Funny Money, An App For That, Two Fathers And Woody Allen

*The first “funny money” in the U.S. Do you remember the phrase, “not worth a continental”? If you don’t, I’m sure your parents do. It refers to the paper money that the Continental Congress authorized back in 1776. It became so worthless George Washington said, “a wagonload of currency will hardly purchase a wagonload of provisions.” For the rest of the story, click here to see my Wednesday column, This Week in History.

*Please prove it really works. Last week I mentioned the iPhone app so you, too, could mimic the blast of vuvuzelas. Now comes news of a noise-cancellation MP3 download that will allegedly eliminate that annoying buzz when you play it next to your television. Check it out at antivuvuzelafilter.com before the next World Cup match.

*Families come in many forms, the president says. In his Father’s Day proclamation two weeks ago, President Obama declared that “nurturing families come in many forms… [including] two fathers.” This isn’t the first time that he has used such a platform to honor homosexuality. In May, Obama also cited “two mothers” in his Mother’s Day proclamation.

*Woody Allen wants Obama to become dictator. The formerly funny filmmaker (try saying that fast four or five times) told a Spanish newspaper, “The Republican Party should get out of [Obama's] way and stop trying to hurt him… It would be good if he could be a dictator for a few years, because he could do a lot of good things quickly.” Apparently Woody thinks that would be an improvement over the present system, where Obama gets to do a lot of bad things slowly.

—Chip Wood

They Signed For Us

Happy Anniversary To Us

Tomorrow will mark a full year of Straight Talk columns for Personal Liberty Digest™. How time flies when you’re having fun! As many of you know, I also write two other, shorter features for Personal Liberty Digest™ every week—Chip Shots, which appears at the bottom of Friday’s columns, and This Week in History, which appears at the bottom of Wednesday’s.

As it happens, my very first piece for Personal Liberty Digest™ was about the incredible men who pledged their lives, their fortunes and their sacred honor to secure liberty for us. So it seems only appropriate to repeat that message again today, as we prepare to celebrate our 234th Independence Day. Happy July 4!

Every schoolchild in America knows why we celebrate the Fourth of July. Flags and fireworks commemorate the day we declared our independence from Britain.

On July 4, 1776, after months of heated debate, representatives of the Continental Congress voted unanimously that, “These United Colonies are and of right ought to be Free and Independent States.”

Thirteen colonies voted to become something new in history—the United States of America. Now, all they had to do was win their independence from a government that would consider them traitors.

Fifty-six men bravely affixed their signatures to the Declaration of Independence. What sort of men were they? And what became of them?

Twenty-four were lawyers and jurists, 11 were merchants and nine were farmers or plantation owners. They were well-educated men of means. All of them had a great deal to lose when they voted to defy what was then the most powerful nation on earth. Yet they willingly risked everything when they pledged to each other “our Lives, our Fortunes, and our sacred Honor.”

As I said, all of us can explain why we celebrate Independence Day on July 4th. But how many of us can name even a handful of the signers of the Declaration of Independence? How much do we know, really, about the men who risked their lives and everything they owned in the cause of freedom?

Because the story of the signers is so inspiring, we’ve arranged a special treat for you today—a free copy of a wonderful little book called They Signed For Us.

Half a century ago two patriotic ladies in the Midwest wanted to help others learn more about the remarkable men who signed the Declaration. Merle Sinclair and Annabel Douglas McArthur wrote a delightful book about the events of that time, including a history of each of the signers. They called it, They Signed For Us.

At the end of today’s column, you’ll find a link that will take you to a free copy of the book. You may read it online or download it and print your own copy. The file also includes a list of all of the signers and the states they represented, plus the complete text of the Declaration of Independence.

To whet your appetite a bit, here’s an excerpt from They Signed For Us.

“SUDDENLY THE BIG BELL in the State House steeple pealed joyously. The appointed signal! Cheers rose from the waiting crowds.

“‘Proclaim liberty throughout the land….’

