Wednesday, November 19, 2008
Many of you have contacted us with questions and concerns about the implications of the nation's economic conditions on Focus on the Family’s programs and staff, and I wanted to take this opportunity to thank you for your compassion and your prayers. The reality of our situation is that, after months of prayer, diligently seeking the Lord's will, we have accepted a budget for our 2009 fiscal year that is $22 million less than what we would have carried over from 2008. In addition to several personal meetings, I recently sent an all staff memo, explaining the foundations for this decision. I would like to share the essence of that communication with you, as an extended member of the family.
In order to meet our Board-approved budget for 2009, we have taken a strategic look at every program and activity in the ministry, and made some difficult decisions to help us better focus on our core mission and foundational principles, and steward the resources given sacrificially to us, particularly in the trying financial times in which we're now living. We realize that the results of these decisions include the reduction or elimination of some very good programs, and, most painfully, some positions held by valued team members. Change is never easy, particularly when it requires saying "goodbye" to those in our ministry family. Their service and the dedication of their gifts and hearts to serve the Lord in this place is recognized and deeply appreciated, and we are all grieving together and praying for the Lord's wisdom, discernment, and provision in the days ahead.
We firmly believe the Lord is preparing Focus on the Family for the "thickets of the Jordan" (Jeremiah 12:5), requiring discipline to obediently follow where He is leading. We have applied discipline to the planning process, and, as a result, several programs are being eliminated or significantly modified, and resources have been reallocated from some areas of the ministry to better support others. Underlying these decisions, the executive leadership team is absolutely united in our resolve to continue the ministry's long-standing tradition of meeting people at their point of need with biblically-based content and answers that speak God's truth and love into their lives. We will not compromise our passion to help whoever contacts us with the content they need; we will continue to adjust how we deliver that content in a personal and meaningful way, based on the resources the Lord provides.
We are continuing programs that support the core of our mission, which is marriage, parenting and defense of the family, and eliminating or reducing some distribution channels and outreach efforts, redirecting content to better help couples produce God-honoring marriages and God-honoring children within healthy, thriving families. In no way are these decisions a reflection of the value of the efforts themselves; we acknowledge the hard work and dedication that has been poured into the outstanding content that has been produced, making this process even more difficult.
I want to recognize that behind each of these programs and changes are people, some of whom have stood shoulder-to-shoulder with us for many years, and all of whom have come to Focus on the Family with a passion for the Lord and a desire to serve Him. We honor these people, who have co-labored with us for a time and will continue to serve the Lord in the places He has prepared for them, by showing respect for their service here and protecting their dignity in their leaving. To be specific, 149 staffed positions were eliminated, in addition to 53 unfilled open positions. Please be assured that we are doing everything we can to help in the transition process, and I ask you to join with me in praying for these friends as they seek the Lord's guiding Hand and His protective care during this time.
I also want you to know that the question of timing is one with which we have grappled, both with the Board and within the executive leadership team; in other words, why make these changes now? The fact is that, a month-and-a-half into our new fiscal year, contributions are already significantly behind last year at this time. Given the economy and hardship our donors are facing, if we don't make changes now, we could carry an even greater deficit into the new year. Please hear my heart: making these decisions now, or even making them at all, is not what we want to do, and it is not easy. Our assurance is in knowing that we have followed biblical direction and godly council in asking the Lord for wisdom.
I know we are not the only ones feeling the weight of a significant burden; in fact, I have met with many donors who are also struggling and sharing their heartaches in the midst of reducing their businesses and letting staff go. They express their appreciation that we recognize their pain as well, and are taking steps to look inward and make some hard strategic decisions, rather than simply asking for more resources and placing an even greater burden on them. We know that our financial needs are firmly in the Lord's Hands, and we trust in His provision. Over the last 32 years, our obligation has been to faithfully steward what He provides, and we believe we have chosen a course of action that does that and reflects our commitment to the Board's fundraising guidelines.
We are certainly living in interesting times that could cause us to throw our hands up in despair, but we continue to move forward in the hope of the Gospel, expecting that in this world, we will have trouble. We do not despair; in fact, we take heart because Christ has overcome the world. We may take the time to mourn through the night, but we must then wake with the Morning Star, whose mercies are new for each of us every day. Remember that the reason we labor and persevere is because our hope and faith are in the One who calls us to stand. He has called Focus on the Family to continue to stand, armed with His Word, truth, righteousness, peace, faith, and salvation, with a mission to nurture and defend His institution of the family. I'm standing with the strength only He can provide, and I hope you will continue to stand with me, as we pray for healing and the courage to take the challenge He has placed before us. Thank you for your faithfulness to the Lord and your hearts for His ministry.
Our church, too, grappled with the problem of not receiving the amount of donations as last year and having to significantly reduce our budget. However, this is not the time to short change God, this is the time to step out in faith and continue to give out of our love for our God as we have when the times were good and there was no pain in the giving.
Sunday, October 26, 2008
Saturday, October 25, 2008
I am writing this because I am, for the first time in my life, frightened for my country. Not because of the economic situation, or the radical Islamic terrorists, nor because most of the young people are unaware of what the real issues are or what the candidates actually propose to change if elected.
