Ron Paul on “Repeal 1913!”

As promised, here is part two of our exclusive interview with Rep. Ron Paul, the maverick Republican/Libertarian from Texas who created such a stir in last year’s primaries. Here is last week’s column, Ron Paul on “End the Fed” (The Campaign and the Book) in case you missed it.

The main thrust of our discussion was the status of legislation Ron has introduced in every session of Congress for the past dozen years or so. He wants to see an audit of the Federal Reserve. When that happens (and he is convinced it will some day), so much damaging information will be revealed that it will make it far more likely that the second part of his campaign—to abolish the Federal Reserve System—will become a reality.

Ron says the Fed itself is helping his cause, both by their unbelievable largesse and also by their incredible secrecy. He told me that the Fed has issued more than $2 trillion worth of loans and loan guarantees in the past year and won’t even tell Congress where the money has gone!

“If Congress can pass $700 billion of bailout funds and not know where the money is going,” Ron said, “what about all the trillions of dollars in loans and guarantees the Fed has issued since the crisis hit? Not only did the Federal Reserve help cause the (economic) problems, they are perpetuating them. But we have absolutely no idea how much the Fed has spent or promised to spend. That’s why an audit is so important.”

Ron says the latest survey shows that three out of four Americans—some 75 percent—support his demands for an audit of the Fed. So it’s no surprise that a majority in Congress has seen which way the wind is blowing and has signed up as sponsors of his bill.

But getting a majority to support it doesn’t mean it will pass. The congressman said he expects House Speaker Nancy Pelosi to do everything in her power to prevent the bill from ever coming up for a vote.

“Won’t this make people even angrier?” I asked him.

“The people are already angry,” he replied. “And rightfully so. I think it’s healthy that they are directing their anger toward Washington. That’s beneficial.” But then he issued an important warning: “If it gets out of hand, if violence erupts, that would be a dangerous thing. Our civil liberties are not all that well protected any more, thanks to the Patriot Act and other incursions on our liberties. The important thing is to make sure we direct that anger in such a way that there will be positive change.”

An audit of the Federal Reserve is a good start. But what we really need to achieve, the congressman told me, is to undo two great mistakes this country made nearly 100 years ago.

“We need to Repeal 1913!”
Then the congressman said something that I hope becomes a powerful new slogan for all of us working to restore Constitutional liberties. “What we really need to do,” he said, “is repeal 1913. That way we could get rid of the income tax and the Federal Reserve at the same time.”

Most Americans are probably not aware of what a disastrous year 1913 was for our historic freedoms. The very same year that saw the Federal Reserve System foisted on a gullible Senate by lies and deception also saw the enactment of the first graduated income tax in our nation’s history.

I don’t have the space today to go into detail on either of these nefarious schemes and how a group of elitists in New York and Washington conspired to bring them about. Suffice it to say that our would-be tyrants delivered a one-two punch that year from which freedom has never recovered.

I could tell Ron was getting as excited about the idea as I was. “You know, if you repeal Big Government, you get rid of government intrusion in our lives.” I could tell he was getting more and more enthusiastic. “You stop the hemorrhaging of the dollar. You repeal inflationary conditions. You restore a sound currency, which would go a long way to restoring a sound economy.”

My next question was obvious: How are we going to do this?

“The most important thing is to become as knowledgeable as possible,” he replied. “Education is the key to victory.”

The congressman is adamant that we need to understand why we are in favor of free markets, sound money, and personal liberty. “We must be able to answer the liberal do-gooders who claim they have the moral high ground, that they are the only ones who care about the poor.”

The next step, he insists, is to do something with the knowledge you have gained. And don’t feel that everyone has to do the same thing.

“What you do will be different from what I do. Some people write. Some get involved in politics. Others join and promote various organizations,” he said.

The important thing, Ron says, is to take a stand. “I think everyone should invest some time and money in the preservation of liberty.”

Speaking of organizations doing something, I should mention the one that grew out of Ron’s own run in the Republican primaries last year, his Campaign for Liberty. “I serve as honorary chairman,” he explained. “I don’t run it on a day-to-day basis; I wouldn’t have the time.”

