It's the Sun, Stupid

“Who are you going to believe, me or your own eyes?”—Groucho Marx.

Who are you going to believe, those claiming global warming or the temperature records you can see with your own eyes?

Marx's line (actually spoken by Chico dressed up as Groucho) was intended to be humorous because it is so preposterous. The second line—no less preposterous—is, in essence, put forth by the International Panel on Climate Change (IPCC) and other human-caused global warming alarmists as serious, because it is intended to make people believe it is not preposterous but scientific. It would be humorous if the consequences were not so costly. The misdirection of public policy engendered by fears of overheating the planet is not only financially wasteful but detrimental to the environment and to human rights and freedom.

The scare that humans a​re creating catastrophic warming of the planet is based on computer models purportedly representing the real world. That's how it was possible to sell the idea to the public. The models, however, were never able to be verified by historical observational data, and their key element—that carbon dioxide causes dangerous global warming—has been shown to be baseless by thousands of peer-reviewed scientific papers in professional journals. The latest Nongovernmental International Panel on Climate Change (NIPCC) report references almost 5,000 of these. They were ignored by the IPCC and most of the news media and politicians who fanned the hysteria over global warming.

But time continues to prove the climate alarmists are wrong. The earth has shown no warming for 17 years despite a continuous increase in carbon emissions. In the fifteen years prior to 2013, carbon dioxide emissions grew from 1.8% per year to 2.2%. From 1998 through 2012, humans produced 461 billion tonnes of carbon dioxide, compared to only 302 billion tonnes in the prior fifteen years, 1982 through 1997. The global-warming models have been an utter failure, projecting a scenario exactly opposite to what occurred in the real world. When a theory contradicts reality, it is the theory that is wrong.

“The sun is the ultimate source of all the energy on Earth; its rays heat the planet and drive the churning motions of its atmosphere,” explains retired meteorologist Joseph D'Aleo. Everyone knows the sun's heating of the earth and atmosphere is uneven. We have all witnessed changes in the sun's heat we receive throughout the day, that it is warmest in midday when the sun is directly overhead; and as the sun moves across the sky, new volumes of air are exposed to its heating while others are left behind. This uneven heating is the basis for wind currents. A similar process takes place in the oceans, creating ocean currents. According to NASA, “uneven heating from the sun drives the air and ocean currents that produce the Earth's climate”

The Hadley circulation is an atmospheric movement of air between the equator and the poles.

This flow of air occurs because the sun heats air at the Earth’s surface near the equator. The warm air rises, creating a band of low pressure at the equator.  Once the rising air reaches the top of the troposphere at approximately 10-15 kilometers above the Earth’s surface, the air flows toward the north and south poles. The Hadley cell eventually returns air to the surface of the Earth in the subtropics.

The large planets Jupiter and Saturn exert a gravitational pull on the earth that makes the earth's orbit around the sun elliptical. These planets align to pull the earth away from the sun to the maximum distance of its orbit every 100,000 years. The earth's 3 degree change in its inclination to its rotational axis has a 41,000 year cycle. And the precession of its rotation, which exposes one pole or the other to more sunlight, has a 22,000 year cycle. There is also a climate cycle of 135 million years that corresponds to earth passing through the arms of the Milky Way. The Milky Way galaxy, which is 100,000 light years across and 10,000 light years thick, has six arms spiraling out from its center like a pinwheel.

While orbital changes produce long-term climate cycles by varying the distance of the earth from the sun, shorter cycles are determined by changes in the surface of the sun itself. The sun's radiation is not uniform but varied by disturbances on the surface of the sun, called “sunspots.” Magnetic fields rip through the sun's surface, producing holes in the sun's corona, solar flares, coronal mass ejections, and changes in the solar wind, the stream of charged particles emanating from the sun. The solar wind, by modulating the galactic cosmic rays which reach the earth, determines both the formation of clouds and the carbon dioxide level in the earth's atmosphere—which has nothing to do with emissions from factories or automobiles! That's why adding 461 billion tonnes of carbon dioxide to the atmosphere did nothing to increase the global temperature. As Reid Bryson, founding chairman of the Department of Meteorology at the University of Wisconsin, put it, “You can go outside and spit and have the same effect as a doubling of carbon dioxide.”

Sunspots have been observed for millennia, first in China and with a telescope for the first time by Galileo in 1610. We now have a 400-year record of sunspot cycle observations, from which we can see a cycle length of 11 years. Combining this fact with the discovery of a strong correlation between solar activity and radioactive carbon 14 in tree rings, it has been possible to backdate sunspot cycles for a thousand years, back to the Oort Minimum in 1010.

