In the 19th century there were ongoing debates about the degree to which government should be involved with money. It was not until the 1930s, more than 150 years after the nation was founded, that government asserted a full monopoly on money by illegalizing the ownership of gold.

By February 1912, about 98 years ago, Senator Bob La Follette, a small business-oriented Progressive and presidential candidate that year, made a speech in which he noted that Wall Street had come to so dominate the media that even recently founded magazines were no longer independent. The next day the New York Times ran an article stating that La Follette had suffered a nervous breakdown, effectively ending his candidacy for president. He continued on as a Senator until the 1920s.

Since then the media has avoided discussion of Wall Street and the Fed. Some, like Glenn Beck, claim ignorance. Others simply kowtow to special interests across the board. Still other media outlets, the majority, do not know what news is, so cannot be expected to discuss a subject like the Fed. Still others are consciously linked to the interests of Wall Street. In any case, Beck is to be commended for being the first to speak on this issue. But is that really a good thing?

Glenda McGee just wrote me this e-mail:

“Glenn Beck and Sarah Palan had me and a few million others THRILLED for many months. The minute the TEA PARTY showed promise in Arizona and Texas they led the movement over the cliff.”

Beck needs to do a better job if he is to remain convincing as a voice for advocates of small government. To do so, he could try a few things:

1. Read a few books on money and banking, including Murray Rothbard’s What Has Government Done to Our Money and Hans Sennholz’s Money and Freedom. He might also read some Hayek and learn about the concept of free market money, an institution that existed here in the US for most of its history.

2. He could be playing an educational role. In the videos I’ve seen of him he claims ignorance. If he wants to be a leader, he should take the time to learn the issues. It’s fine to complain about the Fed’s ownership structure, but that doesn’t lead to any policy prescription.

3. He needs to learn basic history. Money has been a traditionally central argument in American politics until the past 80 years. The bad guys won and have been controlling the debate ever since.

4. Thus Beck could teach his viewers about: (a) the basic policy options, including competing, free market monetary systems and metallic-backed currencies and (b) the historical process by which centralized monetary control was rejected, re-adopted because it facilitates war (specifically the War of 1812), rejected again by Andrew Jackson, reinstated again in small part by the Republicans in order to finance the Civil War, rejected again during the Gilded Age , rejected by the public in the election of 1896, and then adopted by subterfuge in 1913 and re-enforced through fear tactics in 1932.

Shedding crocodile tears about the Fed’s ownership structure is a good way to seem like you oppose something that your boss at Fox really favors.

Let’s hope for a better performance from the undoubtedly theatrical but so far unconvincing Mr. Beck.

I was reviewing Sarah Palin’s speech at the Tea Party convention on Youtube and was reminded of her position on the 2008 bailout.  In a September 24, 2008 television interview Palin supported the bailout.  But at the recent Tea Party convention she objected to bonuses that the support she had previously advocated made possible. I think the expression is that she has been shedding conservative crocodile tears.

Conservatives love to hate Saul Alinsky but in fact all activists, conservative, libertarian or left-wing, follow his advice if they aim to succeed.  One of Alinsky’s rules for radicals is that a tactic that drags on too long becomes a drag.  This seems to be occurring with the Tea Party.

A reader suggested  this blog by the Alantic Magazine’s Andrew Sullivan.  Sullivan argues that the Tea Party convention was not economically conservative but was rather dominated by Christian activists.  Sullivan writes:

“They have no plans to cut serious spending whatsoever. They love their Medicare, as they screamed at us last August. Do you remember them revolting against Bush’s unfunded, Medicare prescription drug bill, the worst act of fiscal vandalism since the Iraq war?”

I have attended my local Tea Party meeting in Kingston, New York.  I do recall others, besides myself, talking about economic issues. One individual brought up the exit of manufacturing from the US, another talked about corruption in government.  There are frequent references to the nation becoming worse for future generations.  These are all good signs and say to me that the Tea Party has potential left.

Since the Atlantic is not a libertarian source (disclaimer: I read it regularly more than a quarter century ago and not since) my gut would be suspicious of anything its writers have to say about the Tea Party.  However, Sullivan makes a good point.

