Friday, November 25, 2011


Let’s take a look at some history.

In 1944, 730 delegates from 44 nations met in Bretton Woods New Hampshire and agreed on an international monetary system.

Pretty simple idea. The United States had a lot of gold in Fort Knox and our dollars were pegged at 1/35th of an ounce of gold. Thirty-five dollars an ounce. Not hardly enough to interest Glenn Beck or Gordon Liddy.

The other 43 nations agreed to adopt fixed rates to exchange their money for US dollars.

The system worked pretty well until about 1970. The United States was involved in a prolonged and not very successful war in Viet Nam. Folks around the world began insisting on redeeming their US dollars in gold.

France demanded 191 million in gold. Switzerland redeemed 50 million, then on August 9, 1971 withdrew from the Bretton Woods system.

Congress began to consider devaluing the dollar.

Six days later, on August 15, 1971, President Richard Nixon imposed a ninety day wage and price freeze, a 10% import surcharge, and closed the gold window.

Historians call it the “Nixon Shock.”

Our Yankee dollar no longer represented 1/35th of an ounce of gold. We were officially using fiat money.

“Fiat” is Latin for “let it be.” Our currency is money because we say it is. Sort of like the banker in a game of Monopoly.

My grandson says fiat money doesn’t work because printing money causes inflation. In fact we did experience inflation in the 1970’s. By the time Ronald Reagan and Jimmy Carter squared off in 1980, 13 and 14 percent inflation was the norm.

Enter Ben Bernacke.

The Federal Reserve System was established by the Federal Reserve Act of 1913. It’s a group of regional banks which function as the official bank of the United States. It’s the job of the Fed to prevent inflation and to ward off recession.

Something else the Fed does: it props up the banking system.

Nothing new there. Back in1907 we had a severe recession. People lost faith in the banks and lined up to take their money out. J. Pierpoint Morgan did a one man bail out, deciding which firms were too big to fail and saving the New York stock market.

Shortly after the panic of 1907, Congress formed a National Monetary Commission, chaired by Senator Nelson W. Aldrich of Rhode Island. Aldrich invited a group of bankers to a ‘duck hunt’ on Jekyll Island. They came up with a plan for a central national banking system.

Three years later the Fed was born.

Most Americans don’t know much about the Fed. It’s all a kind of mysterious economic hokus pokus. Seven bankers who are appointed by the President of the United States and paid $179,000 a year to decide what interest rate to charge the banks.

And some other things. The Fed controls our money supply. They don’t have to print dollar bills, or fives, tens and hundreds. No sir, they just write checks. They write checks that are drawn on the Federal Reserve.

That’s right. It’s a check that tells itself to pay money to somebody. If they want to put more money in circulation, they buy government bonds with those checks. The people they buy the bonds from deposit the checks in their banks and their banks deposit the money with the Fed.

If you or I did that, we’d be arrested for check kiting.

So what’s the big deal about owing trillions to the Chinese? When their loans come due, the Fed can just write them a check.

And what’s the big deal about deficit spending in Washington? The Fed can write checks and never be overdrawn.

Free food, clothing, shelter, health care, education? No problem. The Fed can write a check.

Ain’t Utopia wonderful? All we have to do is pitch a tent on Wall Street and elect Michael Moore President of the United States.

Sunday, November 20, 2011


The national debt has now passed the 15 trillion mark. There are lots of web sites which attempt to help us understand how big that obligation is. Pictures of a football field covered with hundred dollar bills stacked to sky scraper height, for example.

You get the idea. It’s mind boggling.

I’ve never been a big fan of fiat money. Seems to me that money ought to have some real value that people can count on when doing business with each other.

Still, the free market dictates otherwise.

Money, it turns out, is just another commodity. Its value goes up and down according to demand and supply. Sort of like speed and distance and mass and all those other things that Albert Einstein figured out. It’s all relative.

So money is just a chit. A marker. An I.O.U. Its value depends on the muscle of the guy who issued it.

The United States of America, ever since the middle of the last century, has maintained a nuclear arsenal. It has also maintained a very high tech, very sophisticated military establishment. We are often called the most powerful nation on earth. We think we are, and so does most of the rest of the world.

Because we, as a nation, have the most muscle, our markers, our IOUs, if you will, are regarded as the most valuable. U.S. currency is recognized and used all around the world. Our money is what the bankers call the reserve currency.

How much money have we issued? Here’s what Wikipedia says:

As of November 17, 2011 the Federal Reserve reported that the U.S. dollar monetary base is $2,150,000,000,000. This is an increase of 28% in 2 years. The monetary base is only one component of money supply, however. M2, the broadest measure of money supply, has increased from approximately $8.48 trillion to $9.61 trillion from November 2009 to October 2011, the latest month-data available. This is a 2-year increase in U.S. M2 of approximately 12.9%.