“Cannon boomed, drums rolled. Church bells rang, sounding the death knell of British domination!

“News of the adoption of the Declaration of Independence spread like wildfire. Ready messengers leaped into their saddles to ride and spread the word. The Declaration had been ordered printed on a single large sheet, ‘45.5 x 37.5 cm.,’ or approximately 18 inches by 15 inches. These broadsides were distributed with all possible speed, to be read in the provincial assemblies, pulpits, market places, and army camps.”

The story continues:

“On July 8, the Liberty Bell summoned citizens of Philadelphia to the State House yard for a public reading of the document. Colonel John Nixon mounted a high platform and spoke the noble lines in a strong, clear voice. The crowd, now hushed, listened intently throughout.

‘…for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.'”

It was almost a month later that the Declaration was engrossed on parchment and ready for signing by the delegates to the Continental Congress. Members gathered on Aug. 2 for the ceremony.

The only person who had signed the Declaration on July 4 was John Hancock, a delegate from Boston who had been elected president of the Continental Congress. He wrote his signature in large, bold letters and as he did, in a reference to the near-sightedness of the British king, he declared, “There! John Bull can read my name without spectacles and may now double his reward of £500 for my head. That is my defiance.”

As the delegates gathered around a desk to sign the Declaration, William Emery, one of the representatives from Rhode Island, moved as close as he could. “I was determined to see how they all looked as they signed what might be their death warrants,” he later wrote. “I placed myself beside the secretary, Charles Thomson, and eyed each closely as he affixed his name to the document. Undaunted resolution was displayed on every countenance.”

Contrasting with Hancock’s confident signature was the shaky scratch of Stephen Hopkins from Rhode Island. Hopkins was the second-oldest signer and suffered from palsy. As he handed the quill to the next person, he valiantly proclaimed, “My hand trembles, but my heart does not!”

As one or two delegates hung back, seemingly reluctant to add their signatures to such a momentous declaration, John Hancock encouraged them. “We must be unanimous,” he said. “There must be no pulling different ways. We must all hang together.”

Legend has it that Benjamin Franklin replied, “Yes, we must all hang together. Or most assuredly, we shall all hang separately.”

Happily, none of the signers was hanged by the British. But all of them were considered traitors to the Crown. And many of them suffered terribly for the cause they so ardently supported.

When New Jersey signer Richard Stockton returned to his home after signing the Declaration he learned that British troops were coming to arrest him. He fled to a neighbor’s house with his wife and children. But a Loyalist (as supporters of the British cause were called) betrayed the family’s hiding place. Here is how Merle Sinclair and Annabel Douglas McArthur describe what happened to him:

“The judge was dragged from bed and beaten, then thrown into prison. This distinguished jurist, who had worn the handsome robes of a colonial court, now shivered in a common jail, abused and all but starved.

“A shocked Congress arranged for his parole. Invalided by the harsh treatment he had received, he returned to [his home at] Morven to find his furniture and clothing burned, his fine horses stolen, and his library—one of the finest private collections in the country—completely destroyed. The hiding place of exquisite family silver, hastily buried, had been betrayed by a servant.

“The Stockton’s were so destitute that they had to accept charity. For the judge’s fortune was gone, too. He had pledged it and his life to his country. He lost both. He did not live to see the Revolution won.”

John Morton, a delegate from Pennsylvania, was the first of the signers to die. His last words for his family, before his death in April 1777 (just eight months after he signed the Declaration), were, “…tell them that they will live to see the hour when they shall acknowledge it to have been the most glorious service I ever rendered to my country.”

The following month Button Gwinnett, the commander in chief of Georgia’s militia, was badly wounded in a duel with a political opponent. He died a few days later—the second signer to die.

But by and large, the signers of the Declaration of Independence were a hardy bunch. Three of them lived until their 90s—a remarkable accomplishment in a time when most men did not see their 50th birthday.

