I went to see IOUSA yesterday. Given that we’re in the midst of an economic train-wreck it was a bit dispiriting to see a carefully plotted dissection of the REAL mess that is just up around the bend.

The end of the “investment era” hit me the other day as well when I read this from Gary North:

In the first week of February 1966, the Dow Jones Industrial Average went over 1,000 intra-day and closed at 996. Over the next 16 years, the price index increased by just under three times. See the Bureau of Labor Statistics, Inflation Calculator:

http://GaryNorth.com/snip/706.htm

The Dow fell by over 200 points, to 777. The combined loss was a staggering 80%.

Let’s bring this up to date. The Dow closed on November 20 at 7,552. Prices have increased since 1966 by a factor of 6.7 to one. The Dow is 7.5 times higher than in 1966. Taxes aside and dividends aside and commissions aside (there were no no-load funds in 1966), your investment of $1,000 in 1966 would have reaped a profit of $6,500. But prices are 6.7 times higher.

You would be behind.

That is what an investor, age 23 in 1966, would have to show for his faith in the U.S. stock market. He is now 65.

So much for the “buy an index fund of U.S. stocks and hold until retirement.”

What retirement?

Though I suspect North’s numbers focus on a peak at one end and a trough at the other it nevertheless demonstrates the power of inflation.

We’ll soon find out all about inflation if the Fed and Treasury keep pumping liquidity into the market. On top of the $700 billion bailout passed by Congress, and the coming “stimulus” from the Obamaites, a new $800 billion dollar lending program was announced a few days ago. Here is the first terrifying paragraph from the NY Times reporting: “The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they would print as much money as needed to revive the nation’s crippled banking system.”

Given our current plight I’d hoped the local muliplex would be swarming with folks heading to watch IOUSA. As it turned out a friend and I were the only viewers. I guess everyone else was watching “Bolt”, “Twilight” or the latest James Bond flick. Well I guess we get what we deserve. Sooner or later we will have to pay for our sins of covetousness.

But as public service you can watch a 30-minute version here. Enjoy, or perhaps weep.

The late Samuel T. Francis once lamented that Americans don’t have two ideologically distinct parties. Rather we have an evil party (the “liberals”) and a stupid party (the “conservatives”). Occasionally there is a synthesis of evil and stupidity. This is otherwise known as “bipartisanship”.

To see the confluence of evil and stupidity at work, check out these remarks by Senate Majority Leader Harry Reid in an interview with the Detroit Free Press:

Q: With more Democrats in the Senate and the House and a Democrat in the White House, how do you see congressional efforts playing out on such issues as health care and immigration?

A: On immigration, there’s been an agreement between (President-elect Barack) Obama and (Arizona Republican Sen. John) McCain to move forward on that. … We’ll do that. We have to get this economy stuff figured out first, so I think we’ll have a shot at doing something on health care in the next Congress for sure.

Q: Will there be as much of a fight on immigration as last time?

A: We’ve got McCain and we’ve got a few others. I don’t expect much of a fight at all. Now health care is going to be difficult. That’s a very complicated issue. We debated at great length immigration. People understand the issues very well. We have not debated health care, so that’s going to take a lot more time to do

Reid practically promises that health care will go nowhere, ironic given that it was a centerpiece of the Obama campaign. But perhaps we will get mass amnesty, a real crowd pleaser supported only by cheap labor whores at the Business Roundtable, professional mulitculturalist ambulance chasers and Democrat operatives who see amnesty as a means of registering millions of new voters dependent on the state.

Conservatives are in bad shape. In the mid-1970’s the Democrats had a tighter hold on Congress but the GOP had a charismatic spokesman in Ronald Reagan and a host of issues moving in their direction, particularly the tax question which became a staple of Republican campaigns for twenty-five years.

The tax issue has lost its salience but no well-spoken and serious Republican has discussed immigration since the Buchanan campaigns of the 1990’s. If wayward members of the Stupid Party team up with the Left to pass “comprehensive immigration reform”, i.e., the legalization of lawlessness, some enterprising politician will have an issue which divides Democrats and could serve as a springboard to bigger and better things.

