http://campaignforliberty.com

Americans inherit from our ancestors a glorious tradition of freedom and resistance to oppression. Our country has long been admired by the rest of the world for her great example of liberty and prosperity—a light shining in the darkness of tyranny.

But many Americans today are frustrated. The political choices they are offered give them no real choice at all. For all their talk of “change,” neither major political party as presently constituted challenges the status quo in any serious way. Neither treats the Constitution with anything but contempt. Neither offers any kind of change in monetary policy. Neither wants to make the reductions in government that our crushing debt burden demands. Neither talks about bringing American troops home not just from Iraq but from around the world. Our country is going bankrupt, and none of these sensible proposals are even on the table.

This destructive bipartisan consensus has suffocated American political life for many years. Anyone who tries to ask fundamental questions instead of cosmetic ones is ridiculed or ignored.

That is why the Campaign for Liberty was established: to highlight the neglected but common-sense principles we champion and reinsert them into the American political conversation.

The U.S. Constitution is at the heart of what the Campaign for Liberty stands for, since the very least we can demand of our government is fidelity to its own governing document. Claims that our Constitution was meant to be a “living document” that judges may interpret as they please are fraudulent, incompatible with republican government, and without foundation in the constitutional text or the thinking of the Framers. Thomas Jefferson spoke of binding our rulers down from mischief by the chains of the Constitution, and we are proud to follow in his distinguished lineage.

With our Founding Fathers, we also believe in a noninterventionist foreign policy. Inspired by the old Robert Taft wing of the Republican Party, we are convinced that the American people cannot remain free and prosperous with 700 military bases around the world, troops in 130 countries, and a steady diet of war propaganda. Our military overstretch is undermining our national defense and bankrupting our country.

We believe that the free market, reviled by people who do not understand it, is the most just and humane economic system and the greatest engine of prosperity the world has ever known.

We believe with Ludwig von Mises, Henry Hazlitt, and F.A. Hayek that central banking distorts economic decisionmaking and misleads entrepreneurs into making unsound investments. Hayek won the Nobel Prize for showing how central banks’ interference with interest rates sets the stage for economic downturns. And the central bank’s ability to create money out of thin air transfers wealth from the most vulnerable to those with political pull, since it is the latter who receive the new money before the price increases it brings in its wake have yet occurred. For economic and moral reasons, therefore, we join the great twentieth-century economists in opposing the Federal Reserve System, which has reduced the value of the dollar by 95 percent since it began in 1913.

We oppose the dehumanizing assumption that all issues that divide us must be settled at the federal level and forced on every American community, whether by activist judges, a power-hungry executive, or a meddling Congress. We believe in the humane alternative of local self-government, as called for in our Constitution.

We oppose the transfer of American sovereignty to supranational organizations in which the American people possess no elected representatives. Such compromises of our country’s independence run counter to the principles of the American Revolution, which was fought on behalf of self-government and local control. Most of these organizations have a terrible track record even on their own terms: how much poverty have the World Bank and the International Monetary Fund actually alleviated, for example? The peoples of the world can interact with each other just fine in the absence of bureaucratic intermediaries that undermine their sovereignty.

We believe that freedom is an indivisible whole, and that it includes not only economic liberty but civil liberties and privacy rights as well, all of which are historic rights that our civilization has cherished from time immemorial.

Our stances on other issues can be deduced from these general principles.

Our country is ailing. That is the bad news. The good news is that the remedy is so simple and attractive: a return to the principles our Founders taught us. Respect for the Constitution, the rule of law, individual liberty, sound money, and a noninterventionist foreign policy constitute the foundation of the Campaign for Liberty.

Will you join us?