Only two of the signers were bachelors. Sixteen of them married twice. Records indicate that at least two, and perhaps as many as six, were childless. But the other 50 signers were a prolific lot, having a total of 325 children between them! William Ellerey of Rhode Island had 17 children; Roger Sherman of Connecticut had 15.

Fifty years after the united colonies declared their independence from Britain, plans were made for jubilant celebrations on July 4, 1826. Only three of the original signers were still alive—Charles Carroll, Thomas Jefferson and John Adams. Here is how Sinclair and McArthur describe what occurred that day:

“In a dramatic climax that even their agile minds would not have contemplated, these two principals in the struggle for Independence left the nation awestricken and touched, by dying hours apart on the Fourth of July. Jefferson died at one o’clock in the afternoon, Adams toward evening.”

Ten days earlier Jefferson had written the mayor of Washington, expressing his regret that ill health prevented him from coming to the nation’s new Capitol to join the festivities.

“I should, indeed, with peculiar delight, have met… with the small band, the remnant of that host of worthies, who joined with us on that day, in the bold and doubtful election we were to make for our country, between the submission or the sword.”

And he concluded by writing, “Let the annual return of this day forever refresh our recollection of these rights, and an undiminished devotion to them.”

As part of that “undiminished devotion,” we are delighted to provide you with a free copy of They Signed For Us. Please click here for it.

And please share this copy of Straight Talk with others you know so they may enjoy it as well. Just forward this column with a short note urging them to read about the incredibly brave patriots who won our freedom for us when They Signed For Us.

Until next time, keep some powder dry.

—Chip Wood

The Treaty Of Versailles

On June 28, 1919, the First World War officially came to an end when France and Germany signed the Treaty of Versailles with the Allies. The German delegation, which had been forced to sign the punitive agreement, signaled their attitude by breaking the ceremonial pen.

The treaty required Germany to pay such onerous reparations to the victors that the country was impoverished for the next two decades. The terms were regarded with such bitterness in Germany that many historians believe they were directly responsible for the rise of Nazism and World War II.

One little footnote that has been almost forgotten: President Woodrow Wilson, the most powerful person at that conference, was awarded the Nobel Peace Prize in 1920 for his efforts there. As Henry Kissinger could testify, it would not be the last time the “peace” prize had very little to do with achieving a just and lasting peace.

—Chip Wood

PC Police, An Expensive Stock Tip, Vuvuzelas And A Good Question

*The PC police strike again. David Morales, a Rhode Island second-grader, wanted to honor American troops at a special class event. So he took a camouflage baseball cap, put an emblem of the American flag on the front and then glued several plastic soldiers from his collection around the cap. Sounds creative and patriotic, right? Not according to school officials in Providence, R.I., who declared that, because the tiny plastic figures were holding rifles, the cap violated the school’s zero-tolerance policy banning weapons. Off it came until David could take it home. Gee, do you think that’s why they’re called the armed forces?

*Could a stock tip be worth that much? For the past 11 years Warren Buffett has allowed the Glide Foundation, one of his wife’s favorite charities, to auction off a luncheon date. And every year, the cost of that lunch has gone up. This time, the winner will pay $2.6 million to take seven guests to lunch with the Bard of Omaha. I know the steaks at Smith and Wollensky in New York City are good. But $260,000 each?

*Yes, there’s an app for that. I haven’t been watching much of the World Cup this year. First, soccer is not one of my favorite spectator sports (unless a grandchild is playing). But second, the noise from all those plastic vuvuzelas is enough to drive me crazy. If you can’t afford to buy one, turns out you can get a free app for your iPhone. The folks behind Vuvuzela 2010 say more than a million people have downloaded the app so far. Hope none share an office or car pool with you.

*Question of the week. I saw this on a bumper sticker a few days ago: “If ignorance is bliss, why aren’t more people happy?” (Think about it for a minute.)

—Chip Wood

The Scariest Picture You’ll Ever See

Take a good long look at the map below. Pay special attention to the areas that are in blue. Compare them, in size and location, to the areas that are in red. Then let me tell you why the numbers (and the colors) are so significant.

