PO Box 130
West Shokan, NY 12494

June 12, 2010

Lazio 2010, Inc.
P.O. Box 4818
New York, NY 10185

Dear Mr. Lazio:

I am writing as a registered Republican and a member of my Town’s Republican Committee.

Your opponent, Carl Paladino, has publicly stated that during your tenure as a full-time employee and lobbyist for JP Morgan Chase you lobbied for and arranged a payment of $25 billion from the US Treasury to your employer. In other words, Mr. Paldino has publicly alleged that you participated in the “bailout.”  In return you received a $1.3 million bonus.

If Mr. Paldino’s allegations are inaccurate, please respond to this inquiry publicly.

If Mr. Paladino’s allegations are accurate you are morally unfit to serve in public office.  I am posting this letter on my blog and stating explicitly that if Mr. Paladino’s allegations are accurate you are morally equivalent to a common criminal and belong in jail.  Consequently, I would urge you to step down from the gubernatorial candidacy and allow the better man to run.

Sincerely,

Mitchell Langbert, Ph.D.

In his historical tour de force, On Power, Bertrand de Jouvenal traces the process of centralization of power in Europe from the fall of Rome. He paints a picture of an unstoppable centripetal force, power, whose ever tightening grip on humanity was hastened first by the increasing power of monarchs and then by the rise of democracy.   Prior to mass rule that began with the French revolution and Napoleon, war was limited by the resources of local feudal rulers.  Total war became possible with the rise of democracy and nationalistic centralization. The great wars of the twentieth century which saw unprecedented numbers killed were the product of nationalism, mass rule and socialism, indeed, of national socialism and socialism in one country.  These last are the ideologies of both the Democratic and Republican parties today.

For a century the United States showed that in the absence of centralization economic progress would come quicker, the public made better off, and war limited to local expansionism.  But the Civil War began a process of Progressive centralization, and elite Americans of the Gilded Age after the Civil War, envious of the status of German universities, sent their sons to graduate school in Germany and were surprised when they returned advocating ideas that would forestall freedom and progress.  Not having access to the ideas of von Mises, Hayek and Schumpeter, elite Americans adopted German historicism, according to which they, as an expert elite, deserved power and that power ought to be centralized to that end. They chose to remake America in Germany’s image fifty years before the rise of Hitler.

We live with the heritage of their nationalist and now internationalist Progressivism.  Progress has slowed; retirement savings are insufficient to cover the needs of the largest cohort of retirees in the history of the world; the Progressive health care system has faltered and  been redesigned to  restrict care; and for the past forty years Americans have seen the”promise of American life”, an ever increasing standard of living, betrayed and slowed to a halt as the Federal Reserve Bank and the federal government  have transferred ever more resources to banks and speculators.

De Jouvenal saw the rise of Franklin D. Roosevelt as the ultimate success of “power” in the United States.  But the process has taken longer and become more intense as the centralizers’ ideas, one after the next, have failed and destroyed sections of America’s freedom and affluence.  The nation retains its preeminent role because of  the nineteenth century’s gains and because its diminishing sphere of private initiative remains larger than under the rigid socialism that dominates Europe and the rest of the world.

No one can calculate the damage that power has done to the nation.  It is probable that, based on the absence of real wage growth since the gold standard was abolished in 1971 and the 2% compounded growth of real wages between 1800 and 1971,  the real hourly wage today is but 40% of what it might have been without the depredations of the federal and state governments.  But Americans are relatively worse off than that because of increases in taxes at the state and federal levels.

Both parties, Republican and Democratic, have participated in the relentless expansion of power.  The Republican is the more likely of the two to be transformed from a socialistic, elitist party, to one that represents freedom and decentralization. Hence, there is no more important task in politics today than that which the Republican Liberty Caucus has set before itself: to reform the GOP and transform it into a party of freedom and decentralization; to overturn the process of centralization of power; and to reestablish America as a land of freedom.

Given the low quality of public debate and the domination of the public media, this is a difficult task. Struggle we must.