Ron’s Campaign for Liberty is a 501(c) 4 organization. That means it can take sides on legislation and lobby for changes in Washington. It can urge passage of specific bills, such as Ron’s demands to audit the Fed. And it can oppose others. To learn more about it, go to www.campaignforliberty.com.

My final question to Ron concerned his own political future. I told him that I had twice had the pleasure of voting for him for President—in the Republican primary in Florida last year and on the Libertarian Party ticket two decades earlier. So I asked him, “When will I have the pleasure of voting for you again?”

He laughed and replied, “No one knows whether it will ever happen again, including me. I have no current plans. But I’ve never taken the position that I will absolutely never run again. Some very good things came out of our last campaign and much of the momentum we built up last year is continuing.

“I’m actually getting more optimistic about what’s happening in our country. To be honest, I can’t say that a lot of good things are coming out of Washington. But there is no question in my mind that the American people are waking up; they’re demanding that spending be brought under control; they want to get government off their backs.

“I can’t tell you what will happen in the next couple of years. All I can do is to urge you and your readers to continue to spread the word. Tell the truth. And hope that we wake up enough people to make government our servant once again, and not our master.”

I couldn’t think of a better way to end our interview, so I simply said, “Thank you, Congressman. We appreciate everything you are doing.”

Until next time, keep some powder dry.

And for an explanation of why I chose this as my sign-off phrase, see Chip Shots at the bottom of today’s Personal Liberty Alerts.

—Chip Wood

Presidential Deal-making

On Dec. 1, 1824, the United States Presidential election was thrown into the House of Representatives for the first time. With four candidates running for President that year, no candidate won a majority of votes or enough delegates to win in the Electoral College.

Andrew Jackson won more popular votes, more electoral votes and more states than any other candidate, but it didn’t matter. According to the Constitution, it was up to the House to pick the winner. And the fix was in.

Henry Clay, the fourth-place candidate, agreed to throw his support to John Quincy Adams, who came in second. As a result, Adams got a majority of votes in the House and later reciprocated by naming Clay his Secretary of State. Interesting how often political deals determine who sits in the White House, isn’t it?

"Old Hickory," the hero of the Battle of New Orleans, got his revenge four years later. Jackson was elected President in 1828 and went on to serve for two terms. But his real claim to fame is that his stern visage appears on the $20 bill.

—Chip Wood

Racism, the Rich, Record Debt and More Biased Reporting

*Are you a racist? According to Jesse Jackson, if you oppose Obama’s plan for socialized medicine in the United States, you are. And you’re a racist even if you’re black! Yes, incredible as it may seem, the premier race-baiter in America, the so-called “Reverend” Jesse Jackson, told a crowd at the Congressional Black Caucus Foundation that “You can’t vote against healthcare and call yourself a black man.” His remarks were aimed at Rep. Artur Davis, a black congressman from Alabama who voted against the measure. Good for you, Artur. Please stand up to that loud-mouthed bully.

*Are you an American? Here’s an amazing quote from an Associated Press (AP) story distributed Nov. 17: “Americans don’t want to shoulder the cost of President Barack Obama’s healthcare overhaul themselves. They think the rich should pay for it.” Isn’t that something? According to the AP, if you’re rich, you’re not even an American. Just a goose to be plucked, I guess.

*The National Debt sets another record. Did you realize that the National Debt set another record high last week? Yep, it hit $12 trillion. This is the second time the debt has set a record since Barack Obama became president. In March, it hit the $11 trillion mark for the first. And I’m afraid the big spenders in Washington are just warming up. Maybe the new SOS should be Stop Obama’s Spending!

*How’s this for biased reporting? Sarah Palin’s new book, Going Rogue: An American Life, is setting sales records all over the place. Wherever she holds a book signing, the crowds begin lining up 24 hours ahead of time. So naturally the left is going absolutely berserk. At least the reviewer for The Washington Post admitted she hadn’t even read all of the book before she wrote her scathing comments. But Ana Marie Cox thought that was fine. “(I)f I didn’t read it all, neither can Sarah Palin claim to have completely written it,” she said.

—Chip Wood

Ron Paul on "End the Fed" (The Campaign and the Book)

I’ll admit I’m prejudiced. I think Ron Paul, the maverick Republican/Libertarian congressman from Texas, is the best friend we taxpayers have had in Washington for, oh, the past 100 years or so.

