Update no.627

Update from the Heartland

No.627

16.12.13 – 22.12.13

Blog version:  http://heartlandupdate.blogspot.com/

To all,

Merry Christmas and Happy New Year to all.

The follow-up news items:

-- Will wonders ever cease?  Congress passed H J Res 59, Continuing Appropriations Resolution, 2014 [Senate: 64-36-0-0(0)]; House: 332-94-0-7(2)], including §§141-142 regarding the PPACA implementation [626], before the deadline of 15.January.2014, imposed by the Continuing Appropriations Act, 2014 [PL 113-046; 127 Stat. 558; 17.October.2013], §106 [127 Stat. 559] [618].  The President is expected to sign the bill into law while he is on vacation with his family in Hawaii.  Even in the light of uncommon bipartisanship, I will note with some sadness, even the Press is referring to the bill as a budget, as if continuing resolutions are the new normal for proper appropriations legislation.  Regardless, at least the United States Government (USG) will continue to function.

Judge Richard J. Leon of the U.S. District Court for the District of Columbia issued his ruling in the case of Klayman v. Obama [USDC DC civil action no. 13-0851 (RJL)], declaring portions of the National Security Agency’s (NSA) surveillance program unconstitutional.  The decision is at the top of my judicial reading list, so I shall withhold my perspective until I have the opportunity to absorb the judge’s reasoning.  More than a few talking heads and pundits declared the judge’s decision vindication for Snowden’s betrayal as a “whistleblower.”  I say nonsense!  Snowden has committed thousands of felonies and damaged the national security of the United States, Great Britain, and relations with our allies.  More to follow.

The White House announced and released the final report of the presidential Review Group on Intelligence and Communications Technologies.  This is another to-be-reviewed document.  A quick scan tells me that review might be most productive in conjunction with the review of Klayman v. Obama noted above.  Again, more to follow.

Chief of the Defence Staff General Sir John Nicholas Reynolds “Nick” Houghton, GCB, CBE, offered his stark assessment of Britain’s standing in the world community at the Royal United Services Institute in London.  Sir Nicholas offers observations we should all heed.

UK losing ‘courageous instinct’, warns general

by Sam Jones, Defence and Security Editor

Financial Times [of London]

Published: December 18, 2013; 9:19 pm

http://www.ft.com/intl/cms/s/0/ea62dafe-6827-11e3-8ada-00144feabdc0.html - axzz2o4OquECO

I will note in passing New Mexico’s Supreme Court issued a ruling Thursday legalizing same-sex marriage in the state, declaring it is unconstitutional to deny a marriage license to non-heterosexual couples. New Mexico will apparently join 16 other states and the District of Columbia in allowing gay marriage.

The President recently signed into law an extension of 10 years [PL 113-057; 127 Stat. xxxx] to the Undetectable Firearms Act of 1988 [PL 100-649; 102 Stat. 3816; 18 USC 922; 10.November.1988].  The law continues to make the manufacture, distribution, possession, or use of plastic or non-metallic firearms illegal.  State-of-the-Art industrial three-dimensional printing machines can produce a plastic pistol capable of firing lethal projectiles and remain undetectable to conventional security devices at airports, federal buildings, and other facilities with such devices.  The legislation does not indicate why Congress chose a time-limited prohibition on these firearms, yet I am certainly good with this law, and I would encourage Congress to make it permanent, with the only possible exception being the special operations folks.

With all this fretting about USG debt default as a consequence of the political wrangling in Congress, I felt compelled to read a relevant Supreme Court decision – Perry v. United States [294 U.S. 330 (1935); no. 532].  The history is quite intriguing and illuminating. 

