Hayek's Tool Bag of the Week: Al Gore

It is with great pleasure to announce that Al Gore, 45th Vice President of the United States, as the winner of my Tool Bag of the Week award.

Mr. Gore paid Washington and Congress a visit this week in order to testify before the House Energy and Commerce committee concerning the "Cap and Trade", also known as The American Clean Energy and Security Act of 2009. The former Vice President completely supports this bill and called it "one of the most important pieces of legislation ever introduced in the Congress...I believe this legislation has the moral significance equivalent to that of the civil rights legislation of the 1960's and the Marshall Plan of the late 1940's"[1]. Here are some other highlights from this testimony. Here's the transcript.

• "We cannot afford to wait any longer for this transition. Each day that we continue with the status quo sees more of our fellow Americans struggling to provide for their families."

• "Passage of this legislation will restore America's leadership of the world and begin, at long last, to solve the climate crisis. It is truly a moral imperative."

• "The United States is the world's leader. We are the only nation in the world that can. Once we find the moral courage to take on this issue, the rest of the world will come along. Now is the time to act before the world gathers in Copenhagen this December to solve the crisis. Not next year, this year."

I must admit that I personally believe that Mr. Gore is one of the smartest people on this planet and I truly mean that. The man is making a wonderful living ringing the bell of alarm concerning "Climate Change". My problem with Al is that he's going about this situation in a classic Tool bag kind of way. Let me example further.

First, the man paints those that disagree with him as "deniers". Of course the word deniers conjures up thoughts about Holocaust deniers. He also managed to tie the Civil Rights Legislation with this bill. I wonder why. Mr. Gore says that there is no debate or discussion concerning the causes of "Climate Change" when he proclaimed that "the debate is over". It's a perfect storm really. If you are on the other side you are equal to an anti-semitic, racist, who believes that the earth is flat, and that you probably molest your children (Ok, that last part wasn't Al Gore but just another lover of the planet).

Second, Mr. Gore is constantly saying that oil companies are funding researchers, researchers that dare to question the other side in any form, in order to confuse the public about man induced climate change (or warming, or what it's called this week). However, "man is killing the planet" side of the argument are funded by environmental lobbyists or are representing Clean/Green energy companies that stand to make a pretty penny if legislation like this pass.

How is that different from the oil companies?

I'm sorry, I lost my head there for a second. Mr Gore and his environmental comrades are just heroic figures trying to save lives. They just happen to be making a lot of money in the process. Oil companies are raping the earth and should be shot.

I hear you, Big Al. I feel like I am having a Bill Murray moment right now.

Anyway, you're still a giant Tool Bag, Al; albeit a very wealthy one.

By the way, check out the exchange between Prince Al and congresswoman Blackburn (R) from Tennessee. Albert is in classic form, smug look and sighs included.

5 things I hate about the Republican Party

My parents are Cuban and migrated to this country in the early 70's for political reasons. My father is a staunch anti-communist, and a die-hard member of the Republican. I have been a member of the Republican party since 1992 (I voted for Clinton that year), but I've been seriously contemplating leaving the party. The following 5 reasons are most to blame for my disgruntlement towards the GOP.

(The following list is in no particular order).

1. The George W. Bush Era:

The Republican Party has certainly changed since the Barry Goldwater/Reagan era, and President George Walker Bush will forever be the face of that change. His era of rule featured the following gems: TARP, Increased federal spending [1], Harriet Miers nomination to the Supreme court, failure to privatize social security, and a host of other hits. And no, Iraq, Gitmo, and "torture" is not on my list. My disdain for the presidency of George W. Bush is mainly due to his utter contempt toward fiscal conservatism, and his adherence to collective policies toward the end of his administration .

2. Arlen Specter:

My contempt for the tool that is Arlen Specter could not possibly grow any bigger. The senator from Pennsylvania has a long history of upsetting conservatives within the GOP on such topics as: Abortion, The Clinton Impeachment, and some health care measures [2]. While I do disagree with his stance on abortion, my disdain for Mr. RINO himself are due to the following reasons:

• His 46 % rating (lifetime) by the AFL-CIO. His rating was 64 % in 2008 [3]

• Mr. Specter is a fan of bailouts. He voted 'Yes' on The American Recovery and Reinvestment Act of 2009 (Obama's bailout), voted 'Yes' on The Auto Industry Financing and Restructuring Act of 2008, and voted 'Yes on The Emergency Economic Stabilization Act of 2008 (Bush's bailout).

Need some the tax payers money? Specter is your guy, the louse.

3.Talk Radio Personalities:

Talk radio is a major influence within the conservative movement (shocking, I know). Although such "conservative" radio personalities as Rush Limbaugh, Sean Hannity, Glenn Beck, and Mark Levin are not directly affiliated with the GOP, they are as much a part of it as Moveon.org, Dailykos.com, and Air America are apart of the Democratic Party. It's a new age in politics.