It was obvious from the beginning that the Tea Party rank and file is largely inexperienced.  Moreover, these are people who have developed a bad habit of voting for big government candidates who say that they are for small government.  They did it for George W. Bush and they did it for George H. Bush.  They nominated John McCain, who lept at the bailout like a terrier at a steak, along with Palin and Obama.  The Tea Party people realize that something has gone wrong after decades of their de facto support for big government and their solution is…to do the same thing once again.  This is seen in their decision to ask John McCain’s running mate, Sarah Palin, to be the keynote speaker at their convention.  Palin may speak economic conservative rhetoric at times, but she is not schooled in basic economics and can be seen in the September 2008 interview to be in the Progressive tradition.

I believe that libertarians need to work with the Christian right.  However, we have been hammered once before, with respect to George W. Bush.  The tactic of working with the Tea Party has helped expose our views, and it has been successful. But should libertarians continue to support the Tea Party?  I am not certain that the leadership of the Tea Party supports our mission of limited government.  Sarah Palin does not. I don’t think she understands that government activism in the bailout is logically inconsistent with support for limited government. The Tea Party may soon become a drag.

John Tate of the Campaign for Liberty just sent out a press release concerning his group’s opposition to the reappointment of Ben Bernanke.  I agree with him in spirit.

What concerns me, though, is that the left also opposes Bernanke’s reappointment. Given the nature of this term’s Democratic Party-dominated Senate, any alternative to Bernanke could be worse.  I would like to see some specific recommendations for alternatives.

Writing in a Democratic Party outlet, the New York Times, leftist Paul Krugman expresses a similar concern, that it is not clear that Bernanke the devil is worse than some crustacean that Harry Reid might pull from the deep blue sea.

Indeed, Krugman’s deliberations concerning Bernanke emphasize that Bernanke has not inflated enough or “done all he can”.  Unless the Democrats can come up with an alternative (e.g., a 21st century Paul Volcker), I’d prefer to stand pat despite what Krugman calls Bernanke’s “complacency”.

Governor Gary E. Johnson has been called the next Ron Paul.  He has not yet announced his candidacy for president, but has been widely mentioned as a potential Republican presidential candidate who reflects the Tea Party’s and liberty Republicans’ perspectives.

I recently blogged about Governor Johnson’s background.  He received good grades from the Cato Institute when he was governor and has a taste for honesty that is rare in politics and business today.

Besides serving as governor of New Mexico for two terms, he had built a significant corporation from scratch, which he sold in 1999.  Readers who would like to contribute or help Governor Johnson can find contact information on http://ouramericainitiative.com/. He also has a Facebook group page with 2,000 members.

Langbert: Governor Johnson, it is a privilege to interview you.  I teach business administration at Brooklyn College.  What are three things that you learned from your business career that could be applied to the federal government or that you did apply as governor of New Mexico?

Johnson: I started my company in 1974 and I was the only employee.  In 1994 we had 1,000 employees.  Things that I learned and applied as governor include the importance of hiring good people; cutting mistakes short; and sticking to basic principles.

I’m good at hiring people and have a great track record.  But mistakes are inevitable. When you make a mistake in hiring, you need to cut it short.   As governor, I avoided political appointments as much as possible.  There was one instance where I was forced to make one, and I closely monitored the individual’s performance.

The obvious things are most important. The basic principles:  being on time, sticking to principles, telling people to tell the truth.  As governor, I sat down in cabinet meetings and I told people to tell the truth.

L: One of the realities of large organizations is the use of information to manage conflict and improve social compatibility and coordination.  Managers call these patterns interpersonal skills.  Might not 100% truth telling interfere with interpersonal skills? Of course, if everyone in industry tells the truth, costs and performance will be improved.

J: On the contrary, being honest 100% of the time makes it easy.  If you tell the truth, you don’t have to remember anything.  What you’re talking about is managing conflict.  Someone once said that honesty is where what you say and what you think are the same as what you do.  But of course you can say things that minimize conflict.