So when Ron agreed to grant an exclusive interview on his efforts to abolish the Federal Reserve, I jumped at the chance. We spoke for 30 minutes on a wide range of subjects. Because of space limitations, I’ll only be able to cover part of them in today’s column. Look for part two a week from today.

If you’ve never heard Ron speak before, you might be surprised at his delivery. He is no fiery orator. He delivers his remarks in a calm, almost professorial manner. But if his manner is mild, his content most assuredly is not. What he has to say is far more radical, even revolutionary, than anything the average American is used to hearing today.

Ron Paul would actually enforce the U.S. Constitution!

Since he (rightly) regards the overwhelming majority of things Big Government does today as unconstitutional, that means he has never met a spending bill he likes. Or, for that matter, intervention in a foreign land without a congressional declaration of war either. There is a good reason that, among both friends and foes in Washington, Ron is known as “Dr. No.” (In his private life, he is an obstetrician who has delivered thousands of babies.)

After years of toiling in obscurity, in the past couple of years Ron’s message of limited government and unlimited freedom has really caught fire. When he decided to run for president in the Republican primaries last year, even he was startled by the size and enthusiasm of the crowds he attracted.

“Yes, I admit I was pleasantly surprised by the response to my message,” he said. “I think something has been rumbling in the country for a long time, and I happened along just when people were waiting to hear this message.”

And then he made an extremely important point: “I think we’re a lot further along in the freedom movement than some of us have realized. We’re seeing a major shift in the attitude of many people. I think this is happening for two reasons: First, a lot of people have been exposed to free-market economics and the principles of freedom. Second, they are being confronted with dramatic evidence that the current system isn’t working. So whether you’re on the receiving end of government giveaways, or you’re one of the ones whose wealth is being taken, both sides are starting to realize, hey, there’s something wrong!”

Ron’s message has found especially fertile ground among young people. When I introduced him at a conference in Las Vegas a year ago I was astounded by the numbers, the energy and the enthusiasm of most of his supporters, many of whom were high school students. The average age of the crowd was probably around 25, which certainly gave new inspiration to all of us oldsters who were there.

And by the way, I want to offer a few words of praise and encouragement to my fellow seniors who’ve been preaching the message of freedom for many, many years. I know we’ve all-too-often despaired that our message was falling on deaf ears. Not true, my friends! Young people have been listening, they’ve been reading and they’ve been asking some tough questions. And believe me; they are no longer satisfied with the reassuring platitudes they get from today’s politicians.

As Ron put it when we spoke, “Young people in particular grasp our message. They feel as though they’re going to be—if they’re not already—victimized. Whether it’s foreign policy or an attack on their personal liberties and personal choices, they’re very concerned. They’re worried about jobs and how they’re going to pay their bills; about Social Security indebtedness and all of those things.

“The most exciting part for me has been seeing their interest in monetary policy. They’re actually shouting out their support for abolishing the Federal Reserve! That’s been amazing to me.”

Ron told me the story of how his “End the Fed” campaign began. “This followed a debate in Detroit during the primaries. We were talking about the economy and I was claiming we were already in the middle of a recession. Well, my Republican opponents didn’t want to hear that.

“Afterwards, I went to a rally at the University of Michigan. This was early in the campaign and I didn’t expect very much, to be frank. But there were 4,000 or 5,000 young people there. During my speech, they started to chant: ‘End the Fed! End the Fed!’ Some of them even began pulling Federal Reserve notes (you know them as dollar bills) from their pockets and lighting them on fire.

“I could never forget the image of that happening. So of course it became part of my campaign. When it came to picking a title for my book that was an easy choice to make.”

(Quick commercial plug: Ron’s book, End the Fed, climbed to the top of the New York Times’ bestseller list and stayed there for many weeks. It’s dropped a bit recently, which is good news for you if you don’t already own a copy. Because it means you can find them at Barnes & Noble or Amazon.com for a substantial discount off the $21.99 cover price. Get ‘em while you can. And think about what a great Christmas present they would make for all of the students on your list.)

To be honest, I don’t think it’s necessary to read every word of every chapter of Ron’s book. Unless you’re simply amused by mumble-jumble and government jargon, you can pretty much skip chapters six and seven (“Conversations with Greenspan” and “Conversations with Bernanke”).