That’s a lot of dough, and it seems to be increasing very rapidly.

It’s pretty obvious that the increase in money supply is fueled by government borrowing and deficit spending.

Which brings me to propose this simple solution. A constitutional amendment which would say something like this:

The treasury of the United States shall issue currency which shall be legal tender for all debts, public and private, in sufficient amount to discharge all obligations of the United States incurred prior to the ratification of this amendment, and, annually thereafter to fund all appropriations of the Congress.

The Congress shall not otherwise have the power to borrow on the credit of the United States.

At the same time, the treasury should be charged with the obligation of devising forms of currency which are incapable of being counterfeited. Fiat money can have value only if it is real fiat money. Electronic technology should be employed to assure that when the Treasury issues currency it is the real thing.

No doubt this proposal will have the immediate, visceral opposition of many conservatives. The obvious argument against it will be that Congress will spend without limit to satisfy every political demand that comes from the left, while reducing taxes to placate the right.

So what’s new? Isn’t that what they are doing now?

At least with fiat money, the United States would not have to pay interest on a 15 trillion dollar debt. That would save us about half a trillion every year.

In any case, the Congress can’t repeal the law of supply and demand. If it cannot maintain a rational balance between spending and taxation, the good old yankee dollar will melt.

Inflation is the most regressive form of taxation. It shrinks savings, impairs investments, reduces wages. It affects everybody. The 99 percent. The one percent.

And camping out in front of city hall isn’t going to change that.


Almost nobody I know has ever heard of NAMBLA. It’s an acronym that stands for North American Man Boy Love Association.

Founded in 1978, NAMBLA describes itself as a support group for pedophiles.

Its web site lists a number of well known people who are supposed to have had sexual relations with young boys.

Replete with links to references in art, music, poetry, and history, it presents arguments in favor of consensual sex between men and boys and invites persons of similar views to join the movement.

Consensual. That’s the key word. When is a boy old enough to be a real, active homosexual?

Hey, our modern public schools are featuring sex education for middle school kids – age 10 through 14. They learn about anal sex and oral sex. They practice putting condoms on bananas, and are told that one’s sexual orientation is entirely a matter of personal choice.

Sexually active teen agers are apparently the norm. The dominant American culture makes no judgment about sex. It has no moral dimension. It is neither right nor wrong. Just a matter of personal choice.

Thanks to the radical cultural departure of our United States Supreme Court in the case of Lawrence v Texas, consensual sex between consenting adults is now a constitutionally protected activity, at least when done in private.

Now we have teen agers and even sub teens, engaging in sexual
experimentation with the not so tacit approval of the educational system.

By what logic do we rise up in righteous indignation when the activity is between adults and children?

The logic is that the kids are not really consenting. Approached by an authority figure; a teacher, a boy scout leader, a priest or a coach, a child is unlikely to protest.

Indeed, he may assume that the initiative is educational. Here is a gown up who teaches him about other things - arithmetic, grammar, religion, sports –demonstrating the bodily function of sex.

The public goes ballistic over Jerry Sandusky. The same media voices that lionize homosexual activists, that cluck with criticism about right wing condemnation of homosexual conduct, are the first to crucify pedophilic priests and coaches.

In my view, they have a problem. If right and wrong is nothing more than a function of the age of consent; if sexual activity has no more moral significance than push ups, what is the logic of condemning pedophiles?

If teaching a boy how to engage in sodomy or felatio has no greater moral significance than showing him how to brush his teeth, how is it to be condemned or criminalized?

NAMBLA may well be a congregation of sickos, but given the popular consensus that sex has no moral dimension, nor rightness or wrongness about it, it’s hard to fault their logic.

What is missing in the whole Penn State mess is the voice of reason, of history, of the immutable laws of nature.

Who steps forward to teach children that sex is the most powerful, significant, sacred function of the human body?

Who tells them that the function of sex is to procreate human existence on this planet? That it carries serious, moral, and personal responsibilities? That every person’s sexual attitudes and practices define them as human beings and the attitudes and practices of people in a community define their very civilization?

We live in a declining hedonistic society. Adultery and fornication are celebrated in our entertainment media. Abortion provides an inhumane escape from parental responsibility. Sexual perversion is glorified as an honorable alternative lifestyle.

Poets, writers, actors and musicians drive the cultural bus. They create the norm of political and cultural correctness.

Fifty years ago, the idea that an organization of homosexuals would have standing and credibility in the chambers of the United Nations would have been unthinkable. It isn’t any more.

I wonder how long it will take for NAMBLA to get the folks in Hollywood to wear lavender or some other color ribbons in support of pedophilia?

