Obama selling false hope and false dreams
February 22, 2008
It used to be that the average American voter had a pretty good head on their shoulders. Not so much anymore. Too many Americans are allowing the likes of Barack Obama to sway them into thinking that they will be rescued from their current situation should he win the presidency. They cannot see through the hype.Has anyone bothered to take a look at what Obama stands for? What are his real views and plans for America?
The US has been and is involved with helping nations around the world. We give the most aid and manpower (troops and civilian aid) to causes than any other country in the world. I’ve said it before; anything with the word “global” attached to it, beware! This bill will overextend the US and the UN will have greater control over what the US does. Sickening thought! The US is sovereign!
There are people RIGHT HERE in our own nation who are struggling in the downturn of the economy and people have lost jobs. Mr. Obama, why don’t you try telling taxpayers that you plan on using their money to care for the rest of the world when the taxpayers are struggling themselves?!
I have to question where Obama is really willing to take the US. Does he realize we must start RIGHT HERE in America to fix the many problems on our table? America should not strain and stretch itself to make sure the world has what it needs. With the value of the dollar below the Euro, and even Canada’s Dollar, the US is in need of a strong leader who will place the US first and foremost above all other worldly concerns. The welfare of other nations comes last at this point and time.
Where is Barack Obama’s loyalty to this country, a wonderful American nation? Is his loyalty more towards Africa? That seems to be the case as the church Obama attends claims loyalty to the “mother continent,” Africa. The congregation of Trinity United Church of Christ claims to be “an African people” who are “true to their native land.” At the church, heavy emphasis is placed on African studies.
More on Trinity United Church of Christ: http://www.tucc.org/about.htm
Will Africa take precedence over America should Barack Obama become president? Barack Obama has been shown standing with his hands resting in front of him instead of over his heart as the National Anthem played. Now surfaces the questionable statement by his wife stating how proud she is of this nation for the first time:
“For the first time in my adult lifetime I am really proud of my country, and not just because Barack has done well, but I think people are hungry for change.” — Michelle Obama
Michelle Obama’s attitude of being proud of America in terms of her husband having “done well” and that folks want “change” is disturbing. She didn’t mention the greatness of America in the context of all the US has done for the world and for mankind. To me, it was a selfish remark. Barack and Michelle Obama do NOT represent me, nor any other American who wants to make sure that his/her country, stays intact. Perhaps Barack and Michelle Obama would like to indulge a bit more in American studies…to really get a sense of how great this nation has become despite our current challenges. The two of them want change alright, but change not necessarily for the better.
Yet still, crowds fall apart, people reduced to tears at Obama’s rallies. No doubt there are some who profess to be Christians who are part of those crowds. They are getting sucked into Obama’s talk of “hope.” No politician can heal your wounds; no politician can offer you “hope.” WAKE UP!! Only Jesus Christ can offer hope in this dismal world!
How has this nation gotten so far off the beaten path? We used to employ common sense and good sound judgment. Now we are running headstrong over someone who is full of fancy talk, but offers nothing containing substance.
And yes, scrutinizing politicians and combing over their record is something a voter should consider doing. The candidates running for president are within a hair of leading this nation, and as one can see from Barack Obama’s stealth plans for another tax on Americans, we’d BETTER make sure that we send the right people to do the job.
Global Poverty Act (S. 2433)
Obama’s Global Tax Proposal Up for Senate Vote by: Cliff Kincaid
Obama’s Church: More about Africa than God?
The infamous picture of Sen. Barack Obama sans hand over heart
William F. Buckley: R.I.P., Enfant Terrible
By Ann Coulter
Wednesday, February 27, 2008
William F. Buckley was the original enfant terrible.
As with Ronald Reagan, everyone prefers to remember great men when they weren’t being great, but later, when they were being admired. Having changed the world, there came a point when Buckley no longer needed to shock it.
But to call Buckley an “enfant terrible” and then to recall only his days as a grandee is like calling a liberal actress “courageous.” Back in the day, Buckley truly was courageous. I prefer to remember the Buckley who scandalized to the bien-pensant.
Other tributes will contain the obvious quotes about demanding a recount if he won the New York mayoral election and trusting the first 100 names in the Boston telephone book more than the Harvard faculty. I shall revel in the “terrible” aspects of the enfant terrible.
Buckley’s first book, “God and Man at Yale,” was met with the usual thoughtful critiques of anyone who challenges the liberal establishment. Frank Ashburn wrote in the Saturday Review: “The book is one which has the glow and appeal of a fiery cross on a hillside at night. There will undoubtedly be robed figures who gather to it, but the hoods will not be academic. They will cover the face.”
The president of Yale sent alumni thousands of copies of McGeorge Bundy’s review of the book from the Atlantic Monthly calling Buckley a “twisted and ignorant young man.” Other reviews bordered on the hyperbolic. One critic simply burst into tears, then transcribed his entire crying jag word for word.
Buckley’s next book, “McCarthy and His Enemies,” written with L. Brent Bozell, proved that normal people didn’t have to wait for the Venona Papers to be declassified to see that the Democratic Party was collaborating with fascists. The book — and the left’s reaction thereto — demonstrated that liberals could tolerate a communist sympathizer, but never a Joe McCarthy sympathizer.
Relevant to Republicans’ predicament today, National Review did not endorse a candidate for president in 1956, correctly concluding that Dwight Eisenhower was not a conservative, however great a military leader he had been. In his defense, Ike never demanded that camps housing enemy detainees be closed down.
Nor would National Review endorse liberal Republican Richard Nixon, waiting until 1964 to enthusiastically support a candidate for president who had no hope of winning. Barry Goldwater, though given the right things to say — often by Buckley or Bozell, who wrote Goldwater’s “Conscience of a Conservative” — was not particularly bright.
But the Goldwater candidacy, Buckley believed, would provide “the well-planted seeds of hope,” eventually fulfilled by Ronald Reagan. Goldwater was sort of the army ant on whose body Reagan walked to greatness. Thanks, Barry. When later challenged on Reagan’s intellectual stature, Buckley said: “Of course, he will always tend to reach first for an anecdote. But then, so does the New Testament.”
With liberal Republicans still bothering everyone even after Reagan, Buckley went all out against liberal Republican Sen. Lowell P. Weicker Jr. When Democrat Joe Lieberman challenged Weicker for the Senate in 1988, National Review ran an article subtly titled: “Does Lowell Weicker Make You Sick?”
Buckley started a political action committee to support Lieberman, explaining, “We want to pass the word that it’s OK to vote for the other guy or stay at home.” The good thing about Lieberman, Buckley said, was that he “doesn’t have the tendency of appalling you every time he opens his mouth.”
That same year, when the radical chic composer Leonard Bernstein complained about the smearing of the word “liberal,” Buckley replied: “Lenny does not realize that one of the reasons the ‘L’ word is discredited is that it was handled by such as Leonard Bernstein.” The composer was so unnerved by this remark that, just to cheer himself up, he invited several extra Black Panthers to his next cocktail party.
When Arthur Schlesinger Jr. objected to his words being used as a jacket-flap endorsement on one of Buckley’s books in 1963, Buckley replied by telegram:
“MY OFFICE HAS COPY OF ORIGINAL TAPE. TELL ARTHUR THAT’LL TEACH HIM TO USE UNCTION IN POLITICAL DEBATE BUT NOT TO TAKE IT SO HARD: NO ONE BELIEVES ANYTHING HE SAYS ANYWAY.”
In a famous exchange with Gore Vidal in 1968, Vidal said to Buckley: “As far as I am concerned, the only crypto Nazi I can think of is yourself.”
Buckley replied: “Now listen, you queer. Stop calling me a crypto Nazi, or I’ll sock you in your goddamn face and you’ll stay plastered.”
Years later, in 1985, Buckley said of the incident: “We both acted irresponsibly. I’m not a Nazi, but he is, I suppose, a fag.”
Writing in defense of the rich in 1967, Buckley said: “My guess is, that the last man to corner the soybean market, whoever he was, put at least as much time and creative energy into the cornering of it as, say, Norman Mailer put into his latest novel and produced something far more bearable — better a rise in the price of soybeans than ‘Why Are We in Vietnam?'” (For you kids out there, Norman Mailer was an America-hating drunkard who wrote books.)
Some of Buckley’s best lines were uttered in court during a lengthy libel trial in the ’80s against National Review brought by the Liberty Lobby, which was then countersued by National Review. (The Liberty Lobby lost and NR won.)
Irritated by attorney Mark Lane’s questions, Buckley asked the judge: “Your Honor, when he asks a ludicrous question, how am I supposed to behave?”
In response to another of Lane’s questions, Buckley said: “I decline to answer that question; it’s too stupid.”
When asked if he had “referred to Jesse Jackson as an ignoramus,” Buckley said, “If I didn’t, I should have.”
Buckley may have been a conservative celebrity, but there was a lot more to him than a bow tie and a sailboat.
Ann Coulter is the legal correspondent for Human Events and author of Godless: The Church of Liberalism . Be the first to read Ann Coulter’s column. Sign up today and receive Townhall.com delivered each morning to your inbox. Copyright © 2006 Salem Web Network. All Rights Reserved.
|What’s Wrong with Being Spiritual?
Mark R. Rushdoony » Bio
January/February 2008 issue
Faith For All of Life “The Christian World Order”
A familiar hymn of a generation ago had Christians joyfully declaring:
Not too surprisingly, this hymn became popular when the Western church was in full-scale retreat from all social responsibility. “Don’t polish brass on a sinking ship!” was an injunction declared from many pulpits. Another familiar phrase was, “Isn’t it great how bad things are? It means Jesus is coming back soon!”
Common to such thinking was the belief that this world was itself so corrupted by sin that the believer should disassociate himself from it to maintain his purity. Whether he contemplated the higher realm of glory or the miraculous millennial rule of Christ, such thinking meant a disregard for the cares and concerns of “this world” for what was seen as “spiritual things.” In many Christian circles such thinking is still common. To speak against “spirituality” is taken as “worldly.”
From where did the modern church get its ideas of spirituality? This fundamental concept speaks to how the believer grows in grace. If we have a false idea of spirituality, we will be led to a false understanding of our Christian duty.