No, friends, I am really worried about what our Father in Heaven will do if we get this election wrong. We have strayed so far from where we started in relation to the moral foundation of our founding documents that we hardly have a voice strong enough to put out the real message.
We have become a nation that sacrifices our unborn and yes, born to the "god" of selfishness. Of all of the ills this nation is going through, this is, in my estimation the end result of the slippery slope that we embarked upon many, many years ago. When we allowed the removal of the McGuffy readers we started the process to remove God from our education system. If we can remove God from there than we can remove Him from the public square. This was preceded by a "Supreme Court" that got it terribly wrong about "Separation of Church and State". We have allowed a liberal world view to infect the church as well.
But what also worries me is hearing that there are those who won't vote because they might get picked for jury duty. Beside the obvious argument that this line of thinking is so patently selfish and it sets a horribly self centered example for the children that you may have or of friends around you that look up to you. Besides the fact that this line of thinking is so unbelievably selfish because it says that you want all of the benefits of this republic in which we democratically elect our officials yet you don't want to MAYBE have to spend a little bit of YOUR time being a juror. Besides the fact that- those same people don't realize that in getting a driver's license they are put on the list from which prospective jurors are picked.
"I didn't ask to be on a jury--how did they get my name?
Everybody who is asked to serve on a jury gets on that list in the exact same way--by random selection from public lists such as voter rolls and license registrations. The idea is to find a group of jurors who represent a cross-section of the whole community."
But in this election the stakes are higher than any other time in history. This time the vote is for LIFE or MURDER. This time you have one candidate who will be on the side of life for the unborn and select judges for Supreme Court that will uphold the Constitution which will defend our unborn.
The other candidate will do just the opposite. He is for "CHOICE" which translates to abortion which is MURDER no matter what name you chose to call it. He will appoint judges to the Supreme Court who will reflect that same ideology.
So the very worst thing of all is that by not voting these same people will be voting for MURDER because every vote that does not go to the candidate that is for LIFE is the same as voting for the candidate that is for MURDER.
Besides, if you are going to reap the benefits of this system of government, which by all accounts is the best in the world, shouldn't you too invest a small amount of time in its governance? After all, you are responsible, whether you admit it or not, for the condition of the country that you hand over to your children.
Then there are those who won't vote for a candidate because he chose a woman as his running mate. That it is "not Biblical" as women should not be in a position of authority over men.
This argument is one of belief and there is not much of an argument pro or con that can be used when the issue is one of a person's belief.
I would just like to ask those that feel they can't vote for McCain because of Sarah Palin one question. Which is the more serious, more troubling, or of greater value to God?
A. A woman leading the secular government of a nation or,
B. That same nation being led by a man who will not only promote but facilitate the murder of the unborn and the murder of those babies that survive a failed abortion attempt
Are you willing to justify abandoning the weakest among us to the excuse that you "wrote in a candidate" thereby wasting a chance to stop abortion?
I humbly beseech you to carefully weigh this decision because as in all of our decisions, we will have to face God one day and be confronted with them.
Please listen to people like Dr. James Dobson and vote for LIFE.
May God bless each and every one of us and this nation.
Thursday, October 23, 2008
1. One is a 50% reduction in the tax levied on land in excess of 200 acres, except in special circumstances(???????), that you are willing to enter into a covenant(is that like forever as in the biblical sense???????) that will "restrict the use to current use" (is that like in NONE????). It does not say a 50% reduction in this synopsis but you may read the whole proposal HERE
and it is detailed there.
My question is: 1. Why does this need to be a CONSTITUTIONAL amendment?
2. Why do we need the government involved in controlling ever more land?
By the way....there is a bit of smoke and mirrors going on here because the tax savings individuals see can be made up for in other ways.......
The Federal and State governments are already bigger then the founding fathers intended and that is OUR fault. But it does not have to happen that way. I know there are some snake oil salesmen out there that could make this seem like a dream come true, but it is never as it seems if we turn over more and more of our responsibilities to the GOVERNMENT.
2. Authorizes local school districts to use tax funds for community redevelopment purposes.
This is so far out of the reasonableness factor that it almost does not deserve a comment. Schools are for teaching our children not community development. Leave the teaching to the schools and the community development to business. Besides, with as much governmental involvement as there is in our educational system this is just another example of how government is trying to encroach on our lives.
3. The last one is also another example of MORE GOVERNMENT......enough is enough. We are making up departments in government to "provide for the people". Please, spare me more government. We are going to identify underserved areas and "provide for the creation and regulation of infrastructures development districts." Another governmental body that "will be able to impose and collect fees and assessments within each district and to incur debt according to powers and limits set by statute."
I strongly urge a NO vote on each of these amendments.
2008 Constitutional Amendments for the November 4, 2008 General Election
Read below for a summary of the 3 proposed amendments:
Summary of Proposed Constitutional Amendments
Pursuant to requirements of the Georgia Constitution, Secretary of State Karen C. Handel, Attorney General Thurbert E. Baker, and Legislative Counsel Sewell R. Brumby hereby provide the summaries of the proposed constitutional amendments that will appear on the November 4, 2008, General Election ballot for consideration by the people of Georgia:
To encourage the preservation of Georgia's forests through a conservation use property tax reduction program.
