Andrew Cuomo Makes Sure That You Are Poor

This piece is forthcoming in The Lincoln Eagle.

 Andrew Cuomo is the reason you're poor and going to get poorer.  In fact, if you voted for a Democrat or a Republican for president, then you voted for a candidate who makes you poor and will make you and your children poorer.  The reason is that both parties favor the current monetary system and Federal Reserve notes, worthless, green slips of paper that say: "This note is legal tender for all debts public and private."  Federal Reserve notes sport pictures of dead presidents, several of whom, like Andrew Jackson ($20 bill) and Thomas Jefferson ($2 bill), opposed the money we now have because it hurts people like you. 

The greenback dollar is counterfeit, and as the Fed prints more at your expense, it lends them to big banks, which in turn lend them to Wall Street. When Lehman Brothers collapsed, it was in debt for over half a trillion dollars, more than 60 percent of the total money supply at that time. (The money supply is the sum of cash plus checking accounts; in 2008 it was $1.5 trillion; now, four yearslater, it is over $2.5 trillion). 

Of all the politicians in America who have harmed you economically, and virtually everyone you've voted for has, among the worst is Andrew Cuomo.  As the head of the Department of Housing and Urban Development under President Clinton, Cuomo pushed for a policy whereby FANNIE MAE and FREDDIE MAC, the spearheads of the 2008 real estate collapse, had to invest one half of their loan portfolios in subprime (low-income) real estate.  FANNIE MAE, FREDDIE MAC, and the Housing Authority (FHA) hold 90 percent of mortgages in the country. 

If you were lied to and believe that free markets caused the housing collapse, consider that none of the three agencies, FANNIE, FREDDIE, and FHA, is a free market institution; FANNIE and FREDDIE are public-private partnerships.  The banks that generated the low-income mortgages are among the most heavily regulated businesses, and they responded to regulation. 

Why do the media and universities say that free markets and deregulation caused the millennial housing bubble and collapse?  Because the big banks that lend to big media benefit from government.  They also contribute to the dominant universities.  Princeton's endowment is $26 billion. Small wonder that Princeton professor Paul Krugman favored the Wall Street bailout:  Princeton was a chief, albeit indirect, beneficiary. The building that houses Harvard Business School is Morgan Hall; the modern medical school would not exist without donations from Maryland merchant Johns Hopkins, JP Morgan, and one of the first major investment bankers and Johns Hopkins's and JS and JP Morgan's mentor, Baltimore-and-London-based George Peabody.  

Wall Street would not exist in its current form without the Federal Reserve Bank and without government regulation, and that is why, since the days of Alexander Hamilton, big government and regulation have been policies that favor the super-rich.  Jefferson, who favored the productive class, paid off the federal debt; Hamilton, who favored speculators (as did Franklin Roosevelt), favored a national debt.   Have Bill Gates, Warren Buffett, Michael Bloomberg, and the late David Rockefeller advocated regulation because they are altruists?  Most billionaires favor regulation, but the public has been duped into thinking that regulation helps it. There are virtually no libertarian billionaires; the exceptions, Charles and David Koch, are discussed endlessly. Left-wing and Progressive Republican billionaires like Gates, Soros, Buffett, Bloomberg, and Rockefeller, are ignored.

In his book The Financial Crisis and the Free Market Cure, John A. Allison, president of the Cato Institute and former president of BB&T bank, describes how Andrew Cuomo was the inspiration of the housing collapse of 2008.  In 1993, when Cuomo was head of HUD, he mandated that the two public-private partnerships, FANNIE MAE and FREDDIE MAC, invest half their portfolios in sub-prime mortgages.   At first FANNIE, FREDDIE, and the FHA, ignored Cuomo's mandate, but in 1999 President Clinton began to enforce Cuomo's 50 percent requirement.  Even the pro-Wall Street New York Times recognized that the Cuomo policy was self-destructive, and on September 30, 1999 The Times ran an article criticizing the policy; the article predicted that Cuomo's policy would generate a housing collapse.  Proving that it is the newspaper of economic decline, The Times backed Cuomo in the last election despite the path of economic destruction that Cuomo has left.