This is not a new issue. The nature of spirituality has been a controversial issue in the church since its very beginning. Much of the controversy stems from the importation of prevailing philosophical and religious ideas into the early church. One of those ideas imported into the early church was dualism.
Dualism was common to much of the ancient world. It was a basic philosophic, religious, and scientific idea. (Unlike moderns, the ancients readily admitted that all thought was interrelated.) Dualism was a basic supposition about the nature of reality. Dualism saw all of reality as comprised of two conflicting, irreconcilable dimensions. Idea, form, or spirit was the higher state and pursuit. Matter was assumed to be the inferior, lesser state and human pursuit. (Many ancients held to a tripartite division of body, mind, and soul, but this idea has all the same bad consequences as dualism, so we will focus on dualism.)
Dualism saw man’s problem as this metaphysical conflict, i.e., part of the fundamental nature of reality and existence. This “problem” of matter versus spirit was inherent in the world, hence reflected in man. Man’s problem, according to dualism, was that he was flesh and blood in a physical world. His need (salvation) was then escape from the physical world into the spirit world.
According to Christianity, man’s problem is not metaphysical but moral, i.e., that man is a sinner. The problem that quickly arose in the early church was that men, just as they do now, brought their philosophic ideas and definitions into the church. Then, too, the language of Christianity was easily adapted to Greco-Roman categories of thought. The Bible speaks of flesh (even denying the flesh), spirit, and soul. When these were interpreted in terms of dualistic definitions, bizarre results were immediately apparent.
Why is it that the early church saw the advocacy of extreme self-punishment, self-mutilation such as castration, and the repudiation of pleasure? Why did some repudiate even the institution of marriage as carnal? Why did asceticism so quickly enter the church as the highest form of spirituality?
Dualism’s metaphysical worldview was co-opting Christianity’s moral worldview. If matter is bad, it must be repudiated, and, since human flesh is matter, the spiritual man must repudiate his flesh and all the enjoyment of the material world.
It is important to note that the use of the term dualistic in referring to Christianity’s belief in good and evil is not an accurate one. Christianity’s good and evil are moral distinctions, not a metaphysical division of reality. On the other hand, the Manichaean religion was dualistic because it saw good and evil as originating from two opposing gods by those natures, which made it a metaphysical division.
Another obvious manifestation of dualism in the church was its positive view of spirituality. If the negative view of spirituality was asceticism, its positive view of spirituality was that of contemplation of heaven. This explains the early rise of monasticism with its emphasis on ascetic self-denial and retreat in order to contemplate God. Dualism was a problem in the early church from the beginning. It was the prevailing philosophic lens through which early Christians viewed and misinterpreted the message of Christianity.
The first major heresy to infiltrate the church after the apostolic era was the Gnostic movement of the second century. Gnosticism gets its name from the word gnosis, knowledge. Gnosticism was a belief that true religion and knowledge is based on a secret, intuitive knowledge as the real salvation.
Gnosticism was highly speculative. It spoke of the origin of the universe, the origin of God, of spiritual beings, and of evil, which they viewed in a thoroughly dualistic perspective. Gnosticism came from the conscious blending of Eastern and Western ideas. One of those ideas was Greek dualism. (Dualism was common to much of the ancient religions, but the Greco-Roman understanding has most influenced the church and the West.)
Various Gnostic groups held to different ideas, but there were three basic to Gnosticism. First, it was held that the Supreme Being is unknowable and unnamable. He can only be known by the beings that emanate from him. Second, there was the realm of matter, a place of darkness, chaos, and emptiness. Third, in between the unknowable Supreme Being and the corrupt material world there were various spirit beings that emanated from the Supreme Being or from other emanations.
The further the generation of these spirit beings from the Supreme Being, the more imperfect they were assumed to be. In other words, the closer these spirits came to the “lower” realm of matter, the more evil they became. The Jehovah of the Old Testament was viewed, because of His role as creator of matter, as in some way associated with evil.
Gnosticism became a significant heresy in the church of the second century. Its false, dualistic spirituality created a theological justification for blaming the God of the Old Testament for evil because He had created matter. One group of Gnostics was the Ophites (ophis means serpent). The Ophites regarded the Jehovah of the Old Testament as the source of man’s spiritual life. However, they saw the prohibition against eating of the tree of the knowledge of good and evil in Eden as intended to keep man from true gnosis (knowledge) and confined to a material realm. In other words, they believed Satan was telling the truth and that challenging the Creator-God as per his suggestion was the source of true gnosis. The serpent was seen as the liberator of mankind! The worst characters of the Old Testament were held in high esteem as those who understood the true struggle. Jesus was said to be the agent of Jehovah, so some Ophites required members to curse Jesus Christ.
These Ophites saw the betrayal by Judas as done with the best of motives. One group, called Cainites, developed a spurious gospel called “The Gospel of Judas.” Referred to by Irenaeus in the second century, it was long lost until a later Coptic (Egyptian) copy was found and published in 2006. In December of 2006 U.S. News and World Report had a cover story that heaped sympathy on the ancient Gnostics, which it called “the other Christians” who had been harshly denounced by the orthodox.
The dualistic metaphysics of the Gnostics led to extremes. On the one hand it led to self-punishment (asceticism) as a mark of personal holiness. On the other hand, it also led to conscious immorality as contempt for the flesh and the moral laws, seen as inferior because they were meant to regulate a material world.
There are several references in the New Testament that are very likely references to the early emergence of Gnostic ideas. In Acts 8 Simon had, before his conversion, claimed to be “some great one,” a possible reference to a claim that he was an emanation or spirit in the Gnostic sense. Paul notes the tendency to strange doctrines in the churches of Asia Minor, which became a major center of Gnosticism. First Timothy 6:20 refers to false gnosis, or “science falsely so called.” Colossians 2:18, 23 refers to the worship of angels. Since the Jews never worshipped angels, this likely refers to the mythological Gnostic spirit emanations. The same passage also refers to men who were “intruding into things he hath not seen,” a possible reference to the speculations of Gnosticism and to the neglecting of the body, a dualistic tendency. First Timothy 1:4 refers to “fables and endless genealogies,” which would certainly describe the convoluted mythical history of the spirit world that Gnosticism created.
One very interesting reference is in Revelation 2:6, 15. Christ twice says he hates the Nicolaitanes. These Nicolaitanes, and the false teachers of Jude 11, are thought to have shared the common Gnostic traits of believing the Hebraic faith was the work of evil spirits and contempt for the law expressed by gross immoralities.
Marcion and Dispensationalism
One Gnostic leader who had a profound effect on Christianity was Marcion of Sinope. It is important to understand how profoundly even a heretic can impact the church, its history, and theology. Marcion accepted the Gnostic mythological history of eternity past. He taught that Jehovah was an evil God because He had created matter. Moreover, He had compounded His evil by giving the law, which tied men to the mundane life and observances of this physical existence. The Jews, said Marcion, were the chosen people of this evil God of law, justice, and hate. Marcion rejected all the Hebrew Scriptures (he only accepted part of Luke and select passages from Paul) and called its God a failure because His Messiah had not come. He completely separated Jesus from the Creator God of Genesis.
Marcion had proposed an early form of dispensationalism. At least he was consistent. He saw that separating law and grace implied separate authors of law and grace. According to Marcion, the Jews were the people of an evil god and Gnostic Christians the people of a good god. Jesus Christ was said to be a spiritual, nonmaterial person. (Why? Because matter was said to be evil, so the Gnostics were consistently hostile to the doctrine of the incarnation.)
Marcion’s was an extreme position. But it was not out of line with the dualism of the ancient world. It resembled modern dispensationalism in that it contrasted law and grace, justice and love, and it claimed there were different messages in the Hebrew and Greek Scriptures. Marcion was excommunicated by his own father, a bishop, but his influence survived. In defending the binding nature and unity of all Scripture, the orthodox began referring to the Hebrew Scriptures as the Old Testament and the Greek as the New Testament. Thereafter, all that had to be done was for distinct shades of meaning to be placed on those artificial designations. “Old” could be construed as “former” or “obsolete.” New could be construed as “different” or “changed.”
Even in churches that consider themselves Reformed and covenantal, there is, more than at any time since Marcion, a built-in assumption of a difference between the Old and New Testaments. The distinction that began as a defense of both has itself reinforced the dispensational assumption of a fundamental difference.
We should note that a man by the name of Appelles modified Marcion’s thought. Appelles believed there was one god with different dispensations for Jews and Gentiles. This form of dispensationalism is still prevalent. The Old and New Testaments are said to represent different paths to salvation.
Dispensationalism, even the softer modern variety, has always led to antinomianism to one degree or another. The law is declared part of the “old plan” and sometimes repudiated as “unspiritual” or even, as in the tradition of the Gnostics, said to be “works of the flesh.” Spirituality then becomes either a subjective, self-defined, otherworldly idea or an exercise in rule-making where “the commandments of men” predominate.
The contempt for Biblical law in favor of a dualistic concept of spirituality has led to a contempt for matter and wealth as unspiritual, a neglect of the doctrine of creation (the modern rise of dispensationalism resulted in a retreat before Darwinism), a Christian gospel with a limited message to the “spiritual man,” the limited applicability of Scripture, Christianity as a retreatist spiritual “out,” and the separation of Christianity from politics, law, family, and vocation. Instead of seeing the Christian life as “Onward Christian Soldiers,” the dualistic church sings “I’m a Poor Wayfaring Stranger” going home “no more to roam.”
Man’s problem is wrongly identified by all forms of dualism. Dualism sees man’s problem as his lack of spirituality (i.e., his tie to this world) rather than his sin. We are not called to be spiritual in this sense. Man is matter by God’s design. Jesus Christ was incarnate in flesh without sin. Our resurrection bodies will be material. We are called to a material life in a very real world. We are not called to be spirits. We are called to obey God in flesh and blood.
In 1 Corinthians 6:20 Paul says, “[G]lorify God in your body, and in your spirit, which are God’s.” Spirit there means your “breath of life” and refers to your life, your mind, your vitality, not an ethereal spirit. We are to glorify God, therefore, in our bodies, our minds, and with every fiber of energy God has given us.