House Resolution No. 1276
This proposal directs the General Assembly to provide for a new method of ad valorem tax assessment of forest land conservation use property. Such property will include only tracts of forest land which exceed 200 acres except where the General Assembly has provided by general law for exceptions to the 200 acre limit under certain circumstances. Subject to certain qualifications, an owner of such property will be able to enter into a covenant to restrict the use of the land to current use; and the land will then be taxed according to a formula based on current use, annual productivity, and real property sales data. A breach of the covenant will result in a government recapturing the tax savings and may result in other appropriate penalties.
The General Assembly is directed to appropriate funds to local government to partially offset any loss of local revenue.
The General Assembly has enacted a law to implement this constitutional amendment. This law will become effective only if the constitutional amendment is ratified by the voters. This law is 2008 HB 1211; Act No. 464, found at Ga. Laws 2008, p. 297.
A copy of this entire proposed constitutional amendment is on file in the office of the judge of the probate court and is available for public inspection.
To authorize local school districts to use tax funds for community redevelopment purposes.
Senate Resolution No. 996
This proposal affirms that the General Assembly may authorize counties, municipalities, and housing authorities to carry out community redevelopment.
The proposal also revises the Constitution's provisions relative to redevelopment powers and tax allocation bonds. As revised by the proposed amendment, the current provisions for community redevelopment, after providing for such powers, will contain revised provisions relative to tax allocation bonds. In general, tax allocation bonds are government borrowings which are repaid specifically from future growth in the property tax digest of an area under redevelopment.
Under the proposal a general law will be able to authorize the use of county, municipal, and school tax funds, or any combination thereof, to fund redevelopment purposes and programs, including repayment of tax allocation bonds. The general law may provide for such use of tax funds without regard to whether the local government approved such use before January 1, 2009. No county, municipal, or school tax funds may be used for such purposes and programs without approval by the applicable local governing body.
With respect to school taxes only, such taxes may be used for redevelopment purposes and programs only if: (1) they have been pledged for repayment of tax allocation bonds which have been judicially validated (approved by a court for issuance); or (2) such use is authorized by general law after January 1, 2009.
A copy of this entire proposed amendment is on file in the office of the judge of the probate court and is available for public inspection.
To authorize the creation of special Infrastructure Development Districts providing infrastructure to underserved areas.
Senate Resolution No. 309
This proposal authorizes the General Assembly by general law to provide for the creation and regulation of infrastructure development districts. The purpose of such districts will be for the creation, provision, and expansion of such infrastructure services and facilities as may be provided for by general law.
Counties and municipalities affected by the creation of infrastructure development districts will have the authority to approve creation of such districts. The general law providing for the creation of the districts will provide for the establishment of an administrative or governing body for the districts. Such administrative or governing bodies will be able to impose and collect fees and assessments within each district and to incur debt according to powers and limits set by statute.
The General Assembly has enacted a law to provide for the creation and regulation of infrastructure development districts. This law will become effective only if the constitutional amendment is ratified by the voters. This law is 2007 SB 200; Act No. 372, found at Ga. Laws 2007, p. 739.
Thursday, October 09, 2008
This is from Townhall.com
Wednesday, October 08, 2008
The Obama Debate Every American Should See
by Terence Jeffrey
The most telling debate Barack Obama ever had was not with John McCain but Patrick O'Malley, who served with Obama in the Illinois Senate and engaged Obama in a colloquy every American should read.
The Obama-O'Malley debate was a defining moment for Obama because it dealt with such a fundamental issue: The state's duty to protect the civil rights of the young and disabled.
Some background: Eight years ago, nurse Jill Stanek went public about the "induced-labor abortions" performed at the Illinois hospital where she worked.
Often done on Down syndrome babies, the procedure involved medicating the mother to cause premature labor.
Babies who survived this, Stanek testified in the U.S. Congress, were brought to a soiled linen room and left alone to die without care or comforting.
Then-Illinois state Sen. Patrick O'Malley, whom I interviewed this week, contacted the state attorney general's office to see whether existing laws protected a newborn abortion-survivor's rights as a U.S. citizen. He was told they did not.
So, O'Malley -- a lawyer, veteran lawmaker and colleague of Obama on the Illinois Senate Judiciary Committee -- drafted legislation.
In 2001, he introduced three bills. SB1093 said if a doctor performing an abortion believed there was a likelihood the baby would survive, another physician must be present "to assess the child's viability and provide medical care." SB1094 gave the parents, or a state-appointed guardian, the right to sue to protect the child's rights. SB1095 simply said a baby alive after "complete expulsion or extraction from its mother" would be considered a "'person, 'human being,' 'child' and 'individual.'"
The bills dealt exclusively with born children. "This legislation was about preventing conduct that allowed infanticide to take place in the state of Illinois," O'Malley told me.
The Judiciary Committee approved the bills with Obama in opposition. On March 31, 2001, they came up on the Illinois senate floor. Only one member spoke against them: Obama.
"Nobody else said anything," O'Malley recalls. The official transcript validates this.
"Sen. O'Malley," Obama said near the beginning of the discussion, "the testimony during the committee indicated that one of the key concerns was -- is that there was a method of abortion, an induced abortion, where the -- the fetus or child, as -- as some might describe it, is still temporarily alive outside the womb."