L:  To what degree is it possible to cut the federal budget? How would you go about cutting?

J: I faced the same situation in New Mexico as the president faces.  I could have cut big government in New Mexico drastically and no one would have noticed.  (That is, these government employees produce no value for the economy.) The spending train is out of control.  But the Democratic legislature fought me and the courts handed down adverse rulings.  The legislature was 2 to 1 Democratic.  Common sense has gone out the window.  First you have to stop the spending.  The time is ripe for doing so in Washington, and it’s accomplishable.

We are a bankrupt nation.  We’re not taking care of our own house. Unlike the generation before us, interest and principle payments are due now. The enormous budget deficits will lead to inflation and an ever weaker dollar.

L:  What is your position on the bailout and TARP?

J: I would have opposed both.  Government should not have been involved in this. The Paulson connection amounts to this being an inside job.  Why should Goldman and AIG be saved but not Lehman?

L: What is your position on health reform?  How would you recommend the system control health costs?

J:  I would recommend a free market approach to health care reform.  Increase supply through the free market.  Gall Bladders R Us. We ended up with an insurance entitlement rather than health care.  Extending the current approach will lead to shortages and rationing health care.

The same principle applies to education.  We should blow the lid off publicly controlled education.

L: What is your position on the Fed and the gold standard?

J: The Federal Reserve deserves full responsibility for the housing bubble and as well deserves credit for mitigating the bust.  Overriding that, the dollar is now worth a nickel.  I understand the arguments for a free market in money and I support them.  I shy away from the phrase “regulate the Fed” because I do not want Barney Frank deciding monetary policy.  I wouldn’t say the Fed needs to be abolished.  I understand the argument for a gold standard, though.  The US government should be pursuing a strong dollar policy, which the Fed hasn’t done.

L: What is your position on the Middle East and Israel?

J: I’ve been to Israel and the Golan Heights and I understand the threats Israel faces from outside and within. I can’t summarize my position as the issues are too complex. I do believe in a strong national defense.  But our security is not threatened by Iraq and Afghanistan.

L: Where do you stand on Iraq and Afghanistan?

J: I believe we should pull out of both and return our focus to fighting terrorism. The focus needs to be protecting America. I’m not sure if that is still the mission in Iraq and Afghanistan. I was surprised that Obama increased US presence in Afghanistan.

L: What about Social Security reform?

J:  Social Security is flawed.  When it was brought into existence the life expectancy was  55. Benefits started at 65.  Now, life expectancy is 75, and benefits start at about the same age. It’s a Ponzi scheme.  A combination of benefit reduction and/or privatization are necessary.  At least part of Social Security should include private accounts that are counted in your estate.

L: What do you think of making Social Security voluntary and converting it into a defined contribution plan?

J: That would make it viable.

L: What is your position on states’ rights and state sovereignty?

J: The states are 50 laboratories of democracy.  The burden that the federal government places on the states is outrageous.  The same is true of health care.  A return to federalism is needed.

L: Thank you, Governor.  I am certain that liberty Republicans will be interested in learning more about your ideas.

According to Bloomberg News, the House Financial Services Committee today, in a 43-26 vote and a second voice vote, attached a Fed-audit amendment to legislation creating a council of regulators to monitor systemic risk.

According to Dr. Paul, the bill, HR 3996, if passed, will grant sweeping new powers to the Federal Reserve. However, at least with his amendment attached, it won’t be acting in secret anymore.

The panel’s vote increases the possibility that Congress will reverse the ban on audits of interest-rate decisions. The broader bill on financial regulation is subject to a vote by the committee, then must be approved by the House and Senate and signed into law by President Obama.

The effort to audit the Federal Reserve was spearheaded by the Campaign for Liberty, but many RLC members have participated in letter writing campaigns and in-person protests in support of the bill (HR 1207).  In September, the California GOP adopted a resolution by RLC members to support HR 1207.

The bill has over 300 co-sponsors in the House and over 30 co-sponsors in the Senate.