Modern dualism in the church is not as crude as the ancient Greek dualism, Gnosticism, or Marcionism, but it is still a profoundly unbiblical concept. It is essentially a metaphysical view of man’s problem rather than a moral view. It sees the believer’s problem as being his tie to this world and its cares and seeks a higher, more spiritual, way. But Jesus Christ is the way, the truth, and the life, because in Him we have a resolution of our real problem, our sin.
We are made material beings to serve God in a material universe of His creation in terms of His Word. Serving God is not about contemplation or being in tune with some vague concept of otherworldliness. Spirituality in Scripture refers to the Holy Spirit of God, and He does not lead believers to vague contemplation but to conformity to the Word.
Dualism in the Church
The Epistle of Jude warns of false teaching. One of those warnings, in verse 4, was against “ungodly men” who turned the grace of our God into “lasciviousness” (gross immorality). This is an apt description of antinomianism. It uses God’s grace to justify contempt for God’s law. In a dualistic metaphysic, these two things are opposites, but grace and law are not opposites or in any way in conflict or in tension as dualism suggests.
The opposite of God’s grace is our deserved judgment. The opposite of law is lawlessness, which is what antinomianism always fosters.
Spirituality is not a moral standard, it is a metaphysic. It is a way of viewing reality, or at least part of it. God’s law is a moral standard. The Apostle John does speak of “trying the spirits” in 1 John 4:1–4, which we should look at:
It is important to note that the spirits here referred to are not a higher being or an ethereal being or state of any kind. “Spirit” here refers to those false teachers who claimed to represent a spirit or power as a prophet. In verse 1 John says these “spirits” were “false prophets” in the world. Verse 4 says they maintained a false confession about Jesus Christ.
The conflict John describes was not between believers and demonic spirits, or demons and the Holy Spirit. The conflict was between the truth of God and error. The conflict was between true confession of Jesus Christ and false teaching about Jesus Christ.
The conflict that Gnosticism accentuated was the difference in the interpretation of the nature of being. The Greco-Roman world had a dualistic worldview while the Bible had a moral worldview. The Greco-Roman world saw spirit or idea as good, and matter as evil. For them, salvation was an escape into spirit or ideas. Such thinking was quick to expropriate the language of Scripture and continues to muddle Christian thought.
The Biblical view saw God as making all things “very good.” The problem the Bible presents is that all things are fallen into sin, a moral rebellion. Salvation is man’s redemption from moral rebellion to a life of service to God and His law-word. In the resurrection, even our bodies will be fully regenerated for an eternity of service. One of the sad evidences of the impact of dualism on the modern church is its de-emphasis on the bodily resurrection of believers; dualistic Christianity sees heaven as a very ethereal place, not a place of bodies, mansions, or a throne.
Gnosticism was repudiated by the end of the second century, though it keeps resurfacing in one form or another. The dualistic error just took on new forms. All these forms had contempt for the doctrine of the physical incarnation of God in Jesus Christ, so it is not too surprising to find that all the early confessions of the Christian church emphasized that doctrine. This is why, much earlier, John warned that the true confession was “Jesus Christ is come in the flesh.”
This same Jesus, incarnate in human flesh, told us in the Great Commission that “[a]ll power is given unto me in heaven and in earth” (Matt. 28:18–20). He did not hesitate to proclaim His authority over this very material earth and its concerns. He, in fact, commissions us to act in terms of His authority in that world, His world. Our realm of responsibility is this earth, and our spiritual efforts (i.e., our efforts in the power of God’s Holy Spirit) are to teach men to acknowledge who Jesus is and act in terms thereof. Part of the Great Commission, remember, is teaching men to observe all things Christ commanded.
John tells us to “try” or “test” men and their teachings to see if they are of God. Not every spiritual teaching is of God. Gnosticism was very spiritual. Christian Science is spiritual (it denies the reality of matter). Demons are entirely spiritual, but evil.
The effects of dualistic spirituality have been profound and have come to full fruit in the modern church. It has led to contempt for the Old Testament and, sometimes tacitly and sometimes expressly, contempt for the God of the Old Testament. Its antinomianism has silenced God as the source of law and ethical absolutes. It has led to a separation of the realms of the sacred and the secular, thereby relegating God’s claims to the former.
It has de-emphasized voting, education, property, capitalization, and business as “worldly affairs” rather then avenues of dominion work. It has led to escapism as supposedly the purest form of Christianity. It has abandoned the Kingdom of God and dominion for a revival of modern forms of asceticism, monasticism, and the contemplation of heaven.
The answer to false dualistic spirituality is the Holy Spirit. The Holy Spirit will never lead us to anything other than obedience to the Word. Our standard of spirituality, of sanctification by the Holy Spirit, is thus the Word.
Our calling is as material beings in God’s creation. We are not called to be spirit-like, but to be obedient new creatures in Jesus Christ recalled by our new birth to be conformed to His image. The new image we must have before us is His revelation of His holy will for us, the eternal Word.
The hymn was wrong. This world is our home. Until God takes us out of this material world, we are to see it as our assigned quarters, our arena of activity and service. Any pining for heaven that causes us to neglect our earth-based responsibilities is a dereliction of duty.
1. Copyright 1965 Albert E. Brumley and Sons.
Rev. Mark R. Rushdoony is president of Chalcedon and Ross House Books. He is also editor-in-chief of Faith for All of Life and Chalcedon’s other publications.
2008 No. 1
Table of Contents
Running on Empty
By Henry I. Miller and Colin A. Carter
Why corn-based ethanol isn’t the solution. By Henry I. Miller and Colin A. Carter.
Exhortations to be ‚more green” are everywhere. But when green policies and decisions are based on nothing more than a passionate but uninformed desire to save the planet, they often run afoul of the law of unintended consequences. For a prime example, consider the momentum in many parts of the world to reduce carbon dioxide emissions and dependence on imported oil by using more biofuels. Good goals, bad policy.The European Union seeks to replace 10 percent of its oil consumption with biofuels by 2020. Even China has gotten into the game, aiming for 15 percent. President Bush announced in January 2007 a goal of replacing 15 percent of domestic gasoline use with biofuels (ethanol and biodiesel) over the next 10 years, which would require almost a fivefold increase in mandatory biofuel use, to about 35 billion gallons. In June 2007, the Senate pushed the target to 36 billion gallons by 2022, of which 15 billion gallons is mandated to come from corn and 21 billion from other sources that are more advanced but largely unproven.With current technology, almost all of this biofuel would have to come from corn because there is no other feasible, proven alternative. However, it is unlikely that American farmers will be able to meet such demands. Because of the inefficiencies inherent in producing ethanol from corn and the relatively meager amount of energy yielded by burning ethanol, the demands on farmland would be staggering. An analysis by the Paris-based Organization for Economic Cooperation and Development suggested that replacing even 10 percent of America’s motor fuel with biofuels would require that about a third of all the nation’s cropland be devoted to oilseeds, cereals, and sugar crops. Achieving the 15 percent goal would require the entire current U.S. corn crop, a whopping 40 percent of the world’s corn supply.
This would do more than create mere market distortions. Even without the increasing pressure on corn production abroad, the irresistible pressure to divert corn from food to fuel in the United States would create unprecedented turmoil.
Another unintended consequence of the intoxication with ethanol production is the pressure on water supplies. According to a report from an environmental advocacy group, three to six gallons of water are needed to produce each gallon of ethanol. Just to process the corn and produce the fuel, the group estimates, 2.6 billion gallons a year could be required from a single large aquifer that extends from Texas to South Dakota, and an additional 120 billion gallons a year would be needed for irrigation to grow more corn.
In the short and medium term, ethanol can do little to reduce the vast amount of oil that is imported, and the ethanol policy will have profound ripple effects on other commodity markets. Corn farmers and ethanol refiners are ecstatic about the ethanol boom, of course, and are enjoying the windfall of artificially enhanced demand. But it is already proving to be an expensive and dangerous experiment for the rest of us. With other countries joining the United States in ramping up biofuel production, mainly of ethanol, world food prices are skyrocketing.
A 2005 law mandates production of 7.5 billion gallons by 2012, about 5 percent of the projected gasoline use at that time. These biofuel goals are propped up by a generous federal subsidy—via tax credits—of 51 cents a gallon for blending ethanol into gasoline, and a tariff of 54 cents a gallon on most imported ethanol, to keep out cheap imports from Brazil. Such subsidies ignore science and economics in favor of politics, and show disdain for free markets.
CORN PRICES ARE POPPING
Thus, it is no surprise that the price of corn has doubled in the past year—from $2 per bushel to $4. We are already seeing upward pressure on food prices: nationally, food prices were up 3.9 percent in April 2007, compared to a year earlier. An Iowa State University study estimates that food prices have already increased by $47 annually per capita, or $14 billion overall. Until the recent ethanol boom, more than 60 percent of the U.S. corn harvest was fed domestically to cattle, hogs, and chickens, or used in food or beverages. Thousands of food items contain corn or corn byproducts. A spokesman for one of California’s largest cattle ranches and feedlots noted that since the end of 2005, the company has experienced a 36 percent increase in the cost of feed, which translates to an additional expense of $101 per animal raised. Reflecting these trends, the National Cattlemen’s Beef Association has demanded an end to both government subsidies for ethanol and the import tariff on foreign ethanol.
The poultry industry is also squawking. The National Chicken Council demands remedies from senators who represent the big Southern poultry states, and the National Turkey Federation estimates that its feed costs have gone up nearly $600 million a year.
These effects may only hint at things to come. Any shock to corn yields, such as drought, unseasonably hot weather, pests, or disease, could send food prices during the next few years into the stratosphere. Even Gregory Page, the CEO of agribusiness giant Cargill, a major beneficiary of the ethanol boom, shares these fears: “We just have to be sure that the moreis- better mind-set [regarding ethanol] doesn’t get way out ahead of the capacity of the land to provide the fuel. . . . What we would like to see is some thoughtfulness about what we will do if we have a weather calamity.” Such concerns are more than theoretical: in 1970, a widespread outbreak of a fungus called southern corn leaf blight destroyed 15 percent of the U.S. corn crop, and in 1988, drought reduced U.S. corn yields by almost 30 percent.
It’s easy to disparage oil and coal. Politicians like to say that ethanol is environmentally friendly, but these claims must be put into perspective. Although corn-based ethanol is a renewable resource, it has a far lower energy yield relative to the energy used to produce it—what policy wonks call “net energy balance”—than either biodiesel (such as soybean oil) or ethanol derived from many other plants.
