10-Year Yield Sinks

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With retail sales numbers coming in weak earlier today, stocks were down significantly.  But the more interesting story is how low the 10-year yield has gone.  It closed at 1.84%.  It briefly dipped below 1.8% during trading.

I believe this is an indication of a coming recession.  I have been cautious to call a recession too soon and I still don’t know how long this will take to play out.  But I am trying to warn my readers that they should prepare for a significant downturn in the economy.  You can never fully prepare, but it helps if you have an idea of what is coming.

The Fed stopped its massive QE program at the end of October.  We have had a couple of months of relatively stable money from the Fed.  It is rolling over maturing debt, but not adding to its balance sheet.

Yet long-term rates are dropping.  This means it is coming from investors, as opposed to the central bank.  This means that investors are locking in rates, even below 2% for 10 years.  The yield curve is flattening.

An inverted yield curve – where longer-term rates are lower than shorter-term rates – is typically a very good indicator of a coming recession.  In our present situation, short-term rates are near zero.  So we are unlikely to see an inverted yield curve.  For me, this flattening is good enough to indicate a substantial weakening in economic activity.

This should come as no surprise to those familiar with the Austrian Business Cycle Theory.  We have seen huge monetary inflation over the last 6 years and now it has stopped.  If the Fed doesn’t start pumping more money soon, the malinvestment is going to become evident soon.  Resources have been misallocated, and without the new injections of money, the artificial bubbles will be revealed and will go bust.  This has already happened to oil.  It will probably happen to stocks.

Keep an eye on the 10-year yield.  It is good if you are getting a mortgage or refinancing.  It is probably not good if you are invested in stocks.

Getting It Straight on Oil

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As of this writing, the price of a barrel of crude oil is less than $50.  The price sunk quickly in the latter part of 2014 and nobody knows where it will find a bottom at this point.

There are a lot of misconceptions about what is happening and what it means, as so often happens with any economic subject.

There are basically four factors to consider in the pricing of oil.  There is the supply of oil.  There is the demand for oil.  There is the supply of dollars (or whatever currency you are pricing it in).  And there is the demand for dollars.

To be clear, when talking about the supply of oil or the supply of dollars, the supply expectations for the future are a big factor.  You could have no greater supply of oil today, but if there were new discoveries coming online and the oil production was expected to double next year, then the price would fall quickly just on the news.

It is the same with the dollar.  If the supply of dollars were currently steady, but people expected the Fed to start creating trillions of new dollars next year, then prices would start going up right away, all else being equal.  That is why markets move on Fed announcements, as opposed to just the Fed actions.

So what is driving the price of oil down?  In all likelihood, it is probably a combination of all of these things in something of a perfect storm.  The supply (and expected supply) of oil is going up due to the shale oil boom in the U.S.  Also, an announcement from OPEC, and Saudi Arabia in particular, that it would not cut production, helped trigger the downward price, although the price had already been moving down.

It would not be surprising if the demand for oil is down globally.  China has been slowing down a bit, not counting the stock market there.  Japan and much of Western Europe are in recession or worse.  So it makes sense that demand might be down for energy.

In terms of the dollar, the money supply has leveled off since the Fed ended its QE (money creation) program at the end of October.  This means that the money supply is expected to stay relatively flat in the near future, barring a major policy shift from the Fed.  This can also contribute to raising the demand for dollars.

Some might object to the dollar being a cause of declining oil prices because other prices are not going down.  Stocks are mostly booming (not counting the last couple of weeks) and consumer prices are not falling in most areas.  But here, it is important to understand the effects of monetary policy.  It is never uniform, which should be obvious based on recent history.

There was a tech stock boom in the late 1990s that went bust.  There was a housing boom in the 2000s that went bust.  These areas saw much of the monetary inflation rush into these sectors.  Therefore, they were also the sectors that crashed the hardest when it came time.  This is why I am very cautious about the current stock boom.

One thing that is important in all of economics is to not confuse cause and effect.  Low oil prices might be indicating a recession, but this doesn’t mean it will cause a recession.  Oil prices started declining in the summer of 2008 before most people knew we were in a recession.  It is quite possible the same could be happening here.  Or it is possible that it is just the weak global demand from the many major countries in the world that are in recession.