But please pay careful attention to chapter 10, “Why End the Fed?” Here’s how it begins:

“The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, promotes bad economics and undermines liberty. Its destructive nature makes it a tool of tyrannical government.”

So of course I had to ask him, “Other than that, Ron, what’s wrong with it?”

“Bad government destroys liberty” was his succinct reply. “And the Federal Reserve leads to bad government and bad monetary policy. Not only did they cause the present economic crisis, they’re perpetuating the problem.”

Ron has introduced legislation to audit the Federal Reserve every year for the past dozen or so years. And every year it gets bottled up in committee and never sees the light of day. But this year is different.

When we spoke, Ron already had 301 co-sponsors for the legislation. That is every Republican member of the House of Representatives and a bunch of Democrats, too. So it’s a shoe-in to pass, right?

Wrong. Although Ron has gained some surprising support for the measure, including Massachusetts’ very liberal (but very powerful) congressman, Barney Frank, the powers-that-be are dead-set against the measure. He expects House Speaker Nancy Pelosi to do everything possible to prevent a floor vote.

But at least the measure has been voted out of committee. In an email to me after that action, Ron wrote, “I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.”

Does either of us expect an easy victory in Congress this year? Of course not! And even if his measure did pass, despite everything Nancy Pelosi and her cohorts did to stop it, the chances that it will be approved in the Senate and signed by the president are just about zero.

And even when the bill does get signed into law, expect the manipulators of our money system to do everything in their power to protect their trillion-dollar benefactor.

No, folks, this will not be a quick or an easy fight. Ron expects the battle for honest money and limited government to last the rest of his life and beyond. Frankly, so do I.

But rejoice that the battle has been joined! The enemy has been identified! And the weapons we need to win—truth in the hands of an informed public—are all we need, and all we have.

Let me end today’s column as Ron concludes his book. Here are the last three paragraphs of End the Fed:

We have a natural, God-given right to our lives, our liberties, and the fruits of our labor. Protecting those rights is the only role that government ought to have in a free society. To restrain the government from doing more requires a morally determined people willing to assume self-responsibility, rejecting dependence on government force to mold the economy, society, or individual behavior. If the freedom movement continues to grow as it has these past two years, I would say there’s plenty of room for optimism. Freedom and central banking are incompatible. It is freedom we seek, and when that precious goal is achieved, the chant ‘End the Fed’ will become a reality.

Amen to that. Until next time, keep some powder dry.

And remember to look for part two of our interview with Ron Paul next Friday in Personal Liberty Alert.

—Chip Wood

When Thanksgiving was a Moving Target

Are you old enough to remember when Thanksgiving would have taken place last week? The story of why a few million turkeys now get an extra week to live is a great example of what government meddling can do. As Paul Harvey would say, here’s the rest of the story.

Although various “days of thanksgiving” had been proclaimed by Presidents since George Washington, it was first made a national holiday in 1863, when Abraham Lincoln wanted to give special thanks for the Union victory in the Battle of Gettysburg. For the next 75 years, America celebrated Thanksgiving on the final Thursday in November.

But in 1939 Franklin D. Roosevelt (FDR) was persuaded to move the holiday a week earlier. Why? So there would be more shopping days before Christmas.

I kid you not. The country was still suffering from the Great Depression and FDR believed that with more days to shop, Americans would somehow spend more money, thus helping to revitalize the economy.

But instead of an economic boom, Roosevelt’s decision produced social chaos. Most schools and businesses had already scheduled their Thanksgiving holidays. Many colleges had planned their homecoming weekends for a week later, around a traditional Thanksgiving football game. Most devastated of all, however, were the calendar makers, who had already printed calendars for both 1939 and 1940 with what was now the wrong date for Thanksgiving.

A number of states refused to recognize the “new” day of Thanksgiving. Families with relatives in both New York and Connecticut couldn’t celebrate together because each state recognized a different day. The controversy didn’t end for three years, when Congress passed a law declaring that Thanksgiving would henceforth be celebrated on the fourth Thursday in November.