In his book Allison shows that HUD, FREDDIE, FANNIE, and FHA were incompetently run, that the latter three had taken on risky mortgage portfolios in order to make results seem good before 1999, and that the three took on a suicidal degree of risk after 1999. This was in part because FANNIE chief Franklin Raines, Bill Clinton's crony, did not understand how financial institutions work. 

Allison suggests that the only Democrat who was smart enough to understand that the policies he was advocating would lead to economic chaos was Barney Frank; the rest, including Andrew Cuomo, were and are too uninformed to assess the policies that they advocate. Cuomo helped make you poorer because he is an incompetent who has been put in jobs over his head. Because of his father, Cuomo was born on third base, and New York voters have pushed him toward home plate even though he is dumb enough to persist in running toward the dugout.

It is not surprising that Cuomo would now set his sights on taking away your right to defend yourself. Through the wanton use of drones, the Obama administration has murdered nearly 200 children; since 1960 the Democratic Party has murdered in excess of 250,000 children in Vietnam and elsewhere.   The Democrats and Republicans, like Republican Dean Skelos, are eager to take away your right to bear arms so that after they impoverish you some Democratic Party renegade dictator can murder you with impunity.  Incompetents like Cuomo don't worry about the long term effects of the policies that they advocate. 

Mitchell Langbert is political editor of The Lincoln Eagle.

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A nation that has exchanged its welfare for neither liberty nor security can be written off.

Claremont Review of Books

937 West Foothil Blvd., Suite E

Claremont, California  91711
c/o Charles E. Kesler, Editor 

Dear CRB:

I have received a couple of issues of Claremont Review of Books.  It is well written and challenging.  I do not, however, wish to receive further copies.  You can keep my subscription payment as a donation; please take me off your subscription-and-mailing list.

While pursuing a corporate and then an academic career, I took about 25 years off from a brief interest in libertarianism that crested in 1980.  In 2003, with the Iraqi War, I began profiting from investing in gold.  To relieve my guilt about betting against the dollar, I renewed my interest in stemming America's 216-year-old statist goosestep that has led to the dollar's decline. 

It turned out, five years later, that the GOP, the Democrats, and the Federal Reserve Bank had so mismanaged the US's monetary system that Lehman Brothers' Dick Fuld had managed to squander two thirds of a trillion dollars in Federal Reserve-counterfeit--80 percent of the nation's money supply at that time.   Since then impoverishment of America's productive classes through counterfeit channeled to its exploitative financier class has not troubled the two parties, the Wall Street-owned media, the Wall Street-subsidized universities, or the American people themselves.   As a result, I no longer feel guilty about short selling the dollar; morally, I relish it.  Moreover, I plan on a permanent disengagement from political concerns. As Montaigne put it and Jefferson once quoted: "L’ignorance est le plus doux oreiller sur lequel un homme peut reposer sa tête." 

America is not a democracy, nor is it a republic; it is a progressive-totalitarian oligarchy ruled by financiers run amok.  The promise of American democracy is paltry and dull.  It is a democracy with two choices: (a) Republican, Taft Progressives who bailed out Goldman Sachs and (b) Democratic, Roosevelt Progressives who bailed out Goldman Sachs.   

In order to win the public to accepting the financiers' fake Progressive dialectic in 1912, Progressives promised rising standards of living and freedom. They failed to keep their promises; that is, the promise of American life is a fraud.  Socrates chose to abide by the laws of Athens because he had made an implicit contract, but my ancestors were defrauded.  I, for one, don't plan on hanging around, so I don't care what happens here.

Sincerely,

Mitchell Langbert, Ph.D.

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What Is to Be Done?

I just sent this email to an acquaintance who lives in my county and who asks what is to be done:

The conservative movement hasn’t been successful, and the Republican Party has proven itself to be an enemy of liberty much like the Democratic.   One stumbling block is public opinion.  It is not unlike the fall of Rome.  By the first or second century few people living in Rome had any understanding of the republican form of government. They had immigrated there from the conquered provinces, and if they chose to remain in Rome often it was often because of the welfare benefits that Augustus and his successors had developed (bread and circus: free grain, free entertainment, free food).   

