Austrian School of Economics is Not Dead!

See Through the Headlines
Peter Schiff

The good news that everyone has been waiting for apparently came in the form of the recent better than expected jobs report. With the official unemployment rate lowered to 10.0% from 10.2% (Bloomberg, Dec. 2009), investors assume that the economy is improving. As a result, the feeling is that the Fed will accelerate the timetable for its highly anticipated "exit strategy," which will supposedly withdraw the excess liquidly that has driven the dollar lower and gold higher. This belief propelled the U.S. dollar to one of its best days in recent memory and set up gold for a fall of over $100 per ounce. However, the conclusions sparked by the jobs report are wrong on several counts.

First, the economy is not improving. All that has happened is that we have gone deeper into debt by borrowing and spending more money that we don't have. A closer look at the jobs numbers confirms that the areas that showed the greatest strength were those that benefitted the most from federal monetary or fiscal support. The Fed cannot remove the liquidity without cutting the legs out from under this phony “recovery.” The Fed likely knows this, as evidenced by Bernanke's subsequent testimony. As it has shown in countless past episodes, the Fed has no intention of removing the punch bowl.

Even if Bernanke & Co. were to slowly tighten, it would be too little too late to help the dollar or restrain gold. To make a meaningful impact on the trajectory of these mega-trends, the Fed would likely need to pursue aggressive interest rate hikes and sell down its holdings of treasuries and other toxic debt. However, such a sensible, yet politically untenable, policy seems completely off the table. Even if the Fed did pursue such a strategy, the dollar might rise initially, but would likely sell off as the phony economy collapsed as a result of higher interest rates and tighter monetary policy.

We have once again made the same trade-off we did during the last recession. We have decided to defer the pain of an economic rebalancing by adopting aggressive monetary and physical stimulus which merely lays the foundation for an even greater economic disaster down the road. It's shocking how few observers note the repeating pattern.

The vast majority of economists take it on faith that the stimulus can be withdrawn without pushing the economy back into recession. But based on the distortive affect of stimuli and bailouts, our economy has adapted to a climate where cheap credit is plentiful. As a result, our economy is less able than ever to survive in a world in which stimulus is removed. But eventually, the cheap credit will dry up. Not because the Fed decides it should, but because our foreign creditors stop lending. When that happens, our downturn will be even more debilitating in the future than it was in the past.

We will never have a sustainable recovery until all the imbalances are allowed to be worked out, but as long as the government keeps stimulating, this will never happen. Instead, we will have a string of crises escalating in magnitude until a complete collapse of the dollar brings the process to a halt.

In the meantime, I believe pullbacks in the price of gold should be viewed as buying opportunities, and any rallies in the dollar as a chance to add to your foreign investments. Remember that in trending markets, the biggest moves usually occur in the opposite direction, at least until the climactic end. This keeps the speculators in check and the timid on the sidelines. However, those who understand the fundamentals will stay with the trends until the doubters finally throw caution to the wind and join the party -- just as it's getting ready to end.

Why Big Banks Can't Work

Our banks are beyond the control of mere mortals

By John Kay

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08 July 2009 Financial Times

Great and enduringly successful organisations are not stages on which geniuses can strut. They are structures that make the most of the ordinary talents of ordinary people.

At Oxford university, I often hear people say there is nothing wrong with the system: the problem is the vice-chancellor/master/bursar/ university officials. And, in a sense, they are right. If the vice-chancellor had the wisdom of Socrates, the political skills of Machiavelli and the leadership qualities of Winston Churchill, not to mention the patience of Job, he or she would be very likely to be able to fulfil the conflicting demands of the post. But such paragons are few and far between. In the meantime we must try to find structures that can be operated by ordinary mortals.

In the same way, the claim that the fault with the banking system lies not with the structure of banks but with the boards and executives that claimed to run them is both correct and absurd. In one sense, the claim is correct: boards and executives did not successfully perform the tasks assigned to them – tasks that not only did they claim to be discharging, but for which they frequently paid themselves very large sums of money.