Moreover, ethanol yields about 30 percent less energy per gallon than gasoline, so miles per gallon in internal combustion engines drops off significantly. Adding ethanol also raises the price of blended fuel because it is more expensive to transport and handle. Lower-cost biomass ethanol—for example, fuel from rice straw (a byproduct of harvesting rice), switchgrass, or other sources—would make far more economic sense.
Even under the most favorable circumstances, large amounts of ethanol from biomass will not be commercially viable for many years, but we should not hinder such production with government policies that discriminate, by means of corn subsidies, in favor of corn-based ethanol. Government policies should stimulate innovation as broadly as possible and let the marketplace determine winners and losers.
Recent research articles describe the kinds of alternatives that should be permitted to compete with corn-derived ethanol. Researchers at the Samuel Roberts Noble Foundation in Oklahoma reported in Nature Biotechnology the genetic engineering of a new variety of alfalfa that contains less lignin— the substance that imparts mechanical strength to plant stems and woody tissue—than conventional alfalfa. Because the new variant is defective in biosynthesis of lignin, it is more susceptible to digestion by the enzymes used to convert plant material into the sugars from which ethanol is produced; some engineered varieties of alfalfa yield almost double the sugar available from conventional alfalfa. This approach has dual advantages: it promises to reduce the costs and increase the yield of ethanol production from alfalfa, and to reduce the need for environmentally damaging acid in the biofuel refining process.
A research team at the University of Wisconsin described in Nature a catalytic process that converts the simple sugar fructose, which can be obtained directly from biomass or derived from glucose, another simple sugar, into 2,5-dimethylfuran. The advantage therein is that 2,5- dimethylfuran has an energy density—the amount of energy stored per unit mass—40 percent higher than that of ethanol, the only renewable liquid fuel currently made in large quantities. It is also less volatile, and, because it is insoluble in water, easier to obtain in pure form.
A NONCOMPETITIVE PRODUCT
American legislators and policymakers seem oblivious to the scientific and economic realities of ethanol production. They tend toward what John Llewellyn, senior economic policy adviser at Lehman Brothers, has characterized as “piecemeal, disorganized policy-making, reminiscent more of Soviet central planning than of modern market economics.” Brazil and other major sugarcane-producing nations enjoy significant advantages over the United States in producing ethanol, including ample agricultural land, warm climates amenable to vast sugarcane plantations, and on-site distilleries that can process cane immediately after harvest. At current world prices for sugar and corn, Brazilian ethanol production would remain competitive even if oil prices were to drop below $30 per barrel, but U.S. cornbased ethanol plants would be losing money at $40-a-barrel oil, even with the subsidy. It would thus make far more sense to import ethanol from Brazil and other countries that can produce it efficiently than to rely on corn—and also to remove the 54-cents-per-gallon tariff on Brazilian ethanol imports.
Another important strategy: encourage a more prominent role for nuclear power, which consumes no fossil fuels and emits no greenhouse gases. (Note that the benefits of even plug-in electric cars are limited by the source of the electricity, much of which is produced from coal or oil.) The good news is that with electricity demand projected to soar more than 40 percent by 2030—not including the potential demand from greater availability of plug-in hybrids and other forms of electric cars—the Nuclear Regulatory Commission expects applications for as many as 11 new nuclear power units this year and for as many as 28 by the end of 2009.
Our politicians may be drunk with the prospect of corn-derived ethanol, but if we don’t adopt policies based on science and sound economics, it is consumers around the world who will suffer from the hangover.
This is an updated version of an essay that appeared on the TCSDaily website on July 11, 2007.Available from the Hoover Press is To America’s Health: A Proposal to Reform the Food and Drug Administration, by Henry I. Miller. To order, call 800.935.2882 or visit www.hooverpress.org.
Henry I. Miller, M.S., M.D., is a research fellow at the Hoover Institution, where his research focuses on public policy toward science and technology. It encompasses a number of areas, including pharmaceutical development, the new biotechnology, models for regulatory reform, and the emergence of new viral diseases.
Colin A. Carter is a professor of agricultural and resource economics at the University of California, Davis.
Christians Called Back to God, Voting Booths to Restore America
Crowe opened the 3rd Annual Restore America Conference Friday in Tualatin, Ore., with some 500 people. He and a lineup of speakers will inform fellow believers about the “culture war” they’re in and how they can step up as Christians to restore the nation under God.
“We need to stand up for what God says and not compromise with what the world says. We need to fear God and not fear man,” Crowe stressed.
The ministry leader believes Christians are running away from the truth of God’s word and accepting compromises because it’s palatable.
“We fail to shine the light and allow the other side to prevail with darkness,” Crowe said bluntly.
One way to shine the light is to vote.
Crowe called voting a fundamental responsibility for Christians. But many are not taking it seriously and not heading to the ballots. He says out of 52 million voter eligible evangelical Christians in America, only 33 million voted in the 2004 General Election. In 2006, only 20 million voted.
“We folded our arms and [now say] we’re unhappy with the Republicans and nothing’s happening the way we wanted,” said Crowe. “We folded our arms and said we’ll send them a message. We sent them a message alright – we allowed the other side to take complete control of the House and the Senate.”
So when it’s time to point fingers when the country’s political leaders and courts make decisions that do not reflect a moral standard, the blame falls on the large absence of Christian voters from the voting booths.
Crowe’s comments come as more Christians groups are urging pastors to speak up on biblical and moral issues such as traditional marriage and to encourage congregants to vote. While pastors cannot tell congregants how to vote, they are able to personally endorse candidates and present overviews of candidate positions, according to Liberty Counsel.
“If we would simply mobilize our votes and stand for fundamental principles, we would dominate who gets elected to office,” Crowe insisted. “So when I say it’s the Christians who are the problem, that’s exactly what I mean by not voting.”
As conservative Christians this year face a tough road in deciding the next U.S. president – given that many are unhappy with the likely Republican nominee, Sen. John McCain – Crowe’s advice to Christians is to apply biblical principles in terms of social and moral when evaluating candidates and issues.
Another piece of advice he offers: “It’s better off to vote for the lesser of two evils,” he said, regarding the dilemma many face between voting for McCain or a Democrat or sitting out the election altogether.
His messages are viewed as radical, Crowe acknowledged, but he says more are encouraged by it.
“It’s not a matter of what man thinks, but what God thinks,” he said. “If we would believe God and do what we’re supposed to do, God would be with us and we would prevail.”
Money, Banking, and the Federal Reserve: the Complete Transcript
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Voiceover: “The Federal Reserve System virtually controls the nation’s monetary system, yet it is accountable to no one. It has no budget; it is subject to no audit; and no Congressional Committee knows of, or can truly supervise, its operations.”
These are the words of the late professor Murray N. Rothbard, economist and academic advisor of the Ludwig von Mises Institute. The institute is dedicated to the ideals of a free market and sound money. This program is dedicated to the memory of Murray N. Rothbard and his prolific work on money and banking.
For more than twenty years, the living standards of middle class Americans have steadily declined; incomes have remained flat or falling and the opportunities and security we once took for granted have begun to fade. For most families, one income no longer pays the bills; it requires two or more incomes to afford a home, pay medical and childcare expenses, and put children through school. Unless present trends change, young workers are unlikely to ever live as well as their parents. Good jobs with a future are harder to come by; education doesn’t count for what it once did; taxes continue to rise while social security is going bankrupt. Private pensions are no longer reliable; economic volatility and uncertainty are on the rise. Politicians espouse numerous theories about the cause of this country’s economic woes; seldom however do these officials look below the surface: the roots of our economic ills can be traced to central banking and our present monetary system.
The Federal Reserve claims to manage our money; instead it makes our money worth less and less every day. It has generated continuous and worsening business cycles and lowered our living standards.
Lew Rockwell: It’s really no different from a burglar in your house wanting to steal your money. That’s what the Federal Reserve does. It depreciates your savings; it takes away your economic security; and it ought to be treated as an institution that does that, rather than something of alleged benefit.
Voiceover: Money is supposed to serve as a reliable standard of economic value, not a source of instability. Until we restore sound money and take away the government’s ability to debase it, we have little hope of restoring the freedom and prosperity that made America great.
Lew Rockwell: And we really have a choice of what we want in money. Do you want money that is going to be losing its value every year, or do you want money that is going to be gaining in value? If you are happy with your money losing value, then you want the present system. If you want money to increase in value, then you want a gold standard.
Voiceover: What is money? As the good that makes exchange possible, it’s the foundation of every economic activity. In the earliest times, people traded goods and services directly. This form of exchange is known as “barter.”
Joseph Salerno: That is, if a fishing tribe desired to have maybe wheat, which they themselves did not produce, they would seek out other individuals that produced wheat, and then they would exchange theirs for fish.
Voiceover: But barter had limitations in the marketplace.
Joseph Salerno: Well, actually people perceived pretty quickly problems with that direct exchange: if you wanted, for example, fish and you had wheat, but the people who had fish didn’t desire the wheat, you were stuck. Unless you went out and found some other good, possibly berries, that everyone in that society consumed. Then you would trade the wheat for the berries in full confidence that you could turn around and trade the berries for the fish or anything else you desired.
Voiceover: Eventually, the most widely accepted goods in a society became valued for their use in indirect exchange. Money is simply another name for the most generally accepted medium of exchange.
|“Money is simply another name for the most generally accepted medium of exchange.”|
Through our history, many goods have served as money. Feathers from the Quetzal birds were used for exchange by the Mayan Indians up to the 15th century in Central America. Tealeaves compressed into bricks were traded in East Asia through the 1800s. Wampum shells were money to North American Indians, while early American colonists traded beaver pelts, which had a high value both at home and abroad. Metal coins first emerged in Greece and Asia Minor during the 7th century BC. Gold and silver were valued for their use in beauty and jewelry and the decorative arts. They were durable, easily divisible, and limited in supply. These precious metals also had a high value-to-weight ratio, making them easily transportable.
Joseph Salerno: You might think back, we can think back to a time when iron was used as money, for example in Africa, but imagine going into the Sears-Roebuck and trying to purchase, say, a lawnmower for $350. That would take a ton of iron, whereas it only takes an ounce of gold.
