is necessary or well spent. Democrats -- Democrats must admit that domestic welfare and entitlements must be reformed. Republicans and Democrats must replace fear with confidence. Confidence that no terrorist and no country will ever conquer us if we remain steadfast to the principles of our founding documents. We have nothing to fear except our own unwillingness to defend what is naturally ours, our god-given rights. We have nothing to fear that should cause us to forget or relinquish our rights as free men and women. To thrive, we must believe in ourselves again, and we must never, never trade our liberty for any fleeting promise of security."
Here is a video of Jack Hunter speaking about the United States' use of drones, the sanctity of life, and recent discussion regarding drone strikes on MSNBC.
Fact:
People become more entrenched in their beliefs when presented with facts that oppose those beliefs, see Source. This is called the Backfire Effect.
Example:
If you believe in Obama, facts will not dissuade you from your support. Facts opposing what you believe will only entrench your current beliefs. Vice-versa. You will rationalize. Some may become combative. Others will refuse to admit they were wrong.
The Backfire Effect is an anomaly. It is a disturbing truth. Especially in voting and issues of democracy.
How can you bypass the Backfire Effect in people's support for politicians Give them policy, and tell them the opposing candidate argued for it, when in fact it is their own candidate. Then see what they think of the policy. At the end, let them know it was their own candidate who enacted those policies. See what they think then. The result of that experiment can be seen below.
In the video, Obama supporters admit they despise "Romney" policies. However, in the end, they are told those policy ideas are actually things that Obama has enacted over the last 4 years. Some were in disbelief, some refused to change their minds about Obama, others admitted they would have to rethink their beliefs.
I suggest people think about what is important to them. What they believe in. Then think about what kind of policies Obama/Romney, or anyone else would enact.
Julie Borowski, a young libertarian, wrote this nice succinct article about 5 common myths about the New Deal. See the article for yourself here.
The five myths outlined in the article:
1. Myth: The free market caused the Great Depression
Truth: The Great Depression was caused by an out-of control Fed (money supply increased by 60% between 1921 and 1929. Ben Bernanke, Milton Friedman, and others have recognized this.
2. Myth: Herbert Hoover was a do-nothing laissez-faire President
Truth: Hoover, President during the crash and up until 1933, doubled government spending in real terms in 4 years, prohibited businesses from cutting wages, launched huge public works projects (Hoover Dam & San Francisco Bay Bridge), increased the top tax rate from 25% to 63%, and passed the Smoot-Hawley tariff into law creating a trade war.
3. Myth: The Fed's tight monetary policy caused the Great Depression
Truth: The Fed's "expansionary" monetary policy caused the great depression. A policy similar to one we see today with interest rates being held at 0% until at least 2015 and an indefinite infusion of 40b in cash to wall Street each month to buy mortgages.
4. Myth: FDR's New Deal ended the Great Depression
Truth: FDR's New Deal made a significant depression "Great." In 1931, unemployment was at 16.3%, in 1939, after two terms as President, the unemployment rate was 17.2%. Read "New Deal or Raw Deal" by Burton Folsom Jr., you can review it here.
5. Myth: WWII ended the Great Depression
Truth: Life was not better during WWII, many commodities were banned, production of new cars was banned, men went overseas to fight in a war unmatched by any in the modern era. But, between 1944 and 1948, the government cut spending by 75%, and the economy grew. Unemployment was at about 3.5% during this time.
In 2007, one in every seven Americans was on food
stamps, an increase from 2007 of 70%. Source
Obama has a "Kill List," which includes
American citizens. Source
In Obama's first three years, he passed 106 major
federal regulations which has cost businesses over 40b. Source
The country lost its AAA credit rating under Obama for
the first time ever. Source
When congress de-funded Obama's many Czar's (high-level
federal officials who are not confirmed by Congress), Obama ignored it and
kept them on the payroll. Source
Obama promised he would not use signing statements to
bypass Congressional power, he broke that promise many times. Source
Obama has acted aggressively in deporting illegal
immigrants, stepping up deportations to levels triple that of Clinton and
higher than Bush. Source
Signed NDAA into law authorizing
indefinite detentions of US citizens in Guantanamo Bay, then when
indefinite detention provision was ruled unconstitutional, appealed it and
had it re-instated. SourceSource
The Federal reserve under Obama has authorized the
indefinite printing of money, a trickle-down stimulus initiative. SourceSource
Homeland Security tracked peaceful protesters picketing
in PA, including environmentalist groups. They were compared to Al-Qaeda!