Marrying immigration restriction to an aggressive trade policy and America First foreign policy has the potential to create a populist backlash which if properly controlled could threaten the neocon/neolib apple cart.

Scripture is clear that Christians have certain obligations to the civil magistrate.  Their office and authority are to be honored. “Show proper respect to everyone: Love the brotherhood of believers, fear God, honor the king” says St. Peter.

Second, we must pay our taxes (Rom. 13:6-7, Mt. 22:15-21) and obey their legitimate and lawful commands (Rom. 13:5, Titus 3:1).  Finally we are to pray for our civil leadership.  “I urge, then, first of all, that requests, prayers, intercession and thanksgiving be made for everyone– for kings and all those in authority, that we may live peaceful and quiet lives in all godliness and holiness” (I Tim. 2:1-2)

Over at Baptist Press, Curt Iles writes that he learned to pray for presidents and other earthly political leaders from his grandfather:

My maternal grandfather, Sidney Plott, taught me to pray for our president. In all of my years of memory — from President Dwight Eisenhower to the end of George H.W. Bush’s term — he always prayed for the president. At every meal, he sincerely asked God’s blessings and guidance on “Our President.” It didn’t matter who occupied the White House, “Grandpa Sid” believed Scripture mandated prayer and respect (Romans 13:1), and he faithfully prayed it until the very day of his death.

Yet this text like Romans 13 has been distorted.  Here Paul is commanding believers to intercede on behalf of Caesar.  It is Christians who are a royal priesthood crying out to God on behalf of The Man.  In the Roman era intercession was a royal prerogative.  In short the claim made by Christians was seen as sedition in the eyes of Rome.

Moreover, Paul’s intent is not that we pray “Bless the president, congress, governor, and EEOC flunky.”  It is typically the case that magistrates need an understanding of justice, which necessitates a right view of man, sin and God.  In short, rather than some nebulous “blessing” they may very well need conversion or even judgment.

Richard Land has written a column criticizing gay marriage advocates who are petitioning the California Supreme Court to overturn Proposition 8, which amended the state constitution to define marriage.

Land rests his argument on the alleged sovereignty of the people and even goes on to quote that great sage, St. Abraham. You know that whole “of the people, by the people, for the people” stuff. Here is a snippet of the essay:

A majority of Californians have exercised that right and have amended their constitution to define marriage with great specificity and precision as being only between a man and a woman — no same-sex marriage and no polygamy. If the California Supreme Court were now to attempt to nullify what the people have chosen to do through an expression of their sovereign will, they will have attempted to usurp the sovereignty of government ‘of the people, by the people and for the people’ and to replace it with government ‘of the judges, by the judges and for the judges.

If the California Supreme Court does not acknowledge its obligation to submit its collective judgment to a constitutional amendment passed by the people, then the democratic freedom reserved to the sovereignty of the people will have perished in California.”

But what is sovereignty? According to Webster’s it is the “supreme power especially over a body politic.” The word itself derives from the Latin super, meaning “above.” Thus, the sovereign is one who is above all. Land is saying that the voice of the people is the highest authority. But ultimately the sovereign source of the law is the god of a nation. Vox populi vox deus, Dr. Land?

In a democracy people believe that supreme power comes through the people and is incarnated in the state. But sovereignty in fact belongs only to God and is delegated to man, who is given authority in various spheres. A Christian social order knows nothing of ultimate human sovereignty and the word itself is conspicuously missing from our founding documents. In Christendom the state is but one form of “government” among many. Indeed government should primarily mean self-government under God. Likewise the family, school, church and various associations are free to govern themselves.

The effect of “popular sovereignty” is the undermining of all these mediating institutions between the individual and the state. When power is centralized in “the people” the power and legitimate authority of the family and church are undermined. The result is that a democratic state ultimately wars on institutions and demands uniformity. As a consequence, other entities such as businesses increase in size and scope leading to the further centralizing of other spheres as men seek to protect themselves from the state. Tocqueville puts it this way: “As private persons become more powerless by becoming more equal, they can effect nothing in manufactures without combination: but the government naturally seeks to place these combinations under its control.”