There are some people out there who think that falling oil prices are a bad thing, but not because it is a possible warning sign of a coming recession.  They think it is bad because it is hurting the oil business in the U.S., which has some high paying jobs.  But this is bad economics.  We should celebrate falling oil prices, unless you happen to be an employee in that sector or a major investor.

If the price of oil dropped to one dollar per barrel, it would be great.  We could fill up our cars for almost nothing.  It would be bad in the short run for some investors and employees, but resources would have to be reallocated to be more efficient.  This would include some employees having to work in a different sector.

As an individual, you should take advantage of the low oil prices.  If you are like the average American, you should be saving about 50 dollars per month at the gas station.  Maybe you are saving more.  Take your savings and pay down debt or contribute to your savings/ investments.  The low prices may not last.

I am very cautious about the overall economy right now.  The Fed has tightened and I believe that much of the so-called recovery of the last 6 years has been artificial due to the loose monetary policy of the Fed.  The 10-year yield is just under 2% right now.  With oil also low, there are a lot of warning signals.  But as long as things hold up in the U.S. and oil prices stay down, take advantage of the situation and add to your savings.

Economic Update – January 2015

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It was an interesting end to 2014 with oil prices down as much as they are.  Almost nobody would have guessed just 6 months ago that crude oil would be near $50 per barrel.
We must be clear on what lower energy prices mean.  It is a benefit to the consumer, as it costs less to fill up a gas tank.  Let’s just hope that most Americans use this benefit to pay down debt or add to savings, instead of finding something else to spend it on.
The reason I say this is because, first of all, it may not last for long.  Second, it could be a sign that a recession is coming.
I understand that the lower prices may be partially due to higher supplies, or higher expected supplies.  But it seems likely that weakening demand is also a major factor.  Japan and much of Western Europe are already in recession or worse, so this would make sense.  The big question is whether there is weakening demand in the United States.
We shouldn’t confuse cause and effect here.  Lower oil prices won’t cause a recession.  Instead, they can be a warning sign of a looming recession.
There may be some oil companies and investors that lose a lot of money.  Maybe some people will lose jobs.  But this isn’t the point.  The point is that oil was a bubble that has popped.  Like most bubbles, we can assume that central bank monetary policy probably played a role in the bubble in the first place.
It just so happens that a popping oil bubble is good for most Americans because of the benefits of lower energy prices.  It won’t be good when other bubbles pop, particularly the bubble in the stock market.
The Fed has had a tight monetary policy since the end of October, despite the continued low interest rates.  The monetary base has leveled off.  This is going to lead to a bust at some point, especially if the Fed keeps a neutral monetary stance.
Long-term interest rates continue to stay low.  The 10-year yield is down to about 2%.  A flattening yield curve, even if not inverted, is another sign of a possible slow economy.
I continue to advocate a good majority of financial investments be in a permanent portfolio setup.  Even with interest rates low, the 25% in long-term government bonds is important due to the possibility of another recession.  Rates could go even lower, driving bond prices higher.
I am not saying that a recession is imminent, but I am saying it is a decent possibility.  You should be prepared.  Most people weren’t prepared for what hit in 2008.  You should be prepared financially and mentally.  If you know what is coming, or at least know what is possible, then you will likely adapt easier when it hits.