But, in another sense, the claim is absurd: if the failures are both as widespread and as persistent as it appears, the problem is in the job specification rather than with the incumbent. If you employ an alchemist who fails to turn base metal into gold, the alchemist is certainly a fool and a fraud but the greater fool is the patron.

The bank executives pilloried by the UK’s Treasury select committee of MPs were all exceptional people. The vilified Sir Fred Goodwin was an effective manager who had slashed through the National Westminster bureaucracy and revived a failing institution – a task that had defeated many able men before him. His chairman, Sir Tom McKillop, offered experience and ability that met every possible specification for such a role in a big international corporation. As chairman of HBOS, Lord Stevenson was Britain’s supreme networker. This skill is a particularly valuable attribute in an environment where the essence of banking is to extract very large sums of taxpayers’ money while giving as little as possible in return. His chief executive, Andy Hornby, was criticised for being a retailer. But Halifax, half of HBOS, needed retail expertise. The only thing it needed to know about complex securitised products was that there was no good reason to buy them.

Like Sir Fred, Sir Tom, Lord Stevenson and Mr Hornby, most of the people who sat on the boards of failed banks were individuals whose services other companies would have been delighted to attract. If there was a problem of board composition, it is not an issue just for financial services companies but for the UK corporate sector as a whole. Perhaps there is such a problem, but the restructuring of financial services will not wait for its identification and solution.

The hapless four were criticised for their lack of banking expertise but it is, in fact, not clear what modern banking expertise is. The world of modern banking requires all the skills of these gentlemen, plus some others, and no one can expect to have all these attributes.

It has been said of Jamie Dimon (who does not have a banking qualification) that his dominance exists because at every meeting all the participants know that he could do each of their jobs better than they could. But the business world cannot operate at all if it can operate only with individuals of the calibre of Mr Dimon. Better, as so often, to follow an aphorism of Warren Buffett’s: invest only in businesses that an idiot can run, because sooner or later an idiot will.

Our banks were not run by idiots. They were run by able men who were out of their depth. If their aspirations were beyond their capacity it is because they were probably beyond anyone’s capacity. We could continue the search for Superman or Superwoman. But we would be wiser to look for a simpler world, more resilient to human error and the inevitable misjudgments. Great and enduringly successful organisations are not stages on which geniuses can strut. They are structures that make the most of the ordinary talents of ordinary people.

U.S. Economic Decline

The GMO Quarterly Letter (2009 October) by Jeremy Grantham titled Just Deserts and Markets Being Silly Again is an extremely informed comment on the current U.S. economic situation. It identifies the causes for the coming economic decline that the incompetence of the current Washington administration has guaranteed. Additionally, the letter concludes with a Special Topic report titled Lesson Not Learned: On Redesigning Our Current Financial System. The Special Topic report is extremely prescient and worth reading in detail. Both reports are detailed and somewhat lengthy --- consequently, not for the faint of heart.

We're All Goina Die - More Sooner Than Later!

PAUL B. FARRELL

Dec. 1, 2009, 12:01 a.m. EST

Obama's 'predictably irrational' economic policies

14 reasons Obama's love of Wall Street will trigger the Great Depression 2

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- First: Kiss the rally good-bye, says Jeremy Grantham, legendary CEO of the $101 billion GMO money-management firm.

Why? The market is overvalued 25%. A minimum 15% correction is coming in 2010, putting the Dow in the 8,000-9,000 range. The S&P 500? Not at 666 like last spring; maybe 800. Why a top? Black Friday? Dubai? Tiger Woods? All the dark films? The "2012" end of civilization? The post-apocalyptic "The Road?" Stop guessing, timing market turns is irrational.

Grantham's shift from bull to bear appears rational. Remember, earlier this year the Dow was near 6,000, banks near bankrupt, and we were praying for the new untested president to change America. In his latest editorial Grantham reminds us why his prediction made sense in the spring: "Regardless of the fundamentals, there would be a sharp rally. After a very large decline and a period of somewhat blind panic, it is simply the nature of the beast." Get it? A rally was predictable, based on the history of cycles.