            Mr. John M. Perry of New York City, held a bond obligation of the United States of America with a face value of $10,000, known as ‘Fourth Liberty Loan 4 1/4% Gold Bond of 1933- 1938’ issued on 24.October.1918 – the last of the bond series used by the USG to finance the War with Germany.  The bond explicitly stated, “The principal and interest hereof are payable in United States gold coin of the present standard of value.” On 24.May.1934, Perry presented his bonds for redemption “by the payment of 10,000 gold dollars each containing 25.8 grains of gold 0.9 fine” per the conditions on the bond.  Unfortunately for Perry and others, the United States experienced the financial system collapse that sparked and deepened the Great Depression, and Congress passed a series of laws intended to stop the bleeding. 

            On 14.March.1900, President McKinley signed into law the Gold Standard Act [PL 56-I-041; 31 Stat. 45], §1 that established “the dollar consisting of twenty-five and eight-tenths grains of gold nine-tenths fine” . . . “shall be the standard unit of value” for all forms of money.  Then, from Black Tuesday, 29.October.1929, citizens who had the means began hoarding gold as a bulwark against the mounting collapse of the financial system.  On Saturday, 4.March.1933, Franklin Delano Roosevelt took the oath of office as the 32^nd President of the United States of America.  Five days later, he signed into law the first of a series of emergency laws – Emergency Banking Act of 1933 [PL 73-I-001; 48 Stat. 1; 9.March.1933].  As authorized by the new law, Roosevelt issued Executive Order 6102 [5.April.1933], forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States; the order criminalized the possession of monetary gold by any individual, partnership, association or corporation.  To validate, support and reinforce the President’s actions, Congress passed a series of laws:

Agricultural Adjustment Act (AAA) [PL 73-I-010; 48 Stat. 31; 12.May.1933] [570], in this case, specifically, Part 8 –Emergency Farm Mortgage Act of 1933); Title III, §43(b)(2) [48 Stat. 52], allowing POTUS to fix the weight (value) of gold and silver coinage;

AN ACT To assure uniform value to the coins and currencies of the United States [PL 73-I-Res. 10; 48 Stat. 112; 5.June.1933];

Banking Act of 1933 (AKA Glass-Steagall Act of 1933) [PL 73-I-066; 48 Stat. 162; 16.June.1933]; and,

Gold Reserve Act of 1934 [PL 73-II-087; 48 Stat. 337; 30.January.1934].

The effect of these Great Depression era emergency laws made it illegal to own gold and negated the Gold Clauses in the Liberty Bonds as well as other federal and corporate contracts.  As Perry’s 4^th Liberty Bonds matured, he sought to redeem them per the stipulation on the face of the bonds.  The USG refused to pay in gold and chose to pay in devalued paper dollars.  Perry argued the USG has no constitutional authority to change the terms of the contract (bonds).  The Supreme Court disagreed.

            The Perry decision was one of several during that era regarding the dissolution of the Gold Clause.  The companion cases were:

U.S. v. Bankers' Trust Co. [294 U.S. 240 (1935); nos. 270, 471, 472], and

Norman v. Baltimore & O.R. Co. [included in Bankers].

Chief Justice Charles Evans Hughes, Sr., wrote for a narrow majority in all three cases.  The essence of the majority’s argument boiled down to Article I, Section 8, Clause 5, of the Constitution that grants to Congress power “To coin Money, regulate the Value thereof, and of foreign Coin.”  Associate Justice James Clark McReynolds wrote for the dissenters in all three cases, “Congress may coin money; also it may borrow money. Neither power may be exercised so as to destroy the other; the two clauses must be so construed as to give effect to each.”  McReynolds concluded, “Loss of reputation for honorable dealing will bring us unending humiliation; the impending legal and moral chaos is appalling.”