We shouldn’t oppose gay marriage because the people say so, for they may not be saying so for long. It is God who through His Word gives meaning and definition to all of life. It is He who is sovereign. And His Word defines marriage as a union between a man and woman (Genesis 2:24; Malachi 2:15; Matthew 19:5) for the mutual support of husband and wife, to yield the gift of children and spread the dominion of his kingdom (Genesis 2:18; Genesis 1:28). Hence gay marriage is unnatural and a misnomer whatever the whims of “the people” or black-robed tyrants.

I just finished Amity Shlaes “Forgotten Man.” If you only have time for one book on the Depression I would recommend Jim Powell’s “FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression.” Still Shlaes book is quite good and comes to many of the same conclusions, even if she is far more gentle and circumspect in reaching them than Powell.

On Roosevelt and the New Deal Shlaes notes

1.) His and its irregularity and inconsistency

Roosevelt was all over the place on the exchange rate and the value of the dollar in relation to gold.

This suppressed the Markets because the one thing that Markets need is some kind of constancy on which to plan and anticipate. Capital will not flow to where it is unsure of what the rules are on potential return.

2.) His and its meanness and willingness to destroy people to succeed

Roosevelt went after such luminaries as Samuel Insull and Andrew Mellon as well as commoners like the Schechter Brothers.  Mellon was unsuccessfuly prosecuted because he didn’t pay taxes he didn’t owe. Insull was unsuccessfully prosecuted for stock fraud. Both were being pursued in a manner where they were being proscecuted for violating laws that weren’t laws when they did what they did. Both were proscecuted in order to give legitimacy to the New Deal as it sought to create class envy. The charges were completely political and contrived in order to detract attention from the Roosevelt administrations failures.

In the Schechter case New Deal Feds sought to destroy the Schecter brothers because they wouldn’t follow the NRA rules for pricing. Most of the people who lived through that time are dead and Americans don’t realize how heavy handed and jack booted the NRA (Blue Eagle) program was. The Schechter’s lost all the way until they reached the SCOTUS, but the SCOTUS turned back the NRA as the Schechter’s chicken business defeated the Feds Blue Eagle.

Similarly, Shlaes tells the story of Roosevelt’s attempt to pack the Supreme court all because the Supreme court wouldn’t bend to Roosevelt’s socialist will. Roosevelt acolytes published books tarnishing the reputation of the justices.

3.) His and its roots in communism

Shlaes goes out of her way to communicate that significant members of Roosevelt’s brain trust were infatuated with the Soviet model. Several of them in their youth had visited the Soviet Union and had met high ranking communist officials. Shlaes contends that they weren’t communists in the classical Soviet sense but they were beholden to collectivist concepts.

4.) His and its vote buying

The whole New Deal was simply about passing out government largesse in order to buy votes in order to build a constituency. It was the time in history when people finally realized they could vote themselves enrichment at other people’s expense. Roosevelt’s legislation on the Wagner act was bascially a wealth transfer from business to unions and created a Union voting block that still swings Democrat. Rooselvelt’s attention to Farmers with legislation providing vast subsidies to farmers put farmers in the Democrat camp. Roosevelt combined in this coalition the black vote. Roosevelt and the New Deal mastered the art of being elected on the basis of group interests. The New Deal was nothing but Machine politics at the Federal level.

5.) His and its waste in time of poverty

Shlaes tells the well known stories of the Roosevelt administration slaughtering six million pigs without sending them to market simply for the sake of keeping prices artificially high for farmers and of plowing under millions of acres of crops for the same reason.

Shlaes tells the story of the TVA doing a good job of reminding the reader that the success of the TVA was at the expence of private utilities. She could have done better at reminding the reader of the price the rest of America paid in order that TVA could sell cheap electricity. (It does come out but it is done rather slyly.) The Government with an almost inexhaustible supply of money from taxpayers became a competitor to private utilities.

Similarly Shlaes tells the story of the failure of other of Roosevelt’s “ABC” legislation.