Trust Grantham? 100%. Back in early 2007, he warned: "The First Truly Global Bubble: From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips; it's bubble time. ... Everyone, everywhere is reinforcing one another. ... The bursting of the bubble will be across all countries and all assets ... no similar global event has occurred before."

Grantham was one of a small group of industry leaders who saw a crash coming as early as 2000. But political leaders were ideologically blind: Fed Czar Ben Bernanke said the collapsing markets were "contained." Our devious Treasury Czar Henry Paulson was misleading Fortune and all America: "This is far and away the strongest global economy I've seen in my business lifetime." Worse, former Fed Czar Alan Greenspan was busy writing his memoirs bragging about how he invented a "New World" out of Reaganomics, Ayn Rand's New Age wishful-thinking and an unregulated $670 trillion derivatives market.

Three clueless leaders.

Grantham bearish, short-term correction, long-term disaster

Now Grantham's warning us again: America's irrational nightmare will repeat. First, the short-term correction, 15% to 25%. But then long-term, a deadly warning: Disaster ahead. Why? Because America has "learned nothing," we are "condemning ourselves to another serious financial crisis in the not too-distant future."

Yes, Americans are predictably irrational, doomed to repeat history: Grantham points us to a key chart, his "favorite example of a last hurrah after the first leg of the 1929 crash." The similarity between 1929-30 and today are obvious: "After the sharp decline in the fall of 1929, the S&P 500 rallied 46% from its low in November to the rally high of April 12, 1930, then, of course, fell by over 80%."

Familiar? You bet. We've had our rally. Next, the plunge. Our irrationality plus history guarantees another ... only bigger.

A year ago America came dangerously close to the Great Depression 2. We "learned nothing." When psychologist Daniel Kahneman won the 2002 Nobel Prize in Economic Science for his work on irrationality in 2002, the sense was that behavioral economics would help Main Street become "less irrational," that behavioral sciences would make us all better investors, better consumers, better citizens.

Obama even made a big issue of working with behavioral scientists to minimize irrational behavior in America.

Obama gets failing grade in behavioral economics

But they turned against us. Behavioral scientists, behavioral economists and behavioral-finance experts have become the mortal enemies of Main Street America. Two ways: First, behaviorists consistently put us down by reminding us how irrational (stupid) we are. Second: They're using their minds, tools and technologies against us, helping Wall Street profile us as targets for investing products, bank customer fees, tax propaganda, etc.

They are paid mercenaries helping Wall Street scam Americans out of billions. They cannot be trusted, they have lost their independence and professional integrity. They are failing to expose the most toxic sources of irrationality: Wall Street, Congress, the White House.

And that's why when a guy like Jeremy Grantham comes along focusing us on the toxic irrationality at the top of America's leadership he deserves to be seen as one of America's best behavioral economists. He's one of the few honest behaviorists, exposing the irrationality of America's leaders.

So please listen closely to his 14-point analysis of the rampant irrationality at the highest level of American government today, because what he is also predicting is another catastrophic meltdown dead ahead.

1. Obama's shift into 'predictably irrational' economics

If Grantham ever was a fan, he's clearly disillusioned with the president. His 14 points expose the extremely irrational behavior of Obama breaking promises by turning Washington over to Wall Street, a blunder that will trigger the Great Depression 2. Grantham is cynical but subtle. If you want a more brutal attack, read Matt Taibbi's latest Rolling Stone feature: "Obama's Big Sellout," detailing how Obama, same as Bush, turned government over to Wall Street, to the same crooks who created the mess.

2. Bernanke's reappointment, a totally irrational blunder

"The most passionate cheerleader of Greenspan's follies ... completely clueless." A blunder "like reappointing the Titanic's captain" and "a wasted opportunity."