Friday, November 11, 2011


It’s 1998.

Hey coach, did you know that your defensive coordinator loves little boys?

Yeah. Isn’t it wonderful what Jerry does for the kids. You know, he started The Second Mile. They teach Commitment, Responsibility, Opportunity, Character, Potential, Positive Self Image.

No, Coach. I mean he really LOVES kids.

You can say that again. He buys gifts for them, takes them to football games, lets them sleep at his house …

No, no. That’s not it. He really loves the kids physically.

I know. He hugs them. Wrestles with them. Really loves to play with them.

Coach, your still not getting it. Jerry loves the kids sexually.

Jerry? Sexually? What do you mean? What are you talking about?

I’m talking about sodomy. Pedophilia. I’m saying that he is a homosexual

That’s terrible. I better call the Athletic Director.

In 1998 a boy involved with The Second Mile comes home with his hair wet.
His mother asks him why. He says that he took a shower with Coach Sandusky.

His mother promptly calls the police. Two officers come to the house, one a Penn State campus police officer, one from the community.

They tell her to call Sandusky on the phone. She does, and they listen on the extension. The mother asks Sandusky if he showered with her son. He admits it. She reprimands him, tells him he is never to do it again. He promises not to. She says he should promise never to shower with any little boys. He refuses, then asks her to forgive his indiscretion, says he feels bad about it, wishes he was dead.

The police officers report the incident to their superiors both at the university and the community.

I suggest that a report like that would not have been ignored. The head of campus security would tell the President. The President would talk to the Athletic Director. They would sit down with the head coach. They would all agree.

Can’t have pedophilia at the Pennsylvania State University.

Sandusky’s got to go.

It won’t be easy. Somebody’s got to tell Jerry. And it’s pretty obvious that somebody did.

Because about that time Jerry Sandusky started putting out feelers for coaching jobs at other universities. Nothing materialized. Maryland looked very interested, then suddenly hired somebody else.

Then, in 1999, at 55 years of age, without another coaching job to go to, Sandusky announces his retirement from Penn State University. That’s pretty young to retire. But he can manage. He gets $57,000 a year from The Second Mile.

The University gives Sandusky a huge public sendoff and an agreeable separation package. He still has an office. Still can use the gym and showers. Still gets tickets and other perks.

Three years go by. Then in 2002 Mike McQueary sees Sandusky sodomizing a ten year old boy in the shower. He goes home and tells his father, a good friend of Sandusky. The father says, tell Paterno. Paterno tells the Athletic Director.

Once again, the news goes up the line. Everybody knows. What to do? Tell Sandusky he can’t bring kids to the University any more. Tell The Second Mile that they have a problem with Jerry Sandusky.

After all, we can’t have pedophilia on the campus of Pennsylvania State University.

Not at Penn State. Penn State is squeaky clean. Penn State values character, responsibility, commitment. It supports charities like The Second Mile, where kids from broken homes can learn about life, develop a positive self-image and have positive interactions with adult role models.

And get some hands-on sex education from a sicko who is too good to sin.

Thursday, November 10, 2011


It’s right there on the Internet. A newspaper story back in 1999:

PHILADELPHIA. Who will take in the strays?

Who'll tend to the forgotten? Who will open their door to the throwaways, the runaways, the ones squarely in harm's way?

Those are the questions we'd rather not hear, aren't they? The ones that make us avert our eyes, squirm in our seats, wish desperately we were somewhere else.

For almost 20 years now, whenever a hand has been raised to volunteer in answer to those unsettling questions, it has belonged to Jerry Sandusky and his wife, Dottie.

They have adopted and raised six children. They started and nurtured The Second Mile, which began as a foster home and has grown to eight different programs that provide for more than 100,000 children who share this commonality: they are considered to be at risk, which is a chilling term that means their souls will drown if someone doesn't throw them a lifeline.

Jerry Sandusky, by the way, is a football coach.

Back in 1977, coach Sandusky founded the organization known as The Second Mile. To say that it has been a success would be a gross understatement. It has grown to be a multimillion dollar charity whose boards of directors read like a roster of who’s who in Pennsylvania business and society.

Literally thousands of boys and girls have experienced The Second Mile programs, and the positive impact of the program on their lives has been demonstrated and documented.

Sandusky chose the name of his charity from the Bible. Matthew 5:41-42 And whosoever shall compel thee to go a mile, go with him twain.

That’s where we get our phrase “going the extra mile.” Service above and beyond the call of duty.

I looked up the Second Mile on the Internet earlier today. Impressive site. Among the celebrity board members: Arnold Palmer and Cal Ripken Jr.

Then I looked it up again a few hours later. It appears to have been
completely redesigned. Palmer and Ripken are gone.