I’m not one for spending much effort attempting to change the system from the top down. It’s mostly a waste of time. The Campaign for Liberty seems to me to be both top down and down up. You need to spend a little effort on those at the top but mostly at the bottom. Coordination and access to information are the most important aspects besides the drive to change things. It appears to me that Paul’s Campaign for Liberty is or will provide that. Even if it’s just to get the updates I recommend joining. The Ron Paul campaign for president helped spark this new movement for peace, prosperity and freedom and I think it’s an opportune time to get on board. The potential is there for real change. Even if only used as an educational tool.

http://online.wsj.com/…

Central banks around the world pumped short-term cash into strained money markets for the second day in a row Tuesday as markets reeled amid a fast-moving crisis that is reshaping the contours of the global financial system.

With interest rates on the overnight loans banks make to one another rising sharply on market unease, European policy makers boosted the amount of funds on offer. The European Central Bank injected €70 billion ($100.17 billion) in one-day funds into euro-zone money markets, more than double its Monday injection of €30 billion. The Bank of England offered £20 billion ($36.05 billion) in extra two-day funds, atop Monday’s £5 billion in extra three-day funds.

The Swiss National Bank also made extra overnight funds available, but a spokesperson declined to say how much. The Bank of Japan injected ¥2.5 trillion ($23.84 billion) into Japanese money markets in two separate operations.

Demand surged as commercial banks scrambled for short-term cash. Bids from 56 financial institutions totaled more than €102 billion in the ECB’s auction, which set the central bank’s policy rate of 4.25% as the minimum bid rate. The Bank of England said bids totaled £58.1 billion, more than triple the £20 billion on offer.

Think of this kind of action as someone kicking the side of a kiddie pool in order to try to counteract the waves created by someone inside it… without being able to see the water’s movement. You don’t have enough information to cancel it out. You’ll just make the water more turbulent.

The best thing the central banks and governments can do is nothing.

http://www.economist.com/…

A LIFELONG libertarian, Alan Greenspan does not ordinarily advocate giving the government more power. But he does so in a new epilogue to the paperback edition of his memoir, parts of which were made available to The Economist. The crisis of the past year has convinced him it is the lesser evil. Better someone else be in charge of bail-outs, he argues, than the Federal Reserve, which he led for 18 years.

Mr Greenspan says a high-level panel of American financial officials should be given broad power to seize any financial institution whose failure threatens the entire economy, bail out its creditors and close it down. “We need laws that specify and limit the conditions for bail-outs” and do so transparently with taxpayers’ money, “rather than circuitously through the central bank, as was done during the blow-up of Bear Stearns,” he writes in “The Age of Turbulence”. (Penguin is to release the paperback on September 9th.)

If that means the government has to wade in, so be it. “Our country has long since abandoned the notion that we should leave crises to be resolved solely by the marketplace,” he says. “The critical need…is to formalise…the procedures improvised in the case of Bear Stearns. This should ensure that in the future, government financial assistance to lending institutions does not impact the Federal Reserve’s balance-sheet and monetary policy.”

He says a standby panel, empowered by Congress, should determine if an institution’s failure is dangerous enough to require taxpayer support. It would then form a vehicle to take the firm into “conservatorship”, wipe out the equity, preferably impose a “haircut” on its debts before guaranteeing them, and then sell its assets. Mr Greenspan’s model is the Resolution Trust Corporation (on whose board he served), created in 1989 to take over failing thrifts, sell their assets, then close itself down. He pours cold water on a proposal by Hank Paulson, America’s treasury secretary, to give the Fed broad responsibility over market stability.

Mr Greenspan’s proposal may be politically difficult. For years Fannie Mae and Freddie Mac, America’s mortgage giants, resisted the creation of a regulator that could close them down. With other large institutions—be they investment banks, hedge funds or insurance companies—there might be even more of a fuss. And the Fed is not yet ready to bow out. “Unless I hear from Congress that I should not be responding to a crisis situation, I think that it’s a long-standing role of the central bank to use its lender-of-last-resort facilities,” Ben Bernanke, Mr Greenspan’s successor at the Fed, said last month.