3. Summers, Geithner: Wall Street's newest Trojan Horses

Larry Summers blew "no warning whistles of impending doom back in 2006 and 2007." Earlier as Treasury Secretary he "beat back attempts to regulate" derivatives. Tim Geithner "sat in the very engine room of the USS Disaster and helped steer her onto the rocks" as New York Fed Czar. Still an irrational Obama appointed him, as Wall Street cheered.

4. Idiotic, irrational, greedy mortgage borrowers

"The more misguided or reckless the borrowers, the more determined the efforts to help them out," although "these efforts had limited effect." Short-term politics, bad economics.

5. Reckless, irrational and stupid home builders

They "magnificently overbuilt" for years." Still our irrational president stimulated "even more home building by giving new house buyers $8,000 each."

6. Nation of irrational overspenders and undersavers

Americans have been "dangerously overconsuming for the last 15 years." Still, our irrational politicians "encourage consumption and penalize savers by maintaining artificially low rates" fueling the same irrational speculation that created the meltdown.

7. America's too-Irrational-to-fail' banking system

Our banking "system shows every sign of being out of control." Make it simpler, smaller, "so they can be allowed to fail." Separate the "dangerously risk-seeking hedge fund heart from the banking system." Instead Obama set up a bizarre, irrational policy ... force them to be bigger." Now they're "at extreme tilt to risk-taking: it's practically a cliff!"

8. Wall Street's unconscionable crooked mega-bonuses

"Two-thirds of Goldman's huge profits went for bonuses ... largest ever." Last year the "same guys were on the edge of a run on the bank ... saved only by government." Our irrational president upset "the formerly infallible workings of capitalism."

9. Corporate America's grossly overpaid CEOs

"Galling," says Grantham: When he came to America in 1964 "the ratio of CEO pay to the average worker was ... between 20/1 and 40/1." That had "held for the previous 30 years. By 2006, this ratio had exploded to between 400/1 and 600/1 ... obscene."

10. Our irrationally overleveraged, zombie companies

Wall Street has "so overstimulated the risk-taking environment that junky, weak, marginal companies and zombie banks" outperform, with "junk over the great blue chips." We let losers "live to compete against the companies that actually deserve to be survivors." That's "not healthy for the long-term well-being of the economy."

11. Our irrationally managed U.S. auto industry

"Most short-sighted industry of the last 20 (40?) years, and one of the worst managed."

12. A nation addicted to automobiles, dying for more oil

"We chew up a dangerously large amount of Middle Eastern oil ... ruinous for our global political well-being (and ability to avoid war)" and bad for "an overheating world." Still, our irrational politicians are subsidizing more car purchases.

13. Stock options give CEOs a legal right to steal from shareholders

They're robbing us: Corporate CEOs have a "legalized way to abscond with the stockholders' equity." If management messes up and the stock crashes, they just "rewrite the options at new low prices ... no serious attempt to match stock option ... to the building of long-term franchise value. Instead, the motto is: grab it now and run!"

14. Finally, Grantham's irrational 'old nemesis, Greenspan'

He gets "the title of Maestro in the U.S. and is knighted by the Queen ... for thoroughly demolishing the integrity of the U.S. financial system. He overtly ignored the great threat of bubbles in asset classes and, in fact, encouraged them. He Ayn Rand-ishly facilitated the progressive dismantling of governmental restrictions on financial behavior, he deliberately kept real interest rates at zero for years, etc., etc., etc. You have heard it before. ... In the good old days, he would have been set in the village stocks, and not the kind you buy and sell. And I would have been right there, Alan, with very ripe tomatoes."

In the end Grantham encourages everyone to read a John Kay article in the Financial Times. Kay's title says it all: "Our banks are beyond the control of mere mortals." He advises investors to "follow an aphorism of Warren Buffett's: 'Invest only in businesses that an idiot can run, because sooner or later an idiot will.'"