Instead of Thanksgiving at home this year, we’re traveling north to visit some of our extended family. But we’re still looking forward to the traditional meal of turkey, dressing and cranberry sauce. I hope you enjoy a wonderful feast tomorrow as well. And that you’ll pause to give thanks for the many blessings we still enjoy.

—Chip Wood

A Thanksgiving Lesson

Did you know that our Pilgrim forefathers tried communism when they first landed at Plymouth Rock?

How’s that for a dramatic beginning to a story? Years ago, when I used to give a lot of talks to high school classes, this was one of my favorites. It always got the students’ attention. And I have to admit, I also enjoyed seeing some liberal teachers get so upset with me they almost lost their lunches.

Here’s the story I told those students in those long-ago presentations.

The Pilgrims who arrived at Plymouth Rock in 1620 were incredibly brave and hardy souls. They were motivated by the noblest of virtues. They vowed, each and every one, to be as selfless as possibleto always put the needs of the group first. They agreed to own everything in common and to share everything equally.

And their naïve piety almost killed the entire colony.

We all know how the adventure begins. A group of devout Christians, seeking religious freedom for themselves and eager to "advance the Gospel of the Kingdom of Christ" in the New World, sets sail from Plymouth, England in 1620. An investment consortium known as the Merchant Adventurers of London paid the expenses for the trip, including chartering the Mayflower and its 40-man crew.

The deal was simple: The Pilgrims agreed to establish a colony in northern Virginia where they would plant crops, fish the waters and hunt in the forests. They would return a certain percentage of each year’s bounty to London until their debt had been repaid.

Things went wrong from the start. First, the syndicate changed the deal, drastically reducing the amount they would loan the Pilgrims. The brave adventurers were forced to sell many of their own possessions, and much of their provisions, to pay for the trip. As a result, they landed in the New World badly short of supplies.

Next, the small ship they had purchased in Holland, which was to accompany them to America so they could fish the waters off the coast, had to be abandoned in England.

Shortly after they set sail, the ship, badly misnamed the Speedwell, became "open and leakie as a sieve," as its captain reported. They returned to Dartmouth, where the boat was dry-docked for three weeks as repairs were made.

But to no avail. After leaving Dartmouth, the group sailed less than 300 miles when the captain decided the Speedwell "must bear up or sink at sea." This time the ships put in at Plymouth, England, where it was decided to go on without the Speedwell. On Sept. 16, 1620, the Mayflower set out alone to cross the Atlantic.

A month later, when they had reached the halfway point, fierce storms battered the ship and threatened the lives of passengers and crew. Many wanted to turn back for England. But if they abandoned the journey, they would lose everything they had invested. The Pilgrims decided to trust in God and sail on.

Despite the storms, the hazards, the crowding and the poor food, only one Pilgrim died during the voyage, a young servant. His death was balanced by the birth of a son to Stephen and Elizabeth Hopkins, who named their child Oceanus.

There were 102 passengers on board the Mayflower50 men, 20 women and 32 childrenalong with a crew of 40. The captain set a course along the 42nd parallel, a bearing that would carry him to Cape Cod. From there he intended to swing south and follow the coast to northern Virginia.

A little over two months later, on Nov. 19, land was finally sighted and the captain turned the ship south, toward Virginia. However, they soon encountered such "dangerous shoals and roaring breakers" that they turned back to Massachusetts. It was then that the grumblings of dissent turned into a full-fledged roar. Many of the passengers insisted on landing in Massachusetts, where "none had power to command them."

The Pilgrim leaders decided to meet the explosive situation by asking each male on board, except for the crew, to sign a formal document that would lay "the first foundation of their government in this place." Thus the Mayflower Compact was born.

The Pilgrims were a diverse lot. Many of them were illiterate. Yet in creating the Mayflower Compact they showed an extraordinary political maturity. They agreed to establish a government by the consent of the governed, with just and equal laws for all. Each adult male, regardless of his station in lifegentleman, commoner or servantwould have an equal vote in deciding the affairs of the colony. Of the 65 men and boys on board, all but 24 signed the agreement. The only ones who did not were the children of those adults who did sign, or men who were too sick to do so.

The first decision made under the covenant was to abandon efforts to reach Virginia and instead to settle in New England. The first explorers landed at Plymouth on Dec. 21, 1620.

