and just what would you expect from a fellow jew? know the enemy
On Mar 4, 9:14 am, "M. Johnson" <[email protected]> wrote: > David Frum: Hatchet Man for Ben BernankeGary North > March 3, 2010 > David Frum has written an article for CNN, "Ron Paul's money plan is far from > golden." It is an attack on anything resembling a gold coin standard. It is > therefore a defense of central banking in general and the Federal Reserve > System in particular. > Who is David Frum? He is a Canadian immigrant who studied history at Yale and > earned a law degree at the Harvard Law School. He has always earned a living > as a journalist. He has long been employed by the neoconservative movement. > He became a U.S. citizen in 2007. > In 2001, he got a job at the White House as a speech writer. It was Frum who > coined at least part of the phrase, "axis of evil," which identified North > Korea, Iraq, and Iran as the three most dangerous tyrannies of the decade. > George W. Bush used the phrase in his State of the Union Address on January > 29, 2002, his State of the Union Address after 9-11. That speech was part of > his run-up for the Iraq War. > In his book,The Right Man: The Surprising Presidency of George W. Bush, Frum > wrote that the head speech writer had given him the task of inserting a few > words justifying a war on Iraq. He wrote "axis of hatred," but the head > speech writer changed this to "axis of evil." > Frum's wife immediately sent out an email bragging about her husband's > accomplishment, or at least two-thirds of the accomplishment: "axis of." This > story got picked up by theToronto Sunon February 1 -- not surprising, > sinceher father was the editor. > The story spread. On February 27, Frum handed in his resignation. The rumor > mill blamed Bush's anger at having had the most widely quoted phrase in his > speech being attributed to a speech writer, as if anyone would have imagined > otherwise, given Mr. Bush's skills of verbal communication. Frum later said > that he had already given the White House a month's notice, meaningwhile he > was still working on the speech. Whether he expected anyone to believe this > story was a matter between him and his psychiatrist, which I assume he must > have had, if he actually expected anyone to believe this story. > My point here is simple: Frum is a journalist who was briefly a speech writer > for President Bush. For over two decades, he has bounced around inside the > neoconservative movement. At present, he works for the American Enterprise > Institute, which has a lot of money and has lots of Ph.D.- holding economists > on the payroll. He has not written a book on economics, let alone monetary > theory or policy. His books are on politics. > Then why did CNN, which is hardly a neoconservative media outlet, publish his > hatchet piece on Ron Paul? Because he is one of its regular columnists. > Let's see: a conservative (it says here) who is a regular columnist for Ted > Turner's creation. Isn't bipartisanship grand?HATCHET JOB #1Frum has been > swinging his hatchet against Ron Paul ever since he worked for Rudy > Giuliani's campaign for the presidency. According to Wikipedia, he became a > U.S. citizen on September 11, 2007. He joined Giuliani's presidential > campaign staff on October 11, as a senior foreign policy advisor. > On November 7, he wrote hisfirst hatchet job on Ron Paul's economics. > His real motive was politics. He had a truly unique grasp of politics back in > 2007 -- the product of Yale, Harvard Law School, and two decades of close > observation of American politics. He began:Yesterday, I posted an item > casting doubts on the significance of Ron Paul's one-day $4 million > fundraising haul. I suggested that his achievement is comparable to Ralph > Nader's in 2000, and much less impressive than Howard Dean's in 2004. I went > on to suggest that the main effect of Ron Paul's campaign, if continued to > the end, would be to take votes from Hillary Clinton and thus help a > Republican ticket headed by Rudy Giuliani.Eleven weeks later, Giuliani > dropped out of the race. He had entered seven primaries. The best he did was > third place. He received no delegates. Ron Paul eventually received 35. He > and his main supporter also gained a huge email list. > Frum did not have a clue regarding American politics, the Republican Party, > or the utter hopelessness of Rudy Giuliani's dead-on-arrival campaign. > Frum's latest book is Comeback: Conservatism That Can Win Again. I find this > amusing. > His understanding of economics was not as good in 2007 as his understanding > of American politics. > The National Bureau of Economic Research is the arbiter of when American > recessions begin and end. It has determined that the recession -- the worst > since 1937 -- began in December 2007, three weeks after Frum wrote this:As > the dollar buys less abroad, Americans will be constrained to consume fewer > foreign goods and services -- and foreigners will be induced to buy more from > Americans.With luck, this process will occur without a recession. The pace of > domestic economic activity will continue brisk, dollar-denominated incomes > will remain stable or even rise, unemployment may even decline as exports > accelerate. This is what happened in 1985-86, the last time we saw a big drop > in the value of the dollar.Again, he did not have a clue regarding what was > about to happen to the economy.Of course, that's not the only way to balance > accounts. There is another, the way Americans experienced in 1837, 1857, > 1893, and 1930-33. In those years, the value of the dollar was fixed to gold. > (One dollar = 1/20 of an ounce.) If something bad happened in the world or US > economy, the dollar could not adjust. A recession was like a car accident > without bumpers or crumple zones -- the full pain was conveyed uncushioned to > the riders in the cabin. Domestic asset values collapsed. Unemployment jumped > overnight to 15% or 20%. Homes were lost, businesses disappeared.But wait! > This iswhat has happenedin the years since Frum wrote his article. It began > three weeks after he wrote it.In 1896, ironically, the gold standard got > lucky. Bryan lost, McKinley won. Almost immediately after McKinley's > elections, gold miners first in South Africa and then in Australia found huge > new goldfields. America got the inflation it needed without silver, thanks to > a geological accident. From 1896 to 1913, the world economy expanded in what > is known to history as "La Belle Epoque."In fact, the gold standard period > 1879 to 1896 was one of remarkable economic growth -- the greatest in > American history. This is made clear in the book by Milton Friedman and Anna > J. Schwartz, A Monetary History of the United States. Wages fell slightly, > prices fell steadily at a more rapid rate than wages, and output quadrupled. > Per capita income doubled. > As for Ron Paul, Frum dismissed him as a Michael Moore type.Of course I am > saddened to discover that many thousands of Americans have rallied to a > candidate campaigning on a Michael Moore view of the world.Saddened, but not > greatly surprised. There is a constituency for anything in a country this > big.In short, David Frum did not have a clue. > Has he learned anything since 2007? This brings me to hisrecent hatchet job. > HATCHET JOB #2 > Frum began by noting Paul's overwhelming victory at CPAC: the Conservative > Political Action Conference. Paul got 31% of the straw votes for President. > Mitt Romney, who had won for three years in a row, got 22%. From the point of > view of a neocon, this was bad news indeed.CPAC's organizers cautioned > against over-interpreting the Paul win. Participation in the poll had been > light, the Paul team had just out-organized, etc. All true enough.Ron Paul > had once again caught Beltway conservatives by surprise. All they could do > was spin their way around this. With the Web, this no longer works. > Ron Paul is most famous for his bill to audit the Federal Reserve. Frum was > too savvy to mention this. That would identify him as an apologist for the > FED, which is exactly what he is. So, he went after Paul's view of gold as > money. This, all good Beltway conservatives know, is safe. > Or was.So let's rediscover why it was that Americans abandoned the gold > standard in the first place.In 1929, the U.S. economy slumped into recession. > Under the weight of a series of terrible decisions, that recession collapsed > into the worldwide Great Depression.Americans abandoned the gold standard > because Franklin Roosevelt, on his own authority, announced that any American > or resident in America who did not turn in his gold would be prosecuted. If > David Frum is not aware of this, then he spent way too much money and way too > much time getting a masters degree in history at Yale.But why did > decision-makers make so many bad decisions? The short answer is that they > were trapped. Almost all of the right decisions would have ballooned the U.S. > federal budget deficit.Let's see. Which economist became famous for arguing > this way? Was it F. A. Hayek? No. Was it Milton Friedman? No. Was it. . . ? > We all know who it was: John Maynard Keynes. Except for one thing: in 1929, > that was not Keynes' position. It became his position only in 1935, when the > whole world was off the gold standard, inflating like mad, and running > massive deficits. He published in 1936.Between 1929 and 1932, the U.S. money > supply collapsed, as banks failed and bank deposits and commercial credit > vanished. In their classic Monetary History of the United States (1966), > Milton Friedman and Anna Schwartz identified this contraction of the money > supply as the proximate cause of the Great Depression. Why didn't the Federal > Reserve act to prevent the contraction? Again: the gold standard.David, > David, David: at least fake your knowledge of the relevant literature > correctly, will you? The book was published in 1963. > Second, why didn't the FED act to prevent the contraction? It did not > deflate. It just sat. No, it did not buy toxic assets owned by the banks -- > assets that were about to fall in value. No economist believed a central bank > should do this. That was Ben Bernanke's historic innovation in 2008 -- unique > in Federal Reserve history. > The FED did not stay paralyzed. This is known to anyone who has studied FED > policy. It expanded the monetary base from late 1931 through 1933. This is > clear from achartpublished by the Vice President of the Federal Reserve Bank > of St. Louis. > From 1930-1933, 9,000 banks failed, taking deposits with them. There was a > run on the banks. The money supply contracted. This was not the FED's fault. > The government set up the FDIC in 1934. That ended the bank runs. It also > ended the deflation. But the FED had not possessed such authority in 1929-33. > What caused 1929? That, Frum does not bother to ask. Anti-gold economists and > their faithful journalists never do. The world went off the gold standard in > 1914 when World War I broke out. The commercial banks stole their depositors' > gold. Then the central banks stole the commercial banks' gold. They never > gave it back. Then they inflated. > The inflation of the late 1920's created the boom. The boom ended in 1929. > But the anti-gild crew always begin their discussion with 1929. They do not > refer to Murray Rothbard's book, America's Great Depression, also published > in 1963. He showed how the depression was caused by the central bank's > inflation before 1929. Paul Johnson alone used Rothbard's book to write the > section on America's depression in his conservative masterpiece, Modern Times > (1983). Frum does not mention this, either.Imagine now if the gold standard > were in operation today. The federal government would be scrambling to > balance its budget in the midst of recession, cutting spending and raising > taxes. Instead of pumping money into the economy, the Federal Reserve would > be sucking money out. Priority 1 would not be creating and saving jobs, but > preserving the nation's gold hoard.Imagine, rather, that the Federal Reserve > did not exist to bail out large banks, along with Henry Paulson's > unilaterally nationalized mortgage market, with $1.5 trillion in fiat money, > plus T-bill swaps at face value in exchange for toxic assets held by big > banks. > Better yet, imagine that the government owned no gold. Imagine that the > average Joe and Jane possessed gold coins, or IOU's to gold issued by banks > and warehouses. There would be no inflation. There would be no FED to plan > the economy by committee. There would be no -- dare I say it? -- central > economic planning in monetary affairs. > This is not the CNN line. This is not the neoconservative line. This is the > F. A. Hayek line. And, truth be told, it is the Milton Friedman line. As > Austrian School economist Richard Ebelingpoints out,Why wouldn't a > market-based gold standard be feasible or desirable under present > circumstances? Friedman explained his reasoning in an April 1976 lecture > entitled "Has Gold Lost Its Monetary Role?" that was delivered in > Johannesburg, South Africa. Simply put, governments are no longer willing to > be restrained by a gold standard. They want control over money for various > macroeconomic manipulative purposes. However, Friedman said that"if you could > re-establish a world in which government's budget accounted for 10 percent of > the national income, in which laissez-faire reigned, in which governments did > not interfere with economic activities and in which full employment policies > had been relegated to the dustbin, in such a world you might be able to > restore a real gold standard. A real honest-to-God gold standard is not > feasible because there is essentially no government in the world that is > willing to surrender control over its domestic monetary policy."Sadly, the > Ph.D. economists at the American Enterprise Institute are seemingly unaware > of Friedman's rejection of his 1963 position. If they don't know, why should > David Frum know? Or care? > What does Frum know? This: Franklin Roosevelt saved the economy when he took > America off the gold standard. That was the turning point.Back in the 1930s, > governments accepted horrific suffering because they were terrified of the > consequences of going off gold. When President Franklin Roosevelt told his > budget director, Lewis Douglas, of his decision to quit gold, Douglas > replied: "This is the end of Western civilization." He wasn't kidding > either.In fact, the decision was the turning point of the Depression, the > beginning of recovery. And every monetary economist knows it. Which means > that the first thing any future gold-standard government