Source
Obama took over GM, built the Chevy Volt which costs $70k, are selling it for 40k, then passed a 7.5k tax credit for purchasing it. The average Volt buyer earns 170k a year. We the people are paying for a bunch of rich people to feel good about themselves! SourceSource
Obama has eroded away at Clinton's 1996 successful
welfare reform, so that you no longer have to be looking for work to
receive welfare Source
Obama has increased the debt dramatically, exacerbating
Bush's debt increases. Bush raised debt by 4.9 trillion in his two terms
(this includes TARP), Obama has risen debt by 4.9 trillion in just one
term! SourceSource
Obama has failed to pass a budget, had his FY 2012
budget fail in the Senate 0-97 and his FY 2013 budget fail in the house
0-414. His budgets called for large deficit spending. SourceSource
Obama ignored the Simpson-Bowles recommendations to
reduce the growing deficits, Mr. Bowles, the former Chief of Staff for
President Clinton, was critical of Obama's budgets. Source
Obama administration contracted
Blackwater for quarter of a million worth of work. Source
More than half of Obama’s largest
contributors (500k or more) were given an administration job. Hello
patronage and nepotism. Source
Loaned Solyndra over half a billion
of taxpayer money when it was already known the company was planning
layoffs and later would go bankrupt. Source
Obama has bombed Yemen, Pakistan, and Libya, all without
congressional approval. Obama has bombed more countries than President
Bush. SourceSource
Obama has allowed the torturing of Bradley Manning, an
American citizen, for being an alleged whistleblower of corrupt government
practices. Pictures & Source, Source, Source, & Source.
Bradley Manning before being tortured.
Bradley Manning after being tortured.
Obama has ensured that past practices of illegal
surveillance and torture/rendition remain secret. Source
Obama has had Department of Homeland Security
arbitrarily seize online domain names, without convictions of copyright
infringement, representing an attack on internet freedom. SourceSource
Expanded use of Drone attacks in
Pakistan; including targeting a funeral for a person suspected of murder
and targeting first aid responders. SourceSource
Met secretly with health care
executives for assistance in formulating Obamacare. Source
Appointed Eric Holder to Attorney
General, registered lobbyist until 2004 Source
Appointed Vilsack to Secretary of
Agriculture, lobbyist for NEA (Public School Union) as late as 2008 Source
Appointed William Lynn to Defense
Secretary, Raytheon lobbyist Source
Geithner’s chief of staff is a
Goldman Sachs lobbyist Source
Obama appointed Geithner Secretary
of the Treasury, he is former President of NY Fed Source
Obamacare was a victory for corporatists and a money
hand-out for insurance companies. Source
Political Affairs Director Gaspard
was lobbyist for SEIU (Union). Source
Appointed Michael Taylor to be
Deputy Commissioner of FDA, former Monsanto executive Source
Signed executive order to allow CIA
to continue renditions. Source
Obama has secretive government,
denying significantly more Freedom of Information requests than Bush,
despite promising transparency. SourceSource
1000 companies, including McDonalds,
provided exemption from healthcare reform. Pays to have some
lobbyists.Source
Obama opposed allowing importation
of cheap drugs from other countries to appease health care
executives.Source
Current Chief of Staff, Jacob Lew,
was the former COO of Citigroup’s alternative investments division (he
invested in derivatives market). Source
Former Chief of Staff, Bill Daley,
was Vice Chairman at J.P. Morgan Source
Wasted billions on Cash for
Clunkers, subsidizing car market and driving up prices of used vehicle
market. SourceSource
Obama failed to get a budget passed
for over 2 years. Source
Made recess appointments to the NLRB
when Congress was not on recess. Source
The American Recovery and Reinvestment Act
(ARRA) cost $900 billion and did not lower unemployment. (below is Obama
Administration projections vs. reality)
Obama extended federally funded
unemployment benefits 73 weeks, bringing the total to 99 weeks of
unemployment benefits. Source
Obama bailed out auto industry,
represents moral hazard and flagrant display of corporatism Source
DISCLAIMER:
I realize some of these are
more important than others, obviously passing the NDAA and allowing the
indefinite detention of American citizens is exponentially worse than
appointing lobbyist Holder.
Do not assume I agree with
Bush or another politician because I disagree with Obama.
Do not assume Romney is any better
I am opposed to corruption,
corporatism, cronyism, interventionism, secrecy, and policies destroying our
liberties.
El Presidente, the self-titled leader of Barstool Sports, a website which posts hot girls and comments on stupid crimes and the "pussification" of America rhetorically asked on Twitter, "What happens if I'm pro gay, pro choice, pro porn, pro small government, pro don't get involved in shit that doesn't involve you? Am I just fucked?"