Obama made three crucial concessions here: the legislation was about 1) a human being, who was 2) "alive" and 3) "outside the womb."
He also used an odd redundancy: "temporarily alive." Is there another type of human?
"And one of the concerns that came out in the testimony was the fact that they were not being properly cared for during that brief period of time that they were still living," Obama continued.
Here he made another crucial concession: The intention of the legislation was to make sure that 1) a human being, 2) alive and 3) outside the womb was 4) "properly cared for."
"Is that correct?" Obama asked O'Malley.
O'Malley tightened the logical knot. "(T)his bill suggests that appropriate steps be taken to treat that baby as a -- a citizen of the United States and afforded all the rights and protections it deserves under the Constitution of the United States," said O'Malley.
But to these specific temporarily-alive-outside-the-womb-human beings -- to these children who had survived a botched abortion, whose hearts were beating, whose muscles were moving, whose lungs were heaving -- to these specific children of God, Obama was not willing to concede any constitutional rights at all.
To explain his position, Obama came up with yet another term to describe the human being who would be protected by O'Malley's bills. The abortion survivor became a "pre-viable fetus."
By definition, however, a born baby cannot be a "fetus." Merriam-Webster Online defines "fetus" as an "unborn or unhatched vertebrate" or "a developing human from usually two months after conception to birth." Obama had already conceded these human beings were "alive outside the womb."
"No. 1," said Obama, "whenever we define a pre-viable fetus as a person that is protected by the equal protection clause or other elements of the Constitution, what we're really saying is, in fact, that they are persons that are entitled to the kinds of protections that would be provided to a -- a child, a nine-month-old -- child that was delivered to term."
Yes. In other words, a baby born alive at 37 weeks is just as much a human "person" as a baby born alive at 22 weeks.
Obama, however, saw a problem with calling abortion survivors "persons." "I mean, it -- it would essentially bar abortions," said Obama, "because the equal protection clause does not allow somebody to kill a child, and if this is a child, then this would be an antiabortion statute."
For Obama, whether or not a temporarily-alive-outside-the-womb little girl is a "person" entitled to constitutional rights is not determined by her humanity, her age or even her place in space relative to her mother's uterus. It is determined by a whether a doctor has been trying to kill her.
I would not have known most of these gaffs......sorry, out and out fabrications, had it not been for Anne's research into the facts. The sad truth is that she only picked out the most "hallucinatory" of the bunch. Thank you very much Anne for highlighting the fabrications and distortions.
I think the most important thing to remember when in the voting booth is, on the one hand, you are voting for life and on the other, you are voting for murder. If change is the goal, then life is a change that is precious beyond compare.
Pull the Hair Plug on This Guy
by Ann Coulter
If Sarah Palin had made just one of the wildly inaccurate statements smugly uttered by Sen. Joe Biden in last week's vice presidential debate, there would have been 3-inch headlines in newspapers across America. (I can almost hear Katie Couric asking me, "Which newspapers?")
These weren't insignificant errors, such as when Biden said, "Look, all you have to do is go down Union Street with me in Wilmington or go to Katie's restaurant or walk into Home Depot with me where I spend a lot of time, and you ask anybody in there whether or not the economic and foreign policy of this administration has made them better off in the last eight years."
It turns out that Katie's restaurant, where Biden gets his feel for the average American, closed 20 years ago. The only evidence that he spends any time in Home Depot is that it appears that a pipe wrench fell on his head one too many times.
Palin would surely have been forced to withdraw from the ticket had she said something like that, but most of Biden's errors were not trifling mistakes like these. They were lengthy Lyndon LaRouche-like disquisitions that were pure fantasy from beginning to end.
For example, Biden said about Hezbollah: "When we kicked -- along with France -- we kicked Hezbollah out of Lebanon." Hezbollah was never kicked out of Lebanon.
He continued: "I said and Barack said, 'Move NATO forces in there. Fill the vacuum, because if you don't, Hezbollah will control it.'" This is madness -- Lebanon is not a NATO country, nor had any NATO country been attacked by Lebanon.
Somebody please tell me that Biden wasn't picked for the Democrat ticket based on his knowledge of foreign policy.
Biden also stoutly denied that Obama ever said he would sit down with Iranian President Mahmoud Ahmadinejad. Liberals find it hilarious that McCain can't use a computer keyboard on account of his war injuries, but Biden is apparently unaware of the Internet, because there are clips all over the Internet of Obama saying exactly that during the CNN/YouTube debate last year.
Biden might have remembered that debate since: (1) He was there, and (2) he later attacked Obama's answer, telling the National Press Club in August 2007: "Would I make a blanket commitment to meet unconditionally with the leaders of each of those countries within the first year I was elected president? Absolutely, positively, no."
And that's still not all! Obama's own Web site says: "Obama supports tough, direct presidential diplomacy with Iran without preconditions."
Somebody please tell me that Biden wasn't picked for the Democrat ticket based on his ability to remember well-known facts.
Biden also gave a long speech at the debate on vice president Dick Cheney's "dangerous" belief that "he's part of the legislative branch." The great constitutional scholar Biden cited Article I of the Constitution as proof that Cheney "works in the executive branch" and has "no authority relative to the Congress." Biden huffily added: "He should understand that.