would do in the > event of recession would be to jettison gold. And every market trader knows > that too.This is Frum's message: government coercion and theft work. Make it > illegal for citizens to own gold. Confiscate their gold coins at $20 an > ounce, and, once the government has the stolen goods, raise the price to $35, > which is what Roosevelt did in 1934. Let the government pocket 75% on the > transaction (15/20 = .75). In short, take away from the public the right to > control the money supply and stop inflation. Hand this authority over to the > central bank. > Don't blame government-licensed fractional reserve banking for economic > depressions. Blame the public, who use gold and silver coins to hold bankers > in check. Adopt as your reigning monetary principle these slogans: "Power > from the people! Power to the central bank!" > This is neoconservatism. This is economic liberty, neocon style. This is the > government's gun in your belly: "Hand over your gold. It's for your own good." > Frum is upset that Ron Paul has persuaded so many conservatives that > neoconservative economics is Keynesianism in drag. > This is an argument against a government-imposed, government-guaranteed gold > standard. It is an argument for the system that Ludwig von Mises called for > in 1912: free banking. Get government out of the money business. > That would shrink the state. That is the nightmare scenario for > big-government conservatives like Frum.The punch line to one of my favorite > anecdotes goes, "Son, your answers are so old, I have forgotten the > questions." Has the Depression receded so far into history that the answers > that once plunged the nation into misery can possibly look credible > again?Son, your answers are so old -- and so much the product of Franklin > Roosevelt's hagiographers -- that you have forgotten the question. Here is > the question: "Why should anyone trust the government or a central bank to > protect the value of the currency? > Using the inflation calculator (it's not called the deflation calculator) of > the Bureau of Labor Statistics, we can see what the Federal Reserve System > has done to the dollar. Beginning in 1914, it has eroded 95% of its > value.http://data.bls.gov/cgi-bin/cpivcalc.pl > > CONCLUSION > Let me review. In 2007, Frum wrote this:My correspondents were most irked by > my sardonic suggestion that Ron Paul could enhance his electoral appeal by > concentrating his blame-America foreign policy (for which as Michael Moore > showed, there exists an unfortunately substantial constituency) and dropping > his crank monetary views.Sardonic, indeed. "Sardonic, adjective: > characterized by bitter or scornful derision; mocking; cynical; sneering." He > knew exactly what he was doing. > David Frum is a hatchet man. If he were to spend the rest of his life in > rigorous journalistic training, he might make it to hack status. Maybe. > Note: you have just read a hatchet job. I am very good at this art form. Here > are the steps for writing an effective hatchet job:1. Find a target who is > superficially informed about his subject, but who in fact is ignorant.2. > Ideally, your target will have publicly attacked someone with more knowledge > in this area than he himself possesses.3. Even better, show a long-term > pattern of ignorance in multiple fields in which he lays claim as an > expert.4. If he has published in an Establishment liberal forum, so much the > better: guilt by association (his and theirs).5. Leave the reader with the > impression that your target is a self-assured blowhard.6. Let him reply to > you, which forces him to deal with the terms of debate that you have > established.7. Repeat the exercise if he is silly enough to reply.It takes > one to know one. The difference is, I know what I'm talking about. David Frum > doesn't. > More to the point, Ron Paul knows what he is talking about. David Frum is a > Harvard-educated lawyer who lacked the skills of persuasion suitable for a > lawyer. He chose instead to become a paid hatchet man. He is not very good at > it, but at least it's a living. It pays more than the Toronto Sun. > When you think "David Frum," think "political advisor to Rudy Giuliani." That > is really all you need to know. > If you are still not convinced that Frum is both ill-informed and a hatchet > man, see what Austrian School economists Walter Block and William Barnett II > did to Frum after Frum's first hatchet job on Ron > Paul.http://www.lewrockwell.com/block/block92.html > > But Frum just couldn't stay away. He had to do it again. So, I got my turn. > It is not all that often that someone as clearly a statist inflationist wolf > in conservative clothing as Frum is presents himself for a second go-round. I > am thankful for small favors. > So much education. So few rhetorical > skills.http://www.garynorth.com/public/6180.cfm -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