Well El Presidente's Twitter was then inundated with appeals for Gary Johnson, a person El Presidente had never heard of before but now "endorses."
The endorsement was for the "common sense" party.
Barstool sports has about 300k unique visitors everyday, mostly college aged kids. The website is not a serious news site by any means, but it is popular and influences people.
The following short video by Reality Check regarding the National Defense Authorization Act (NDAA) is a good summary of the Bill, from its passing into law to its current status in litigation. The NDAA gives the President the power to indefinitely detain any US citizen, without evidence, without trial, anywhere in the world, for how ever long the President wants, if the government believes their acts are "belligerent" and associated with a terror group (note that Wikileaks was just listed as an enemy of the state, maybe you will be indefinitely detained if you tried to post something to Wikileaks, see that article here.
In short, President Obama, our beloved leader, promised to veto the NDAA, but when the bill was presented to him, he unexpectedly signed it into law. Note that Mitt Romney has stated he would have passed the bill as well, so this is but another important issue where there is no difference between our two party system which presents us with an alleged stark contrast of a choice in this years election (the two parties are the same, it is true, it is sad, it is undemocratic, their differences are negligible and meaningless, but I digress). However, in signing the NDAA into law, President Obama ensured he disagreed with the indefinite detention article and would not implement it in his Presidency. Ok. That is a nice assurance. That makes me feel good, right? Well, then a judge of the 2nd Circuit District Court enjoined the indefinite detention provision as "facially unconstitutional." This means the President cannot use that provision until its constitutionality is determined by the Court. You would think President Obama would be happy with this situation, he got to sign a law he thought necessary for our safety into law, and like a line item veto the Court made his life easier by striking down the clearly unconstitutional provision he was opposed to from the get-go. You would be wrong. Despite what President Obama said before the bill was passed, and despite what he said when signing the bill, he appealed the decision to the Appeals Court and had the injunction overturned. So now the President can enforce the indefinite detention provision, the one he was going to veto and would not use, that he signed into law and appealed to remove an injunction against.
Reality Check says it best, "actions speak louder than words."
p.s. The Libertarian candidate, Gary Johnson, opposes the NDAA. Obama and Romney both support it.
Julian Assange, creator of Wikileaks, has been labelled an enemy of the state by the US military, the same label applied to Al Qaeda. Declassified counter-intelligence documents show that military members who contact Wikileaks or support Wikileaks will be charged with "communicating with the enemy," a charge wich holds a maximum penalty of death.
Vice President Biden had previously labelled Mr. Assange a "hi-tech terrorist."
Assange's US attorney, Michael Ratner, stated that "an enemy is dealt with under the laws of war, which could include killing, capturing, detaining without trial, etc."
Mr. Assange website released massive amounts of information that was released by Bradley Manning. This included video of US soldiers killing Iraqi civilians.
Who he is:
American Political Activist, he advocated for consumer protectionism, especially in regards to the automotive industry. He ran for President as either a write-in candidate or for the Green Party between 1996 and 2008, garnering 2.74% of the national popular vote in 2000.
His statements:
Ralph Nader called President Obama a "war criminal," and stated that his foreign policies are "more aggressive" and "more illegal" than President Bush. Nader also stated the President Obama "thinks the world is his plate." He went on to say he still supports President Obama over Mitt Romney for President, as the "lesser of two evils."
Christopher Hitchens
Who he is:
British firebrand journalist, known for his atheism. He considered himself socialist at one point, later labelling himself a "conservative Marxist." See here.
His statements:
At the end of 2008, Chris Matthews, a (bad) host on MSNBC, predicted that President Obama' recently appointed national security team would take foreign policy "a notch or two to the left." Hitchens hits back that "this is not change," calling the appointments "disappointing." Hitchens had amazing foresight in this video, and history has proven him right. The video can be found here.
Noam Chomsky
Who he is:
MIT professor in linguistics, philosopher, author, and much more, he is one of the most cited authors alive, he favors "voluntary socialism."
His statements:
When interviewed by DemocracyNow, a left-leaning organization, on his thoughts of the Obama Presidency, Noam Chomsky replied "In many ways it's a little worse than I expected, but I didnt expect anything." Go to minute 25:05 to see the comments here. Regarding Obama's attacks on civil liberties, Noam stated that "the part that really did surprise me -- and I don't frankly understand it -- is his attack on civil liberties, which is extreme. He's gone beyond Bush."
Noam also stated that when Bush didn't like someone, they would capture them and torture them, "if the Obama administration decides they don't like someone, they murder them." About minute into same video.