The home page features a letter from John Raykovitz, CEO of Second Mile.
In part, it reads:

As The Second Mile’s CEO Jack Raykovitz testified to the Grand Jury, he was informed in 2002 by Pennsylvania State University Athletic Director Tim Curley that an individual had reported to Mr. Curley that he was uncomfortable about seeing Jerry Sandusky in the locker room shower with a youth. Mr. Curley also shared that the information had been internally reviewed and that there was no finding of wrongdoing. At no time was The Second Mile made aware of the very serious allegations contained in the Grand Jury report.

Subsequently, in November 2008, Mr. Sandusky informed The Second Mile that he had learned he was being investigated as a result of allegations made against him by an adolescent male in Clinton County, PA. Although he maintained there was no truth to the claims, we are an organization committed first and foremost to the safety and well-being of the children we serve. Consistent with that commitment and with The Second Mile policy, we immediately made the decision to separate him from all of our program activities involving children. Thus, from 2008 to present, Mr. Sandusky has had no involvement with Second Mile programs involving children.

One has to wonder why Raykovitz thought Curley was telling him about Sandusky’s being in a shower with a youth if indeed there was ‘no wrongdoing.’

Did Raykovitz think Curley was just gossiping about Sandusky? C’mon.

So Sandusky continues to be involved with Second Mile children for six more years until he finally admits being under investigation in 2008. And then what? What does The Second Mile do?

It tells Sandusky he can’t play with the kids anymore. But he stays on the staff until he resigns in 2010.

Pennsylvania Governor Tom Corbett wants The Second Mile to be investigated.

Who knows what other horror stories will surface. The bigger they are, the harder they fall.

Saturday, November 5, 2011


Back in 2005, Congress passed the Presidential $1 Coin Act. It requires the U.S. Mint to crank out nearly two million shiney one dollar coins every day.

So now the Mint has more than a billion of them. They’re building a new vault in Dallas – at a cost of $650,000 – just to store them.

Not very popular, these brass bucks. I have a friend who uses them to tip the bag boys at the golf club. I tried it myself. They look at you like you just stiffed them.

An editorial in USA Today says we ought to use the coins. Paper dollars last about 22 months. Brass bucks are still in circulation after 32 years. And they can be recycled. Old paper dollars get ground up and used for landfill.

The bucks cost about 30 cents to make. That works out to over 300 percent profit on very buck the Mint can sell. It won’t make a huge dent in a 3 trillion dollar deficit, but it would help a little.

I stumbled onto a blog the other day where some guys were talking about how to make easy money buying dollar coins. It seems that the Mint is so eager to put them in circulation that they ship them to buyers without charging freight.

And you can buy them with your credit card.

So here’s how it works: you buy $1,000 worth of coins from the Mint and charge them on your Visa card. That buys you $10 in cash awards. The coins arrive in a few days and you immediately deposit them in your bank account. You won’t have to pay Visa for another few weeks, so the bank pays you interest on the money.

Only in America.

I was still thinking about the brass bucks when I browsed over to see what the Occupy Wall Street people were doing. Looks to me like they are running out of gas. Apparently the New York assembly has degenerated into a free for all in which fun seeking teen agers mingle with street derelicts and radicals of all sorts tout inconsistent messages and demands.

Too bad.

There certainly is enough mischief on Wall Street to warrant attention. And whether or not the ratio is truly 99 to 1, it is pretty obvious that some of the top financial decision makers have screwed up and the vast majority of common folk are taking the hit.

In Orlando and elsewhere, the Occupy people are talking about taking all their money out of the banks and putting it into credit unions. Perhaps credit union managers as a class of people are more civic minded than bankers.

Still, many credit unions have gotten into the mergers and acquisitions craze that has produced huge banking conglomerates that are ‘too big to fail.’

And credit unions have the same kind of federal deposit insurance as the banks. So the bottom line is that your money, whether in a bank or a credit union, is as safe as the other fifteen trillion dollars Uncle Sam owes.

I seriously doubt that the current crop of demonstrators will have any impact on the ravages of human avarice. Wall Street will still be Wall Street in 2013.

But the frustration and outcry of the occupiers and the tea party can make a difference. If one step by one man on the moon can signal a giant leap for mankind, so can the individual actions of individual citizens affect the nation’s economy.

So what if you and I, and everyone we can email began using brass bucks instead of dollar bills?

What if each one of us started taking George Washington to the bank?
Turning in all our George Washingtons and using brass bucks instead.

Our constitution authorizes – indeed requires - Congress to coin money. Says nothing about printing bank notes for the Federal Reserve.

The dollar bill in your wallet is nothing more than a note from the Fed.

At least the brass buck is real money.