Good-Bye Pennies and Nickels

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The U.S. Mint has released its latest biennial report to Congress.  For all four major coins – pennies, nickels, dimes, and quarters – production costs fell in 2014.  The Mint says it “saved” $29 million in production costs as compared to last year, primarily due to lower copper prices.
The catch is that the Mint is still losing money on the production of pennies and nickels.  It now costs about $1.62 to make 20 nickels, or one dollar in face value.  It costs approximately $1.66 to make 100 pennies.
So while the prices of the metals used to make coins has dropped in recent times, they are still high enough to produce losses on the two coins with the smallest denomination.
To say that the Mint saved money is similar to cheering a reduction in deficit spending while the overall debt continues to increase.  The rate of loss is going lower in percentage terms, but the losses keep coming.
As of 2013, the Mint was losing $105 million annually to produce pennies and nickels.  This is mostly a drop in the bucket when compared to the annual federal budget, but it is still another little thing that adds up.
And these losses are not fixed.  If the prices of certain metals go up significantly, then the losses will accumulate quickly.
There are discussions about ditching pennies and nickels, but this proposal hasn’t gained a lot of traction up to this point.  The move would be highly opposed by certain special interests including metal alloy industries and Coinstar, which makes money when people trade in their change for cash.
The Mint could also change the metal composition in its coins, including dimes and quarters, to use more inexpensive metals, but this is not quite as easy as it sounds.  It would affect vending machines nationwide, requiring an upgrade to read the new coins based on the new weights.
Blame the Fed
Of course, the only reason this is an issue is because of monetary inflation.  As the money supply is increased by the Federal Reserve, our fiat dollars become worth less and less.  The purchasing power decreases with more dollars in circulation.  Therefore, most things will go up in price in nominal terms, particularly metals.
Over time, this adds up.  Since the Fed’s inception 100 years ago, the purchasing power of the dollar has declined over 95%.  Some things may get cheaper such as computers and other electronics due to increasing technology and production.  But in the case of most commodities, production and technology are not enough to offset the monetary inflation.  Prices will rise over time.  As metals such as zinc and copper rise in price over time, the value of the metal eventually exceeds the artificial values of 5 cents and 1 cent for nickels and pennies.
When metal prices began to soar in the mid-2000s, the metal value in nickels and pennies exceeded the monetary value of the coins.
Hoarding Pennies and Nickels
We can be sure that the days for pennies and nickels are numbered, at least in their current state.  If metal prices continue to rise, then losses for the U.S. Mint will continue to mount.  In other words, losses for taxpayers will continue to mount.
We will also see Gresham’s law take over.  This is where good money is driven out of circulation when there is an artificial government price control.  In this case, the government’s artificial price is putting a one-cent value on pennies and a five-cent value on nickels.
More people will begin to hoard pennies and nickels.  I can envision nickels going out of circulation faster because it is more cost effective and space effective to hoard nickels over pennies.
You could say that collecting pennies and nickels are the safest investment you can find.  They protect you from deflation and inflation.  If we have deflation, you can always just spend them based on the government’s monetary value.  And in a deflationary environment, the purchasing power of your money should increase.
If we have inflation, then the coins will increase in value based on the content of their metals.  They will end up trading just as we see “junk silver” traded today.  These silver coins are not really junk at all.  They are pre-1965 dimes, quarters, and half dollars that trade based on their silver content.
The same thing that happened to pre-1965 silver coins, which actually contain silver, is going to happen to pennies and nickels.
If the Fed keeps printing money, then we can say good-bye to pennies and nickels in their current state.  We can make a safe assumption that the Fed is going to continue to print money, whether it is done on a computer screen or outsourced to the Mint.

Colorado Holding the Line on Marijuana Legalization

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Voters in the state of Colorado effectively legalized marijuana when they approved a state amendment back in 2012.  But officials in two states – Nebraska and Oklahoma – are asking the U.S. Supreme Court to declare the approved amendment unconstitutional.
The stated reason for the lawsuit is that marijuana is freely flowing into bordering states.  This would, of course, make things more difficult on the drug warriors seeking to stamp out drugs in these other states.
Fortunately, the Attorney General of Colorado has vowed to defend the new state law and says that the lawsuit has no merit.
The funniest quote has to be from Nebraska Attorney General Jon Bruning who said, “While Colorado reaps millions from the sale of pot, Nebraska taxpayers have to bear the cost.”
The only reason that Nebraska taxpayers have to bear the cost is because it is forced on them by their government.  If enough voters in Nebraska favored legalization – or just not fighting a war on drugs – then they wouldn’t have to pay any cost.  They can choose to do the same thing that Colorado voters did or just choose not to go after marijuana sellers and users.
Taxing Drugs
A lot of people will say they favor legalization of marijuana or other drugs because it means the government can then tax it.  Personally, that is the one disadvantage I see of drug legalization.  I don’t really think governments at any level need more money to spend.  I suppose if the taxes from drugs meant eliminating other taxes, it might be acceptable, but we know that isn’t what happens.
But it is humorous to see these politicians struggle with this issue.  On the one hand, they want to control people’s lives and tell them what to do.  They like the war on drugs because it gives them more power and more excuses to encroach on people’s civil liberties.
On the other hand, politicians like to spend other people’s money and they are being deprived of some of the loot when they can’t tax the drugs that they have outlawed.
So while I don’t like additional tax money going to politicians, it is at least causing some to look twice at the issue, even if for the wrong reasons.  If more states legalize marijuana (or any other drugs) because they are seeking tax money, I still see it as a step in the right direction.
States’ Rights
From a Constitutional point of view, the U.S. Supreme Court should refuse to hear this lawsuit.  The entire federal war on drugs is unconstitutional in the first place.  It is certainly not an enumerated power listed in Article I, Section 8.
And in this case, Colorado has explicitly stated in its law that marijuana is legal.  There can be little question that this would trump federal law, even though the federal law should really be no law at all.
I think the most interesting scenario would be if the U.S. Supreme Court actually ruled against Colorado.  This would stir up a lot of trouble.  You would hear more talk about secession and nullification.
For this reason, I don’t think that will happen.  I think the Supreme Court will not rule for Nebraska and Oklahoma.  They are not going to risk a political riot by going against a clear majority of the people in Colorado.
In a sense, liberty lovers might actually hope the Supreme Court tries to strike down the law.  We might see Colorado officials simply ignore it.  This would be really bad news for the federal government, as it might set a precedent.
Over the last several years, more and more people have talked about the idea of nullification, where states refuse to enforce federal laws.  The federal government doesn’t want to see more of this, so we can expect the Supreme Court to actually do the right thing here and dismiss the lawsuit.
The people of Oklahoma and Nebraska can figure out how to deal with their situation without forcing other states on what to allow and what not to allow.  And if they can’t beat them, maybe they will join them.