The Republican Liberty Caucus of California successfully held its second annual convention meeting of 2009 in conjunction with the California Republican Party Convention. The CRP Convention was held the weekend of September 25-27, which provided the RLCCA with a unique opportunity to hold a Convention Meeting and build relationships with fellow California Republicans.

The RLCCA Convention Meeting took place on Saturday, September 26. With several new faces and our growing leadership, comradery and activism filled the room. During the meeting, new By-laws revisions were passed unanimously.

All weekend long, the RLC offered an exhibitor booth along side other volunteer organizations and candidates running for state office. The World’s Smallest Political Quiz was again administered at our table, with the results, as expected, placing the majority of fellow California Republican quiz takers in the libertarian quadrant. New to this years convention was the RLCCA Voter Recommendation Guide. The guide focus was on two proposed state party rules and a resolution. There was no action taken by CRP Delegates on the rules, but the resolution passed!

The California Republican Party voted nearly unanimously in support of HR 1207 and S 604, The Federal Reserve Transparency and Sunshine Acts. The resolution was sponsored by the Alameda County and Sonoma County GOPs, and co-sponsored by the Republican Liberty Caucus of California, RLC-endorsed Congressman Tom McClintock, State Assemblyman and U.S. Senate candidate Chuck DeVore, as well as a number of CRP Delegates.

The California Republican Party supporting an audit of the Federal Reserve was a shining moment for the RLCCA and the Liberty Movement. Chuck DeVore, a tremendous supporter of auditing the Federal Reserve, spoke passionately on behalf of the resolution during the resolution committee meeting. Immediately after Chuck DeVore spoke, the Resolution Committee voted unanimously to send the resolution to the floor of the convention. Thanks Chuck!

All weekend long, members of the Republican Liberty Caucus could be seen at our exhibitor booth, CRP committee meetings, County Chairman and Treasurer meetings, CRP Convention floor, and many other party functions and meetings. We certainly made sure the Liberty Movement was active throughout the weekend. And it paid off with our co-sponsored resolution passing overwhelmingly.

The Republican Liberty Caucus of California would like to thank all our members and volunteers who showed up to the convention. We could not have done it without your dedication! We would also like to thank the California Republican Party for holding the Convention and so overwhelmingly supporting the resolution; and U.S. Senate Candidate Chuck DeVore for his support.

2010 elections are right around the corner and the RLC CA is poised to make a difference! If you haven’t yet done so, please join the RLC today!

Some photos from the event follow:

At its Convention on Saturday, the California Republican Party adopted the following resolution:

Whereas, the California Republican Party applauds transparency and accountability in government and rejects government secrecy involving monetary policy that impacts the entire economy; and

Whereas, serious discussions of proposals to oversee and audit the Federal Reserve are long overdue; and

Whereas, the Federal Reserve can enter into agreements with foreign governments and foreign central banks and the United States Congress is prohibited from overseeing these agreements; and

Whereas, the California Republican Party believes agreements made by the Federal Reserve with foreign powers and foreign banking institutions should be subject to Congressional oversight; and

Whereas, the United States Constitution, gives the United States Congress the authority to coin Money and regulate the value thereof and does not give Congress the authority to delegate control over monetary policy to a central bank; and

Whereas, auditing the Federal Reserve will allow Congress to assert its constitutional authority over monetary policy and help to protect the value of the United States dollar;

Therefore, BE IT RESOLVED, that the California Republican Party, in defense of the United States Constitution, STRONGLY URGES the representatives of the 111th United States Congress to support the Federal Reserve Transparency Act of 2009 as set forth in H.R. 1207 and S. 604.

The Alameda and Sonoma County Republican Parties recently submitted a resolution in support of auditing The Federal Reserve to the California Republican Party.  The resolution was introduced by two RLC supporters, Jerry Salcido and Michael Erickson.

In addition, RLC-endorsed Congressman Tom McClintock, Assemblyman and U.S. Senate candidate Chuck DeVore, and Congressional candidates John Dennis, Paul Smith and Jon del Arroz have all thrown their support behind the proposed resolution.  In fact, Chuck Devore even spoke passionately on behalf of the resolution before California GOP delegates.