Yes, my political interests are within the same spectrum as the above mentioned personalities, however my anger with them comes from their lack of venom, and fury they show the GOP (although less with Beck than the others). They do criticize the GOP from time to time but it is tame compared to how they speak of the Democratic Party. These personalities should take note of how Michael Savage does things. Mr. Savage has called congressional Republicans "gangsters", and even called President Bush "a fiscal socialist".

I may disagree with some of Michael Savage's stance on certain issues, but no one can call him a shrill for the Republican Party. Can the same be said for Hannity or Limbaugh?


4. "Cronyism, Nepotism, Rascalism":

Homer Stokes, a reform candidate running from governor of Mississippi in the movie "O Brother Where Art Thou", had a popular phrase that he would use to describe Pappy O'Daniel, the incumbent: "Four more years of cronyism! Nepotism! Rascalism! Of service to the interests". Yes, it does sound like Washington, doesn't it? The Republicans had their own issues with rascalism. Here's yet another list.


• Florida Congressman Mark Foley and his sexually explicit e-mails and instant messages with former pages[4].

• Jack Abramoff's, a former Republican lobbyist, scandal in where he was found "guilty of fraud, tax evasion and conspiracy to bribe public officials.[5]

• Randy "Duke" Cunningham, former congressman from California, plead guilty to bribery charges in 2005.[6]

And a host of others....

5. Embracing Keynesianism :

If there is anything that draws my ire these days it's the Keynesian school of economics. One of the tenets of Keynesianism is the state creates policies in order to stabilize a "bad business cycle"[7]. An obvious example of this was the wasting of over 700 billion by Bush with the first bailout.

Friedrich August von Hayek, Nobel Prize winner in economics in 1974 and a very influential figure in the Austrian School of economics was a great critic of Keynesianism. He stated that:

Keynesian policies to combat unemployment would inevitably cause inflation, and that to keep unemployment low, the central bank would have to increase the money supply faster and faster, causing inflation to get higher and higher. Hayek’s thought, which he expressed as early as 1958, is now accepted by mainstream economists[8]

Hayek also believed the Keynesian policies would lead leads to totalitarian abuses, due to the need for centralized planning. John Keynes, the creator of Keynesianism, surprisingly echoed that concern:

The theory of aggregated production, which is the point of ['The General Theory of Employment Interest and Money'], nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire."[9]

The fact that Republicans, specifically President Bush and his administration, would embrace such failed fiscally policies is the biggest crime, in my eyes, that they have committed against all people who believe in liberty, limited government, ,and free markets.

I wonder what Barry Goldwater would think about the current state of the GOP if he were alive today. Actually, I think that would put him back into his grave.

Holy TARP, Batman!! (and other banking goodness)

The awesome program that is TARP (Troubled Asset Relief Program) continues to work its wonders. According to the Wall Street Journal, "lending at the largest banks is actually down in February by 23%". Here's a graph breaking down each of the individual banks.




The main purpose of TARP was to make sure that credit continued to flow so that these banks could make loans out to customers. The Obama administration response to this data is to say that things would be much, much worse without the TARP program; which is something that would be difficult to prove (either way). However, for most people, the return on this 700 billion dollar project has been more than disappointing. What started off as a horrible idea by the Bush administration, has turned into Obama's nightmare. By the way, I haven't even mentioned the power grab ability that this TARP project has given to the government.

While we're on the subject of banking let's talk about the stress test. For those who have already forgotten, "stress tests seek to measure a bank's ability to continue lending under extreme economic conditions. To help shore up confidence in the banking sector, the government is expected to distinguish between banks that need more capital and those able to withstand a worse and prolonged economic downturn."

There has been a lot of concern over these stress tests in government and financial circles. Many of them, including Treasury Secretary Timothy Geithner, believe that many of these banks are under capitalized. A website called Turner Radio Network says that they have a gotten a copy of the stress test results that are not suppose to be made public until May 4th. This is the same website that actually got the leaked out report concerning Homeland Security targeting "right wing extremists", so they do seem to have some sort of track record of correct reporting. Anyway, the alleged results of this test is down right scary. I will post what they had on their site.

LEAKED! Bank Stress Test Results !

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent. (Based upon the “alternative more adverse” scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. (Without further government injections of cash)

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital! (HSBC is NOT in the top 19 banks undergoing a stress test, but is mentioned in the report as an aside because of its risk capital exposure to derivatives)

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!

The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter.

Put bluntly, the entire US Banking System is in complete and total collapse.

Again, the results on these tests have not been made public but it could be a very, very ugly day on May 4th.