America has increasingly become a nation of beggars and welfare cheats; there is little understanding of Jeffersonian individualism, especially among those educated in New York’s and similar public schools; increasingly, Americans are motivated by lust for subsidies and handouts. This starts at the top--on Wall Street.  If the public was comfortable with the bailout and with the monetary policies that have been pursued since ‘08, there is no limit to how much wealth transfer they will accept. 

This is not the America of Jefferson,  of Grover Cleveland, or even of Franklin Roosevelt.  I do not think there is much hope for democratic change.  Secession, nullification, or a breaking off of freedom-loving Americans in a new polity are possible paths, but they can’t be executed now.   Relocation to another country is feasible now, and I am planning at least a partial relocation.  

To do more, there will need to be a further breakdown in federal power.  That might occur as the dollar falls to ever lower levels and America finds that the federal government is not sustainable. That might happen within our lifetimes.  I’m sorry to say it, but there needs to be more chaos before anything important can happen.  Rather than waste time with political activity, it might be more useful to spend your time educating yourself, building a game plan, and winning over others to a vision of an alternative.  There is no point in defending an American system that already has disappeared.  

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The New Deal in Old Rome

"The attempt of Diocletian and his successors to save an empire that was crumbling resulted in complete regimentation under a totalitarian state.  In the reign of Marcus Aurelius many villages and towns had been virtually wiped out by a great plague…On a diminished population with greatly impaired resources taxes were increased to support the enlarged army and the vast bureaucracy.  Heavy contributions of grain were extracted from farmers to feed the soldiers and the population of the large cities.  There were land taxes, property taxes, occupation taxes, poll taxes.  It has been said of this period that 'the penalty of wealth seemed to be ruin.'  The heart was taken out of the enterprising men. Finally the burden became so intolerable that to escape the imperial levies tenants fled from the farms and business men and workmen from their occupations.  The government intervened and bound the tenants to the soil--the beginning of serfdom--and the business men and workmen to their occupations and trades.  Private enterprise was crushed and the state was forced to take over many kinds of business to keep the machine running.

"As oppression by the central authority increased, many Romans in the frontier provinces escaped from its heavy hand to find refuge among the Germans and even the Huns.  It is recorded that a refugee with the Huns told a Roman ambassador that 'he considered his new life with the Huns better than his old life among the Romans.'  To the poor, it was said, the enemy was kinder than the tax collector. "

--H.J. Haskell, The New Deal in Old Rome, p. 221. 

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More on Slavery

 In response to a comment:

One of the more blatant lies taught in American schools is that the Civil War was fought over slavery. A reading of DiLorenzo's and Hummel's books will disabuse you of that myth.

First of all, four slave states fought on the side of the North--Maryland, Delaware, Missouri, and Kentucky. They did not abolish slavery even after the war ended. It took the Thirteenth Amendment passed by the radical, post-war Congress.

Second, four secessionist states that in total had a greater population than the seven that seceded when Lincoln was elected, most importantly Virginia, did not secede until Lincoln attacked the South after he was elected. The reason was specifically Lincoln's violent imposition of the federal government on the secessionist states.

Third, Lincoln repeatedly said that he did not aim to repeal slavery. In fact, he said that he favored a constitutional amendment that would have prohibited the abolition of slavery. He said this repeatedly.

Fourth, on November 7, 1861 The London Times wrote an editorial expressing its and the British people's dislike of slavery. Britain at that time was the leading abolitionist nation in the world, for it  had abolished slavery a few decades earlier. Nevertheless, the Times editorialized, it was eminently clear that the Civil War was not being fought about slavery. As Lincoln repeatedly stated and made clear through direct action, the war's aim was to keep the union united. This was contrary to the aims of the American founders, and directly contradictory to Jefferson's statement in the Declaration of Independence that just government is derived FROM THE CONSENT OF THE GOVERNED. As a result, The London Times opined, most British citizens favored the South over the North because the North's war was an effort to enforce a government on a people who did not consent; The Times held that the Civil War had nothing to do with slavery.