After about 210 years, sunspot cycles “crash” or almost entirely die out, and the earth can cool dramatically. These unusually cold periods last several decades. Of greatest concern to us is the Maunder Minimum, which ran from 1645 to 1715. Figure 1 shows the paucity of sunspots during this time. Some years had no sunspots at all. The astronomer Sporer reported only 50 sunspots during a 30-year period, compared to 40,000, to 50,000 typical for that length of time.

Figure 1, Source

Since the Maunder Minimum, a less extreme but still significantly below-average period of cooler temperatures occurred during the Dalton Minimum (1790 to 1830), also shown on the graph.

Changes in the number of sunspots cause only slight changes in the sun's radiation, but these changes are amplified many fold by the radiation's interaction with 1) ozone in the upper stratosphere, and 2) clouds in the lower troposphere. The sun's energy output that reaches earth varies only slightly (about 0.1 percent) throughout most 11-year solar cycles. However, in ultra-long cycles (since the Maunder Minimum) the irradiance changes are estimated to be as high as 0.4%. 

Figure 2, Source

In 2008 the minimum for Solar Cycle 23, shown in Figure 2, had 266 days with no sunspots. This is considered a very deep solar minimum. You can check out pictures of sunspots—or their absence—day after day for recent years at http://tinyurl.com/6zck4x.

Figure 3, Source

We are currently over five years into Solar Cycle 24. We should be at the maximum for this cycle, but in Figure 3 the smoothed sunspot number maximum for this cycle is only about 67, reached in the summer of 2013. That's about half of the maximum in Cycle 23, which peaked in early 2000, and less than half the maxima of Cycles 19, 21 and 22 shown in Figure 2. This is a very ominous picture: it portends an extremely weak Cycle 25—meaning much more cold weather is ahead, not global warming.

At least as far back as 2007—before Cycle 23 had bottomed—a Russian solar physicist, predicted what we are seeing now. Professor Habibullo Abdussamatov, head of the Pulkovo Observatory in Russia, noting that solar irradiance had already begun to fall, said a slow decline in temperatures would begin as early as 2012-2015 and lead to a deep freeze in 2050-2060 that will last about fifty years. He said the warming we've been witnessing was caused by increased solar irradiance, not CO₂ emissions:

It is no secret that increased solar irradiance warms Earth's oceans, which then triggers the emission of large amounts of carbon dioxide into the atmosphere (italics added.) So the common view that man's industrial activity is a deciding factor in global warming has emerged from a misinterpretation of cause and effect relations.

Further, debunking the very notion of a greenhouse effect, the celebrated scientist said:

Ascribing 'greenhouse' effect properties to the Earth's atmosphere is not scientifically substantiated. Heated greenhouse gases, which become lighter as a result of expansion, ascend to the atmosphere only to give the absorbed heat away.

In a paper published in 2009, Abdussamatov wrote that there have been 18 Maunder-type minima of deep temperature drops in the last 7500 years, “which without fail follow after natural warming.”

And, correspondingly,

while in the periods of high sunspot maxima, there have been periods of global warming. Such changes in the climate of the Earth could be caused only by lasting and significant changes in the Sun, because there was absolutely no industrial effect on nature in those times.

We would expect the onset of the phase of deep minimum in the present 200-year cycle of cyclic activity of the Sun to occur at the beginning of solar cycle 27; i.e., tentatively in the year 2042 plus or minus 11 years, and potentially lasting 45-65 years.

Regarding analyses of ice cores in Greenland and Antarctica, Abdussamatov wrote:

It has been seen that substantial increases in the concentration of carbon dioxide in the atmosphere and global climate warming have occurred cyclically, even when there was as yet no industrial action on nature. It has also been established that periodic, very substantial increases in the carbon dioxide content in the atmosphere for a period of 420 thousand years never preceded warming, but, on the contrary, always followed an increase in the temperature with a delay of 200-800 years, i.e., they were its consequence (italics and boldface added.)

In an update in October 2013, Abdussamatov warned, “We are now on an unavoidable advance towards a deep temperature drop.”

Abdussamatov's conclusions about global cooling came from his studies of the sun, but another scientist came to a similar conclusion by studying ocean currents. Don Easterbrook, a geology professor and climate scientist, correctly predicted back in 2000 that the earth was entering a cooling phase. He made his prediction by tracing a “consistently recurring pattern” of alternating warm and cool ocean cycles known as the Pacific Decadal Oscillation (PDO). He found this cycle recurring every 25 to 30 years all the way back to 1480. Projecting this forward, he concluded “the PDO said we're due for a change” and that happened. No warming now for 17 years.

