Ron Paul receives S.S. benefits even though he believes it’s unconstitutional (VIDEO)

Watch as libertarian Republican Rep. Ron Paul explains how he gladly draws a Social Security check from the government even though he thinks Social Security is unconstitutional (watch at about 1:17 into the video).

What’s even more stunning about Rep. Paul’s admission on Wednesday is that it came only minutes after he called for younger generations to wean themselves off the program during an interview on MSNBC’s “Morning Joe.”

It takes a hell of a lot of chutzpah to do what Rep. Paul did, and hopefully he’ll do what’s most consistent with his ideological beliefs and stop accepting his Social Security checks.

I want to be a fiscal conservative

Because those guys spend money like crazy(on themselves):

Ron Paul, The deficit hawk and republican presidential candidatewho has never seen a spending bill that he liked, UNTIL NOW!

Rep. Ron Paul (R-TX) emerged this week atop a list of congressional representatives who’ve paid family members fees and salaries from their campaign war chests, congressional offices and political action committees, with one ethics advocacy group highlighting him for paying more of his relatives over the last two election cycles than any other member of the House.

The iconoclastic Texas libertarian has been on the campaign trail almost perpetually since his failed run at the Republican presidential nomination in 2008, taking in more than $34 million in the 2011-12 election cycle alone. While he’s already spent most of that, with just $2.5 million on hand as of his last Federal Election Commission (FEC) filing, a total of $304,599 went to six of Paul’s relatives, according to an analysis of public disclosures released Thursday by the Center for Responsibility and Ethics in Washington (CREW).

That dubious distinction means Paul paid more of his family members than any other person in Congress, although other representatives paid fewer relatives even higher dollar amounts.

Ron paul is not alone:

On the list of the highest-paying members, Rep. Alcee Hastings (D-FL) earns the top spot, having shelled out an astonishing $622,674 in the last two election cycles to his girlfriend. He’s followed on CREW’s list by Rep. Jerry Lewis (R-CA), who paid his wife $512,293; Rep. Maxine Waters (D-CA), who paid her daughter and grandson $495,650; and Rep. Buck McKeon (R-CA), who paid his wife $238,438.

Overall, CREW said that a total of 82 House members paid more than $5.5 million to their family members. Even more than that, 90 representatives contributed to family businesses or the employers of family members, sending those entities a total of $3.1 million.

The issue of unusually high payments to family members is not a partisan one, either: CREW said that 40 Democrats and 42 Republicans shelled out for family through their congressional offices, campaign committees and political action committees.

As is typical in the legislature, Republicans break the rules, the dems do it also, meaning there is no watchdog, and the republicans then take this law breaking into a whole new dimension…

Looks to me like they want to shrink government just enough so that they can fit it in their bank accounts….

Ron Paul: Dumber by the Day

I didn’t think it was possible, but Ron Paul is getting dumber.

“There is no such thing as federal money,” Paul said, on CNN’s State of the Union. “Federal money is just what they steal from the states and steal from you and me.”

Wrong and wrong.

The Defects of the Gold Standard and the Ignorance of Ron Paul

This is the best, simplest explanation of the reasons the gold standard is so profoundly broken.  Are you listening, Ron Paul?

In short, there is a really serious problem inherent in any banking system in which the standard is itself a medium of exchange. The very fact that gold is money means that, in any fractional reserve system based on gold, there is an inherent tendency for the system to implode when there is a loss of confidence in bank money that causes a shift in demand from bank money to gold. In principle, what would be most desirable is a system in which the monetary standard is not itself money.  Alternatively, the monetary standard could be an asset whose supply may be increased without limit to meet an increase in demand, an asset like, you guessed it, Federal Reserve notes and reserves. But that very defect is precisely what makes the Ron Pauls of this world think that the gold standard is such a wonderful idea.  And that is a scary — as in terrifying — thought.

Of Tulips and Gold: The Ron Paul Devolution Marches On

Warren Buffett tears into the gold buggery so favored by nuts like Ron Paul.  Mr. Buffett prefers productive to non-productive assets.

The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century.

This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.

The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end. What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while.

Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.

Michigan Seems Like Obama’s Dream

Michigan holds its GOP primary at the end of this month, and if it were held right now it would be Mitt Romney’s nightmare.  Romney, who calls himself a “son of Detroit,” and who went to school at the elite Cranbrook Academy in Bloomfield Hills, Michigan, has is having a tough go in the state where he claimed the auto industry should go bankrupt.  Romney trails Rick Santorum in every Michigan County except Oakland, the county where Cranbrook resides, according to the latest PPP poll.  I suppose Mitt Romney telling Detroit to go bankrupt doesn’t help, even amongst Republicans, but I dare say his doubling down in this OpEd carried in papers all over the state isn’t helping.  As noted here, Romney’s OpEd is just a miserable whine.  Average folks in Michigan can feel the auto industry reviving, and know that Romney wanted to let it fail. 

