GCN Opinion

Spem Et Mutatio
Recent Congressional Legislation Has Americans Asking, What Is Happening To My Country?  The Answer Is The President Is Merely Fulfilling His Campaign Pledge To Fundamentally Change America.

Part 1 of 2

By:  Perry Hicks - Special to GCN   6/29/15
 

In Latin, Hope & Change has an ugly sound, far removed from the smooth honey-tongued promises offered by candidate Obama to his adoring masses.  It was also vague.  Whose hope? What change?  However, those words did get him elected, and after seven years, it is becoming clear that future historians will view Barack Hussein Obama as the most significant president since FDR.  By comparison, Ronald Reagan would be just a fleeting success.

 

This acknowledgement should not be taken as an approbation.   President Obama is deceitful as his own brother has recently opined.  He is also shown himself to be venal and utterly void of any allegiance to the US Constitution, a document patriotic Americans hold sacred.  The president considers the Constitution to be deeply flawed by the limitations imposed by its "negative" rights, also known as the enumerated powers that restrict what the government can do.

 

Barack doesn't like to be restricted, though.  He once was caught boasting to French President Francois Hollande, "That's a good thing about being president, I can do whatever I want."  He said that in of all places, Monticello, the home of Thomas Jefferson.

 

While Reagan succeeded in simultaneously pulling America out of the funk that was the “Carter Recession” and growing the revenue by cutting taxes, The Gipper left nothing behind that couldn't be undone in just a few short years.  He was not unlike another "important" but undone President, Woodrow Wilson.

 

It was Franklin Delano Roosevelt that, aided as it were by the Great Depression, bulldozed through Congress the New Deal legislation that has had lasting effects to this very day.  During the 1930s, the New Deal fundamentally changed our nation by addicting much of America, including its corporations, to the heroin-like highs of governmental largess.  Uncle Sam came to be irreverently known as Uncle Sugar.

 

When conservatives bellowed that none of FDR's schemes were part of the enumerated powers, the president simply forged ahead anyway, threatening to "pack" the Supreme Court with extra justices if the existing nine decided to rule against him.

 

Tradition and original intent meant nothing to FDR.  It was all about imposing his imperial will on the country.

 

The result was that the so-called "greatest generation," those that weathered ten years of the Great Depression followed by the hardships imposed by World War II, were lulled,  seduced if you will, into thinking government could provide it all for all.

 

It never occurred to them that the excesses of the New Deal could have actually prolonged the Depression.  Corporations didn't complain, though, because the very policies intended to save big business, such as halting the meaningful enforcement of the the Sherman Anti-Trust Act, also allowed them to get exponentially larger and thus more powerful.

 

Presidents ignoring the law and doing what they damn well please sounds familiar today, doesn't it? 

 

Regardless of the Democrat's derision of the rich, it is the 1% of top earners who have made more money under President Obama than any other president in American history. 

 

Unlike their experience with President Obama, under FDR the little guy was not ignored.  Subsidies could insulate farmers from the vagaries of weather and markets.  Americans could traverse their nation on magnificent new Federal highways, and enjoy a government pension on the backs of the yet unborn.  The phrase, "I'm from the government and I'm here to help you" was not then considered some kind of joke.

 

Moreover, it kept getting better year after year.  By the 1960s, Government could not only put a satellite into space, but actually send a man to the moon and return him safely to earth.  It was government that was both the initial developer and purchaser of multimillion dollar computers and jet aircraft engines whose manufacture soon migrated to ever growing corporations.

 

It was government that was seemingly building the literal world of tomorrow, and middle class America's standard of living rose with it to be the highest of any nation on earth.

 

However, had anyone cared to have one of the new mainframe computers “do the math” as we would say today, they would have realized that the numbers did not, and could not, add up.  Taxes could not remain artificially low while the government leviathan   exponentially grew to wrap its tentacles around every facet of American life.

 

There had to be a source of funding to make all of those government goodies possible.  That source is called deficit spending, otherwise known in everyday parlance as debt.

 

Prior to FDR, heavy government borrowing was reserved only for emergencies, typically war, as it raises the cost of money on the free market as fewer dollars are available for private sector use.  The Government's solution to the problem was to supply the market with ever greater quantities of currency- what the government would today term "quantitative easing-"which is nothing more than creating money out of thin air.

 

The consequences of printing large quantities of fiat money, that is money backed by nothing but the public's faith, or lack thereof, in government causes inflation: During times of rampant inflation, it takes more money today to buy the very same thing that could have been bought yesterday cheaper.

 

FDR was able to avoid serious inflation because of depression induced deflation and the government's  direct  manipulation of the gold market.  At that time, the value of the dollar was $35 to an ounce of gold.  As the treasury approached that statutory limit, FDR issued Executive Order 6102 criminalizing private “hoarding” of gold, gold coin, gold bullion, and gold certificates.

 

The executive order was a clever trick to circumvent Congress's codified monetary policy by abuse of the Trading with the Enemy Act of 1917 as amended by Congress in 1933 to include the hoarding of gold in times of any national emergency.  The Treasury not being able to further borrow money was certainly viewed by FDR to be an emergency.