Everyone should understand that."
Palin would have had to deny that Alaska is a state in the union in order to say something comparably stupid.
Article II, not I, describes the executive branch. Someone tell Biden, who is supposed to be a lawyer. Apart from getting the Articles of the Constitution mixed up, what on earth does
Biden mean when he says that the vice president "has no authority relative to Congress," apart from breaking ties?
The Constitution makes him president of the senate every day of the week. I realize that Biden may not be able to count to two, but Article I says the vice president is president of one of the two houses of Congress -- the one Biden is in, for crying out loud -- which is what you might call "authority relative to Congress."
Somebody please tell me that Biden wasn't picked for the Democrat ticket based on his knowledge of the Constitution.
In one especially hallucinatory answer, Biden authoritatively stated: "With Afghanistan, facts matter, Gwen. ... We spend more money in three weeks on combat in Iraq than we spent on the entirety of the last seven years that we have been in Afghanistan building that country."
According to the Congressional Research Service, since 9/11, we've spent $172 billion in Afghanistan and $653 billion in Iraq. The most money spent in Iraq came in 2008, when we have been spending less than $3 billion a week. So by Biden's calculations, we've spent only about $9 billion "on the entirety of the last seven years that we have been in Afghanistan building that country." There isn't even a "9" in $172 billion.
Somebody please tell me that Biden wasn't picked for the Democrat ticket based on his knowledge of math.
In the same answer, Biden went on to claim that "John McCain voted against a comprehensive nuclear test ban treaty that every Republican has supported."
The last nuclear test ban treaty the Senate voted on was the one Clinton signed in the '90s. As The New York Times editorialized on the Senate vote a few years later: "Last week, Senate Republicans thundered 'no' to the nuclear test ban treaty, handing the White House its biggest defeat since health care in 1994." Forty-nine Republicans voted against the treaty; only four liberal Republicans voted for it. That's the treaty Biden says "every Republican has supported."
Somebody please tell me that Biden wasn't picked for the Democrat ticket based on his ability to function as vice president.
Wednesday, October 08, 2008
HON. RON PAUL OF TEXAS
Before the U.S. House of Representatives
February 15, 2006
The End of Dollar Hegemony
A hundred years ago it was called “dollar diplomacy.” After World War II, and especially after the fall of the Soviet Union in 1989, that policy evolved into “dollar hegemony.” But after all these many years of great success, our dollar dominance is coming to an end.
It has been said, rightly, that he who holds the gold makes the rules. In earlier times it was readily accepted that fair and honest trade required an exchange for something of real value.
First it was simply barter of goods. Then it was discovered that gold held a universal attraction, and was a convenient substitute for more cumbersome barter transactions. Not only did gold facilitate exchange of goods and services, it served as a store of value for those who wanted to save for a rainy day.
Though money developed naturally in the marketplace, as governments grew in power they assumed monopoly control over money. Sometimes governments succeeded in guaranteeing the quality and purity of gold, but in time governments learned to outspend their revenues. New or higher taxes always incurred the disapproval of the people, so it wasn’t long before Kings and Caesars learned how to inflate their currencies by reducing the amount of gold in each coin-- always hoping their subjects wouldn’t discover the fraud. But the people always did, and they strenuously objected.
This helped pressure leaders to seek more gold by conquering other nations. The people became accustomed to living beyond their means, and enjoyed the circuses and bread. Financing extravagances by conquering foreign lands seemed a logical alternative to working harder and producing more. Besides, conquering nations not only brought home gold, they brought home slaves as well. Taxing the people in conquered territories also provided an incentive to build empires. This system of government worked well for a while, but the moral decline of the people led to an unwillingness to produce for themselves. There was a limit to the number of countries that could be sacked for their wealth, and this always brought empires to an end. When gold no longer could be obtained, their military might crumbled. In those days those who held the gold truly wrote the rules and lived well.
That general rule has held fast throughout the ages. When gold was used, and the rules protected honest commerce, productive nations thrived. Whenever wealthy nations-- those with powerful armies and gold-- strived only for empire and easy fortunes to support welfare at home, those nations failed.
Today the principles are the same, but the process is quite different. Gold no longer is the currency of the realm; paper is. The truth now is: “He who prints the money makes the rules”-- at least for the time being. Although gold is not used, the goals are the same: compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses.
Since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency. The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people-- just as was the case when gold was the currency and it was obtained by conquering other nations. And this destroys the incentive to save and produce, while encouraging debt and runaway welfare.
The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases personal responsibility for one’s actions is rejected.
When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules-- rules no longer written by those who ran the now defunct printing press.
“Dollar Diplomacy,” a policy instituted by William Howard Taft and his Secretary of State Philander C. Knox, was designed to enhance U.S. commercial investments in Latin America and the Far East. McKinley concocted a war against Spain in 1898, and (Teddy) Roosevelt’s corollary to the Monroe Doctrine preceded Taft’s aggressive approach to using the U.S. dollar and diplomatic influence to secure U.S. investments abroad. This earned the popular title of “Dollar Diplomacy.” The significance of Roosevelt’s change was that our intervention now could be justified by the mere “appearance” that a country of interest to us was politically or fiscally vulnerable to European control. Not only did we claim a right, but even an official U.S. government “obligation” to protect our commercial interests from Europeans.