Ahamdinejad turns Racism Summit into Farce

Perhaps the recent attention that has been given to Hugo Chavez, Kim Jong Il, and Cuba’s Fidel Castro, has now prompted Iran’s own member of the Axis of Evil, President Mahmoud Ahamdinejad, to take center stage at the U.N. Racism Summit, and deliver the type of speech puts him back in the lead of “World Dictators we Love to Hate.”

Not that the Summit needed the little mad man from Iran opening his mouth again to spew anti-Semitic rhetoric, since a boycott by the US and other allied nations had already condemned the meeting to the status of “multi-national farce” for much the same fears.

Still, being true to what was expected of him, Ahmadinejad used the platform for attacks against Israel (as if Israel really needed a little more hate thrown their way). In his ever delusional manner, Ahamdinejad proceeded to pronounce Israel as a “cruel and repressive racist regime,” that is bent on mistreating Palestinians.

At least US President Obama had the good sense to avoid the whole thing. Kudos for Obama, for all the wrong actions I think he has taken during his first 100 days in office, at least he acted right on this one, calling the Summit in part a meeting that would be laced with “hypocritical and counterproductive" antagonism toward the Jewish state.

So repulsive was the Iranian Presidents speech that upon his attacks, several diplomats got up and left the hall while he spoke. Of course, in keeping with the current state of affairs in the Middle East, there were several other nations that applauded the speech, which is just as disturbing in its own right.

In the end, Ahamdinejad served to under score the limitations that the United Nations is faced with as a platform for world peace, or as a leading force in world politics. Not that we did not know that already, but it’s nice to be reminded every now and again that this overly self-important organization is not the answer to what the world needs; As for continuing the Summit against Racism, why bother?

No. not that racism is not an issue that should be properly addressed world wide, it’s just that as long as this platform continues to be used to propagate other agenda’s it will not achieve what it was set up to do…and isn’t that the real shame of letting a mad man like Ahamdinejad have his day in the sun? After all, why should this pint-size mad man address real racism around the globe when he has a political ax to grind?

Are Obama and Chavez BFF???

Yes, I am biased, and with good reason.

Having been born in a third rate Communist country, and having seen first hand what Socialism gone wrong looks like, color me skeptical that anything positive will come out of the Obama – Chavez handshake in Port-of-Spain, Trinidad this past week.

Nothing good for the US that is, for Chavez it was a once in a lifetime photo-op to try and legitimize his place on the “Who’s Who List” of third-world dictators. What more can you say about Chavez than that his idol and mentor is Cuba’s Fidel Castro?

Still, Obama is trying to stick to his guns, calling the meeting with the long-winded and narcissistic Venezuelan leader, at the Summit of the Americas, "an opportunity for frank dialogue on a range of issues, including critical issues of democracy and human rights throughout the hemisphere." (http://news.yahoo.com/s/ap/20090419/ap_on_go_pr_wh/cb_obama_summit)

Sure, I would love to give President Obama the benefit of the doubt on that, but honestly, I know better. Having lived in a Communist country, I know that there is no love lost for America in a country whose leader idolizes a monster like Castro.

So I have two choices, I can take the high road and say that we have a President who is naïve enough not to have figured out by now that no good can come out of making friends with Chavez, or I can have the ugly opinion that they are Socialist birds of a feather with more than a few points in common. An ugly thought to have of your President, sure, but didn’t we just recently wade knee deep into the nationalization of private businesses?

Isn’t that a page right out of the Socialist handbook that Chavez follows? Didn’t Castro too begin by nationalizing businesses the minute he took over the Island nation of Cuba? Hey, I’m just keeping it real. My ideas of “hope and change” goes no where near replacing the U.S. Constitution with the Communist Manifesto.

For his part, Chavez who wanted nothing to do with the last US Presidential Administration, goig as far as calling Obama “much smarter than the last president.” The problem is that it doesn’t really matter if the statement is true or false, what really matters is a US-hater like Hugo Chavez would not make that kind of statement if he did not have a hidden agenda to go along with it.

Obama, on the other hand, shakes off the critics by saying, "It's hard to believe we are endangering the strategic interests of the United States" by talking with Chavez. Sure okay, but lets count the times in which talking to a third-rate dictator has accomplished anything for US strategic interests? Anyone really believe that the Cuban missile crisis could have been avoided by a talk between Kennedy and Castro? Really? Or did it a take a hard stance and a blockade of the Island nation?

At least let us hope that Chavez has not added Obama to “his Five” or that he will be referring to the US President as his new BFF. Only time will tell though.

Susan Roesgen, of CNN, needs a lobotomy

I'm a believer that all media outlets display some form of bias. Of course some of these displays are more subtle than others. Unfortunately, sometimes a writer or reporter will go out of their way to make a statement. Let's take Susan Roesgen as the latest example of this kind of behavior.