Oh sure, Rick Santorum is not much better, but he’s not Romney, and on the strength of that sterling quality Rick Santorum is finally surging, in Michigan and nationwide.  Amongst Republicans.  Santorum still loses to Obama by a long shot in head-to-head polling.  The real winner in the GOP pirmaries so far is Obama, and especially in Michigan.  No surprise there.  As CBSNews analysis notes, Rick Santorum is no longer a long shot for the GOP nomination.  Yes, the GOP is getting tired of Romney, AGAIN!  But that isn’t Obama’s dream. 

The real dream here takes note of the fact that Mitt romney still has a TON of cash on hand.  He will use that cash to strike at Santorum, bloodying Little Ricky so badly that Romney might even take Michigan, but surely Romney will be back on track for the nomination soon.  Along the way, and this is the dream here, Mitt Romney will try once again to place himself as the truest and severest of conservatives.  How?  Romney has already come out against contraceptive care in insurance plans, even though contraceptive care is wrong fiscally, as I noted here in regard to Paul Ryan betraying his own fiscal cred.  How much further will Romney go in order to “prove” he’s more severely conservative than Rick Santorum?  

The dream here is that Mitt romney will be forced to go to extremes.  Will he question not just the theory of evolution but also the theory of gravity?  Will he claim that women should head back to the kitchen and should be denied the vote?  Will he argue for shooting illegal immigrants on sight?  Perhaps not, but there’s going to be some severely conservative claims by Mitt Romney (Santorum is raising money of Romney’s clumsy phrasing) in the next couple weeks that are going to make every independent voter int he country cringe, and that’s a nice dream, for Obama.   And it isn’t just Santorum who will push R Money to the extremes.  Ron Paul is doing well in Arisona, which has its primary the same day as Michigans. 

Oh joy!  Is there enough popcorn in the world for this?  There’s an idea. . . Romney should spend his potfulls of campaign cash wisely and send free popcorn to all Americans so they can settle in and watch this disaster.  That would be the first idea he’s had to really help the economy.

Concise Takedown of Gold Buggery

Pushing back on the ongoing derailment of the G.O.P. and the commitment of both Newt Gingrich and Ron Paul have committed to appoint one of Wall Streets best-know gold bugs to chair the Federal Reserve.  This would be a ReallyBadIdea(tm).  Any romantic notion that a return to the gold standard reflects a poor understanding of history.

The pre-Fed era was characterized by frequent episodes such as the Panic of 1857, Panic of 1873, Panic of 1893, Panic of 1896, and Panic of 1907 in which even the safest borrowers would suddenly find themselves needing to pay a very high rate of interest. Those events were associated with significant financial failures and business contraction. After establishment of the Federal Reserve, the U.S. short-term interest rate became much more stable and exhibited none of the sudden spiking behavior that used to be so common.

 

One of the problems with the gold standard is that when the real value of gold changes (as it does all the time) and the dollar price of an ounce of gold is fixed (as it must be by definition under a gold standard), that means dollar prices have to adjust in response to anything that happens to the gold market. With the economic and financial turbulence of the late 1920s and early 1930s, there was a big increase in the relative price of gold.

For example, to get an ounce of gold in 1929, a farmer would need to deliver a little over a hundred pounds of cotton. By 1932, it would take more than three times as much cotton to get that same ounce of gold. Whereas 18 bushels of wheat would be enough to buy an ounce of gold in 1929, you would have needed more than twice as much wheat to get gold in 1932. And since the price of gold in terms of dollars was fixed between 1929 and 1932, that means you’d need to produce about three times as many pounds of cotton or two times as many bushels of wheat in order to earn one dollar in 1932 as you would have needed to earn one dollar in 1929.

Fiat currency gives the Federal Reserve much more flexibility in dealing with financial panics and other financial turbulence than tying the dollar to the arbitrary value of some random metal.  Why would we give up our sovereignty that way?

Democracy: Only a Faint Echo to the GOP

Hamlet, Act 1, Scene 4

Horatio: He waxes desperate with imagination.

Marcellus:Let’s follow. ‘Tis not fit thus to obey him.

Horatio:Have after. To what issue will this come?

Marcellus:Something is rotten in the state of Denmark.

Horatio:Heaven will direct it.

Marcellus: Nay, let’s follow him. [Exeunt.]

Something is rotten in the GOP nominating process.  After tonight’s Maine caucus, the fix is in.

The mainstream media has chosen to ignore it, but there is something really wrong going on in the Republican nominating process.

If this whole situation is reminding anyone of Mitt Romney’s caucus night “win” in Iowa, it should. Just as Rick Santorum won Iowa, it is very possible that Ron Paul won Maine. The Republican establishment is so desperate to get Mitt Romney nominated as soon as possible that they have no qualms about rigging their own elections.

The GOP establishment wanted Mitt Romney to win Maine. They needed Romney to win Maine, so they made sure that Mitt Romney won Maine.

The Republican establishment is rigging their own primary process to get the nominee that they want.

Nobody should be surprised by this.  The GOP’s contempt for democracy is well documented.  Any party with an aggressive campaign of voter disenfranchisement would not balk at rigging their own primary process.  Democracy is not in their creed.  Authority and power are what they’re all about.  The democratic process? Not so much…

I’m reminded of another authoritarian regime…