2008 elections results by county

What you’re looking at is a map of the 2008 Presidential election, broken down by the results in each county. If Barack Obama received most of the votes in a particular county, it appears in blue. If John McCain was the winner, that county is in red.

If you added up the land mass of every blue and red county you’d see something really striking—the Republicans won 80 percent of this country, when measured by acreage. John McCain got a majority of votes in 2,417,000 square miles of the United States. Barack Obama, by comparison, won in just 580,000 square miles.

Ah, but now let’s look at the population numbers for each county. McCain still came out ahead, but not by much. The total population of counties won by Republicans was 143 million, while the population of counties won by Democrats was 127 million.

Basically, the Democrats swept the populations centers—the cities and more populated suburban areas—while the Republicans won everything else.

Now, guess what you would find if you could then overlay this map with one showing the distribution of food stamps, unemployment checks, subsidized housing and other welfare payments? Sure, there will be some in all of those red areas. There are plenty of Republicans receiving Social Security and Medicare. I’m sure there are even some Republican farmers who get paid not to grow crops. And there are certainly some Republican businessmen getting subsidies from Uncle Sam.

But the overwhelming majority of voters in the red areas pay more into government than they receive; while just the opposite is true in the blue areas. The majority of people there receive more in government benefits than they pay in taxes. In fact, 45 percent of adults in America pay no income taxes at all. Not one red penny. Zero. Nada. Zilch.

Can you guess where most of those people live? And which party they vote for? While you ponder the significance of these statistics let me repeat a quotation I used in last week’s column when I was discussing the differences between a republic and a democracy:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, and is always followed by a dictatorship.”

The statement does not come from one of our Founding Fathers (although I’m sure that, to a man, they would agree with its warning). No, it was written long after our revolution, by a Scottish historian named Alexander Fraser Tytler. By the way, he wasn’t predicting the collapse of our republic; he was talking about what happened to the Athenian democracy 2,000 years ago.

Back to that map that’s bothered me so much. In most of the country the numbers are so close that an election can go either way, depending on which side is the most motivated. If the Democrats and their union allies and community organizers do a better job of getting out the vote, they win.

If the Republicans are inspired and enthusiastic enough about their candidate that they become almost evangelical in getting their friends and neighbors to vote, they carry the day. (This is especially true if they can appeal to enough independents to put the good of the country ahead of their own desire for some of that government booty.)

Now, let me ask you another question. How do you think this very delicate balance will change if several million illegal aliens are allowed to vote in our elections? May I see a show of hands of everyone who thinks the Republicans will get a majority of those votes? Anyone? Anyone?

I think you can guess where I’m going with this. For a lot of reasons we’ve discussed before, the Democrats not only won the White House two years ago, they also won a super-majority in Congress. Until Scott Brown won the Senate seat in Massachusetts last year the Republicans didn’t even have the manpower to mount a filibuster.

If you went by the numbers alone you’d have to conclude that the Democrats could pass anything they wanted. And yet look at all the trouble they’ve had getting their legislative program adopted. Yes, by using enough bribes, bluster and baloney they finally got Obamacare approved. But just by the skin of their teeth. Almost everything else they’ve wanted and Obama has promised is dead in the water. Cap and trade? Card check for unions? Unemployment payments forever? Fuggedaboutit. They just won’t happen. Not unless a lot more Democrats become a lot more suicidal.

Remember, the vast majority of people in Congress aren’t dedicated liberals or dedicated conservatives. The only thing they’re dedicated to is staying in office. They love the power and perks that come with being a member of the House of Representatives and the U.S. Senate. Where else would you get to spend billions of dollars of other people’s money—and usually be thanked for it?

Remember, when you rob Peter to pay Paul you can count on getting the thanks of Paul. And his vote, too.

So what can we do about it? To paraphrase a comment I received from an alert reader a few weeks ago, we have three boxes we can use.

The first is the soap box. By and large, we’re doing a good job telling ourselves what’s wrong. But we’re not doing as well telling others.