Voiceover: In 1536, less than fifty years after Christopher Columbus set foot on the American soil, a Spanish mint in Mexico City struck the first coins made in the New World. These silver coins eventually found their way into the British Colonies. Great Britain’s mercantilist policies deliberately tried to keep precious metals out of America, so the Spanish milled dollar became the unofficial currency. It was often divided into eight pieces for smaller transactions, hence the term “pieces of eight,” with 1/4 of the coin being “two bits.”
In 1792, Thomas Jefferson adopted the dollar as this country’s official monetary unit.
Lew Rockwell: He looked around. He investigated to see what the American people were using, and that was the dollar. So that’s why the dollar became the standard in the United States. And we went onto a gold and silver standard, and started minting gold coins with the American eagle, a $10 gold coin.
Voiceover: Jefferson in particular spoke eloquently of the dangers of paper money. During the war for independence, the continental Congress printed vast sums of paper money out of thin air to finance the army. The diluted money supply naturally depreciated to almost nothing, leading to the phrase “not worth a continental.”
Lew Rockwell: The people who held onto these notes, who tended to be patriotic Americans concerned about wanting America to be free of British control, lost everything whereas the Tories, who wanted nothing to do with this American-government money and immediately got rid of it, were benefited. And Pelatiah Webster, one of the first American economists, and others who looked to this, saw that this paper money unbacked by gold was extremely dangerous.
Voiceover: As early as the 16th century in Europe, goldsmiths stored gold coins for their customers for a fee and issued receipts for the gold to the depositor. Thus began the use of paper as money.
Joseph Salerno: In other words, if you came in and deposited 10 ounces of gold for safekeeping, you got back receipts in the amount of 10 gold ounces and those receipts entitled you to instantaneously redeem that gold.
Voiceover: These receipts soon became widely accepted as means of exchange, since it was easier and safer to use the receipts for significant transactions. This was the origin of banknotes as money substitutes. These first bankers then took that process one step further.
Joseph Salerno: In effect, if the goldsmith had 1,000 ounces of gold and 1,000 ounces of legitimate receipts being held by the depositor of that gold, he could increase his profits by merely printing another thousand ounces worth of receipts, and lending them out. In which case he would effectively get fifty-percent reserve banking, or fractional reserve banking. Only a fraction — 50% of the receipts — were now backed by gold.
Voiceover: There was no longer a one-to-one ratio of paper to gold. Now there could be three or four pieces of paper in circulation for every unit of gold in the vault. These bankers were no longer simply storing or warehousing gold for a fee, they were artificially inflating the money supply and loaning out these phony receipts at interest. This system became known as “fractional reserve banking” and was later transported to the early American colonies. It formed the root of the American commercial banking and ultimately the Federal Reserve System.
Lew Rockwell: This is a fraudulent system, it’s not allowed in any other business. If you had a grain warehouse that had loaned out the grain it was supposed to have in storage, that’s considered criminal, and the guy would go to jail. But the banks are the one industry that’s allowed to get away with this and to profit from it.
Voiceover: Alexander Hamilton became the first treasury secretary and in 1791 set up the first Bank of the United States as America’s central bank to expand the supply of paper money for the benefit of the government and the commercial banks.
Joseph Salerno: Alexander Hamilton believed in a strong central government and he saw a central bank as one of the means by which the government could be centralized and by which its power could be expressed.
Voiceover: Thomas Jefferson opposed this view. He saw a central bank as an undemocratic tool of the northeastern banking establishment. It was dismantled after twenty years.
Joseph Salerno: Jefferson was an opponent of the strong central government and at all costs wanted to remove the central bank.
Voiceover: In 1816, the federal government made another attempt to set up an inflationary central bank, but this Second Bank of the United States was denounced by president Andrew Jackson as a “monster bank,” for benefiting a few at the expense of many.
Joseph Salerno: They inflated the money supply, which brought about a boom initially, that is prosperity for the country, followed by a bust; when they stopped inflating the money supply many businesses that had depended on the low interest rates that were introduced or induced by the initial inflation went out of business.
Voiceover: Jackson succeeded in abolishing the second central bank in 1836. But by then, speculators had set up hundreds of new private banks with little or no gold to back the notes they issued. The nation’s monetary system became more stable when the United States introduced the gold standard in 1834. The dollar was worth approximately one-twentieth of an ounce of gold.
Joseph Salerno: The gold standard was understood by the founding fathers, by Andrew Jackson and others, as being a money of the people. That is, it was a hard money, a money that could not be tampered with, that could not be inflated to permit government expenditures skyrocketing.
Voiceover: But by 1862 Abraham Lincoln needed to fund his invasion of the South. So, once again, the government began to print up paper money.
Joseph Salerno: Basically the United States went off the gold standard in order to finance the Civil War. And you’ll find in history that almost every large war, every major war, has involved a departure from the gold standard, because the gold standard put strict limits on government financing.
|“Every major war has involved a departure from the gold standard, because the gold standard put strict limits on government financing.”|
Voiceover: Lincoln’s notes became known as “greenbacks” because they were printed in green ink rather than the usual black ink on the reverse side. These so-called fiat notes were deemed legal tender by the government, but they were not redeemable in gold.
Lew Rockwell: Lincoln, under cover of war, issued tremendous numbers of greenbacks. Gold was still circulating but people were forced to accept these greenbacks as if they were at par with gold.
Voiceover: The government’s power to print unbacked paper notes would later become the pillar of the Federal Reserve System.
After the Civil War, the nation’s monetary system became sounder, when the US adopted a gold standard.
Lew Rockwell: We were back on the gold standard in 1879, and had probably the greatest period of growth and prosperity ever in the country’s history.
Voiceover: For nearly twenty years, the total output of goods and services grew at an unprecedented rate of 4% per year.
Joseph Salerno: The reason being that with the sound money and without the ability to manipulate the interest rate, we had a lot of genuine saving and investment, which then led to more capital goods and higher labor productivity in the United States.
Voiceover: In the midst of this prosperity, the big industrialists and financiers were plotting to expand their empires with the help of government. With the passage of the Interstate Commerce Act of 1887, the large railroads succeeded in blocking their smaller competitors through regulation.
Joseph Salerno: The ICC was put in place in order to protect the railroad owners from competition. It was not the case that it was going to protect consumers or shippers. In fact, consumers were hurt because ultimately, with higher railroad rates, they were forced to pay higher prices for the goods and services that were shipped across the country.
J.P. Morgan (left) & John D. Rockefeller (right)
Voiceover: By 1896, they were poised to do the same thing with the banks. Two camps emerged as leaders in this economic war. They were led by J.P. Morgan, the world’s most powerful private banker, and John D. Rockefeller, the oil tycoon.
Morgan and Rockefeller were great adversaries, but, despite their business differences, they both favored a central bank. They wanted cheap credit and an inflated money supply to finance the expansion of their empires. Together, they led the campaign to sell the idea to the American public, which later led to the founding of the Federal Reserve.
Joseph Salerno: If the American people got wind of the fact that this bank was not in their interests … in fact, if they understood instead it was in the interests of the financial elites who would use it to inflate the money supply and, in doing so, increase their own revenues, there would have been hell to pay. Legislation would have never passed under those conditions. So it had to be sold to the American people as a way of making their currency more “elastic.”
Voiceover: The bank reform campaign received a boost in 1907, when there was a run on some of New York’s biggest banks, thanks to their fractional reserves. Panic spread among depositors who got wind of the bank’s insolvency and tried to withdraw their money.
The Knickerbocker Trust failed, and two other institutions went to the brink of bankruptcy despite a $35 million bailout from J.P. Morgan. Wall Street swiftly adopted the fear of bank failures to sell the idea of a central bank, or lender of last resort, to the American public.
Lew Rockwell: And so the Federal Reserve was to be the lender of last resort, in case any bank had any trouble. They wouldn’t have to worry: they would get the cash from Washington DC.
Hans Hoppe: The question is, however, whether it really is desirable to have such a thing as a lender of last resort. The correct position appears to me that every single bank should be responsible for its own debts and contractual obligations, and if banks through imprudent policy then go bankrupt, this should not be considered a bad thing, but in fact considered to be a magnificent thing, because bankruptcies or the danger of bankruptcies is precisely what makes banks adhere to sound policies.
Voiceover: Bank runs and failures continued at an alarming rate. In 1908, the National Monetary Commission — headed by John D. Rockefeller Jr’s father-in-law, Senator Nelson Aldrich — was set up to push for a central bank.
In November of 1910, under the guise of a duck-hunting trip, six men took a secret train ride to an exclusive private club on Jekyll Island, Georgia, to write a Central Banking Act. The classified gathering read like a who’s who of American banking. There were two Rockefeller men: Aldrich and Frank Vanderlip of the National City Bank of New York; two Morgan men: Henry P. Davison from Morgan Bank and Charles D. Norton, president of Morgan’s First National Bank of New York; Paul Walberg, a Kuhn-Loeb partner; and Assistant Treasury Secretary A.P. Andrew, who was friendly to both camps.
They spent a week at the luxurious club as Morgan’s guests, crafting the proposal that would form the basis of the Federal Reserve System. It would be three years before their vision was realized. Just before Christmas 1913, the Federal Reserve Act was passed by Congress and signed by President Wilson. It established a Federal Reserve System to oversee monetary policy and regulate the commercial banks.
“If the American people got wind of the fact that this bank was not in their interests … there would have been hell to pay.”
Lew Rockwell: It’s no coincidence that the Federal Reserve System was established by the Wilson administration. This was the height of the Progressive Era, a time of tremendous government expansion of special interest deals in Washington.
Voiceover: There are twelve regional reserve banks concentrated in the East and in the Midwest. The board of governors of the Federal Reserve controls and coordinates their activities. The board is made up of seven members appointed by the president. Even though there were twelve regional banks, Wall Street soon ran the show. As president of the New York Fed, Morgan protégé Benjamin Strong seized control of the board’s Open Market Committee operations. Strong would remain the dominant force at the Fed until his death in 1928.