GMO Decentralization

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Genetically modified organisms, or GMOs, are the subject of much debate, particularly as they apply to agriculture.  Most Americans consume some form of GMOs, as most corn and soybeans grown in the U.S. are genetically modified.
Proponents of GMOs say that genetically modifying food provides far more abundance and helps to feed hundreds of millions of people in the world who would otherwise lack food.
Opponents or critics of GMOs say that these foods are not healthy and that they should be labeled accordingly.  In the U.S., labeling is not required.  In addition, some critics think GMOs should be banned completely because they are dangerous to the environment and pollute other crops due to “gene drift”.
For those who defend liberty, the last part about GMOs spreading is probably the most controversial.  If it can be proven that GMO pollen is contaminating other areas, then perhaps it should be banned for the violators, as this is an issue of property rights.  You should certainly have the right to grow whatever food you want and sell it to whomever you want, but not if you violating the property rights of others.  This would be no different than dumping chemicals on your lawn that seep into your neighbor’s ground.
Of course, this is a major political issue.  As it seems with so many things, the government pushes things that line their own pockets and puts your health in jeopardy.  Monsanto is a giant corporation that sends money to campaigns in exchange for government favors and protection and Monsanto is probably the biggest proponent of GMOs.
In 2012, an amendment was introduced to the 2014 farm bill that sought to clarify states’ rights in determining whether GMO labeling is required.  The amendment was introduced by Senator Bernie Sanders of Vermont and Senator Barbara Boxer of California, who aren’t exactly known as decentralists.
But the amendment was voted down by 71 senators, including several senators who are thought of as more conservative.  Apparently the Constitution means nothing to any of these politicians.
The U.S. Constitution and Agriculture
As with almost everything, the Commerce Clause in the Constitution has been completely turned on its head.  While it original intent was to make sure that free trade existed between the states, the politicians in Washington DC use it as an excuse to pass almost any piece of legislation.
Of course, the Congress and the federal government have no business being in the business of agriculture.  This isn’t an enumerated power in the Constitution.  There should be no such thing as a national farm bill.  There should be no Department of Agriculture.
As a libertarian, I am against mandating the labeling of anything.  It should be the choice of the seller, which ultimately is dictated by consumer demand.  Perhaps more consumers will stop buying food products that aren’t labeled.
At the same time, this is also an issue of states’ rights.  While I don’t agree with a law requiring labeling, it should be for each state to decide this.  It is none of Washington DC’s business.  For this reason, Senators Sanders and Boxer actually had a good amendment that should have been included, even though the whole bill was unconstitutional anyway.
In case you haven’t noticed, the politicians in DC don’t care about the Constitution.  They also don’t care about your health.  They are collecting donations from Monsanto, so they don’t care, unless they start to get significant backlash from their constituents.
You can’t depend on the government for anything, including protection.  Why would they protect you when they are too busy destroying you?  For this reason and others, you have to take personal responsibility and look out for yourself and your family.
If you are concerned about GMO foods, then you will have to do some research yourself and avoid foods that you know are likely to contain GMOs.  Instead of writing a letter to Congress, write a letter to a food producer or to a grocery store, asking for labeling of GMOs.  Perhaps more stores will pick up on this as a niche market to attract customers by keeping a non-GMO section in the store.
If you are going to write your “representative” in Congress, don’t ask for required labeling of GMO foods.  Instead request that they stop passing farm bills and to defund the Department of Agriculture.