This new policy came on the heels of the “gunboat” diplomacy of the late 19th century, and it meant we could buy influence before resorting to the threat of force. By the time the
“dollar diplomacy” of William Howard Taft was clearly articulated, the seeds of American empire were planted. And they were destined to grow in the fertile political soil of a country that lost its love and respect for the republic bequeathed to us by the authors of the Constitution. And indeed they did. It wasn’t too long before dollar “diplomacy” became dollar "hegemony” in the second half of the 20th century.
This transition only could have occurred with a dramatic change in monetary policy and the nature of the dollar itself.
Congress created the Federal Reserve System in 1913. Between then and 1971 the principle of sound money was systematically undermined. Between 1913 and 1971, the Federal Reserve found it much easier to expand the money supply at will for financing war or manipulating the economy with little resistance from Congress-- while benefiting the special interests that influence government.
Dollar dominance got a huge boost after World War II. We were spared the destruction that so many other nations suffered, and our coffers were filled with the world’s gold. But the world chose not to return to the discipline of the gold standard, and the politicians applauded. Printing money to pay the bills was a lot more popular than taxing or restraining unnecessary spending. In spite of the short-term benefits, imbalances were institutionalized for decades to come.
The 1944 Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, replacing the British pound. Due to our political and military muscle, and because we had a huge amount of physical gold, the world readily accepted our dollar (defined as 1/35th of an ounce of gold) as the world’s reserve currency. The dollar was said to be “as good as
gold,” and convertible to all foreign central banks at that rate. For American citizens, however, it remained illegal to own. This was a gold-exchange standard that from inception was doomed to fail.
The U.S. did exactly what many predicted she would do. She printed more dollars for which there was no gold backing. But the world was content to accept those dollars for more than 25 years with little question-- until the French and others in the late 1960s demanded we fulfill our promise to pay one ounce of gold for each $35 they delivered to the U.S. Treasury. This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard.
It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets.
Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency with no restraints placed on it-- not even a pretense of gold convertibility, none whatsoever! Though the new policy was even more deeply flawed, it nevertheless opened the door for dollar hegemony to spread.
Realizing the world was embarking on something new and mind boggling, elite money managers, with especially strong support from U.S. authorities, struck an agreement with OPEC to price oil in U.S. dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence “backed” the dollar with oil. In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup. This arrangement helped ignite the radical Islamic movement among those who resented our influence in the region. The arrangement gave the dollar artificial strength, with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as dollar influence flourished.
This post-Bretton Woods system was much more fragile than the system that existed between 1945 and 1971. Though the dollar/oil arrangement was helpful, it was not nearly as stable as the pseudo gold standard under Bretton Woods. It certainly was less stable than the gold standard of the late 19th century.
During the 1970s the dollar nearly collapsed, as oil prices surged and gold skyrocketed to $800 an ounce. By 1979 interest rates of 21% were required to rescue the system. The pressure on the dollar in the 1970s, in spite of the benefits accrued to it, reflected reckless budget deficits and monetary inflation during the 1960s. The markets were not fooled by
LBJ’s claim that we could afford both “guns and butter.”
Once again the dollar was rescued, and this ushered in the age of true dollar hegemony lasting from the early 1980s to the present. With tremendous cooperation coming from the central banks and international commercial banks, the dollar was accepted as if it were gold.
Fed Chair Alan Greenspan, on several occasions before the House Banking Committee, answered my challenges to him about his previously held favorable views on gold by claiming that he and other central bankers had gotten paper money-- i.e. the dollar system-- to respond as if it were gold. Each time I strongly disagreed, and pointed out that if they had achieved such a feat they would have defied centuries of economic history regarding the need for money to be something of real value. He smugly and confidently concurred with this.
In recent years central banks and various financial institutions, all with vested interests in maintaining a workable fiat dollar standard, were not secretive about selling and loaning large amounts of gold to the market even while decreasing gold prices raised serious questions about the wisdom of such a policy. They never admitted to gold price fixing, but the evidence is abundant that they believed if the gold price fell it would convey a sense of confidence to the market, confidence that they indeed had achieved amazing success in turning paper into gold.
Increasing gold prices historically are viewed as an indicator of distrust in paper currency. This recent effort was not a whole lot different than the U.S. Treasury selling gold at $35 an ounce in the 1960s, in an attempt to convince the world the dollar was sound and as good as gold. Even during the Depression, one of Roosevelt’s first acts was to remove free market gold pricing as an indication of a flawed monetary system by making it illegal for American citizens to own gold. Economic law eventually limited that effort, as it did in the early 1970s when our Treasury and the IMF tried to fix the price of gold by dumping tons into the market to dampen the enthusiasm of those seeking a safe haven for a falling dollar after gold ownership was re-legalized.
Once again the effort between 1980 and 2000 to fool the market as to the true value of the dollar proved unsuccessful. In the past 5 years the dollar has been devalued in terms of gold by more than 50%. You just can’t fool all the people all the time, even with the power of the mighty printing press and money creating system of the Federal Reserve.