Asked by CNSNews about the IPCC, Easterbrook said they “ignored all the data I gave them...every time I say something about the projection of climate into the future based on real data, they come out with some modeled data that says this is just a temporary pause...I am absolutely dumfounded by the totally absurd and stupid things said every day by people who are purportedly scientists that make no sense whatsoever....These people are simply ignoring real-time data that has been substantiated and can be replicated and are simply making stuff up.” He said they are driven by money and power and added, “What they're doing in the U.S. is using CO2 to impose all kinds of restrictions to push a socialist government.”

Is it true that the global-warming issue has become a front for a political ideology? Has it become a tool for increasing government control over our lives, not just in the U.S. but all over the globe? In 2010 a leading member of the United Nation's IPCC said, “One has to free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with environmental policy anymore.” Now it's not about saving the environment but about redistributing wealth, said Ottmar Edenhofer, a co-chair of the IPCC's Working Group III and a lead author of the IPCC's Fourth Assessment Report (2007). “We redistribute the world's wealth by climate policy.”

Investors Business Daily reported:

"Developed countries have basically expropriated the atmosphere of the world community" said Edenhofer,” and so they must have their wealth expropriated and redistributed to the victims of their alleged crimes. U.N. warm-mongers are seeking to impose a global climate reparations tax on everything from airline flights and international shipping to fuel and financial transactions....Given this administration's willingness to compromise American sovereignty, we could soon see Americans taxed to fund a global scam—the ultimate form of taxation without representation.

Edenhofer told a German news outlet (NZZ AM Sonntag ): “Basically, it's a big mistake to discuss climate policy separately from the major themes of globalization. The climate summit in Cancun at the end of the month is not a climate conference but one of the largest economic conferences since the Second World War.”

The Cancun agreement set up a “Green Climate Fund” to administer assistance to poor nations suffering from floods and drought due to global warming. The European Union, Japan and the United States have led pledges of $100 billion per year for poor nations up to 2020, plus $30 billion in immediate assistance.

The Cancun agreement says it “recognizes that deep cuts in global greenhouse gas emissions are required according to science” and calls for “urgent action” to cap temperature rises. At the Cancun conference, UN Secretary-General Ban Ki-moon warned, “Nature will not wait....Science warns that the window of opportunity to prevent uncontrolled climate change will soon close.” That is funnier than Groucho Marx. (Well no, not really—but just as preposterous.)

The IPCC regularly submits its reports to its Expert Reviewers Panel. As you might expect, most of its appointments to this panel have been supporters of global warming. A few nonbelievers have been included to give the appearance of balance, but their comments and questions have been routinely ignored as the IPCC focuses on what it claims to be the “consensus” view.

Only one person has been been on every IPCC Expert Reviewers Panel, dating back to 1990. That man is Dr. Vincent Gray of New Zealand. He submitted a very large number of comments to IPCC drafts, including 1,898 for the Final Draft of the 2007 report. Here are some of his comments from a letter he wrote on March 9, 2008:

Over the period I have made an intensive study of the data and procedures used by IPCC contributors throughout their whole study range....Right from the beginning I have had difficulty with this procedure. Penetrating questions often ended without any answer. Comments on the IPCC drafts were rejected without explanation, and attempts to pursue the matter were frustrated indefinitely....

I have been forced to the conclusion that for significant parts of the work of the IPCC, the data collection and scientific methods employed are unsound. Resistance to all efforts to try and discuss or rectify these problems has convinced me that normal scientific procedures are not only rejected by the IPCC, but that this practice is endemic, and was part of the organization from the very beginning. I therefore consider that the IPCC is fundamentally corrupt. The only "reform" I could envisage, would be its abolition....

The models are so full of inaccurately known parameters and equations that it is comparatively easy to  "fudge" an approximate fit to the few climate sequences that might respond....

By drawing attention to these obvious facts I have now found myself persona non grata with most of my local professional associations, Surely, I am questioning the integrity of these award-winning scientific leaders of the local science establishment. When you get down to it, that is what is involved....

Yes, we have to face it. The whole process is a swindle. The IPCC from the beginning was given the license to use whatever methods would be necessary to provide "evidence" that carbon dioxide increases are harming the climate, even if this involves manipulation of dubious data and using peoples' opinions instead of science to "prove" their case.

The disappearance of the IPCC in disgrace is not only desirable but inevitable....Sooner or later all of us will come to realize that this organization, and the thinking behind it, is phony.  Unfortunately severe economic damage is likely to be done by its influence before that happens.