Shlaes delights us with a chapter committed to telling the story of the National Art Gallery. She may have done so in order to remind American’s of the great soul of Anderw Mellon who was pilloried by the Roosevelt administration. The National Art Gallery was a gift of Mellon to the American Public. It was completely paid for out of his donation. Shlaes take is that Mellon did this in order to communicate that the real advantage to the American public was not to be found in Government programs but rather in private philanthropy. This chapter is worth the price of Shlaes book. It made me want to run out and book a flight to Washington in order to see Mellon’s bequest.

Shlaes spends a good deal of time telling us the story and life of Rex Tugwell (one of Roosevelt’s brain trust) Wendell Wilkie (the Democrat who ran as a Republican against Roosevelt in 1940), Andrew Mellon, Samuel Insull and of other forgotten characters who were affected by or were part of the New Deal.

In light of the election results I think there are some things that we need to be realistic about.

1.) First, the pollsters were not correct. Except for the IBD-Tipp poll which called the final total at 2.9% the pollsters were overwhelmingly wrong. Remember that the RCP average ended with a 7.4% spread between Obama and McCain. Without all the votes fully counted the spread between McCain and Obama stands at 3%.

2.) I think we have to admit that the country may stay as left as it went tonight for quite some time. I say this for three reasons.

(a.) Hispanics voted overwhelmingly for Obama and Democrats. This is significant because given the amnesty for illegal aliens that Democrats will shove through this will anchor the country in its newly minted left tilt as more and more Hispanics will become voting citizens.

(b.) We must remember that one way FDR established 36 years of overwhelming Democratic control (1932-1968) was to make large enough constituencies beholden to the Federal government through his and (its) sundry socialist give away programs. Obama and the Democrats will certainly try to recreate that kind of program and that kind of legislation that will, in effect, create financial incentive for people to vote Democrat.

(c.) Look for a resurgence of Unions and unionism. Unions have traditionally been Democratic voting constituencies and the talk of creating laws that will make it substantially easier to unionize will build a Democratic constituency in the middle class.

The implication of all this is that the Republican party will have to move left in order to avoid oblivion. The movement of the Republican party to the left will be similar to Republican dime store new dealism that arose in the context of the success of the New Deal.

3.) We need to realize that though Obama won convincingly in electoral terms that we can not call this a landslide due the tightness of the popular vote. This is important in order to deflect the inevitable mandate language that we are bound to hear.

4.) The neo-cons destroyed the Republican party. Their influence in the Bush administration produced the compassionate conservatism that grew the size of the state in ways that Lyndon Johnson could have only dreamed of. Their influence in the Bush administration set America on Empire building that alienated millions of Americans.

5.) A silver lining in this may be that Obama will bear the guilt for the serious economic downturn that is 6 months to a year out. The downturn will be sooner and more intense if he insists on pursuing protectionist policies combined with policies of tax increases that burden small businesses.

6.) Obama and the Democrats will not rule from the center. This Democratic President elect and the Democratic leadership in the US House and Senate may be as far left as Henry Wallace and Alger Hiss were in the Roosevelt administration. There is already talk of censoring the radio airwaves, creating a Federalized police force, cutting defense spending by 25%, serious cap and trade policies that will have the effect of wealth flowing out of America to the rest of the world, and a clear pursuit of wealth redistribution here in the states.

7.) The Democratic party will pursue globalism. Look for the Democrats to become very cozy with the United Nations.

8.)With a overwhelming Democratic victory the National Education Association as well as all unions will be greatly empowered again. Look for legislation that will make homeschooling more difficult.

9.) There will be absolutely no advance on any pro-life issues for the next four years. Obama is more pro-murder then any candidate that could have been elected. Indeed, look for pro-life issues to suffer significant losses.
It is possible that what we have witnessed this evening is a political realignment that may not change for a generation. The last realignment of this nature was in 1968 with the election of Richard Nixon and which rose to its nadir in the Reagan years.

I am not without hope this evening but I am very saddened. I believe resistance will be difficult and may even have consequences that are not pleasant to consider.

God is sovereign.