Susan was sent to cover the "Tea Party" rally that took place in Chicago. Susan became the story when she lost her mind, or perhaps it was the affects of the lobotomy, when she antagonized the crowd with her mindless questions, constant interruptions, lunatic inferences, and overall bias approach to covering a story.

The best part of this entire story, and by best I mean the gheyest, is not in that video. Susan closed one of the segments by saying that she only saw 1 black person at this protest rally. Now, I wasn't there so I don't know how many black protesters there were. I honestly don't know why that's even relevant. It's certainly a wonderful thing that a reporter, especially one as dumb as Susan, would besmirch the character of all those who participated in this protest, and also infer that these participants are racists.

Of course, she wasn't the only one who thought such a thing. Susan now joins the ranks of such mental pygmies as Janeane Garofalo and Keith Olbermann. Janeane went on record when she stated "This [The "Tea Party Rally"] is about hating a black man in the White House...That is nothing but a bunch of Tea Bagging rednecks". Mr. Olbermann agreed with her, which is not difficult to believe since they share a brain.

Susan, please do the world a favor and get a lobotomy. Oh, while you're at it, get your tubes tied as well, you sanctimonious windbag hack. Now that I think about it, perhaps all the normal thinking people of this country can donate money to the "Get Susan, Janeane, and Keith a lobotomy" fund. Actually, now that I think about it, could we even tell after the surgery is performed?

By the way, I found out some interesting news concerning Susan Roesgen. Mrs. Rosegen was apparently rejected not once but twice by Fox News. Perhaps this better explains her little rant against Fox News (which I do not watch)? Well, either way I'm all for helping her out. Never let it be said that a conservative does not care about their follow "man".

Class Warfare 101: The "Not A Dime" tax myth

During the 2008 US Presidential campaign, and after he was elected, President Obama repeated his mantra of “Your taxes won’t increase one dime” for families making less than $250,000 a year (or individuals making 200,000 or less). Obama was able to ride a populist wave against those that have, as well the negative sentiment against Republicans due to the Bush years, to win the presidency. However, examining the "Not A Dime" tax pledge shows that it was, at worst, a lie, or, at best, an insane promise.

I shall now go over some of the ways in which everyone's taxes will go up.

1. Cap and Trade tax

Cap and trade has been the subject of much debate, at least on the blogsphere. President Obama's Cap and Trade policy in his budget calls for over 650 billion in revenues from Cap and Trade (Although Jason Furman, deputy director of the National Economic Council, said that figure is actually much higher, anywhere between 1.3 to 2 trillion). Expect higher energy costs, and not to just the rich.

Here's a preview of what could come from Cap and Trade:

1. North Dakota: Utilities say cap-and-trade means higher rates

2. Louisiana: Obama's new energy tax hits Louisiana the hardest


2. Cigarette Tax

President Obama, in February of this year, signed into law a federal hike on cigarettes. This hike, a doubling of the tax, is expecting to help fund health care for children (You are your brother's keeper after all. Sorry Cain).

Oh yeah, this won't affect anyone making less than $250,000 a year though. Wait, no, I lied. Sorry.



3. Inflation:

Federal spending has not stopped since the majority of voters in this country elected Barack Obama (Thank you, Mr. Bush). In fact, spending has gotten much, much worse. When federal spending increases this much then inflation is always a real possible. Richard W. Rahn, Chairman of the Institute for Global Economic Growth and a contributor at The Cato Institute, breaks down why a big inflation rate just might be around the corner:

"Return of Money Snatchers?"

An increase in government spending must be financed by increasing taxation, or increasing government borrowing, or creating more money by the central bank (the Federal Reserve), or all of the above. Increasing taxation or government borrowing does not directly increase inflation, but if the central bank creates new money faster than goods and services are increased, inflation will result.

Keep an eye on the printing press.


4. Federal Income Tax?:

Perhaps some of you are saying to yourself "Hayek, Obama was clearly talking about Federal Income tax during his campaign and when he addressed the congress". Well let's assume for a moment that he was just referring to Income Tax. An editorial titled "Who Pays Taxes" appeared in the Washington Post this month, a paper with a liberal reputation. The editorial stated the following:

President Obama has promised that taxes will not be increased for families making under $250,000. That is a promise that will probably have to be dropped down the road. There just isn't enough revenue to be found above that figure unless we create a system so lopsided that voters would always want more government spending because it would come at such a low price.

The commonly used political definition of "rich" has crept up in recent years from $100,000 to $250,000. Either that definition is going to have to change again, or we will have to come to terms with the fact that the middle class will have to face higher tax burdens, too

Nice to see that the label "rich" keeps getting lower, and lower, and....