Tuesday, August 23, 2005

Fiat Money, Deficit spending, and Invasions

[Editor's note: I originally wrote this as an email to the normal blog writer and his wacky band of hopelessly liberal family/friends, prompted by reading a recent Ron Paul essay which I will link at the bottom. Just so you don't think the guy who wrote "Freedom will Set you Free" fell off the flag-waving Bush-voting bandwagon, we are two different people who normally agree 94.9% of the time. The writer asked me to post this here, so this is not an attempt to steal his glory - although I do think this is an attempt on his part to justify a further delay in writing more posts.]

This is not as exciting as global warming or Cindy Sheehan or Karl Rove, but consider this:

1) Currently oil is traded in US dollars, tying our currency to the major world commodity. Quote:

"Oil can be bought from OPEC only if you have dollars. Non-oil producing countries, such as most underdeveloped countries and Japan, first have to sell their goods to earn dollars with which they can purchase oil. If they cannot earn enough dollars, then they have to borrow dollars from the WB/IMF, which have to be paid back, with interest, in dollars. This creates a great demand for dollars outside the U.S. In contrast, the U.S. only has to print dollar bills in exchange for goods. Even for its own oil imports, the U.S. can print dollar bills without exporting or selling its goods. For instance, in 2003 the current U.S. account deficit and external debt has been running at more than $500 billion. Put in simple terms, the U.S. will receive $500 billion more in goods and services from other countries than it will provide them. The imported goods are paid by printing dollar bills, i.e., "fiat" dollars."

2) In 2000, Iraq (with the approval of the UN) switched to trading its oil in Euros. At the time it was seen as a political statement that would cost Iraq revenue (as the Euro was valued at .82 cents on the dollar). However, since 2000 the dollar has declined in value vs the Euro and the move actually made Iraq wealthier. Well, until it was invaded.

3) The move by Iraq, and threatened move to the Euro by other oil-producing countries, is a threat to the dominance of the US dollar:

"If OPEC oil could be sold in other currencies, e.g. the euro, then U.S. economic dominance-dollar imperialism or hegemony-would be seriously challenged. More and more oil importing countries would acquire the euro as their "reserve," its value would increase, and a larger amount of trade would be transacted and denominated in euros. In such circumstances, the value of the dollar would most likely go down, some speculate between 20-40 percent."

4) Now with that in mind, read Ron Paul's essay below. The simplistic argument that the Iraq war was over oil was laughed off by those who tried to spin this as a moral war vs. those who hate us because we are free. And while that probably plays a part, it doesn't make sense when looking at the big picture (why Iraq, why does Bush hold hands with Saudi kings, etc). In most things "follow the money" seems the right way to look. This turns the argument back to Iraq invasion being about oil, but does so in a way that to me makes the most sense of all. The US government, unable to consider fiscally responsible spending which would stop the devaluation of the dollar and shut down the Federal Reserve printing presses from trying to make something from nothing, has to look to other more violent and oppressive means of maintaining it's position - including giving a major threat to any other oil-producing country to not move to the Euro. Iraq made the perfect target (history of animosity, former ally, 2nd largest oil reserve, first to make Euro jump), getting rid of a little thorn in their side (Saddam) while also getting rid of a major thorn (Euro-backed oil) and sending a strong message to other nations. This allows them to parade the 'spread of democracy' and the removal of a rights-violating tyrant, while at the same time stopping something that was a greater threat to the US dollar. It's probably just a matter of time, since China is also moving to a mixed reserve currency (dollar and euro), and we can't invade every nation on Earth. The next time you complain about gas prices realize the rest of the world pays about $5/gallon - and if/when the Euro becomes the dominant currency, we will too.

5) All is not lost however, although a depression in the US will be very painful - a devalued dollar means our exported goods will be cheaper, which would be a boon to many industries - if the government doesn't panic and institute more regulations to strangle them. Fingers crossed.

More info:

http://www.theglobalist.com/DBWeb/StoryId.aspx?StoryId=3193
http://archives.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut/

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Ron Paul essay - Borrowing, Spending, and Counterfeiting

Tuesday, August 09, 2005

Judging the Supreme Court

"The chair yields the floor to the Senator from Blogsphere, you have three minutes to question the President's Supreme Court nominee." The lights are blinding, the cameras are rolling, the flash bulbs are popping (hey - they used to actually make a popping noise). What would I ask? Well, if I were a real politician, that would be easy. I'd say what ever made me look the best to whatever constituency I was courting at the moment. But I have self-respect, I have morals, I'm not a politician.

So what questions would I ask of a Supreme Court nominee? That in itself is a very good question. To begin with, I would have done my homework beforehand and learned just what the heck authority it is that I would be either voting for or against this nominee to posses. So lets begin with the US Constitution. Or to be more specific, Article III; the Judiciary:

"Section 1. The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish."

Simple enough, there will be a Supreme Court, and it will be the court of the United States of America. Congress can also create, and remove, other lower courts as they see fit. That would be the federal court system, the patent courts, and any other court that gets its money from Congress (but I'm assuming that doesn't include Military tribunals. The military is a world unto itself). What comes next I find remarkable, as well as an indication of the intelligence and insight to the founding fathers:

"The judges, both of the supreme and inferior courts, shall hold their offices during good behavior, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office."

Those magnificent bastards! They could envision some 230 years ago what ass wipes would come to inhabit the halls of Congress! Congress may not like what the courts are doing, but one thing Congress can't do is starve them into submission. (Well, technically they can by not funding the court system, but they can't bring down the judges. Chalk one up for checks and balances!)