If the fate of this republic depended on it, over the next four months, could you get one other person to share your concerns and vote accordingly? Believe it or not, that’s all it would take. Conservatives would win enough seats in the House to bring Obama’s socialistic schemes to a screeching halt. (And a lot of members who used to rubber-stamp every liberal boondoggle would begin to sound like Sarah Palin.)

That brings me to the second box we need to use—the ballot box. If just 10 percent of the people who voted right last time got one more person to vote with them, the politicians who promise to help take back our country would win in a landslide.

Listen, we have all the resources we need to turn things around. No matter how much some on the left might like to, government can’t shut us up or shut us down. We have all of the time, the talent and the funds we need. Let’s use them while we still can.

If we don’t, the day may come when the only avenue left to defeat total government is the third box. It’s the one that won our liberty the first time. I’m talking about the ammo box. Pray God we won’t have to use it again.

Until next time, keep some powder dry.

—Chip Wood

Not Worth A Continental

The Continental Congress was struggling to find funds and provisions for the Revolutionary forces when it decided to issue its own currency. On June 22, 1776, it issued $2 million in paper money. The currency featured the likeness of Revolutionary soldiers and carried the inscription, “The United Colonies.”

The “Continentals,” as the bills were known, were not backed by gold or any other assets. Merchants distrusted their value and demanded more and more of them for the same amount of goods. General George Washington complained that, “A wagonload of currency will hardly purchase a wagonload of provisions.”

By the end of the war the new currency was virtually worthless. The bills were ultimately redeemed by the new United States government at 1/100th of their face value. Because of this experience, the phrase “not worth a Continental” became a way to describe something that was virtually worthless.

The lesson also convinced our Founding Fathers to insist that any currency issued by the U.S. government be fully redeemable in gold or silvera requirement that became part of our Constitution and was honored for the next 100 years. Today, of course, our currency is only backed by “the full faith and credit of the United States,” which some cynics (this writer included) say explains why the value of the dollar continues to fall.

—Chip Wood

Democrat Doozie, A Bad Investment, Green Policies And Pension Fund Raids

*The Dems pick a doozie in S.C. With all the news pouring in from various state primaries you might have missed one of the weirdest. It seems that an unemployed veteran, with no visible means of support, somehow came up with the $10,400 filing fee in South Carolina and won the Democratic primary for the U.S. Senate there. Alvin Greene, who did zero campaigning, was recently booked on felony obscenity charges. It doesn’t look as though Republican incumbent Jim DeMint need worry very much.

*Big Labor’s bad investment. Meanwhile, down in Arkansas, Big Labor spent more than $10 million in a failed effort to defeat incumbent Senator Blanche Lincoln in the Democratic run-off there. Seems the unions are mad at the lady because she refuses to support “card check,” which would eliminate secret ballots in a vote for unionization. Happily, that’s $10 million the unions won’t have to spend on elections this November that might really matter.

*That’s telling them, John. John Myers, one of my favorite Personal Liberty columnists, had a great article last week explaining how environmental extremists are responsible for the Gulf oil disaster. “To the Greens I have six words regarding the catastrophe,” he wrote. “Your President, your policies, your fault.” In case you missed his very compelling piece, click here.

*Only politicians could get away with this deal. You probably already know that public pension funds are facing all sorts of problems around the country. In California the unfunded liabilities have passed $500 billion. Things aren’t quite as desperate in New York where Gov. David Paterson and legislative leaders came up with an incredible deal to patch over the problems. Seems they are going to raise the $6 billion they owe the state pension fund by borrowing the money from… are you ready for this?… the state pension fund. You see, unlike the Administration, they can’t just print the money they need.

–Chip Wood

"A Republic—If You Can Keep It"

At first I couldn’t believe my eyes.

In fact, I had to look away and blink a couple of times before reading the email again. But it still said the same thing: “Benjamin Franklin said, ‘We have given you a democratic-republic… if you can keep it.”

No, he didn’t!