The Federal Open Market Committee, now based in Washington, directs the Fed’s most important instrument of monetary policy: the purchase and sale of government securities on the open market. To increase the supply of money and credit, that is “to inflate,” the Fed buys government securities from a few handpicked firms with newly created money. To tighten money and credit, the Fed sells securities. In this, it can act on its own discretion.
Joseph Salerno: Every government wants the ability to create new money: it’s an alternative to raising taxes. Taxes, when they are raised, tend to evoke a lot of resistance among the public. It’s much less [painful] to increase the money supply. The effects, the negative effects don’t occur until six months, a years, two years later — at which time the increasing prices can be blamed on other factors: the weather, speculators, and so on.
Voiceover: Another device the Fed uses to control the amount of money in circulation is setting the discount rate: this is the interest rate charged to member banks when they borrow short term from the so-called “discount window.” If the Fed lowers the discount rate for its loans, commercial banks will likely borrow more from the Fed. This increases the amount of funds banks have to lend. Bank credit thus becomes cheaper, as reflected in lower interest rates on bank loans and credit cards. The increase in funds available for banks to lend also increases the amount of money in the economy.
The Fed can also manipulate the nation’s money supply by raising or lowering the reserve requirement. Banks are required to set aside a percentage of their deposits as reserves to meet depositors’ demands. When the Fed was established in 1913, it cut reserve requirements in half over the next four years, doubling the money supply by the end of World War I.
But the Fed’s real power lies in its monopoly to create money. Although the US was still on the gold standard in 1913, it was quickly eroded as the Fed continued to expand the money supply. The first step was backing Federal Reserve notes by only 40% in gold, allowing the money supply to be increased two and a half times. The inflationary effect to fractional reserve banking was also heightened by the central bank.
Hans Hoppe: The commercial banks are permitted to create checkbook money on top of Federal Reserve notes. That is to say, the commercial banks are only obliged by law to hold reserves, in the form of Federal Reserve notes, of 10% to back all demand deposits that they have. Ninety percent of their demand deposits are backed by nothing.
Voiceover: The Federal Reserve System adds another inflationary layer to an already unstable banking system. For example if the central bank has $100 worth of gold reserves in its vaults and a 10% reserve requirement, it can print up $1,000 of new notes in deposits, which become the reserves of the commercial banks. The commercial banks take this $1,000 and, if they’re required to hold 10% again in reserve, they can multiply the $1,000 into $10,000 through fractional-reserve loans. So an inverted pyramid is created with $100 worth of gold, or real money, at the bottom and $10,000 of inflated paper money at the top. As this $10,000 of new paper money circulates in the economy, it drives prices up, therefore reducing the buying power of ordinary citizens.
Lew Rockwell: When they spend that money, the people who get the new money first and are able to buy products with it benefit, and the people who get it at the end lose because, when they go to spend it, the prices have already gone up, and so they’re able to buy less. And so there’s a transfer of wealth and of power from some segments of the economy to others because of the actions of the central bank. And basically, those who benefit are the government itself, big banks, government contractors, and anybody who is a closely associated with the federal government.
Voiceover: By making enormous amounts of credit easily available, the Fed can also drive down interest rates, sending out the wrong signals to investors. It sets in motion an unsustainable investment boom that carries with it the seeds of its own destruction. It’s this business cycle that is ultimately responsible for economic disasters such as the Great Depression.
|“It’s no coincidence that the Federal Reserve System was established by the Wilson administration. This was a time of tremendous government expansion of special interest deals in Washington.”|
Soon after the Federal Reserve was established, the US entered World War I. Once again, the government temporarily abandoned the gold standard to print more money to finance the war effort. The US government borrowed heavily and the national debt ballooned from $1 billion to $27 billion. A sharp spike of inflation followed; this set off a cycle of rapid expansion and contraction in the economy. To dampen the overheated economy, the Fed halted its inflation, causing interest rates to nearly double over the next 18 months.
By 1921, the market begun to recover: new technology helped to increase productivity; markets developed for new cars and appliances. The 1920s were a period of extraordinary growth but, behind the scenes, much of this growth was distorted by a Fed-generated inflationary credit expansion.
Joseph Salerno: These were the “Roaring ’20s” — this was a period of increasing affluence. That hid the inflation from American economists.
Voiceover: The Fed-generated bubble burst in the Wall Street crash of October 1929. Speculators who had borrowed money to buy shares when bank credit was readily available saw the stock market lose one third of its value. Bank loans totaling $7 billion were outstanding. As the speculators defaulted on their loans, bank failures spiraled, and the Great Depression set in.
Joseph Salerno: Depositors lost their bank accounts, both their savings deposits and checking deposits. They saw them disappear into thin air.
Voiceover: In 1932, Franklin D. Roosevelt was elected president and quickly implemented a New Deal policy of “spending us to prosperity.” Even though we needed lower taxes and lower spending, his administration would seek unprecedented amounts of money to finance its big-government programs. In his inaugural speech of March 4, 1933, Roosevelt vowed to put an end to poverty and the unemployment lines and get people back to work. It didn’t work: the Depression got worse, thanks to increased central planning. FDR only succeeded in making the monetary system even less sound. Just after taking office the president declared a four-day nationwide bank holiday, absolving the bankrupt fractional-reserve banks of any need to repay their depositors. But before the banks reopened, the Roosevelt administration had to come up with a scheme that would lead people to believe that new deposits would be safe. It created the Federal Deposit Insurance Corporation to lull the public into a sense of security. In reality, the Federal Deposit Insurance Corporation holds just half of 1% of all the deposits it ensures, but what people are counting on is that the Fed, as the lender of last resort, would step in and print whatever money would be necessary to prevent a massive bank run.
By the mid-1930s control of the Fed by the New York bankers was drawing to a close. The Morgan era ended when President Roosevelt, who was no friend of the Morgans, appointed Marriner Eccles as its governor. Eccles, a Republican from Utah, moved the activities of the Open Market Committee to Washington.
President Roosevelt was on hand for the dedication of a new $3½ million building to house the Fed.
F.D. Roosevelt: I dedicate this building today to progress. To progress toward the ideal of an America in which every worker will be able to provide his family at all times with an ever-rising standard of American comfort.
Voiceover: Nineteen thirty-three also marked the beginning of the end for the gold standard, there was no end to Roosevelt’s appetite for spending on such New Deal programs as the gigantic $13 billion Tennessee Valley Authority, which flooded vast areas of productive farmland to provide government-subsidized electricity, and the Works Progress Administration, which spent $11 billion on make-work jobs and pork-barrel public works. But the US currency was tied to gold, which limited the amount of money the Fed could print to pay for these costly projects, so the government scrapped the gold standard for American citizens in 1933, and then Roosevelt confiscated the people’s gold.
As in World War I, the warring parties in the Second World War abandoned the gold standard to finance the war with central-bank-generated inflation. After the war there was an attempt to use the prestige of the gold standard to establish a global inflationary system. The world’s financial leaders met at Bretton Woods in New Hampshire, under the direction of the famous economist John Maynard Keynes. Their idea was to set up a new international monetary system that would have both gold and inflation.
Joseph Salerno: Under this system, the US dollar would be redeemable in gold, but only for foreign official institutions — central banks and foreign governments — at the rate of $35 per ounce. All other currencies would have fixed exchange rates with the US dollar and they would be redeemable in US dollars.
Voiceover: The New York Times editorialist Henry Hazlitt was one of the first to realize that this “semigold standard” would not succeed.
Ron Paul: Even from the very beginning, it was doomed to failure. And this very outstanding journalist at that time, Henry Hazlitt, predicted it wouldn’t work, because, he says, the temptation will always be that the government will print more money, because they will accept these dollars and they won’t demand the gold and won’t hold the government in check. And he was absolutely right.
Voiceover: During the 1960s, the US government was trying to meet the cost of massive social welfare programs at home and the Vietnam War abroad. By printing more money, President Lyndon Johnson believed, the US government could accomplish its goals without raising taxes, which may have caused a taxpayers revolt. In other words: it could have both guns and butter.
Lyndon Johnson: We will make sure that every dollar is spent with the thrift and with the commonsense which recognizes how hard the taxpayer worked in order to earn it.
Voiceover: But the more money the US printed, the more it eroded the value of the dollar: nervous foreigners began redeeming their dollars in gold as they were entitled to do under the Bretton Woods agreement. After paying out billions in gold, the US was left with $36 billion worth of outstanding debt to foreign creditors and gold reserves worth just $18 billion. Rather than stop the inflation, in 1971, President Richard Nixon refused to redeem any more dollars.
Richard Nixon: I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
Voiceover: It was the death now for the Bretton Woods semigold standard and a triumph for the Federal Reserve. The dollar would no longer have even the illusion of a fixed value against other currencies: it would float against them causing even more dislocation in foreign trade and massive uncertainties for businessmen. Worse, the final check on dollar creation disappeared, creating endless possibilities for inflation. It’s running at more than 300% since 1971 thanks to the Fed’s power to create money out of thin air and to insure deposits. No US federal budget has been balanced since it abandoned the gold standard.
Joseph Salerno: I don’t think that that’s something that enhances the efficiency of our economy. I believe that the best money is a market-determined money, such as we had under the gold standard. In order to get back to a market-determined money, the Fed has to be abolished.
Voiceover: There is not now, nor has there ever been, any direct control over the Fed by the president or Congress. The meetings of the Federal Reserve Board are held in secret, and nobody knows exactly what goes on. If you watch the business report every night, commentators are constantly speculating about what the Fed might do:
News speakers: All eyes were on Washington today as the Federal Reserve met to decide the future direction of interest rates.
|“In order to get back to a market- determined money, the Fed has to be abolished.”|
Most economists expect the Fed to leave monetary policy unchanged.
Voiceover: It has born a whole industry of Fed watchers who try to second-guess the Fed.
Lew Rockwell: The Federal Reserve has been surrounded by secrecy over since its planning, its installation, and its operations to the present day. And the reason is because they can’t tell the truth; if they told the truth, there would be a revolution; there would be a bunch of Americans that are ready to go and toss them out of the building.
Voiceover: A recent attempt to open the Fed to public scrutiny came in 1993. The head of the House Banking Committee, Rep. Henry Gonzales from Texas, called for an independent audit of the Fed’s operations; he wanted the proceedings of the Open Market Committee videotaped, with detailed minutes released within a week instead of vague summaries issued several weeks later. Gonzales also proposed that the president chooses the twelve heads of the Fed’s regional banks instead of powerful bankers. Predictably, Fed Chairman Alan Greenspan resisted the changes. What was surprising was President Bill Clinton’s position: he declared the reform would “run the risk of undermining market confidence in the Fed.”