Weather delays kept the majority from seeing their new home for nearly two weeks. On Jan. 2, 1621, work began on the first building they would erecta storehouse.

Because provisions were so scanty they decided that the land would be worked in common, produce would be owned in common, and goods would be rationed equally. Not unlike the society Karl Marx envisioned of "from each according to his ability, to each according to his need."

Unfortunately, thanks to illness, injury and attitude, the system did not work. Pilferage from the storehouse became common. Suspicions of malingering were muttered. Over the course of that first, harsh winter, nearly half of the colonists perished. Four families were wiped out completely; only five of 18 wives survived. Of the 29 single men, hired hands and servants, only 10 were alive when spring finally came.

The colonists struggled desperately for two more years. When spring arrived in April 1623, virtually all of their provisions were gone. Unless that year’s harvest improved, they feared few would survive the next winter. The Pilgrim leaders decided on a bold course. The colony would abandon its communal approach and permit each person to work for his own benefit, not for the common good.

Here is how the governor of the colony, William Bradford, explained what happened then. This is taken from his marvelously readable memoir (if you can make adjustments for the Old English spellings), History of Plimoth Plantation:

The experience that was had in this commone course and condition, tried sundrie years, and that amongst godly and sober men, may well evince the vanitie of that conceite of Plato & other ancients, applauded by some of later times;—that ye taking away of properties, and bringing it in communitie into a commone wealth, would make them happy and flourishing; as if they were wiser than God.

For this communitie (so farr as it was) was found to breed much confusion & discontent, and retard much employment that would have been to their benefite and comforte. For yet young men that were most able and fitte for labor & services did repine that they should spend their time & strength to worke for other men’s wives and children with out any recompense.

Once they replaced communal efforts with individual responsibility the differences were dramaticand life-saving. Men went into the fields earlier and stayed later. In many cases, their wives and even their children (some barely past the toddler stage) worked right alongside them. More acres were planted, more trees were felled, more houses were built, and more game was slaughtered because of one simple change: People were allowed to keep the fruits of their own labors.

The Pilgrims arrived deeply in debt to the London merchants who sponsored them. They worked for more than 20 years, as individuals and as a community, to pay off the crushing burden. In 1627, they borrowed money to pay off the Merchants Adventurers. By 1645, they had paid off the entire debt to the company which had advanced them the sums to pay off the Merchants.

When their debt had been paid in full (at the astronomical interest rate of 45 percent per year), the company that had advanced the sums wrote the Pilgrims:

Let it not be grievous to you, that you have been instruments to break the ice for others who come after with less difficulty. The honour shall be yours to the world’s end.

As we celebrate this coming Thanksgiving Day, some 380 years after the Pilgrims celebrated the first of this uniquely American holiday, let us remember the sacrifices they made… the devotion they showed… and the lessons they learned.

Until next time, keep some powder dry.

—Chip Wood

New York City Taxes, Conservative Women, Global Warming and Loans to Uncle Sam

*Where were you on Nov. 16, 2000? Most of us would find it impossible to know for certain where we were on any given dayespecially if it were almost a decade ago. But for one hedge-fund manager, his whereabouts for four days in 2000 was worth almost $27 million. That’s how much Julian Robertson saved on New York City taxes for the year, when he and his staff could prove he was in the city for less than half of the year.

*New Calendar Features Conservative Women. Many thanks to all of you who had kind things to say about my Straight Talk interview with Michelle Malkin. Permit me to note she is as pretty as she is smartas you can prove for yourself by getting the 2010 Great American Conservative Women calendar. A fundraiser for the Clare Boothe Luce Policy Institute, you can see the calendar at www.cblpi.org. Other women featured this time include Anne Coulter, Star Parker, Bay Buchanan and Carrie Prejean.

*What Happened to Global Warming? That’s the provocative headline over a story on the British Broadcasting Corporation website. The article notes that climatologists have not been able to confirm any global warming in the past 11 years, despite a measurable rise in carbon-dioxide, which is blamed for much of this non-existent problem. By the way, the Met Office (the British weather service) says that over the next decade, at least half of the years will be hotter than 1998so far the warmest year on earth since records were kept.