I had to face the fact: A Straight Talk reader had fallen victim to 100 years of liberal brainwashing. What he said was such a gross perversion of the truth—and the difference is so incredibly important to preserving what liberties we have left—I hope you’ll indulge me in a brief history lesson this week.

If you remember much from your high school history classes about the founding of this country, you know there was a great deal of controversy about what type of government the newly independent states should create.

The first effort, the Articles of Confederation, was generally regarded as a failure. But what should replace them? Each state sent a group of representatives to meet in Philadelphia and hammer out a new agreement. The deliberations of the Constitutional Convention in 1787 were held in strict secrecy. Consequently, anxious citizens gathered outside Independence Hall when the proceedings ended, eager to learn what had been produced behind those closed doors.

As the delegates left the building, a Mrs. Powel of Philadelphia asked Benjamin Franklin, “Well, Doctor, what have we got?”

With no hesitation, Franklin replied, “A republic, if you can keep it.” Not a democracy, not a democratic republic. But “a republic, if you can keep it.”

Over the past four decades I have recounted this story several hundred times. For many years I traveled the country giving speeches about the threats to this Republic. I always enjoyed the opportunity to talk to high school students when I could wrangle an invitation. When I did, I loved to tell them about the differences between a republic and a democracy.

“A lynch mob is democracy in action,” I would say. “While if you believe someone is innocent until proven guilty, that they deserve their day in court and that a jury of their peers should decide their fate, then you believe in a nation of laws, not just the whims of a mob.”

Another line I used a lot was, “Democracy is five wolves and a sheep voting on what to have for lunch. If you were the sheep, which would you rather live in—a republic or a democracy?”

I told them about the importance of “binding men down with the chains of a Constitution.” That this was the only sure way to protect their freedom. And that anyone who wanted to change this republic into a democracy was an enemy of liberty.

A century or two earlier there would have been no need to give such a talk—and no interest if one did. Back in the 18th and 19th centuries, every American who could read and write (and probably most of those who couldn’t), knew we were a republic. The campaign to brainwash us into believing we were a democracy didn’t begin until 100 years ago. Today, if you take a poll of high school or college students, the overwhelming majority will tell you that we are a democracy.

Please don’t dismiss this as a mere quarrel over semantics. Understanding the difference between the two systems of government is absolutely vital. I am not exaggerating when I tell you that our very liberties depend on getting more Americans to realize the importance of this seemingly arcane dispute.

Our Founding Fathers Feared And Hated Democracy
Most high school students who heard me say such a thing were surprised and shocked. They had been taught that the United States was, and had always been, a democracy. That “majority rule” was the fairest of all possible forms of government.
Who was this guy to tell them they’d been lied to?

So I quoted what some of our founding fathers had to say. I asked if they had heard of The Federalist Papers—the collection of articles written during the debate over ratifying the new constitution.

In Federalist No. 10, James Madison, often referred to as “the father of the Constitution,” had this to say:

“…democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they are violent in their deaths.”

Alexander Hamilton concurred. In a speech he gave in June 1788, urging ratification of the Constitution, he thundered:

“The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity.”

Fisher Ames, a member of Congress during the eight years that George Washington was president, wrote an essay called “the Mire of Democracy.” In it, he said that the framers of the Constitution “intended our government should be a republic, which differs more widely from a democracy than a democracy from despotism.”

Yes, our founding fathers were well aware of the differences between a republic and a democracy. They revered the former; but as I said above, they hated and feared the latter.

In view of the founders’ ardent convictions, it is no surprise that you cannot find the word “democracy” anywhere in the Declaration of Independence or the Constitution of the U.S. Indeed, the Constitution not only proclaimed that our Federal government should be a republic; it went further and mandated that “The United States shall guarantee to every State in this Union a republican form of government.”

These principles used to be widely understood and commonly accepted. John Marshall, chief justice of the Supreme Court from 1801 until 1835, said that, “Between a balanced republic and a democracy, the difference is like that between order and chaos.” Ralph Waldo Emerson wrote that “democracy becomes a government of bullies tempered by editors.”