After the Mexican government inflated and devalued the peso in 1995, the Mexican economy went into a tailspin. Alan Greenspan lobbied Congress and the Clinton administration for a $52 billion bailout. As it turned out, the Fed’s member banks held as much as $26 billion in Mexican debt. With no choice in the matter, American taxpayers and savers paid the bill.
Ron Paul: The congressmen themselves, from my experience there, are pretty naive and they don’t understand. But the few that have to — like the chairman of the banking committee, who is aware of this and goes along with it — continue to perpetuate this myth that the Federal Reserve brings about stability and they do good things for economic growth even though they are the culprits; they are the ones who caused all the problems; they are the ones who caused the recession and unemployment and the downsizing of big businesses and all the ill effects that we have to witness. But their PR job is excellent because they have convinced most congressmen that they are very necessary to maintain stability and economic growth and all these wonderful things they claim credit for.
Voiceover: It is clear that the United States cannot rely on Alan Greenspan or any other Fed chairman to fight the chronic inflation that has wrecked our savings, distorted our economy, redistributed income and wealth, and brought us devastating booms and busts. Despite the established view, Greenspan, the Fed, and big commercial bankers are not the inflation fighters they pretend to be. The Fed and its allied banks are not part of the solution to inflation in the business cycle: they are the problem itself.
To limit chronic inflation and boom-bust business cycles, the currency must be backed 100% by gold. That would remove the Fed’s ability to print money, which amounts to no more than legalized counterfeiting. Instead there would be a monetary system where gold serves to anchor the dollar rather than the fiat reserves created by the Fed.
Lew Rockwell: If we were to establish a real gold standard, the average American family would benefit tremendously: first of all there would be more jobs, better jobs, more secure jobs, more business opportunities, no more business cycle, no more recessions and depressions; people’s savings would be secure; you would not have to worry if you put away money for your old age that its value would be stolen by the central bank and by the central government, as they are today.
Voiceover: Under a 100% gold standard there would be no place for fractional-reserve banking. For checking accounts and other demand deposits, the banks would keep reserves on hand to meet depositor’s claims; banks would receive a fee from their customers for keeping their gold. In loan banking, investors would hand over their money for a fixed period of time to earn interest. Once the gold standard is in place, individual bank depositors would always have access to their money, and investors would be kept informed through their balance sheet, and, at a national level, a tight rein would be kept on government spending.
Ron Paul: You have, relatively, price stability. You have a stable purchasing power for the money. You eliminate the business cycle. You have reasonable interest rates rather than gyrating interest rates, and you get rid of the political manipulation of interest rates and the political manipulation of the money supply. And this, then, preserves wealth and builds wealth and allows for economic growth.
Voiceover: It’s as simple as this: sound money means economic prosperity and limited government; unsound money means inflation, recessions and depressions, and big government. What sort of system do we want for our families? Don’t we want prosperity and security that we can hand on to future generations? Transition to a gold standard will not be easy, but as Murray Rothbard put it, “The alternative is much worse.”
“Since 1980, the Fed has enjoyed the absolute power to do literally anything it wants: to buy not only US government securities, but any asset whatever, to buy as many assets, and to inflate credit as much as it pleases. There are no restraints on the Federal Reserve. The Fed is master of all it controls.”– Murray N. Rothbard (1926–1995)
With grassroots support, a Democratic mayor embraces the policing revolution.
New York City’s policing revolution is 13 years old now and by any objective measure a phenomenal success, with major crimes down by 74 percent since 1993. Even as the decline in crime nationwide started flattening out in 2000 and many cities saw their 1990s gains erode, crime in Gotham continued to fall. Still, critics deny that policing can cut crime. They attribute Gotham’s remarkable turnaround to the end of the crack epidemic, the strong economy of the Clinton years, or the number of potential criminals who have not been born since abortion became legal. Worse, they argue, New York–style law enforcement is racist: policing quality-of-life offenses and sending more cops to crime-ridden areas, they say, inevitably singles out minority residents for racial profiling and police harassment.
So it is even more remarkable that Denver, Colorado—home to America’s most liberal marijuana laws and an electorate that has sent Democrats to the mayor’s office in every election since 1963—has in the past year and a half enacted a series of policing reforms based on New York’s success, with surprisingly wide support, especially from the city’s poor and minority residents. In particular, the Denver PD has instituted Broken Windows and Compstat policing—so far, to good effect. Major crimes dropped 14 percent from 2005 to 2006, and another 13.7 percent for the first eight months of this year compared with the same period last year. If Mayor John Hickenlooper’s reelection this spring with 87 percent of the vote is any guide, popular support remains strong for the policing policies that, along with education reform, were the most prominent planks in his campaign platform.
And who sparked this policing reform? A group of plucky Hispanic high school kids who wanted their neighborhood safe, a grassroots organization that believes in helping people help themselves, and above all a former city official who describes himself as a “political progressive.”
Hickenlooper, a 55-year-old restaurateur and developer first elected mayor in 2003, had not run at first as a police reformer. But policing issues forced themselves upon him. After cops killed two Denverites in separate, high-profile incidents in 2003 and 2004—one just days before he took office—Hickenlooper began mulling over changes in policing strategy. Moreover, he had a crime problem as well as a policing problem. After almost a decade of falling crime in the 1990s, Denver, a city of about half a million people, saw crime begin to climb again in 2000. By early 2005, violent crime was up 42 percent compared with five years before, and burglary 49 percent. With one crime reported for every 15 residents in 2005, according to the FBI, Denver had a higher crime rate than Las Vegas, Los Angeles, New York, and Philadelphia.
A stabbing brought these problems into public focus. In early September 2005, at an after-school soccer practice outside Saint Anthony of Padua Catholic Church in the rough Westwood neighborhood, a group of gang members started hassling Lisette Mendoza, one of the team’s players. When Victor Flores, then 19, tried to get between the gangbangers and Mendoza, they stabbed him nine times—steps from the church’s front door, in full view of his teammates—and fled. He survived and has since recovered.
Horrified that such an attack could happen literally at their church’s doorstep, Saint Anthony’s called in Mateos Alvarez, a community organizer for a nonprofit group called Metro Organizations for People (“Mop”), for advice about the crime in their neighborhood—home to about 15,000 people, three-quarters of them Hispanic and one-quarter living under the poverty line. “We didn’t feel safe, so we looked for help,” says Teresita Chavira, who was 16 when she witnessed the stabbing. “We were like, ‘This is going to be the final point. We shouldn’t be scared of them. This is where we say it’s all going to end.’ ”
With 11 staffers and a $750,000 budget, Mop works with Denver-area churches, schools, and youth and neighborhood associations to solve community problems. On its website, Mop answers the question, “What is community organizing?” with an expanded (and gender-neutral) version of the ancient Chinese proverb, “If you give a man a fish, you feed him for a night; if you teach a man to fish, you feed him for the rest of his life.” Mop adds: “If you are thinking 100 years ahead, educate people. . . . By educating people, you will harvest one hundredfold.”
In that spirit, Alvarez met with about 20 parishioners a few days after the stabbing. “I advised them on how to make an impact on their community without going for what people traditionally go for, which is a service model,” he says. “Instead, they said, ‘We’re going to use this experience to begin to change the culture of our community ourselves and make it safe for everybody.’ ”
A core group of about a dozen high school students and recent grads quickly formed, with Chavira and her younger sister Brenda as leaders, along with their friends Claudia Perez and Yasmin Solis. Calling themselves the Saint Anthony’s Public Safety Committee, they met each Sunday with Alvarez. At first, they wanted to form a neighborhood-watch patrol, but Alvarez persuaded them instead to try to change the way their neighborhood was policed.
Alvarez started studying policing. Rosemary Rodriguez, then Westwood’s city councilwoman, put him in touch with the police commander for the area, Rudy Sandoval, who was interested in trying new policing strategies, and with Shepard Nevel, who would become the major force behind Denver’s policing reform. Nevel had been advocating that the city adopt Broken Windows and Compstat policing since 1998, when he went to work for the previous mayor, Wellington Webb. Despite his left-of-center politics, Nevel admired how effective these techniques had proved in New York.
Developed by James Q. Wilson and George Kelling, the Broken Windows theory, which undergirded New York City mayor Rudy Giuliani and former police commissioner William Bratton’s quality-of-life and zero-tolerance policing, posits that cracking down on minor crimes such as vandalism creates an atmosphere of law and order that discourages major crime. Compstat, short for “computerized statistics,” refers not only to the technology that monitors crime patterns by location but also to the philosophy that cops can prevent crime by policing aggressively where it occurs—and that precinct commanders should hold cops accountable for doing so, which in New York they do at weekly crime-report meetings.
Now working in the private sector, Nevel watched the numbers with mounting concern as crime continued to rise. In January 2005, he suggested that Hickenlooper hire Kelling, a Rutgers criminal-justice professor (and Manhattan Institute fellow), to help revamp Denver’s policing strategy. Kelling’s consulting firm, the Hanover Justice Group, had advised the Los Angeles Police Department, and has since begun work in Milwaukee, Boston, and Allentown, Pennsylvania.
It took Nevel nine months to convince Hickenlooper that Kelling and New York–style policing would be Denver’s best bet. He succeeded, he says, because he could cite data to prove that such policing worked. “I had the best product,” he says. “I had what the generation before me didn’t have: numbers from New York—from City Journal, by the way. I had ready answers, even in the first meeting.”
He also had, by the autumn of 2005, the well-publicized support of Mop and the Saint Anthony’s teens for a dramatic push against crime. The day after he formally presented his plan to Hickenlooper, Nevel met with the Saint Anthony’s Public Safety Committee to explain Compstat and the Broken Windows theory. He gave them a 2005 City Journal article and two Manhattan Institute bulletins reprinting speeches by Kelling, Wilson, and Bratton, among others.