Just because the man used to hang out with Ayn Rand and was apparently a libertarian Objectivist doesn’t mean he continues to be one. Anyone who advocates aggression is not by definition a libertarian. But what better way to destroy a movement then by redefining the words? Eric Arthur Blair would be proud. It was done at around the turn of the 20th century with ‘liberal.’ In economics ‘inflation’ has been redefined. Now a concerted effort appears to be being made to change the meaning of ‘libertarian.’ People like Glenn Beck and Neil Bortz nationally claim to be libertarians. Advocating government manipulation of the market and money bailouts, immigration control and war with people who pose no threat is NOT libertarian.

http://www.nytimes.com/…

The Federal Reserve said Wednesday that it was extending its emergency borrowing program to Wall Street firms and was taking other steps to ease a tight credit market that has hobbled the national economy.  

The Fed said the program, where investment houses can tap the central bank for a quick source of cash, will be available through Jan 30. Originally the program, started on March 17, was supposed to last until mid-September.

Another program, where investment firms can temporarily swap more risky investments for super-safe Treasury securities also will continue through Jan. 30, the Fed said. And, it also will let commercial banks, in a separate program, be able to bid on cash loans that last longer — for 84 days, besides the 28-day loans now available.

The Fed said it was taking these steps “in light of continued fragile circumstances in financial markets.” The Fed said that the emergency borrowing program for investment houses and the program that lets investment firms temporarily borrow Treasury securities would be withdrawn should the Fed determine that conditions in financial markets are “no longer unusual and exigent.”

Starting Aug. 11, the Fed will give banks the option of bidding on 84-day cash loans from the Fed, besides the 28-day loans now available. Specifically, the Fed will conduct biweekly auctions. They will alternate between making available $75 billion in 28-day loans and $25 billion in 84-day loans. The steps expand a program started in December aimed at helping banks overcome their credit problems so that they can keep lending to customers.

The European Central Bank and the Swiss National Bank have informed the Fed that they also will make available to their banks similar 84-day cash loans. The Fed also increased its credit line with the European bank to $55 billion from $50 billion.

And the market rallies to the beat of their own destruction.

And in other news to rally against: Bush signs law to ‘help’ homeowners, Freddie and Fannie

President George W. Bush signed into law legislation that helps 400,000 homeowners facing foreclosure and extends a lifeline to Fannie Mae and Freddie Mac.

Bush signed the measure at the White House shortly after 7 a.m., spokesman Tony Fratto said. Treasury Secretary Henry Paulson, Housing and Urban Development Secretary Steve Preston and Federal Housing Administration Director Brian Montgomery were among those present.

“We look forward to putting in place new authorities to improve confidence and stability in markets, and to provide better oversight for Fannie Mae and Freddie Mac,” Fratto said.

The law is aimed at stemming foreclosures and halting a free-fall in housing prices by providing federal insurance for refinanced 30-year mortgages for homeowners struggling to make their monthly payments.

The measure also is designed to restore confidence in Fannie Mae and Freddie Mac by tightening regulations and authorizing the Treasury secretary to inject capital into the two biggest U.S. providers of mortgage money.

The Treasury chief, who was the lead lobbyist for the White House, persuaded Bush to back off a threatened veto over a section of the legislation that provides $3.9 billion in grants to states to buy and repair foreclosed properties. Bush said he regarded it as a bailout of lenders. Democrats said it would stabilize neighborhoods.

I think if they want to raise the prices of homes they should scrap this grants for buying and repairing properties and just blow up the homes on them. It’d be cheaper to the tax payers and the increase in scarcity will push up prices. Just like they’ve been doing with farmed products since the Great Depression.

http://www.washingtonpost.com/…

The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.

Since the Reagan years, free-market cliches have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives recognize that capitalism is ailing.

You know the talking points: Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn’t matter. Providing incentives for the investors of capital to “grow the pie” is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is “protectionism.”

The old script is in rewrite. “We are in a worldwide crisis now because of excessive deregulation,” Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, said in an interview.

He noted that in 1999 when Congress replaced the New Deal-era Glass-Steagall Act with a set of looser banking rules, “we let investment banks get into a much wider range of activities without regulation.” This helped create the subprime mortgage mess and the cascading calamity in banking.