Even with all the shortcomings of the fiat monetary system, dollar influence thrived. The results seemed beneficial, but gross distortions built into the system remained. And true to form, Washington politicians are only too anxious to solve the problems cropping up with window dressing, while failing to understand and deal with the underlying flawed policy.
Protectionism, fixing exchange rates, punitive tariffs, politically motivated sanctions, corporate subsidies, international trade management, price controls, interest rate and wage controls, super-nationalist sentiments, threats of force, and even war are resorted to—all to solve the problems artificially created by deeply flawed monetary and economic systems.
In the short run, the issuer of a fiat reserve currency can accrue great economic benefits. In the long run, it poses a threat to the country issuing the world currency. In this case that’s the United States. As long as foreign countries take our dollars in return for real goods, we come out ahead. This is a benefit many in Congress fail to recognize, as they bash China for maintaining a positive trade balance with us. But this leads to a loss of manufacturing jobs to overseas markets, as we become more dependent on others and less self-sufficient. Foreign countries accumulate our dollars due to their high savings rates, and graciously loan them back to us at low interest rates to finance our excessive consumption.
It sounds like a great deal for everyone, except the time will come when our dollars-- due to their depreciation-- will be received less enthusiastically or even be rejected by foreign countries. That could create a whole new ballgame and force us to pay a price for living beyond our means and our production. The shift in sentiment regarding the dollar has already started, but the worst is yet to come.
The agreement with OPEC in the 1970s to price oil in dollars has provided tremendous artificial strength to the dollar as the preeminent reserve currency. This has created a universal demand for the dollar, and soaks up the huge number of new dollars generated each year. Last year alone M3 increased over $700 billion.
The artificial demand for our dollar, along with our military might, places us in the unique position to “rule” the world without productive work or savings, and without limits on consumer spending or deficits. The problem is, it can’t last.
Price inflation is raising its ugly head, and the NASDAQ bubble-- generated by easy money-- has burst. The housing bubble likewise created is deflating. Gold prices have doubled, and federal spending is out of sight with zero political will to rein it in. The trade deficit last year was over $728 billion. A $2 trillion war is raging, and plans are being laid to expand the war into Iran and possibly Syria. The only restraining force will be the world’s rejection of the dollar. It’s bound to come and create conditions worse than 1979-1980, which required 21% interest rates to correct. But everything possible will be done to protect the dollar in the meantime. We have a shared interest with those who hold our dollars to keep the whole charade going.
Greenspan, in his first speech after leaving the Fed, said that gold prices were up because of concern about terrorism, and not because of monetary concerns or because he created too many dollars during his tenure. Gold has to be discredited and the dollar propped up. Even when the dollar comes under serious attack by market forces, the central banks and the IMF surely will do everything conceivable to soak up the dollars in hope of restoring stability. Eventually they will fail.
Most importantly, the dollar/oil relationship has to be maintained to keep the dollar as a preeminent currency. Any attack on this relationship will be forcefully challenged—as it already has been.
In November 2000 Saddam Hussein demanded Euros for his oil. His arrogance was a threat to the dollar; his lack of any military might was never a threat. At the first cabinet meeting with the new administration in 2001, as reported by Treasury Secretary Paul O’Neill, the major topic was how we would get rid of Saddam Hussein-- though there was no evidence whatsoever he posed a threat to us. This deep concern for Saddam Hussein surprised and shocked O’Neill.
It now is common knowledge that the immediate reaction of the administration after 9/11 revolved around how they could connect Saddam Hussein to the attacks, to justify an invasion and overthrow of his government. Even with no evidence of any connection to 9/11, or evidence of weapons of mass destruction, public and congressional support was generated through distortions and flat out misrepresentation of the facts to justify overthrowing Saddam Hussein.
There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling oil in Euros. Many believe this was the real reason for our obsession with Iraq. I doubt it was the only reason, but it may well have played a significant role in our motivation to wage war. Within a very short period after the military victory, all Iraqi oil sales were carried out in dollars. The Euro was abandoned.
In 2001, Venezuela’s ambassador to Russia spoke of Venezuela switching to the Euro for all their oil sales. Within a year there was a coup attempt against Chavez, reportedly with assistance from our CIA.
After these attempts to nudge the Euro toward replacing the dollar as the world’s reserve currency were met with resistance, the sharp fall of the dollar against the Euro was reversed. These events may well have played a significant role in maintaining dollar dominance.
It’s become clear the U.S. administration was sympathetic to those who plotted the overthrow of Chavez, and was embarrassed by its failure. The fact that Chavez was democratically elected had little influence on which side we supported.
Now, a new attempt is being made against the petrodollar system. Iran, another member of the “axis of evil,” has announced her plans to initiate an oil bourse in March of this year.
Guess what, the oil sales will be priced Euros, not dollars.
Most Americans forget how our policies have systematically and needlessly antagonized the Iranians over the years. In 1953 the CIA helped overthrow a democratically elected president, Mohammed Mossadeqh, and install the authoritarian Shah, who was friendly to the U.S. The Iranians were still fuming over this when the hostages were seized in 1979. Our alliance with Saddam Hussein in his invasion of Iran in the early 1980s did not help matters, and obviously did not do much for our relationship with Saddam Hussein. The administration announcement in 2001 that Iran was part of the axis of evil didn’t do much to improve the diplomatic relationship between our two countries. Recent threats over nuclear power, while ignoring the fact that they are surrounded by countries with nuclear weapons, doesn’t seem to register with those who continue to provoke Iran. With what most Muslims perceive as our war against Islam, and this recent history, there’s little wonder why Iran might choose to harm America by undermining the dollar. Iran, like Iraq, has zero capability to attack us.