In November, the teens’ Public Safety Committee called a meeting at Saint Anthony’s. More than 150 people, many of them Spanish speakers, showed up. Councilwoman Rodriguez, precinct commander Sandoval, and Nevel were there, along with representatives of the mayor’s office. Victor Flores, still in bandages, gave a compelling speech, saying that he wanted people not to see him as a victim but rather to learn from his experience and make Westwood safer. The girls gave a PowerPoint presentation on Broken Windows policing. “We were afraid people would think it meant no tolerance,” Chavira says. “But we showed them the good points. The people I know thought it was a really good program.” Later, the young people met with Mayor Hickenlooper, who had already decided to give Kelling a try. They persuaded him to make Westwood the spot for one of his pilot programs.
Hickenlooper, with money from the non-profit Denver Police Foundation, hired Kelling’s Hanover Justice Group. The two Hanover consultants who spearheaded the work in Denver were Mike Wagers, who heads the Police Institute, a crime-fighting think tank based at Rutgers, and Robert Wasserman, former chief of staff of the White House’s Office of National Drug Control Policy. They set up two neighborhood pilot programs and transformed the Denver PD’s Command Operation Review and Evaluation—or Core—meetings into something more like New York’s Compstat. City and police officials still keep in close touch with Kelling, Wagers, and Wasserman.
The pilot program in Westwood began in late February 2006. Before it started, however, officers went around the neighborhood knocking on doors, chatting, and handing out a survey to learn what complaints residents had about crime and disorder—what street corners they feared to walk on at night, where they regularly saw kids dealing drugs, where they encountered vandalism, panhandling, litter, and noise. Much of the cops’ work during the pilot program involved aggressive quality-of-life policing, as well as trying to anticipate and prevent crime instead of just responding to 911 calls. Commander Sandoval sent out two units called “Scat”—Special Crime Attack Team—that spoke to residents and examined crime data to figure out where offenses generally occurred, and then patrolled those areas relentlessly to discourage criminals or catch them in the act.
Over the program’s 28 weeks, incidents in which officers took the initiative increased by 70 percent from the previous year. The result of all this work: crime in the neighborhood fell 21.4 percent, again compared with the year before. Contrary to what opponents of Broken Windows and Compstat would predict, not one civilian lodged a complaint against a cop in Westwood during that time.
The other pilot, this one still ongoing, focuses on drug dealing, prostitution, and quality-of-life crimes in the Capitol Hill neighborhood, and it encourages property and business owners to beautify the neighborhood and keep it clean. Crime there dropped 12.5 percent in 2006 and another 14.5 percent for the first eight months of this year.
The Westwood pilot program won approving editorials in both the liberal Denver Post and the more centrist Rocky Mountain News, and Flores, Chavira, and their friends appeared at a press conference to praise it. Residents of many other neighborhoods—especially poor and minority ones—lobbied for their locales to be next, and similar crime offensives are now under way in three Denver police districts.
The Kelling team’s redesign of the Core meetings proved crucial. Now, precinct commanders meet every week with the police chief, deputy chief, and other city officials to report crime patterns in their districts, explain what tactics they’re using to combat them, and answer often sharp questions about their decisions. “We have made significant strides in arming the police department with more accurate and fresher crime data,” Hickenlooper says, “and we’re setting the expectation that officers and managers will use that information to deploy resources more strategically.”
Reports Jeremy Bronson, Hickenlooper’s special assistant on public safety, “The meetings are changing practically weekly. We’re still experimenting with what works best.” Each commander now presents his district’s crime statistics not only for the previous week but also for the previous 28 days and 12 months, in order to distinguish a trend from a weekly aberration. And the tone of the meetings has recently become less adversarial, with commanders having more control over the agenda and more time to pursue each goal. Among the rank and file, morale has picked up, too, now that the department gives cops clear information about crime and expects them to take the initiative and do something about it. “For many police officers that is a very empowering thing,” Bronson says. “That’s exactly the sort of trust and encouragement one should give to public-safety officers.”
In Shepard Nevel’s view, “Assertive policing is one of the most progressive things you can do. I believe that one of the greatest injustices is that you can have law-abiding, hardworking people who live in fear and are not safe.” After all, lawlessness hits minorities and the poor hardest. Blacks and Hispanics (40 percent of Denver’s population) are the victims of many more crimes per capita than whites, according to the Bureau of Justice Statistics, and poor people (14 percent of Denverites) suffer many more crimes against their person than the more prosperous (though property crimes are more evenly distributed). Plus, getting mugged for $50—or being stuck with a $2,000 hospital bill after an assault—makes life a lot harder for someone earning $20,000 a year than for someone earning five times that.
Nevertheless, critics condemn Broken Windows and Compstat policing as inherently bigoted. Cops, they say, unfairly single out the poor and minorities not because such people are more likely to commit crimes but out of their own institutionally sanctioned bigotry. Activist policing is not just unhelpful, such critics say; it is immoral and must be stopped.
For example, even as plummeting crime numbers were revitalizing New York City—especially its poorest, most crime-ridden neighborhoods—left-wingers and self-appointed minority advocates accused Gotham’s police of racism and tyranny. “There is an awful sickness coursing through the NYPD,” columnist Bob Herbert wrote in the New York Times in 1996. “The department has gotten more brutal, not less, . . . because no one has stepped forward to make it clear to the sadists and the sociopaths and the raging, howling racists in the Police Department that their murderous behavior will not be tolerated.”
Jeremiads veered into conspiracy theories. Eddie Ellis, president of a Harlem-based advocacy group called the Community Justice Center, suggested to Newsday in 1995 that New York City’s policing was a racist ploy to get rid of blacks and Latinos by confining them to the state prison system, “a multiple billion dollar industry that provides jobs and contracts and patronage in upstate Republican areas.” And after the police shooting of soon-to-be-married Sean Bell outside a Queens nightclub last November, the Reverend Al Sharpton absurdly claimed that minorities had as much to fear from the police as from robbers. Outside the court where the three officers who shot Bell appeared in April, the New York Times reported, protesters chanted: “Today’s pigs, tomorrow’s bacon.”
Though none of these charges is true—not just crime but also shootings by police declined in Gotham during the Giuliani administration and after—the anger and ideological prejudices of activist policing’s opponents can stymie change where leftist attitudes predominate. Take ultra-liberal San Francisco, for example, where Mayor Gavin Newsome is attempting the modest reform of establishing a community court that would crack down on quality-of-life crimes in the seedy downtown Tenderloin neighborhood. Newsome’s model is Gotham’s Midtown Community Court, a very moderate institution that combines punishments of community service—and, rarely, jail time—with counseling and job training. Its efficient handling of petty crimes helped resuscitate Times Square in the mid-nineties. Newsome’s critics say that the proposed court will “criminalize poor people simply for being poor,” the San Francisco Chronicle reports. They’re shocked, they say, “that a city like San Francisco would choose a hard-core Republican”—that is, Giuliani—“as a model for how to deal with social problems.” Chris Daly, a community-court skeptic and San Francisco Board of Supervisors member, told the Chronicle, “This proposal is dead on arrival.”
How, then, in Denver, did a bunch of liberal Democrats successfully institute New York–style policing reform, with overwhelming support not just from homeowners and the business community, but from poor minorities who live in blighted neighborhoods?
For one thing, as Nevel observes, “This city doesn’t have as sharp-elbowed grievance groups” as New York’s, which threaten violence (as city councilman Charles Barron did after the Bell shooting) and throw feces at effigies of the mayor (as the hatchet-job film Giuliani Time lovingly documents). With three times as many Hispanics as African-Americans in Denver, many of the city’s activist groups that speak—or claim to speak—for minorities lack the loathing for and suspicion of the police that simmer in many of today’s black partisans.
Without an entrenched class of reflexively oppositional race activists, Denver could thus have a real conversation about crime and policing. Policymakers found that, when vitriol or demagoguery did not drown out the voices of ordinary poor and minority residents, they said that they wanted safe neighborhoods, and for the city to use tactics that experience showed would work best to protect them from the tyranny of lawlessness. In Denver, that desire proved so strong that it erupted in grassroots advocacy for New York–style policing from the very people whom Al Sharpton and his ilk depend on to oppose it—minorities and the poor.
Some predictable opposition has finally cropped up, though. In April, members of the Colorado Progressive Coalition (which advocates “racial, economic, environmental, and social justice”) staged a leafleting campaign that denounced the Broken Windows theory. “More aggressive police will not make our neighborhoods stronger or safer,” the pamphlet reads.
“ ‘Broken Windows Policing’ targets low-level offenses and leads to an increase in racial profiling, youth harassment, police brutality fines, and arrests of those most vulnerable in our neighborhoods. We can’t arrest and ticket our problems away.”
Hickenlooper and the police understand the damage that even such mild opposition can do, and they have been working to assuage it. They’ve stopped using the term “Broken Windows,” emphasizing Compstat-based techniques instead. In May, the mayor and his staff met with two dozen activists to hear their concerns. “The group wanted to look at other solutions to community problems beyond law enforcement,” reports mayoral public-safety aide Bronson, and they wanted cops out of their cars doing foot patrols and building relationships as well as confronting suspicious behavior. “These are all tenets of the program we’re implementing,” Bronson says, “but the Broken Windows debate has interfered with our ability to reach common ground more quickly.”
Officials have also addressed fears about increased police presence in neighborhoods that are home to illegal immigrants, as Colorado has the toughest immigration law of any state. Officers have taken care to explain to residents of these neighborhoods that they won’t turn illegals over to the feds if they report a crime. State law requires cops to refer to Immigration and Customs Enforcement only those whom they have arrested for another crime and also suspect of being illegal immigrants. “Cultural transformation and the institutionalization of change require time both to achieve and to demonstrate as having a sustained positive impact on community safety,” Hickenlooper says.
It’s inconceivable that the mayor, who consistently polls as one of Colorado’s most popular politicians, will ever spark the antipathy that Giuliani did in New York. The only question is whether, should there be another tragic police shooting like those in Denver in 2003 and 2004, he would make the knee-jerk assumption that the police must have been at fault, as New York mayor Michael Bloomberg did after Sean Bell’s killing. If Hickenlooper sticks to his guns, his policing reform will succeed.
Alec Magnet, a former reporter for the New York Sun and the Telluride Watch, is a Chancellor’s Fellow at the Graduate Center of the City University of New York.