While Frank is a liberal, the same cannot be said of Ben Bernanke, the chairman of the Federal Reserve. Yet in a speech on Tuesday, Bernanke sounded like a born-again New Dealer in calling for “a more robust framework for the prudential supervision of investment banks and other large securities dealers.”

Bernanke said the Fed needed more authority to get inside “the structure and workings of financial markets” because “recent experience has clearly illustrated the importance, for the purpose of promoting financial stability, of having detailed information about money markets and the activities of borrowers and lenders in those markets.” Sure sounds like Big Government to me.

This is the third time in 100 years that support for taken-for-granted economic ideas has crumbled. The Great Depression discredited the radical laissez-faire doctrines of the Coolidge era. Stagflation in the 1970s and early ’80s undermined New Deal ideas and called forth a rebirth of radical free-market notions. What’s becoming the Panic of 2008 will mean an end to the latest Capital Rules era.

In the campaign so far, John McCain has been clinging to the old economic orthodoxy while Barack Obama has proposed a modestly more active role for government. But the economic assumptions are changing faster than the rhetoric of the campaign. “Reality has broken in,” says Frank. And none too soon.

Is this a joke?

A Massachusetts liberal writing an article about the failures of capitalism using another Harvard grad, NJ born, Massachusetts representing liberal as a source?

Using the fact that the head of the Federal Reserve, which is about as anti-free market as you can get, wants to increase the organization’s power as evidence that free market conservatives are giving up on the free market? Who said Bernanke is conservative? Who said a central bank was free market?

Using the Great Depression as more evidence of free market failures?

Claiming John McCain is a free market conservative?

I’m just astounded by the amount of steaming feces coming off of this article.

http://www.bloomberg.com/…

Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation’s financial system, said the central bank may extend its emergency-loan program for investment banks into next year.

“The Federal Reserve is strongly committed” to financial stability and is “considering several options, including extending the duration of our facilities for primary dealers beyond year-end,” Bernanke said in a speech to a conference in Arlington, Virginia.

Woot! More inflation!

Bernanke also endorsed proposals to set up a federal liquidation process for a failing investment bank. The Treasury should “take a leading role in any such process” in consultation with regulators, he said. Such a resolution mechanism may help reduce concern that investors and dealers begin counting on Fed aid in case their bets go wrong.

So like enforcing the current bankruptcy laws? I somehow doubt it.

Fed officials are working with the Securities and Exchange Commission and securities dealers “to increase the firms’ capital and liquidity buffers,” Bernanke said.

More inflation!!

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told the same conference that he supported Fed and Treasury proposals for “policies, because of what happened, to take proper action if a large investment bank goes bankrupt.”

Of course he does. He, and the rest of Wall St., directly benefit from this intervention and inflation.

Without any liquidation procedure in place, the Fed in March decided to make a bridge loan to keep Bear Stearns out of bankruptcy. The central bank then agreed to take on $30 billion of hard-to-trade Bear Stearns assets to help secure its takeover by JPMorgan.

“The Federal Reserve in essence bought $30 billion of mortgage product from Bear Stearns; I want to remind people we bought $350 billion,” Dimon said today. “We don’t really think” the deal will end up costing taxpayers money, he also said.

I do. Anyone with a cursory understanding of economics could see that taxpayers will be both directly and indirectly paying for this. The indirect in terms of all the likely new regulations and powers the Fed will get on top of the inflation that will continue to destroy the middle class and poor are likely the greatest costs.

Congress should legislate “consolidated supervision” of investment banks and other big securities firms, with the unspecified regulator having authority over capital, liquidity holdings and risk management, Bernanke also said today.

The Fed should also get “explicit oversight authority” over payment and settlement systems, putting the it on a par with counterparts from around the world, Bernanke said.

U.S. central bankers will already play a part in setting capital cushions at securities firms under an agreement yesterday with the SEC. The two agencies will collaborate in determining “guidelines or rules concerning the capital, liquidity and funding” arrangements of investment banks, the accord said.

Because obviously planned economies have worked so damn well. They function like clockwork everywhere they have greater control. Right Ben?