Vaclav Klaus, former president of the Czech Republic and a university professor before he became president, is the author of a book on global warming and has spoken often on the subject. He says , “What frustrates me is the feeling that everything has already been said and published, that all rational argument has been used, yet it does not help.”

It does not help because global warming alarmism is not based on rational argument. It is not based on science. It is not based on reality. It is based on political ideology. If rational argument doesn't fit, then phony arguments must be invented: the spread of malaria, the loss of biological diversity, oceans flooding, polar bears disappearing, Himalayan glaciers vanishing, etc. If global warming does not fit the observable temperature measurements, then a new “reality” must be invented to fit the ideology: actual temperature records must be altered or dismissed—hundreds of temperature-reporting stations in colder areas worldwide were eliminated from the global network so the average temperature is higher than when those stations were included link. Presto! Global warming. Ditto for carbon dioxide measurements: 90,000 CO₂ measurements in 175 research papers were dismissed because they showed higher CO₂ levels than desired, and various other studies were selectively edited to eliminate "uncooperative" measurements while claiming the cherry-picked remaining ones showed global warming link. The global warming advocates are not disturbed by all this because, in their view, ideology trumps reality!

Patrick Moore, a co-founder and director of Greenpeace, resigned because of its “trend toward abandoning scientific objectivity in favor of political agendas.” After the failure of communism, he says, there was little public support for collectivist ideology. In his view a “reason environmental extremism emerged was because world communism failed, the [Berlin] wall came down, and a lot of peaceniks and political activists moved into the environmental movement bringing their neo-Marxism with them and learned to use green language in a very clever way to cloak agendas that actually have more to do with anti-capitalism and anti-globalism than they do anything with ecology or science.”

“I think if we don't overthrow capitalism, we don't have a chance of saving the world ecologically,” said Judi Bari, principal organizer of Earth First!

NASA Scientist James Hansen—notorious for his many inexplicable “corrections” to temperature measurements—virtually invented global-warming alarmism with his widely publicized testimony before the U.S. Senate in 1988 that he was 99% sure greenhouse warming was already underway. He revealed a passionate hatred of capitalism and industrial development in an impassioned e-mail in 2007 denouncing the attention paid to errors in NASA temperature data: “The deceit behind the attempts to discredit evidence of climate change...has a clear purpose: to confuse the public about the status of knowledge of global climate change, thus delaying effective action to mitigate climate change. The danger is that delay will cause tipping points to be passed, such that large climate impacts become inevitable...[T]he ones who will live in infamy if we pass the tipping points, are the captains of industry, CEOs in fossil fuel companies such as EXXON/Mobil, automobile manufacturers, utilities, all of the leaders who have placed short-term profit above the fate of the planet and the well-being of our children.”

On June 23, 2008, exactly twenty years to the day from his momentous Senate testimony, Hansen appeared before the House Select Committee on Energy Independence and Global Warming. There he conjured up images of the Nuremberg trials of Nazi war criminals by claiming the CEOs of fossil fuel energy companies “should be tried for high crimes against humanity and nature.” See

Klaus states (link link link): "We succeeded in getting rid of communism, but along with many others, we erroneously assumed that attempts to suppress freedom, and to centrally organize, mastermind, and control society and the economy, were matters of the past, an almost-forgotten relic. Unfortunately, those centralizing urges are still with us....

“Environmentalism only pretends to deal with environmental protection. Behind their people and nature friendly terminology, the adherents of environmentalism make ambitious attempts to radically reorganize and change the world, human society, our behavior and our values....They don’t care about resources or poverty or pollution. They hate us, the humans. They consider us dangerous and sinful creatures who must be controlled by them. I used to live in a similar world called communism. And I know it led to the worst environmental damage the world has ever experienced....

“The followers of the environmentalist ideology, however, keep presenting us with various catastrophic scenarios with the intention of persuading us to implement their ideas. That is not only unfair but also extremely dangerous. Even more dangerous, in my view, is the quasi-scientific guise that their oft-refuted forecasts have taken on....Their recommendations would take us back to an era of statism and restricted freedom....The ideology will be different. Its essence will, nevertheless, be identical—the attractive, pathetic, at first sight noble idea that transcends the individual in the name of the common good, and the enormous self-confidence on the side of the proponents about their right to sacrifice the man and his freedom in order to make this idea reality.... We have to restart the discussion about the very nature of government and about the relationship between the individual and society....It is not about climatology. It is about freedom.”