There is no one date that can be identified as to when Rome fell and the Dark Ages began.  Alaric and the Visigoths sacked Rome in 410 and Geiseric and the Vandals sacked it in 455, but it wasn’t until hundreds of years later that the Gauls, ruled by the conquering Franks,  realized that they were no longer speaking Latin but rather a new language derived from Latin.  Eastern Rome or Constantinople did not fall to Sultan Mehmed and the Ottomans until 1455.  Whatever date you choose to assign, there was a period of several hundred years during late antiquity when literacy rates were lower than previously, population had been decimated because of a series of plagues between the sixth and eighth centuries and few records were kept.  I would argue that this decline was necessary for the rebirth of European civilization that occurred in the Renaissance, the Enlightenment and in Europe’s most backward quarter at the time, Great Britain, from the 1500s to 1800s.

Compared to the period from 1776 to 1971, we have entered into an  incipient dark age.  The dark age is not necessarily identifiable through declines in literacy, although recent studies announced in the newspapers  indicate that students’ achievement has been in the decline.  Nor do I predict the outbreak of plagues, although there have been such predictions.  Rather, excessive monetary creation and the new money’s transfer to Wall Street and real estate interests have slowed wage growth and innovation. We are in a dark age compared to where we would have been without the Federal Reserve Bank , the current monetary system and income taxes.

In other words, the Federal Reserve Bank’s control of the money supply has displaced technological and market innovation with financial  and real estate speculation and government.   Until Richard M. Nixon finally abolished the  gold standard in 1971 the real hourly wage grew at 2% per year.  Since then, the real hourly wage has not grown at all.  The difference between the wage profiles with compounded 2% annual growth and 0% annual growth over 40 years is around 100%.   American workers today are earning  1/2 of what they would have been earning had the gold standard been in place and savings and investment  resources allocated efficiently.

No one can know what the economy would have looked like in the absence of the Fed and the income tax, but there is no question that there would have been considerably more rapid and more extensive rates of innovation, just as there had been in the late 19th and early 20th centuries before the Fed was established.  There would be less opportunity to work in low-paying retail jobs and less stock market appreciation.  But there would have been opportunities to work in technologies that are unknown to us and unknowable because the individuals who would have otherwise invented the technologies became stock traders or lawyers instead of inventors.  Likely there would be cures to diseases that are today unknown, methods of transportation that are unknown and conveniences that are unknown.  Compared to where we would have been without the Fed, we are living in a dark age.

The Dark Ages perpetuated the Roman class system, replacing Roman Emperors, Senators and Equestrians with barbarian tribal chieftains like Clovis as kings and various feudal titles like earl, duke and count.  In the American case, the Fed creates a three-class system: those with early access to Fed reserves, to include the banking system, the military-industrial complex, Wall Street and government;  a middle class that mostly works in the military-industrial complex  with some access to Fed reserves; and a lumpen proletariat without much access, about a third of the population.   The three-class system replaces the egalitarian democracy of laissez faire capitalism, which was characterized by fast paced competition and more fluid class structures than today.

The new dark age is perpetuated by the creation of gilds or interest groups that resist change.  Public employee unions demand the privileges to which they have become accustomed, as do their “betters” on Wall Street.  The lowest extreme of the lumpen proletariat is content with section 8 housing, welfare and Medicaid, and the right not to work.

The new system is not yet so stable as the manorial and feudalist system of the earlier Dark Ages.  The trifurcation of society will see stagnant living standards that may eventually decline.   Medical innovation and then the standards of health care will be reduced, along with declines in the quality of diet, resulting in stagnant or perhaps increasing rates of mortality.

America’s state-controlled media will attribute stagnation and decline  to capitalism or to foreigners.  They will protect the aristocrats of Wall Street, the military-industrial complex and government at all costs.

It remains unclear whether American wages will continue along the current stagnant path of the past 40 years or will begin to decline as the nation’s economy becomes less important on the global scene.  In order to regain a growth position (in real wages) there will need to be considerable upheaval in the American economy.  It seems most likely  that the wealth transfers to Wall Street, the military industrial complex and government will not abate unless there is an overt crisis.

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!