Beer Fascism

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Craft beer has become quite a popular thing in America.  Unfortunately, when consumers demonstrate their preferences, oftentimes government shows up in an attempt to reverse those preferences.
While there is a lot of cronyism coming out of Washington DC in terms of the government teaming up with big business, it also happens at the state and local levels just as much.
Big businesses don’t like competition, so some of them turn to the government for special favors.  In the case of distributing beer, this is exactly what is happening in Texas.
Three craft breweries are challenging a 2013 Texas law that essentially forces breweries to surrender their ability to sell their distribution rights.  Instead, they are forced to surrender their rights to distributors without compensation.
It used to be the case that beer distributors would compensate the brewers in exchange for the right to sell their beer to the marketplace.  With the new law in effect, the distributors get those rights for free and are then able to sell those rights to other distributors.  You can’t make this stuff up.
Of course, this is already hurting consumers, as some small breweries in Texas are putting plans on hold to expand.  There will be fewer options for consumers around the state.  Unfortunately, these laws are spreading, as Kentucky recently passed something similar.
Three craft breweries are challenging this law in court based on the Texas Constitution, with the help of the Institute for Justice.
No Free Market for Beer
As with so many bad government laws, this stems from previous bad laws.  When alcohol Prohibition ended nationally in 1933 (thankfully), some state governments took control of the distribution of alcohol and even the retailing.
However, most states have what is called a three-tier system, which means that there have to be three independent parties in the process of selling alcohol.  Producers have to sell their product to wholesale distributors and distributors then sell to retailers.  It is then the retailers that may only sell to consumers.  As with everything, there are exceptions.
This actually boggles the mind.  These laws were ridiculous when passed in the 1930s and they are still ridiculous today.  Why can’t a brewery distribute their own beer or sell their beer directly?  Why do there have to be independent parties doing this?
(As a side note, the state of Washington repealed its three-tier system in 2011, but it also boasts of having the highest liquor tax in the nation.)
The problem is that we don’t know what would be most efficient in a free market system because it currently doesn’t exist.
If you like to knit blankets and sell them on your own website, should that be illegal?  Should you be forced to take your product to an independent distributor who then sells it to an independent retailer?
The problem isn’t just this recent Texas law, but also the laws already on the books.  The state legislature should be repealing these archaic laws that were ridiculous and harmful to begin with.
Again, this is just another example of one bad law leading to another.  And, of course, we shouldn’t be surprised it is being done as a form of corporate welfare.
This is nothing more than beer fascism, where the government is seeking to control an industry to benefit some at the expense of others.  They can’t let consumer demand decide what products are best and how they can be produced and distributed most efficiently.
I’m glad these three breweries are fighting back and that the Institute for Justice is helping.  If they succeed, maybe they should go after the silly 1930s era law too.