Rereading Buffett's wisdom I wonder: Perhaps America really is a "business" that nobody can run? Not the best and brightest. Nor an idiot. And certainly not our too-clever behavioral scientists.

Moreover, "people" are not the problem. The 1982 classic "In Search of Excellence" tells us that 85% of organizational failures were systemic, not people caused. "It's the system stupid." That means America, our economy, our markets, our capitalist system have become too big, too complex, too out-of-control, too unmanageable.

Our wealthy elite already know that and are grabbing what's left. The "idiot" masses could regain control, but only in a 1776-style revolution, except they're too docile, too irrational to revolt.

The Climate Change Hoax

Sun-Caused Warming

Posted 09/08/2009 06:52 PM ET

Climate Change: A team of international scientists has finally figured out why sunspots have a dramatic effect on the weather. It shows the folly of fearing the SUV while dismissing that thermonuclear furnace in the sky.

Mankind once worshiped the sun. Now the world studiously ignores it as nations prepare to hammer out a successor to the failed Kyoto Protocol, which expires in 2012, in Copenhagen in December. Something is indeed rotten in Denmark.

Our own government is committed to fighting climate change whether it be though Son of Kyoto or our own growth-capping, job-killing cap-and-trade legislation known as Waxman-Markey.

Despite the sun being the major source of all energy on earth, supporters of man-caused global warming have dismissed the sun's role in climate change. They say the historic 11-year solar cycle changes the amount of energy reaching the earth by about only 0.1% — not enough to account for temperature rises this century.

The Aug. 28 issue of the journal Science details how the scientific team led by the National Center for Atmospheric Research (NCAR), using a century's worth of data and three powerful computer models, figured out just how small changes in solar activity can trigger great changes in earth's climate.

The study found that chemicals in the stratosphere and sea surface temperatures during solar maximums act in a way that amplifies the sun's influence. The slight increase in solar energy in the peak production of sunspots is absorbed by stratospheric ozone, warming the air in the tropics where sunlight is most intense.

The additional energy also helps produce more ozone that absorbs even more solar energy. The increased sunlight causes a slight warming of ocean surface waters across the subtropical Pacific.

This stratospheric energy absorption and sea surface warming can intensify winds and rainfall, and ultimately influence global weather in ways that amplify the sun's influence.

"The sun, the stratosphere and the oceans are connected in ways that can influence such events as winter rainfall in North America," says study author Gerald Meehl. "Understanding the role of the solar cycle can provide added insight as scientists work toward predicting regional weather patterns for the next couple of decades."

The world has significantly cooled in the last decade, a period that corresponds to a decline and virtual halt in sunspot activity. Solar activity is in a valley right now, the deepest of the past century. The National Oceanic and Atmospheric Administration reports that in 2008 and 2009 the sun set Space Age records for low sunspot counts, weak solar wind and low solar radiance.

R. Timothy Patterson, professor of geology and director of the Ottawa-Carleton Geoscience Center of Canada's Carleton University, has said that "CO2 variations show little correlation with our planet's climate on long-, medium- and even short-time scales."

Rather, he says, "I and the first-class scientists I work with are consistently finding excellent correlations between the regular fluctuations of the sun and earthly climate. This is not surprising. The sun and the stars are the ultimate source of energy on this planet."

A Hoover Institution Study a few years back examined historical data and came to a similar conclusion. "The effects of solar activity and volcanoes are impossible to miss. Temperatures fluctuated exactly as expected, and the pattern was so clear that, statistically, the odds of the correlation existing by chance were less than one in 100," according to Hoover fellow Bruce Berkowitz.

Current solar inactivity is similar to what scientists call the Maunder Minimum, a period of solar inactivity from 1645 to 1715 that spawned what is known as the Little Ice Age. At Christmas, Londoners could ice skate on the frozen Thames and New Yorkers could walk over the Hudson from Manhattan to Staten Island.

The NCAR study shows how complicated atmospheric and climate science really is and how many variables must be factored in to have even a basic understanding of all the components that make up and influence earth's climate before the world commits economic suicide.