But that didn’t stop us from turning Saddam Hussein into a modern day Hitler ready to take over the world. Now Iran, especially since she’s made plans for pricing oil in Euros, has been on the receiving end of a propaganda war not unlike that waged against Iraq before our invasion.
It’s not likely that maintaining dollar supremacy was the only motivating factor for the war against Iraq, nor for agitating against Iran. Though the real reasons for going to war are complex, we now know the reasons given before the war started, like the presence of weapons of mass destruction and Saddam Hussein’s connection to 9/11, were false. The dollar’s importance is obvious, but this does not diminish the influence of the distinct plans laid out years ago by the neo-conservatives to remake the Middle East. Israel’s influence, as well as that of the Christian Zionists, likewise played a role in prosecuting this war. Protecting “our” oil supplies has influenced our Middle East policy for decades.
But the truth is that paying the bills for this aggressive intervention is impossible the old fashioned way, with more taxes, more savings, and more production by the American people. Much of the expense of the Persian Gulf War in 1991 was shouldered by many of our willing allies. That’s not so today. Now, more than ever, the dollar hegemony-- it’s dominance as the world reserve currency-- is required to finance our huge war expenditures. This $2 trillion never-ending war must be paid for, one way or another. Dollar hegemony provides the vehicle to do just that.
For the most part the true victims aren’t aware of how they pay the bills. The license to create money out of thin air allows the bills to be paid through price inflation. American citizens, as well as average citizens of Japan, China, and other countries suffer from price inflation, which represents the “tax” that pays the bills for our military adventures. That is until the fraud is discovered, and the foreign producers decide not to take dollars nor hold them very long in payment for their goods. Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it. If oil markets replace dollars with Euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.
It is an unbelievable benefit to us to import valuable goods and export depreciating dollars. The exporting countries have become addicted to our purchases for their economic growth. This dependency makes them allies in continuing the fraud, and their participation keeps the dollar’s value artificially high. If this system were workable long term, American citizens would never have to work again. We too could enjoy “bread and circuses” just as the Romans did, but their gold finally ran out and the inability of Rome to continue to plunder conquered nations brought an end to her empire.
The same thing will happen to us if we don’t change our ways. Though we don’t occupy foreign countries to directly plunder, we nevertheless have spread our troops across 130 nations of the world. Our intense effort to spread our power in the oil-rich Middle East is not a coincidence. But unlike the old days, we don’t declare direct ownership of the natural resources-- we just insist that we can buy what we want and pay for it with our paper money. Any country that challenges our authority does so at great risk.
Once again Congress has bought into the war propaganda against Iran, just as it did against Iraq. Arguments are now made for attacking Iran economically, and militarily if necessary. These arguments are all based on the same false reasons given for the ill-fated and costly occupation of Iraq.
Our whole economic system depends on continuing the current monetary arrangement, which means recycling the dollar is crucial. Currently, we borrow over $700 billion every year from our gracious benefactors, who work hard and take our paper for their goods. Then we borrow all the money we need to secure the empire (DOD budget $450 billion) plus more. The military might we enjoy becomes the “backing” of our currency. There are no other countries that can challenge our military superiority, and therefore they have little choice but to accept the dollars we declare are today’s “gold.” This is why countries that challenge the system-- like Iraq, Iran and Venezuela-- become targets of our plans for regime change.
Ironically, dollar superiority depends on our strong military, and our strong military depends on the dollar. As long as foreign recipients take our dollars for real goods and are willing to finance our extravagant consumption and militarism, the status quo will continue regardless of how huge our foreign debt and current account deficit become.
But real threats come from our political adversaries who are incapable of confronting us militarily, yet are not bashful about confronting us economically. That’s why we see the new challenge from Iran being taken so seriously. The urgent arguments about Iran posing a military threat to the security of the United States are no more plausible than the false charges levied against Iraq. Yet there is no effort to resist this march to confrontation by those who grandstand for political reasons against the Iraq war.
It seems that the people and Congress are easily persuaded by the jingoism of the preemptive war promoters. It’s only after the cost in human life and dollars are tallied up that the people object to unwise militarism.
The strange thing is that the failure in Iraq is now apparent to a large majority of American people, yet they and Congress are acquiescing to the call for a needless and dangerous confrontation with Iran.
But then again, our failure to find Osama bin Laden and destroy his network did not dissuade us from taking on the Iraqis in a war totally unrelated to 9/11.
Concern for pricing oil only in dollars helps explain our willingness to drop everything and teach Saddam Hussein a lesson for his defiance in demanding Euros for oil.
And once again there’s this urgent call for sanctions and threats of force against Iran at the precise time Iran is opening a new oil exchange with all transactions in Euros.
Using force to compel people to accept money without real value can only work in the short run. It ultimately leads to economic dislocation, both domestic and international, and always ends with a price to be paid.
The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or Euros. The sooner the better.