Fifth, many leading abolitionists, including William Lloyd Garrison, had for years advocated NORTHERN SECESSION as a way TO END SLAVERY. In other words, leading opponents of slavery had believed all along that secession would by itself end slavery. Rather than give this idea a chance, Lincoln chose to kill 500,000 to 800,000 people, maim a million people, and conquer the South, forcing a tyranny on them.

Why might secession have ended slavery? Because the Fugitive Slave Law was a key impediment to slaves' escaping, and it would have been repealed with secession. The result would have been that slaves could escape and not be returned. That is what happened in Delaware. By the end of the war virtually all the slaves had left to enlist and could not be returned. Rather than let slavery die naturally, Lincoln, who  repeatedly said he favored continuation of slavery, fought a war to suppress the South and prevent them from seceding.

In sum, your belief that the Civil War was fought over slavery and that disagreement with the Civil War in some way suggests agreement with slavery is based on bad education, lies, misinformation, and propaganda that you probably learned in an American school. You did not get a good education, and I didn't either.


 In response to two political activists:

Dear     _________           :

 I have decided to disassociate myself from political activity.  Political activity requires some concern and common ground with the polity and the citizenry.  Having just read DiLorenzo’s Lincoln Unmasked and, worse, Jeffrey Hummel’s Emancipating Slaves, Enslaving Free Men, I have concluded that the United States is based on the false premise that a government can be derived from the barrel of a gun; consequently,  the American people and the American form of government are immoral; focusing concern or political emotion on them is misguided.  

The developments that occurred after the Civil War are a function of a people bent on violence, theft, and self-aggrandizement;  the establishment of the Federal Reserve Bank and Wall Street’s ongoing economic rape of the American people is a symptom of a deeper, underlying immorality on the American people’s part.  All con men know that it is greed that makes a mark susceptible to their cons.  Americans are those greedy marks.  

Americans have been satisfied with the violent compulsion that Lincoln imposed on the South (he did not oppose slavery, and four slave states fought on Lincoln’s side, which we are not told in in pro-government, progressive schools).  More generally, America is not a nation based on premises of freedom and consent of the governed; as a result, I do not support the current form of government, and I do not care what happens to an American people willing to use violence to impose their will on others.   I have zero interest in conservatism, in Republicans, in establishment candidates, or in opposing Andrew Cuomo with other, equal candidates.

Please remove me from your mailing list.

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In 1861, The London Times Got It Right

The contest is really for empire on the side of the North, and for independence on that of the South, and in this respect we recognize an exact analogy between the North and the Government of George III, and the South and the Thirteen Revolted Provinces.

---The London Times, November 7, 1861, quoted in Jeffrey Rogers Hummel, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War, Chicago and La Salle, Illinois, Open Court Press, 1996, p. 168

Hummel notes earlier on p. 168:

Britain was the neutral country that mattered most, and slavery was a key issue affecting its reaction.  Lincoln, however, had made clear that the war was for the preservation of the Union only.  He promised not to interfere with slavery in the states, and many Union commanders during the early campaigns returned runaways to their southern masters, in compliance withe the Fugitive Slave Law.  As a result, the foreign antislavery movement was reluctant to throw its weight behind the Union, and many Britons openly sympathized with the Confederacy.

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A Colossal Failure of Common Sense

I have been preparing a new course called Government and Business, and I wanted to include a few examples of the consequences of monetary expansion and ongoing Fed policy.  A good candidate is the case of Lehman Brothers.  I ordered Lawrence G. McDonald and Patrick Robinson's A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers from Amazon and read it over the past two days. It is a colorful, enjoyable book that I recommend.  It is mostly well written, but there are occasional sophomoric grammatical errors.  I wondered whether Three Rivers Press bothered to copy edit the work; at the same time,  McDonald's self-deprecating humor reminded me of Ragged Dick's from Horatio Alger's novel; moreover, the early part of the book is a  rags-to-riches tale.  McDonald pulls no punches in describing Richard Fuld and Joe Gregory's (the top management's) incompetence.

