Friday Is Ron Paul Day!

"Dr. No" is a 72-year old obstetrician (Duke University M.D. 1961) turned politician, the sanest man in the Republican debates and perhaps the most courageous in all of Congress.

Some time ago, I inaugurated a weekly feature which attempted to reach across the great partisan divide. Every Friday became a be-good-to-a-Republican-day. On these occasions I tried to find and feature a 'redeemable' Republican. I had in mind a Republican willing to stand up against, speak up against, and vote against, the worst president in American History, George W. Bush.

I still stand behind that iron-clad criterion, but it has been an exacting bar to overcome. Republicans willing to register early and consistent opposition to the Busheney clique are few and far between. It has been hard ('work'), but always good to find one.

But the choice has always been an obvious one. Ron Paul is the epitome of an authentic conservative. Dr. Paul stands up for re-starting the Constitution and restoring the rule of law, and defying the unitary executive.This Texan has always cast his vote in accordance with the Constitution and not whim of his party's leadership. That is how he won the nickname of 'Dr. No.' In this campaign, Congressman Paul has engaged himself in shattering the myth of monolithic Republican unity around the ethos of war. At each intra-party confrontation, Paul has aroused the crowd and outraged his fellow candidates by merely speaking truth to power. In the polling of the television audiences after the debate in New Hampshire, for example, St. Paul has embarrassed the entire GOP field

As a result Ron Paul is the Neo-Con elites' worst nightmare. Simply having him on the stage with other candidates jars and fractures the message of what passes nowadays for mainstream Republicans. It's like having a liberal or progressive head under the war-mongering party's tent. His presence reminds those in the GOP that they don't have to be militarists, colonialists, or imperialists, just because they are Republicans. Bringing the troops home can be a respectable way to support them. It's a reminder to all potential GOP voters that idiocy is a choice: you weren't necessary born with it.Last night I heard Dennis Kucinich say in the Las Vegas Democratic debate that he was the only one on the stage who actually voted against the 2002 resolution authorizing the use of force against Iraq. If Dr. Paul had been there, Kucinich would not have been able to make that statement. That's how oppositional Ron Paul has been. More courageous and obstinate than half the Congressional Democrats, Paul is a festering splinter in the Republican hide.

Paul does not play the two-face Democratic game of hemming and hawing over non-binding resolutions of different schedules of troop redeployment from Iraq. Paul is also an in-your-face rejection of the Republican nonsense of the 'Islamofascism menace' terrorism. He roasts their nuts every time he says,

Terrorists don't come here because we are free and prosperous. Terrorists come here because we are in their face, we are in their country, building bases in their land and stealing their oil.

Of course I don't cotton to all the Ron Paul positions on tax code, freedom of choice and heath care reform. All of these are important. But on the issues of war, peace and occupation in Iraq, Iran, and Israel (the three I's I call them), Paul's positions are more steadfastly and dependably American than you can find among most rubber-kneed Congressional Democrats these days.

As much as I look forward to voting in California's Democratic primary, at the last minute I can see myself jumping parties by re-registering Republican - just to poke that damned elephant in the eye. With reliable Progressives so hard to find in Congress these days,the enemy of my enemy is my friend.

After Bush - The Deluge?

As In 'World Economic Collapse'?

This morning, I woke up to the BBC as I do every morning. But this morning I was jolted upright before dawn by a riveting interview of Richard Duncan.

I remember shittola from my college and graduate courses in economics. (Maybe the reason might be disclosed in looking up my transcripts.) But this interview scared any residue of shittola out of me.

Personal experience has taught me that the best way to dispel the lingering effects of a nightmare, a nightmarish day dream (or even a cold) is to disperse it by sharing it with all others in earshot.

In the interview, yet to be posted on the 'Net, Duncan updated his conclusions of his earlier book, The Dollar Crisis. In the interview, he spotlighted the recent crash in sub-prime mortgages. We are poised on the precipice of a world wide deflationary crash.

As I said, I can't find the BBC interview yet, but Duncan wrote this last September:

Global credit markets are caught up in the worst systemic crisis in living memory. A meaningful portion of all outstanding financial instruments are significantly impaired. The solvency of some of the largest financial institutions in the world is in question and trust in the interbank market has evaporated. Central banks have been forced to inject hundreds of billions of dollars into money markets to prevent a world-wide financial sector meltdown. It is imperative to understand this credit crisis is only one part of a much more far reaching crisis within the global economy. A world-wide credit bubble has arisen as a result of the United States’ $800 billion a year current account deficit. Flaws in the post-Bretton Woods international monetary system are to blame.

The chances of a global recession are high. The severity and length of the downturn will be determined by how policy makers respond now that the global credit bubble has begun to deflate. A wise policy response could result in some good emerging from this disaster. A foolish policy response could have catastrophic consequences. This article will consider the origins of this crisis. It will also offer advice to policy makers, who need to act quickly to prevent the Great Credit Crisis of 2007 from becoming an economic depression.

Flaws in The Dollar Standard

The Dollar Standard is the most appropriate name for the international monetary system that evolved following the collapse of the Bretton Woods System in the early 1970s. The principal flaw in The Dollar Standard is that it has no mechanism to prevent large and persistent trade imbalances between countries. Consequently, the deterioration in the United States’ current account deficit has gone unchecked, recently reaching nearly 7% of US GDP. The countries with a trade surplus with the United States have been blown into economic bubbles. Japan in the 1980s, the Asia Crisis countries in the 1990s, and China today are examples. Moreover, as the central banks of the United States’ trading partners have reinvested their dollar surpluses back into US dollar assets, the United States itself has also been blown into a bubble. In short, the US current account deficit has destabilized the global economy. That was the theme of my book, The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005).

Before the breakdown of the Bretton Woods International Monetary System, international trade balanced. Subsequently, however, the gap between what the United States bought from the rest of the world and what the rest of the world bought from the United States began to steadily expand.

Under a Gold Standard, or the quasi gold standard Bretton Woods system, such large trade deficits would not have been sustainable since the US would have had to pay for its deficits out of its limited supply of gold reserves. However, the willingness of the United States’ trading partners to accept payment in dollars instead of gold meant there were effectively no limits as to how large the US trade deficits could become. This vendor financing arrangement allowed much more rapid economic growth around the world than would have been possible otherwise. The larger the US current account deficit became, the more the United States’ trading partners benefited.

When the foreign companies selling product in the United States took their dollar earnings home and converted them into their own currencies, it put upward pressure on those currencies. The central banks of those countries intervened to prevent their currencies from appreciating so as to preserve their trade advantage. They intervened by creating money and buying the dollars entering their countries. In this way, the exporters were able to keep their export earnings in their domestic currency and the central banks accumulated large foreign exchange reserves.

As the US current account deficit grew larger, central banks created more and more money and intervened on a greater and greater scale each year. In fact, total foreign exchange reserves have doubled over the past four years. In other words, during the course of the last four years, foreign exchange reserves have increased by as much (US$ 2.8 trillion) as in all prior centuries combined. The reinvestment of those dollar reserves into US dollar assets fuelled the credit excesses in the United States that culminated in an unsustainable property bubble there.

As in the case of Keynsian theory resolving the 1928 crash, Duncan sees the problem as the inability of millions of people not being able to purchase the current unprecedented surplus production of goods and services provided by our global economy. One of his long-term solutions posed in the BBC interview was the institution of a world-wide minimum wage to be increased annually.

Well, now. That feels better now that I got that off my chest. . .