Climate Change Fiasco

The Coming Climate Dictatorship

Posted 11/12/2009 07:43 PM ET

Control: The House and Senate climate bills contain a provision giving the president extraordinary powers in the event of a "climate emergency." As chief of staff Rahm Emanuel says, a crisis is a terrible thing to waste.

If you thought the House health care bill that nobody read has hidden passages that threaten our freedoms and liberty, take a peak at the "trigger" placed in the byzantine innards of both the House-passed Waxman-Markey bill and the Kerry-Boxer bill just passed by Democrats out of Sen. Barbara Boxer's Environment and Public Works Committee.

As Nick Loris of the Heritage Foundation points out, the Kerry-Boxer bill requires the declaration of a "climate emergency" if the concentration of carbon dioxide and other declared greenhouse gases in the atmosphere exceeds 450 parts per million (ppm). It was at about 286 ppm before the Industrial Revolution and now sits at around 368 ppm.

That figure was picked out of a hat because the warm-mongers believe that's the level at which the polar ice caps will disappear, boats can be moored on the Statue of Liberty's torch and dead polar bears will wash up on the beaches of Malibu.

The Senate version includes a section that gives the president authority, under this declared "climate emergency," to "direct all Federal agencies to use existing statutory authority to take appropriate actions ... to address shortfalls" in achieving greenhouse gas (GHG) reductions.

What the "appropriate actions" might be are not defined and presumably left up to the discretion of the White House. Could the burning of coal be suspended or recreational driving be banned? Sen. David Vitter, R-La., asked the EPA for a definition and received no response.

Competitive Enterprise Institute scholar Chris Horner says "this agenda transparently is not about GHG concentrations, or the climate. It's about what the provision would bring: almost limitless power over private economic activity and individual liberty for the activist president and, for the reluctant leader, litigious greens and courts" packed by liberal Democrat appointees.

Writing in the Financial Times recently, Czech President Vaclav Klaus, author of the book, "Blue Planet, Green Shackles," said: "As someone who lived under communism for most of his life, I feel obliged to say that I see the biggest threat to freedom, democracy, the market economy and prosperity now in ambitious environmentalism, not communism."

Klaus, who has challenged Al Gore to a debate and has rejected Europe's embrace of Kyoto, told the Cato Institute recently that "environmentalism is a religion" that accepts global warming on faith and seeks to exploit it to reshape the world and economic order.

"Environmentalism only pretends to deal with environmental protection," he told the libertarian think tank. "Behind the terminology is really an ambitious attempt to radically reorganize the world."

The Minnesota Free Market Institute recently hosted an event at Bethel University in St. Paul, Minn. Keynote speaker Lord Christopher Monckton, former science adviser to British Prime Minister Margaret Thatcher, warned of one of the consequences of Copenhagen — the loss of American sovereignty.

"I read that treaty," Lord Monckton said, "and what it says is this: that a world government is going to be created. The word 'government' actually appears as the first of three purposes of the new entity. The second purpose is the transfer of wealth from the countries of the West to Third World countries, (to satisfy) what is called, coyly, 'climate debt' — because we've been burning CO2 and they haven't."

This nation was founded and built by those yearning to breathe free. Its freedoms are imperiled by those demanding that we breathe pure. We are human sacrifices to the earth goddess Gaia. Loss of sovereignty to both a federal and a world government and redistribution of wealth on a global scale — all this in the name of saving the planet from a concocted threat.

As we have said, the road to Copenhagen is being paved with good intentions.

Another View of Obama

Anne Wortham is Associate Professor of Sociology at Illinois State University and continuing Visiting Scholar at Stanford University 's Hoover Institution. She is a member of the American Sociological Association and the American Philosophical Association.
She has been a John M. Olin Foundation Faculty Fellow, and honored as a Distinguished Alumni of the Year by the National Association for Equal Opportunity in Higher Education.