            In the Gold Clause cases, the USG was caught between conflicting provisions of the Constitution, the extremis of economic situation, and the obligations of a contract.  While we are not dealing with the government’s use of gold as currency, we are witness to and bear the consequence of the continuing political conflict between the two major political parties, specifically with respect to the congressionally-created debt limit and the congressional penchant to spend (borrow) Treasury funds for their pet projects and programs.  The gold situation in the middle of the Great Depression was a genuine, grave situation.  We can argue whether the USG took the correct action or whether the Supreme Court made the correct decision.  In my humble opinion, for what it is worth, the United States had to leave the gold standard to achieve the economic growth we have enjoyed since the Great Depression.  I also believe the Supremes made the correct decision given the exigencies of that era.  The Court did what had to be done.  The Treasury had been bleeding gold for four years, and by Gold Standard, the national currency reserves were diminishing when the USG needed to borrow money to stabilize the financial system.  The USG found itself caught between Article I, Section 8, Clause 2 and Clause 5.  The essence of our current national debt situation comes down to Congress, the Legislative Branch, not the Executive or Judiciary.  Using the debt limit to bludgeon to extract concessions from the majority party will never work.  The only solution lies in cooperation, negotiation and compromise between the conflicting spending interests of the two parties.  The intractable partisanship we have endured for several decades must stop.  We, the People, must find the will to elect representatives who are encouraged to find national solutions rather than protect parochial, local interests.  This is not about our share of the public teat; it is all about the strength of this Grand Republic.

News from the economic front:

-- The U.S. Federal Reserve took the first step away from its historic bond-purchasing program as it announced its decision to reduce monthly buying from US$85B to US$75B.  The Feds’ action marks the moment when the extraordinary monetary response finally passed its peak almost five years after the financial crisis that staggered of the global economy – a positive sign in our recovery from the Great Recession.

-- In another positive sign, the Commerce Department reported the U.S. economy grew at a healthy 4.1% annual rate in 3Q2013, stronger than previously forecast, as new data showed consumer spending accelerated in the summer.  The nation’s Gross Domestic Product (GDP) expanded at the fastest pace since 4Q 2011 and the second-fastest since the recovery began in mid-2009.

-- In a rather rich twist of reality, after JPMorgan Chase agreed to pay US$13B in penalties for its part in the mortgage collapse [623] and another US$1B in penalties for its contribution to the Madoff crime [626], the bank files a suit against the Federal Deposit Insurance Corporation (FDIC), alleging the USG unit forced losses on the bank during the acquisition of Washington Mutual.  This will be an interesting case.

Continuation from Update nos.624 &625:

“I'll start by noting that it is not my friend whose medications were cut; she uses no psychological medications. She works in a public library; it is a large number of people who come into the library whose medications have been arbitrarily cut in half. That's not likely to change.

“The diagnoses in common assorted notorious criminals and notably successful people have been brought to our attention by professionals in the mental health field. I doubt they result from coincidence. In addition, the mental health/illness field has only just begun to learn about the many neurological and genetic factors involved in human behavior. Parenting becomes less viable as an explanation for behavior as we learn more.

“Cap, you undermine your own cause with the sentence, "I continue to maintain guns are instruments of projection preferred by disturbed people; they amplify their acting out their frustration with invisibility or being ignored." That's the point. Firearms make it far easier to act out whatever's in their heads than other weapons. As I have long maintained, it's just not possible for the mental health establishment to find all the disturbed people and determine which ones are dangerous. Making it at least a little difficult to obtain weapons if one has been diagnosed and entered into a database is at least a beginning.

“One of the ironies of our current situation is that we (the USA) make the Taliban what it is today, as we did with Saddam Hussein, the Shah of Iran and several other now-unwelcome entities. Our meddling in others' affairs, especially in the Middle East, comes back to bite us again and again. We are now supposedly winding down another long and expensive war. If we would put a quarter of the Pentagon budget into our infrastructure, educational system, and well-chosen research projects here in the USA, we would prosper more and lose no legitimate defense capability.

“I will note here tonight's new that a U.S. District Court has ruled the NSA's large data collections unconstitutional, but stayed its own ruling pending appeal. So it begins.

“The length of my writings matters when I post a reply to the blog. That box only holds so many characters, and it's less work to edit it into a tighter essay that is better written rather than to learn and carry out some way of splitting it up into more than one piece.”