 

The circumvention was that if the public could not own quantities of gold, then the various gold backed government issued instruments could not be redeemed making the statutory requirement to back dollars with gold moot.

 

After the war, runaway inflation was further forestalled for about twenty-five years because America was the sole beneficiary of the post war Bretton Woods (global) Monetary System.

 

This new world order came about as a recognition that the United Kingdom was utterly exhausted and could no longer shoulder the weight of providing the world's reserve- that is, commercial trading- currency.  Its global empire was collapsing, its industry, at one time the envy of the world, was heavily damaged by German bombing, and was otherwise woefully lagging behind the American's advancements in manufacturing technology spurred on by the war effort.

 

Far from being fatigued, the US was actually invigorated by the war:  America possessed eighty percent of the (then) known oil reserves; its industry, lauded as the arsenal of freedom, was humming at maximum capacity; our merchant marine rode the seas supreme, protected by a military that singularly could project power anywhere in the world, and do so as the sole possessor of the atomic bomb.

 

At that time, the United States also held over half of the world's gold reserves.  The system fixed the dollar at $35 per ounce and many other currencies were pegged to the dollar, with every foreign held dollar redeemable in gold.

 

Having the world's dominant currency gave America an enormous competitive advantage.  It took only pennies to print a one hundred dollar bill but the world had to provide fully one hundred dollars worth of material goods or services in exchange to get one.  As manufacturing declined, the dollar became America's number one export.

 

As nearly every nation on earth was trying to rebuild out of the rubble of WW II, there was initially a strong and growing demand for both the US dollar and the US goods that dollar would buy.  American democracy was stable and strong, its industry mighty, and its modernized agriculture made the US a net food exporter.

 

America was then a lender, not a debtor, and was able to produce nearly everything it needed for domestic consumption and still export to the rest of the world.  No one dared to seriously challenge its military, as it had simultaneously defeated three Axis powers.

 

However, that was then and this is now.  The newest of new world orders is witnessing a fading United States which is increasingly unable to provide leadership and regional stability to any of its allies anywhere in an ever more dangerous world.

 

The American decline began with the generational shift from those who thought it imperative that America decisively win its wars, to those who had no compunction for extending a conflict out for decades with absolutely no intention of realizing victory.

 

Korea was not only intentionally fought to a stalemate, the one general willing to do what needed to be done to win, Douglas MacArthur,was relieved of his command rather than allow him to prevail.

 

After Korea, America's political elite shamefully sacrificed a minimum of 58,272 American lives, and destroyed countless others, over the course of the twenty year Vietnam War.

 

Technically, neither conflict was actually a war declared by Congress.  They were instead termed “police actions,” and therefore losing one did not change America's war fighting record.

 

The seminal way-marker along this path of decline occurred in 1971 with what historians have labeled the “Nixon Shock.”

 

As the foreign post war industrial output rose in challenge the US, the foreign demand for dollars also began to decline, resulting in enough excess dollars existing to ignite inflation.  By 1965, the French, fed up with what they derided as “America's exorbitant privilege,” began, as did others, in exercising Bretton Wood's currency for gold exchange provisions.  Foreign central banks soon came to hold more gold than did the US Treasury.

 

As inflation flared, the declining industrial output was also pushing up unemployment.  By Spring 1971, Germany lost confidence in the system and exited, which was soon seen as an aid to its economy. Switzerland followed shortly thereafter.

 

Before summer was out, Nixon was forced to effectively end Bretton Woods by unilaterally taking the United States off the gold standard.  All dollars were now pegged to absolutely nothing and the world was awash in them.  A combination of economic decline and inflation ensued, aptly nicknamed “stagflation.”  The value of goods were uncoupled from demand.  As people bought less, the cost of what they did buy rose.

 

Fast forward to today.  The situation has arguably eroded.  Since 1976, the US has sustained year after year of net trade deficits with the world's principle industrial powers.  Manufacturing in 2014 accounted for only about 12.0% of the US total GDP.  The North American Free Trade Agreement of 1994 has devastated both the manufacturing sector in the US, and the agricultural sector in Mexico, stimulating immigrant flight to the United States.

 

Today, America's enemies hold such massive numbers of US dollars, they could take down the national economy if they just dumped them all at once.  As these enemies have come to produce most everything their domestic economy needs, and do so far cheaper than  we can here, there is little they can buy from America beyond America itself.

 

Distressingly, there is no effort by the Congress to change the nation's economic direction. Indeed, there has been concerted efforts to do the opposite, such as passing the highly secret Fast Track trade legislation that some have called NAFTA on steroids.

 

In Part 2, we will survey the range of policies continuing to act as a drag on the US economy, and hasten President Obama's promised fundamental change, a calamity the far Left has long hoped would be wrought on America.

 



Additional Information:

 

About the Author.....

 

Perry Hicks is the senior writer and Washington correspondent for GCN. He is a former Mississippi Coast resident and was a correspondent for the old Gulfport Star Journal. He has appeared on Fox News Channel. Perry has also hosted his own radio talk show on the auto industry with a mix of politics. Perry is a frequent contributor to GCN writing on stories of national importance with local interests. His articles can be found in the GCN Archive.

 

Contact the Author: bsalightning650@live.com



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