A “Living” Wage Pays Off For Some Employers

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There have been protests and rallies around the country calling for a so-called living wage.  Specifically, some fast-food workers are advocating a minimum wage of $15 per hour.
These workers don’t understand that if the government followed through with their wishes, they would probably be out of a job.  Employers are not going to hire people for more than they are worth, unless they have a lot of money and are willing to be charitable.
We don’t currently live in anything close to a free market environment now, with minimum wage laws, various taxes, and thousands of regulations.  But employers, for the most part, still have enough rights that they don’t have to hire people and they can also pay employees what they want, as long as it isn’t below the minimum wage.
There is a burger and chicken chain in suburban Detroit called Moo Cluck Moo where some workers are paid up to $15 per hour.  When the first place opened a couple of years ago, the starting pay was $12 per hour for all of the workers.
While this is something of a fast food restaurant, it is a step above McDonald’s.  The workers make the buns fresh daily and they use grass-fed meat for the burgers.  Due to the better quality of food (and probably better service), Moo Cluck Moo can also charge higher prices, with burgers starting at around $6.
The higher prices certainly contribute to the employer’s ability to pay higher wages while still managing to turn a profit.  The employees are also expected to know how to do various jobs.  It is a two-way street.  If employees expect higher pay, they need to show more motivation, stronger work ethic, and their ability to please customers.
Not surprisingly, the turnover at the restaurant chain is low and we can be sure that the higher wages are a contributing factor to that.
Employee Advantage
Of course, one obvious thing to point out to all of these protesters is that they are free to leave their job at any time.  Other than being in the military or having to fulfill some contract obligation, you can walk out of any job at any time without penalty.  If you can find a better job with higher pay, you can take it at any time.  The people protesting perhaps would have very limited options if it weren’t for their current employer.
The large majority of workers in the United States make far more than the mandated minimum wage.  So why are employers paying them more than they have to?  Obviously, the employees are worth it to the employers.
If you have skills in demand and show some kind of dedication or work ethic, then some employers are going to want to hire you.  The expensive part of hiring someone is at the beginning.  You don’t necessarily know if the person is right for the job.  (This is why temps and interns can be an advantage for both parties.)  In addition, an employer has to train people, so they are usually losing money at the beginning.
For that reason, employers usually want to keep employees if they are doing a good job.  It is more profitable than to have higher turnover.  It is in the interest of the employer to pay higher wages to get better performance and lower turnover.
The reason that many of these fast food workers are being paid relatively low wages is because they lack demanded skills.  They also sometimes lack a strong work ethic, although that is certainly not true from many others.  These jobs are not really meant for heads of household.  They are supposed to be a beginning, or something of a stepping-stone.  They can also act as part-time work for people needing a second job and some extra income, or for a spouse that is not the primary breadwinner.
If you look at some third-world country where the average wage is $2 per day, the reason for the low wages isn’t a lack of minimum wage laws.  Setting higher minimum wage laws would just eliminate jobs.  The wages are low because they are poor societies with a lack of capital and investment.
For anyone who wants to see higher wages, they need to advocate for lower taxes and less regulations.  This leads to more savings and more capital investment, which increases worker productivity.  The key is to increase worker productivity, which will enable employers to pay higher wages.
A living wage sounds nice, but it needs to be done voluntarily in a free market.  It cannot be achieved through the use of government force.

Statistical Games for Obamacare

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The Obama administration has been caught telling lies again.  It was just last month that Jonathan Gruber was caught telling the truth about Obamacare.  Gruber, one of the architects of Obamacare, referenced “the stupidity of the American voter” making it necessary to write Obamacare in a “tortured way” so that Americans wouldn’t oppose it.
Gruber told the truth about his previous lies, not expecting his comments to go viral on YouTube.
Now the administration has been caught deceiving the American people with its reporting of the numbers for Obamacare.  It was previously reporting separate numbers for individuals who signed up for medical coverage and individuals who bought dental insurance.
But then in September, the numbers were reported that 7.3 million people had bought insurance through Obamacare.  But the numbers were reported differently, combining the medical and dental numbers.  If the numbers had been broken out as before, it would have showed that 380,000 people had bought dental insurance.
In other words, the administration was trying to inflate the Obamacare sign-up numbers, thinking nobody would notice, or that it would go unreported.
Of course, this is Obama’s legacy and it isn’t a very good one right now.  The Affordable Care Act has been an unaffordable act.  It has contributed to continually increasing premiums for health insurance for nearly everyone in the country.
Political Lies Aren’t What They Used To Be
One thing that strikes me about this story is that it goes beyond the disaster that is Obamacare.  It is also a demonstration of how times have changed.
In the past, politicians could lie frequently and mostly get away with it.  As long as the major newspapers and major television networks didn’t pick up on it, or didn’t report on it, then it was fine for the politicians.  They could usually depend on the media to stay on their side and keep quiet on certain things.
There is a show in Washington DC that Republicans and Democrats are vicious enemies.  I’m sure some of the political battling is real, but both major parties don’t ever do anything drastic to make people question the system.  It’s almost as if they have a secret agreement that they won’t spill each other’s dirty laundry too much.
Talking to some people today, they think that politics is worse than ever now.  They think that there are more lying politicians than ever.  They think there is more corruption than ever.  But I actually don’t think this is the case.  There have been lying politicians for a long time.  The difference now is that they are getting caught.
The funny thing is that many of these politicians and bureaucrats are not with the current times.  They don’t realize how much things have changed.  They think they can casually tell lies and that most people won’t notice.  They forgot about the internet and today’s world of instant communication.  They forget about video cameras on cell phones.
Gruber made those comments not expecting it to be all over YouTube and eventually on the news.  There gets to a certain point where even the so-called mainstream media can no longer ignore a story that is widespread, because doing so would make them look too biased.
The Obama administration tries to inflate the number of enrollees for Obamacare and they think nobody will notice.  Twenty years ago, they probably would have gotten away with it.  In today’s world, someone finds out and posts a story about it on the internet.  Now the administration is being forced to backtrack and admit the numbers were in error the way they were reported.
We shouldn’t be surprised by this statistical manipulation and deception going on.  Perhaps we should be surprised that politicians and bureaucrats aren’t learning that they are no longer protected the way they once were.
While some are disappointed in the lying and deceiving, I am actually encouraged.  It just means they are now getting caught.