Nor was it only Americans who feared and despised democracy. Lord Acton, the famous Englishman who coined the aphorism that “power corrupts, absolute power corrupts absolutely,” had this to say:

“The one prevailing evil of democracy is the tyranny of the majority, or rather that party, not always the majority, that succeeds, by force or fraud, in carrying elections.”

It was only during the last century that the falsehood about this country being a democracy became widely accepted. Woodrow Wilson declared that we fought World War I “to make the world safe for democracy.” Franklin Roosevelt said that the U.S. “must be the great arsenal of democracy.”

So today, almost every schoolchild in America believes that the U.S. is a democracy. Why did the liberal intelligentsia in this country, supported by their slavish followers in the media and their docile puppets in politics, pull this “bait and switch” on us?

For the answer, let’s turn to another Englishman, Alexander Fraser Tytler, also known as Lord Woodhouselee, who wrote:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.”

The only part of Mr. Tytler’s warning I’ll dispute is his use of the word “always.” You and I have been given the power to prevent our country’s descent into a democracy. It’s called the ballot box. Let’s hope enough of us use it this coming Nov. 2 to begin the process of taking our country back.

Until next time, keep some powder dry.

—Chip Wood

The Magna Carta Established

It was nearly 800 years ago this week that King John of England, under pressure from a group of barons, agreed to put his seal on a document that, for the very first time in English history, limited the king’s powers by law.

King John was one of Britain’s most unpopular monarchs. He devised numerous ways to extract more money from his subjects, including the country’s first income tax. By 1215 many of the most important barons in England had had enough. They entered London in force on June 10, 1215. The citizens of the city showed their sympathy with the barons by throwing open the gates to the city and cheering them as they entered.

Five days later, on June 15, 1215, King John acquiesced to the barons’ demands. He agreed to meet them at Runnymede where he placed his Great Seal on the document they presented. It became known as the Magna Carta Libertatum, or the Great Charter of Freedom.

After King John’s death the Magna Carta would be revised numerous times, including three times during the rule of his successor, Henry III. It is the version approved in 1297 that remains in force in England and Wales to this day.

The Magna Carta is generally accepted as the most significant early influence that led to the rule of constitutional law today. So, thanks, barons.

—Chip Wood

The Goldman Sachs Lie

*Goldman Sachs lied to its customers. The best summary I’ve seen about what Goldman Sachs did wrong comes from my friend Eric Fry. Here’s what he said in the Daily Reckoning, one of my favorite ezines:

“As one of America’s largest purveyors of toxic collateralized debt obligations (CDOs), Goldman played the role of financial cigarette salesman. Nothing wrong with that… so far. But this particular cigarette salesman took out insurance policies on its biggest customers. Okay, so maybe that’s a bit morally ambiguous, but it is still perfectly legal… as long as the cigarette salesman didn’t lie to his customers about the potential consequences of smoking cigarettes.

“But Goldman did lie. To continue our metaphor, Goldman not only ‘whited out’ the Surgeon General’s warning on every pack it sold, it also substituted its own warning that read something like: ‘These cigarettes are full of sugar and spice and everything nice, just like little girls.’

“Goldman informed its clients that John Paulson—the guy who secretly helped construct the Abacus CDO that is at the heart of the SEC’s complaint—was a large buyer of this security, when in fact he was a large short-seller of the security. That was a lie. Importantly therefore, Paulson did not utilize his legendary expertise of the CDO market to select the securities that would succeed, he used his expertise to select the securities that would fail.

“Goldman’s failure to disclose this very material fact was a fraud… big time. If Goldman had merely informed its customers that the "cigarettes" it sold were full of ‘frogs and snails and puppy dog tails’ and/or that the guy who helped select the securities comprising this particular CBO was selling it short, Goldman could have purchased life insurance on its customers all day long in full compliance with every applicable securities law.”

—Chip Wood