My response:

            Re: friend.  Ahso; my bad.  I misunderstood.  She sees the consequences.  I would like to think, once PPACA is fully functional, those situations will pass.

            Re: diagnoses.  I’m not that familiar with those common diagnoses.  I shall keep an eye out.

            Re: parenting less viable.  I’m a long way from accepting that argument.  While I am convinced there are sometimes biological or genetic effects in behavior, I believe parenting is by far the biggest impact on childhood and adult behavior. 

            Re: guns.  I do not agree; I was only reflecting reality.  My point remains, guns can never be the root cause; they are inanimate.  Also, I do not agree that firearms make it easier to act out.  Yes, no matter how good any future mental health system becomes, it will never be good enough to catch all the potentially violent people.  Likewise, the same goes for law enforcement or social services.  We, the People, must be concerned about our communities.  Parental accountability will also go a long way to illuminating those situations where parents have lost control and need help.

            Re: Taliban.  I do not agree.  That is like saying the gun shop owner or video game programmer made the boy a killer.

            Re: meddling.  I do agree here.  We are not perfect.  The USG has clearly made mistakes in the past and will in the future.  But, we have also had some profound successes.  Let us keep things in perspective.

            Re: Judge Leon’s ruling.  I’ve seen the news, but I have not yet read his ruling.  I think appeal is inevitable.  I’ll try to get the ruling read ASAP.

            Re: Blog length.  Your choice entirely.  I appreciate your contributions however they come.  I cannot modify the Blog site limitation.

Comments and contributions from Update no.626:

“Good day my U.S. friend.

“Thanks for your message below. You have covered some very contentious subjects with skill.

“The whole world needs to be concerned over Senkaku situation although I cannot agree with your contributor’s views over stepping in to prevent a fight as costly as it may be to our nations. That’s what friends are for surely. We the British and your forefathers did not count the cost when we went into France in both World Wars, and many conflicts since. That in my view is an unacceptable appeasement policy as attempted by our very own Prime Minister Neville Chamberlin in 1939 with Hitler. Thank God we had a stronger man waiting in the shadows to lead our nation.  

“I notice you haven’t mentioned the death of the man who we are hearing over here as the ‘greatest’ national leader of all time, Nelson Mandela. Are Your contributors interested in aspects of non-American subjects? I would be interested to hear their views. Was he greatest national leader of all time? And if not who?”

My reply:

            Re: Senkaku.  Indeed!  The actions of the PRC remind me of a schoolyard bully.  The PRC has no reasonable rationale for its recent actions in/over the East China Sea or in the South China Sea.  Appeasement never satisfies the bully.

            Re: Mandela.  My choice to not mention his passing is largely due to widely mixed perspectives.  I truly admire his public forgiveness of his tormentors.  However, I do not agree with those who pronounce him the “greatest national leader of all time,” or even his time.  He deserves credit for avoiding the destruction for South Africa that Mugabe wrought upon Rhodesia/Zimbabwe after apartheid.  However, the barely disguisable corruption, cronyism, and incompetence in South Africa today are part of his legacy as well.

            Re: “Are Your contributors interested in aspects of non-American subjects?”  Short answer: yes!  I have rendered my succinct opinion above.  Perhaps others will choose to chime in.

            Re: “Was he greatest national leader of all time?”  Again, my answer and opinion are above.

            Re: “And if not who?”  I have difficulty with this part of your query.  My inclination is Churchill, given the enormity, gravity and isolation of the situation he faced in May & June 1940, and through 1941 for that matter.  I might also cite Franklin Roosevelt for his apparent public fearlessness in dealing with the Great Depression, in preparing the nation for war with rampant isolationism at all levels, and for his courage in making grievous decisions.  Yet, they were both deeply flawed men, who made serious mistakes.  Nonetheless, I cannot elevate Mandela to that level of national leadership.

My very best wishes to all.  Take care of yourselves and each other.

Cheers,

Cap                        :-)