They Hate Us For Our Freedoms

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We have been told since at least 9/11/2001 that terrorists strike America because they hate us for our freedoms.  And if that is true, then the only way to stop terrorism is to go after the terrorists, which means more war, most spying, more torture, and more violations of human rights.  (The other option is to stop being free, which means terrorism should have already stopped based on what the government has done since 9/11.)

In the 2007/ 2008 presidential race, there was one particular moment in one Republican debate that really began a new dialogue in this country, at least for some people.  Ron Paul pointed out the concept of blowback.  He said that the terrorists attack us because we are over there.  The term “we” is actually a reference to the U.S. government.

Rudy Giuliani acted like he was outraged by the comment and he said he had never heard that before.  So it is an accepted doctrine by the establishment and the so-called mainstream media that the terrorists hate us for our freedoms.  Because if that isn’t the case, then it means they hate us for what the U.S. government has been doing for decades.  That would mean that we could stop terrorism by simply adopting a policy of non-interventionism.

When the report on the CIA torture was recently released, there were warnings of a higher risk of terrorism.  There were extra precautions being taken due to the increased risk of attacks.

By why would this be so?  I thought the terrorists attacked us because we are free and they don’t like our Western culture.  Why would they be motivated based on some CIA report?  That would mean that they hate us for more than just our freedoms.

With these reports of tightened security, has there been any reporting on the fact that people attack the U.S. because of how the U.S. government has been treating others?  Is there any mention that many American people promote these policies or ignore that they are happening?

This is not a justification for terrorist attacks, as some would like to accuse.  But it is a reason for terrorist attacks.  And Americans have to stop believing that the government that claims to represent them can go overseas and kill people, occupy lands, torture people, and destroy property without there being any blowback.

Suspected Terrorists

Amazingly, there are still many Americans who are defending torture.  They think, quite naively, that it is just bad guys being tortured, so who cares.  But who determined that these are bad guys?

These were suspected terrorists being tortured.  The key word is “suspected”.  They didn’t get a trial.  And the word “terrorist” has become completely meaningless when used by the U.S. government.  It could just mean living in Afghanistan and being in the wrong place at the wrong time.  It could mean being falsely accused by someone else being tortured.

If we knew for a fact that these were really bad guys and that no mistakes could be made about their guilt (which is impossible), then perhaps we could have a discussion about whether torture is moral or appropriate.

But we aren’t even close to that situation.  Many of these people who were tortured were completely innocent.  Some of them died being tortured.  The CIA was supposedly trying to extract information out of people that probably didn’t have any information to give.

The CIA is an evil organization.  John F. Kennedy realized this early in his presidency and began to take a stance against it.  We all know how that worked out.

But most Americans will pretend this didn’t happen or won’t care about it.  They will keep voting for their representatives to go to Washington DC to continue funding the CIA, the NSA, and all of the overseas wars and interventions.

Even if terrorists did hate us for our freedoms, I don’t think we need to worry too much about that any more.

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