*A Rush to Loan Uncle Sam Money. The latest Treasury auction three weeks ago, for a record $123 billion in U.S. debt, was oversubscribed by nearly $250 billion. The five-year notes, which will pay just over 3.5 percent, were especially popular with central banks, foreign governments and other eager lenders. Let’s see if this remains true for the rest of this fiscal year when the profligate federales will need to borrow an additional $1.2 trillion to cover the deficits they’re accumulating.

—Chip Wood

Unhappy Birthday to the Federal Reserve

The Federal Reserve System was “born” on Nov. 16, 1914. That’s the day that marks the beginning of the long, slow decline in the value of the U.S. dollar.

Although this country had managed to survive without a central bank for the first 140 years of its existence, that all changed when Congress approved the Federal Reserve Act the previous December. (For an account of the conspiratorial manipulations that led to the passage of this bill and its consequences, see G. Edward Griffin’s masterful study, The Creature From Jekyll Island.)

The Fed’s friends in Congress promised that it would be a passive institution, working behind the scenes to prevent future bank panics. Instead, it soon adopted an interventionist policy. Today, it is actually praised in many quarters for controlling interest rates and regulating (read: increasing) the U.S. money supply.

Since the creation of the Fed 95 years ago the dollar has lost 98.5 percent of its purchasing power. Sadly, most Americans have been convinced that greedy businessmen cause the steady rise in prices. Tell them that higher prices are caused by a Fed that continues to flood the world with fiat currency and you’ll be greeted with blank stares and a change of subject.

—Chip Wood

Dismantling the Berlin Wall

On the night of Nov. 9, 1989, the most hated symbol of the Cold War, the Berlin Wall, was turned into a pile of rubble. All night long, East and West Germans celebrated their new freedom by smashing the 28-mile-long (and 28-year-old) barrier. The following morning, East German troops were ordered to dismantle all of the wall. Soon, East and West Germany were reunited.

Two years earlier President Ronald Reagan stood in front of the Brandenburg Gate (one of the many checkpoints into Communist East Germany) and declared, "Mr. Gorbachev, tear down this wall!" The wall was the last desperate effort by East Germany’s then boss, Walter Ulbricht, to stop defections to the west.

But by 1989, the Soviet Union and its various satellites were on the verge of collapse. Erich Honecker, East Germany’s brutal head of state since 1976, resigned. A day later, so did Bulgaria’s communist boss, Todor Zhikov. By Christmas of that year, most former Soviet satellites had gained their freedom, as a sort of reverse domino effect took place.

—Chip Wood

What Obama Should Do and Shouldn’t Have Done, a Deficit and Ted Turner

*What Barack Obama should do. A Straight Talk salute to Liz Cheney, daughter of former Vice President Dick Cheney, for the best suggestion I’ve heard regarding Obama’s acceptance of the Nobel Peace Prize. Here’s what she said: “What he ought to do, frankly, is send the mother of a fallen American soldier to accept the prize on behalf of the U.S. military, to remind the Nobel committee that each one of them sleeps soundly at night because of the greatest peace-keeping force in the world today.” Right on, Liz. Too bad there’s not a chance in a million he’ll do it.

*And what our president shouldn’t have done. I’ll admit this could be a very long list. But I’m thinking specifically of his decision to renege on a commitment to attend ceremonies in Germany next week, marking the 20th anniversary of the fall of the Berlin Wall. This was one of the greatest symbolic victories of freedom over communism in my lifetime. I’m sorry and a bit ashamed that our president thought going to Copenhagen to lobby for the Olympics in Chicago was more worthy of his time.

*The biggest deficit in 60 years. The U.S. Treasury Department reported that the budget deficit for fiscal 2009, which ended Sept. 30, hit the astronomical total of $1.4 trillion. The number is the most red ink we’ve incurred since World War II and represents 10 percent of the gross domestic product of this country. That’s our money they’re using to buy those votes, friends.

*The “Mouth of the South” on getting by. Ted Turner says things just aren’t the same for him anymore. He’s lost CNN, the Atlanta Braves, Jane Fonda and much of his money. But he adds, “You know, if you economize and don’t buy new airplanes or long-range jets, or that sort of thing, you can get by on a billion or two.” Thanks for the inspiring advice, Ted.

Chip Wood