RLC members — such as Matthew Heath, John Dennis, David Latour, Walter Stanley, and David Ewing — were the primary movers and shakers pushing for resolution adoption. More information on the resolution is available HERE.

Congratulations!

The Republican Liberty Caucus (and its California affiliate) has endorsed Gary Clift for Congress.

Due to incumbent Ellen Tauscher’s resignation as California’s 10th Congressional District Representative, an open primary election will be held on September 1. Mrs. Tauscher was appointed Undersecretary of State for arms control.

According to a press release from the California RLC, “Of the 11 candidates running for the 10th Congressional District, Gary Clift is the right choice for Congress … he stands for individual rights, free enterprise, and limited government.”

Says Mr. Clift,”The financial future of our country is at risk if the federal government follows California’s lead. The federal government has grown too big and expenditures greatly exceed tax revenues. This cannot continue. We need to reduce federal government by cutting the waste and mismanagement. One of my first actions in Congress will be to cosponsor HR 1207, which aims to audit the Federal Reserve and make government transparent with our tax dollars.”

The Clift campaign has requested volunteers for phone banking. Phone bank volunteers do not need to live in California’s 10th Congressional district.

“If we Liberty and Constitutional Republicans truly want to restore our Constitutional Republic, we must stand up and support candidates who will take our cause to the halls of Congress. Gary Clift is just that man. Support your freedoms by supporting Gary Clift,” said Matthew Heath, Chair of the California RLC affiliate.

California Congressional District 10 includes Fairfield (Solano County) in the north, Livermore in the south, ad Walnut Creek on the east. It stretches as far west as the San Pablo Bay and as far northeast as route 5 nearing Sacramento.

___________________________________________________________________

GARY CLIFT PROFILE

AGE: 53
PARTY: Republican
HOMETOWN: Vacaville (home is in a rural area north of town in a small finger of the 10th District.)

EDUCATION: Bachelor of arts in political science and Spanish, University of California at Davis, 1980

BACKGROUND: Grows a variety of organic crops for family and friends. Retired 26-year manager and peace officer with the California Department of Corrections. Lived in numerous countries including Cuba, Ecuador and Iraq as the son of a foreign service officer with the U.S. State Department. Married, father of two children in college.

ISSUES

Health Care:

Wants more transparent discussion of benefits and drawbacks of proposals under discussion, particularly effects on people who like their existing insurance. Believes the federal government cannot manage Health Care: insurance well and it could reduce quality and innovation.

Immigration

As a practical matter, supports a path to citizenship for illegal immigrants in the country. Supports strict enforcement of existing Immigration laws.

Federal stimulus package

Says it’s too soon to say if it will work, although he would have voted against it. Says business tax cuts are the best way to stimulate the economy.

National Security

Wants all U.S. troops out of Iraq, Afghanistan and other countries as soon as practical. Says military occupation foments enemies and does not promote democracy. Supports repeal of the Patriot Act, which gives the government latitude to spy on telecommunications, e-mails and phone calls.

Energy Policy

Supports allowing states to fully develop all sources of domestic energy, including oil drilling and nuclear plants.

Transportation

Wants California congressional delegation to use its clout to end the state’s export of tax dollars to other states and to use the money for local needs.

Gay Rights

Says voters should decide whether same-sex couples should be allowed to marry. Says the “Don’t Ask, Don’t Tell” military policy is within the authority of President Barack Obama, who has said he will abolish it.

Education

Would abolish the U.S. Department of Education, return its money and education control to states.

Mike Doherty has seemingly done the impossible.

In 2002, he was elected to the New Jersey Assembly. He has never been a party man, but always has been a man of integrity and principle. A West Point graduate who served for eight years in the Army as an artillery officer, Doherty has three sons currently serving in the military.

He has consistently bucked the Republican Party leadership while standing up for his own convictions. For example, in last year’s presidential election he committed what amounted to apostasy in the eyes of both the state and national Republican establishments: Rep. Doherty supported Ron Paul for U.S. President. He even went so far as to give a speech at a rally on Philadelphia’s Independence Mall at which Paul directed a tirade in the direction of the Federal Reserve building nearby.