Obama, in his book, admits that he smoked marijuana and and maybe did a little blow. President Obama was not caught, was not jailed, and went on to go to Harvard and become President. However, if he was caught under the laws he is now enforcing, "he would have done hard fucking time." The US has more people in jail than any other country in the world, and one out of 6 of those people are there for marijuana. If this does not make you mad it should. Penn is mad.
"The Administration's central activity -- the political allocation of wealth and opportunity -- is not merely susceptible to corruption, it is corruption." George Will
On Thursday, September 13, Federal Reserve Chairman Ben Bernanke announced that the Fed will begin to "buy" $40 billion in mortgage-backed-securities (MBS), a type of security packaged by our good friends at Fannie Mae and Freddie Mac. Every month. Indefinitely. $40 billion. This unconventional monetary policy performed by the Fed is called Quantitative Easing (QE). Most people have no idea what it means or how it will impact them. Most people ignore this as just arcane monetary policy enacted by the government, that we can trust because Hey, the government did it and the government acts in our best interests. The apathy is ill-deserved and the trust in government is ignorant. QE will impact You, and the government is not looking out for your best interest, they are not acting out of virtue, they are acting in their best political interest (in this case reelection). This 3rd round of QE by the Fed will harm the middle class, will make us poorer, and will further deteriorate at the long-term strength of our economy.
First, what is QE, second, why is it bad.
What is actually happening is the Fed approaches Wall Street banks and buys their mortgage securities by crediting their accounts. This money will not be added to the national debt though, because the Fed just makes it up. They credit the account by just "printing" money, although no actual money is printed because it is electronic, but you get the idea. Money is created, and it is given to Wall Street. (There is a reason Goldman Sachs, JP Morgan Chase, & Citigroup were all within the top 10 contributors to the Obama campaign in 2008, see here) So, the Fed creates cash and gives it to the big banks holding mortgage securities.
Everyone loves pictures...
QE3 will relieve banks of their mortgage securities, allowing them to use this influx of cash to invest in other ventures. QE3 will also make it easier to borrow and buy a home. The Fed hopes that this indefinite promise of $40 billion every single month to buy mortgage backed securities will spur investment in the US economy (commodities, small businesses, capital ventures, IPO's, etc) which will in turn create jobs. Wohoo, sounds great, right! right?
No. It is not great. Is our memory really so short-sighted that we do not recall the 2008 sub-prime mortgage crisis where easy credit, a la Fannie Mae and Freddie Mac (government guaranteed mortgages totaling 1.4 trillion, or 40% of all mortgages in the US, see here), and government directives, a la the Community reinvestment Act (The Act's goal was to promote home ownership by requiring loans to low-income households, see here), created such a massive bubble (mis-allocation of wealth) that when it burst the economy was thrown into a recession which we are still struggling with. Instead of allowing the free market to reach equilibrium and for real estate, and homes, to return to their true value so that the economy can begin to enjoy true and sustainable growth, the Fed is going to subsidize the housing market. The free money for mortgage backed securities will create a malinvestment in real estate which will only further damage the economy.
When you first look at it, QE3 seems great, it allows for more investment by Wall Street in Main Street and it does not add to the debt! Yay. However, "there is no such thing as a free lunch" (Milton Friedman) and this infusion of cash will be no different. I just described how it will cause malinvestment, but it will also benefit the rich at the expense of the poor and middle class. This is because of inflation. Simply, when you add money to the market, prices increase. But it is not immediate. QE3 will give Main Street plenty of cash to profit off of while at the same time inflating the price of commodities and everything else people buy. This inflation in price, in homes, in gas, in food, in clothes, will harm the average consumer, while Wall Street gets to invest it and use it before the inflationary correction. The dollar has already been weakened by the announcement, see here.
SUMMARY:
The Fed is going to continue to print money to buy mortgage securities until there is a substantial increase in employment. This action is a boon to Wall Street yet will further tighten the average consumer's pocket book. It will create malinvestment. Also, it will not create true sustainable growth because it is premised on free money and easy credit, something which will not always exist. Jobs created that rely on this easy credit will not last, they cannot last. It is a facade of prosperity.
To steal a Peter Schiff analogy, we are building a larger and larger skyscraper on a crumbling foundation. We need to mend the foundation before we can have sustainable growth, building the skyscraper higher will only further break the foundation.
QE3 is meant to help Pres. Obama win reelection, it is meant to make people feel good about the economy, its a move in an incumbent President's playbook to create a political advantage. QE3 is not meant to make this country stronger, it does not create real growth, it does not benefit anyone but Wall Street, and you should care, because you are being screwed.