In fall 1988 she was one of a select group of intellectuals who were featured in Bill Moyer's television series, "A World of Ideas." The transcript of her conversation with Moyers has been published in his book, A World of Ideas.
Wortham is author of "The Other Side of Racism: A Philosophical Study of Black Race Consciousness" which analyzes how race consciousness is transformed into political strategies and policy issues.

She has published numerous articles on the implications of individual rights for civil rights policy, and is currently writing a book on theories of social and cultural marginality. Recently, she has published articles on the significance of multiculturalism and Afrocentricism in education, the politics of victimization and the social and political impact of political correctness. Shortly after an interview in 2004, she was awarded tenure.


Fellow Americans,

Please know: I am Black; I grew up in the segregated South. I did not vote for Barack Obama; I wrote in Ron Paul's name as my choice for president. Most importantly, I am not race conscious. I do not require a Black president to know that I am a person of worth, and that life is worth living. I do not require a Black president to love the ideal of America

I cannot join you in your celebration. I feel no elation. There is no smile on my face. I am not jumping with joy. There are no tears of triumph in my eyes. For such emotions and behavior to come from me, I would have to deny all that I know about the requirements of human flourishing and survival - all that I know about the history of the United States of America, all that I know about American race relations, and all that I know about Barack Obama as a politician I would have to deny the nature of the "change" that Obama asserts has come to America .

Most importantly, I would have to abnegate my certain understanding that you have chosen to sprint down the road to serfdom that we have been on for over a century. I would have to pretend that individual liberty has no value for the success of a human life. I would have to evade your rejection of the slender reed of capitalism on which your success and mine depend. I would have to think it somehow rational that 94 percent of the 12 million Blacks in this country voted for a man because he looks like them (that Blacks are permitted to play the race card), and that they were joined by self-declared "progressive" whites who voted for him because he doesn't look like them.

I would have to wipe my mind clean of all that I know about the kind of people who have advised and taught Barack Obama and will fill posts in his administration - political intellectuals like my former colleagues at the Harvard University 's Kennedy School of Government.

I would have to believe that "fairness" is equivalent of justice. I would have to believe that a man who asks me to "go forward in a new spirit of service, in a new service of sacrifice" is speaking in my interest.. I would have to accept the premise of a man that economic prosperity comes from the "bottom up," and who arrogantly believes that he can will it into existence by the use of government force. I would have to admire a man who thinks the standard of living of the masses can be improved by destroying the most productive and the generators of wealth.

Finally, Americans, I would have to erase from my consciousness the scene of 125,000 screaming, crying, cheering people in Grant Park, Chicago irrationally chanting "Yes We Can!" Finally, I would have to wipe all memory of all the times I have heard politicians, pundits, journalists, editorialists, bloggers and intellectuals declare that capitalism is dead - and no one, including especially Alan Greenspan, objected to their assumption that the particular version of the anti-capitalistic mentality that they want to replace with their own version of anti-capitalism is anything remotely equivalent to capitalism.

So you have made history, Americans. You and your children have elected a Black man to the office of the president of the United States , the wounded giant of the world. The battle between John Wayne and Jane Fonda is over - and Fonda won. Eugene McCarthy and George McGovern must be very happy men. Jimmy Carter, too. And the Kennedys have at last gotten their Kennedy look-a-like. The self-righteous welfare statists in the suburbs can feel warm moments of satisfaction for having elected a Black person.

So, toast yourselves: 60s countercultural radicals, 80s yuppies and 90s bourgeois bohemians. Toast yourselves, Black America. Shout your glee Harvard, Princeton , Yale, Duke, Stanford, and Berkeley. You have elected not an individual who is qualified to be president, but a Black man who, like the pragmatist Franklin Roosevelt, promises to - Do Something! You now have someone who has picked up the baton of Lyndon Johnson's Great Society. But you have also foolishly traded your freedom and mine - what little there is left - for the chance to feel good.

There is nothing in me that can share your happy obliviousness. God Help Us all...

Anne Wortham