McDonald lacks a paradigm to accurately grasp the sources of Lehman's failure.  He sees Fuld's dominance of the firm as the cause--if only his friend Michael Gelband had gained control of the institution, things would not have gone wrong.  His philosophy is the result of his education at the University of Massachusetts Dartmouth and, more generally, of the one-dimensional coverage in the media and in universities, which serve as cheerleaders for America's value-destroying financial-and-banking system.  Things may have gone better if competent people were at the helm, but there are few competent people; they weren't at the helm at Goldman, AIG, Bear Stearns, GE Capital, or any of the other foolishly run outfits that were trading derivatives that they did not understand.

The cause was not bad leadership, but a bad system that permits the Fed to print money and hand it to people who lack the ability to use it wisely.  Investment in Wall Street's waste and the income tax crowd out innovative investment such as occurred in the late 19th century, when there was was no Fed, no central bank, no income tax, and Wall Street was in extremis. Historically, Wall Street's strength and growth rate are inversely related to the nation's innovation and the average American's financial well being.  Yet, Americans continue to vote into office politicians whose first priority is to subsidize Wall Street. 

Lehman had borrowed two thirds of a trillion dollars in printed money. The Federal Reserve Bank had stolen its value from the American people and handed it to half-witted crooks like Fuld and Gregory.  Lehman does not represent a deviant problem like bad leadership. It represents the core of the problem: malinvestment because of a financial system that has no incentive to invest optimally and that lives off the theft of wealth from the public; the stock market will not rise without such theft.

The entire money supply during the millennial years was close to $800 billion.  An amount equal to almost the entire US money supply was handed to half wits who proceeded to buy hundreds of billions of dollars in over-valued real estate and take financial gambles that they did not understand.

McDonald's message, which he does not grasp, is that the American systems of government and finance are  broken and cannot be fixed. An American people that continues to be satisfied with the stealing that underlies the profligacy McDonald describes (via the Federal Reserve Bank, which had printed the money Lehman badly invested ) is the underlying problem.  On this score, McDonald stands accused of apathy along with the rest of a nation that has allowed itself to be financially molested for the past century.

Perhaps a tragedy greater than the fall of Lehman is that smart guys like McDonald and his friends can think of no more imaginative career than living off printed money and playing financial markets. When America was a worthwhile place to live, people like McDonald, Gelband,  and McCarthy were inventors rather than stock jobbers. 

McDonald is a true insider, and he gives an insider's picture of the distressed asset trading desk at Lehman.  He is starry eyed, referring to his various colleagues as "the best in history" at various points, but the sophomoric grammar and starry-eyed reverence amount to a small price to pay for McDonald's wit, charm, idealism, and apparent workmanlike competence with respect to his craft.  At Enron there were two or three people, chiefly Vince Kaminski of Enron's risk management group, who saw that the firm was headed for disaster.  McDonald asserts that several of his trading colleagues, such as Michael Gelband and Larry McCarthy, had warned Fuld and Gregory of an impending crash in the real estate market nearly two years before Lehman's ultimate demise;  they and several others in McDonald's group had resigned months and weeks before the collapse. The remaining members of his group took over the firm when it was already too late; as will occur with the United States, things had to get close to the edge before Fuld and Gregory could be ousted; it seems to me that America may face a fate similar to Lehman's.  Hopefully, by then I will be resident elsewhere.

I think I will fit part of this book into my course, which also includes some material on Long Term Capital Management and Enron--all products of the American Whigs' and financial establishment's stealing from the Americn people via the value-destroying Federal Reserve Bank.  If you want to know why the average American's real hourly raise hasn't gone up since 1970, read this book.  The high salaries in exchange for the destruction of real wealth by Wall Street's bums is malinvestment on a scale that Ludwig von Mises could not have imagined.

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