Section 2 is where the real meat is, the scope of the authority of the Supreme Court. Now, being a product of the public school system, I assumed I knew everything there was to know about the Supreme Court from history class. First off they're the highest court in the land, check. They determine whether a law is constitutional or not, check. Their authority mostly comes from "Marbury v. Madison", a supreme court case heard at the beginning of the 1800's that nobody today bothers to learn about anymore, check. FDR had some trouble with them passing the New Deal, but he showed them, check. Everything I needed to know. Guess again.

"Section 2. The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority;--to all cases affecting ambassadors, other public ministers and consuls;--to all cases of admiralty and maritime jurisdiction;--to controversies to which the United States shall be a party;--to controversies between two or more states;--between a state and citizens of another state;--between citizens of different states;--between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens or subjects."

There's a lot to take in there, so I decided to break it down in to a easier format.

Section 2.
The judicial power shall extend to
all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority;
--to all cases affecting ambassadors, other public ministers and consuls;
--to all cases of admiralty and maritime jurisdiction;
--to controversies to which the United States shall be a party;
--to controversies between two or more states;
--between a state and citizens of another state;
--between citizens of different states;
--between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens or subjects.

Now that's an eye opener, but still pretty simple. Being an avid fan of politics (its more exciting than watching 'blue-bellied-sap-suckers'), I've been told over and over by GOPers that the Supreme Court really has no jurisdiction. Perhaps Rush Limbaugh should read the constitution. It gives them some real meat. They have jurisdiction on any cases that arise from the constitution, from laws made under the authority of the constitution, federal officials, and any treaties passed by the senate and the president. They have final say on claims by US citizens on the high seas (arrrg matey). They have jurisdiction over claims between states and between states and people of different states. Short, sweet, to the point. I like it. Now keep in mind the Tenth Amendment:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."

To me, this says that unless the Constitution specifically grants authority to the federal government to do something, then they are prohibited from touching it. So that means not only is this a list of what the Supreme court can do, more importantly it shows in great detail what the Supreme Court can not do - everything else. There is one item on it that peaks my curiosity:

"--to controversies to which the United States shall be a party;"

Notice it doesn't say cases, as do the first three entries on the list. So what exactly is meant by "controversies"? I'm not sure, I'm not a lawyer. I suppose it could mean the Supreme Court has the authority to decided the difference between a case and controversy that involves the United States, that is weather or not it is worthy to be called a case. It also sounds to me like an option towards an open ended authority that's strangely lacking in most of the rest of the document.

Section 3 is pretty limited in scope, it deals with treason, and I like it (the writing, not treason), mostly because its simple and straight forward with the subject matter. The theft of freedom and rights comes from the dark murky parts. The clear and concise parts are beautiful.

"Section 3. Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court."

"The Congress shall have power to declare the punishment of treason, but no attainder of treason shall work corruption of blood, or forfeiture except during the life of the person attainted."

Defines what treason specifically is, states one can not be convicted on the testimony of a single person, unless its a confession. And you can't find relatives guilty of anything ("corruption of blood"). Also you can't punish them by taking property away from their families in the future. Once again, clear and concise.

(Author's note: There has been way too much blood spilled between the author and the editor on addressing Section 3. As the author, this intrigues me because Benedict Arnold was fresh in the minds of the founding fathers. Here's what they considered the minimum requirements for stringing him up - and that they didn't think it appropriate to destroy the entire Arnold family to get even. It shows off one of America's greatest accomplishments, the sins of the father are not the sins of the son.)

[Editor's note: As intriguing as a discussion of treason may be, one can't help but wonder how a digression on it holds any relevance to the Supreme Court and its nomination process. Perhaps the author could be convinced to write a separate essay involving treason, Benedict Arnold, and - if he drinks while writing it - an overuse of the word 'freedom'. ]

There's a tad more about the supreme court in a few places, such as detailing the Senate confirmation, but for our purposes, this is plenty. We know what the Supreme Court is. We know what they are allowed to do - and thereby, what they aren't allowed to do.

....the press, the rest of the judicial committee is waiting, CNN camera guy is pointing at his watch. What would questions would I ask? I think I would have just two.

(Bypassing all the formal opening salutations and ass-kissing that accompanies monumental conferences from the self promoting class)

"What can you do to assure me that you would not allow your personal positions, on issues that may come up before you on the high court, to influence your interpretation of the considerable limits placed on federal authority by the constitution of the federal government?"

(Translation: Tell me you'll do what the constitution says you have to do, regardless of how immoral you may find it.)

Assuming that doesn't require month long recess to answer, and I still have some time left...

"Can you point to any experience in your career that would indicate you hold the previous stated beliefs?*"

(Translation: Prove it!)

(Author's note: Once again, there was much wailing and gnashing of teeth over this last one with the editor. He thought it a cheap shot question, as lower courts are held to precedents handed down by higher courts. Should the nominee point this out, I would reassure them that I realize and understand that point. Part of being a good judge is to follow the rules. And I grant him that lower courts are somewhat ham-strung at what they can do based upon precedents and high court rulings.)

[Editor's note: My second question would be: "In 300 words or less, describe your feelings toward the recent SC rulings on Kelo and Rauch"...see how much more topical, clear and not needing of clarification it is? It's good to be the editor and have the last say.]