According to columnist Paul Mulshine, a reporter who frequently covers libertarianism and New Jersey politics, “I first became aware of [Doherty's principles] in 2001 when he was a freeholder. A judge threatened to throw [him] in jail if he wouldn’t change his vote and approve construction of a county college.” Says Mulshine, “Doherty stood up. The judicial system backed down.”

This year, Doherty began his campaign for an open State Senate seat, facing opposition from Republican Marcia Karrow. The RLC endorsed his candidacy. Doherty risked his safe Assembly seat to enter the primary against Karrow.

Ms. Karrow circulated a flyer accusing Doherty of advocating “surrender in Iraq” — most likely because he supported Ron Paul. Says Mulshine, “Karrow decided to make Doherty’s support for Paul a central theme of her campaign. And if Doherty supported Paul, then Doherty supported surrender in Iraq. Or so the logic went.”

Continues Paul Mulshine, “It didn’t go very far. Neither Paul, who is also a veteran, nor Doherty supports surrender in Iraq. They simply support the Constitution, which calls for wars to be declared by Congress and then fought to the quickest conclusion possible. That is a stance popular with many military men.”

Doherty defeated Karrow in the primary. Doherty now becomes perhaps the most prominent conservative in the New Jersey Republican Party. Keep your eye on him.

Mulshine says that “Doherty showed an ability to rouse a crowd that is almost entirely lacking among GOP politicians.” He continues, “The reason is not difficult to discern. He actually bases his positions on principles. Among Trenton Republicans, that’s a novel concept. But sooner or later they might be tempted to try it.”

The district Doherty is running in encompasses rural Warren and Hunterdon counties and is safely Republican, making it likely that Mike Doherty will be moving up to the Senate come 2010.

You can learn more about Mike Doherty or donate to his campaign at http://www.mikedohertynj.com/.

From liberals and conservatives, from grassroots activists to lawmakers — the Fed is under attack for its role in aiding Bank of America’s takeover of Merrill Lynch, for which Bank of America received $20 billion in bailout funds. Says The Wall Street Journal:

“House lawmakers aren’t known for bipartisanship, but congressmen from both parties managed to come together from opposite sides at a House Oversight Committee hearing today to besiege Federal Reserve Chairman Ben Bernanke.”

“The onslaught was near universal, but the attacks came on different flanks. Republicans railed against what they perceived as a government imposing its will on business. Rep. Jim Jordan (R., Ohio) kept bringing up the October 2008 meeting where Treasury Secretary Henry Paulson, alongside Bernanke, presented bank CEOs with the TARP capital injections. “Do you see how a reasonable person could reach the conclusion that there, in fact, was this pattern of pressure from the government?”

“Ranking member Rep. Darrell Issa (R., Calif.) took a similar attack, after yesterday accusing the Fed of a coverup. He focused on the Bank of America deal with Merrill, indicating that it was reasonable for BofA to back out, and that government pressure pushed it into the deal.”

Politico features an article that refers to RLC Adviser Ron Paul (R-TX) as a trendsetter on the issue. Paul’s bill to mandate the first-ever audit of the Fed suddenly finds itself with 242 co-sponsors.
“Could it be possible that the Fed not only can cause these bubbles, but they’re … acting on their own?” asks Dr. Paul.

Senator Jim Bunning, who faces a tough re-election campaign, has also been a persistent critic of the Fed. “The Federal Reserve has handed out over $2 trillion to various financial institutions with absolutely no accountability for who they are giving to and how much those institutions are getting,” Bunning said. “I have asked repeatedly for an answer to this — but without success. If the Fed is going to print money hand over fist that the United States government can’t afford, I think the taxpayers have a right to know exactly who they are giving this money to and how much. It’s time for the Fed to come clean with the American people.”

In the Senate, Jim DeMint (R-SC) is the lead co-sponsor of HR 1207. He spoke to Glenn Beck about the bill on Tuesday:

Will the Fed have to finally answer to the people?