Since 1993, the U.S. federal government has spent $165 billion on climate change, $22.6 billion of it in fiscal year 2013. This is not merely a total waste but propagates waves of additional wasting throughout the economy. These are far more expensive than that $165 billion. Energy is the lifeblood of the economy. When government, because of fears of carbon dioxide emissions, (1) prohibits new coal-fired power plants from being built, (2) issues new EPA regulations on CO₂  for existing coal-fired power plants that puts them out of business, (3) impedes the development of shale gas, or (4) refuses to license oil pipelines—like Keystone—the price of electricity goes up. Compulsory inefficiency is a waste. It is a cost that should and could be avoided, and it is passed all down the line in products for industry as well as consumers. Furthermore, it is added to by every processor, wholesaler, retailer, or distributor since their energy costs are higher, too.

In addition, when government subsidizes solar and wind projects—the most expensive and least reliable forms of energy—to substitute for fossil fuels, it is a further waste. Subsidies do not make alternative energies economic, they merely transfer their high cost to others. Taxpayers now and in future generations are stuck with the continually rising federal debt for these and thousands of other government expenditures.

The federal debt, now at $17 trillion, is equal to the U.S. GDP (gross domestic product.) That debt does not include future costs of Social Security, Medicare and Medicaid, which amount to $55 trillion, for a total of $72 trillion. The GDP of the entire world, including the U.S., is estimated at $72 trillion. Thus the U.S. is already obligated to pay an amount equal to what entire world produces.

There is no way the U.S. can repay what it has already borrowed. Still, the government continues to spend more and borrow more. The U.S. is in a unique position. The Bretton Woods agreement in 1944 made the dollar the world's reserve currency. As a result, the U.S. is the only country in the world that can pay its debts by simply printing more of its own money. That is what the Federal Reserve has been doing, more aggressively than ever in recent years. In his first term of office, Obama added as much to the national debt as all the presidents from George Washington through George W. Bush combined. In the fifteen months following collapse of the housing/mortgage bubble in 2008, the Fed created more money than in all the years combined since 1913 when it was founded.

The monetary front is quiet for the moment, but the problems have not been solved. The recent U.S. government partial shutdown and furor over increasing the debt ceiling accomplished nothing. The can was merely kicked a little further down the road, but the can is getting too heavy to kick much further, and there is not much road left. As I explain in my recent book The Impending Monetary Revolution, the Dollar and Gold, and in postings on this blog, the world is turning away from the dollar. It is increasingly obvious to everyone that the U.S. is never going to be able to repay what it has borrowed and the current situation cannot continue indefinitely. Some sort of default will occur, and the dollar is going to lose its unique role as the world's reserve currency. Then the U.S. will no longer be able to continue its wild spending and ballooning of the national debt. The balloon is going to burst.

Recently Detroit filed for bankruptcy protection. The city has 88,000 street lights, but according to National Public Radio, fewer than half of them work. It reports, “In some parts of town, city block after city block is filled with streetlights that never come on.” The city doesn't have the money for maintenance. The city's lighting department has 85 workers, down from its peak of 500. Most of the poles are stripped of copper or the underground wiring is fried. In 2008 Detroit had 317 parks, now just 107—and 50 of those are set to close. Only one-third of the city's ambulances are in operation. The short-handed police department takes 58 minutes to respond to citizen's calls, compared to a national average of 11 minutes.

The financial position of the federal government is worse than Detroit's. The day is coming when the federal government, like Detroit, will have to cut back on its spending even for far more important functions than combating global warming. Why wait? That funding should be eliminated now!

Where is the U.S. Economy Going?—and Why

The U.S. employment news on January 10 sharply contradicted the oft-repeated refrain that economic growth was beginning to accelerate. Employers added only 74,000 jobs in December, the smallest job increase in three years and far below the 200,000 expected. The new number was well below the 182,000 average for all of 2012 and 2013 through November and less than the approximately 150,000 needed for population growth and replacing retirees.

The dismal number of new jobs was blamed in part on severe weather and increased retirements from an aging population, but too much importance should not be assigned to these factors. The really severe, record-breaking weather so far this winter occurred in early January so would not be reflected in the December figures. And the loss of jobs among prime-age workers was far larger than for older ones. Among workers ages 45 to 54, the labor participation rate dropped 0.4% to 79.2%, the lowest since 1988. For workers 55 and older, the rate was only down 0.1 percent.

The jobless rate fell to 6.7% from 7%, but most of the people responsible for the decline simply dropped out of the labor force. Less than one-third of them found a job; the rest just quit looking for one, perhaps too discouraged to continue. In December, 2.6 million workers were looking for a job for more than a year. The most significant job gains (55,000) were in low paying jobs, and 40,000 others were for temporary help. Those aren't signs of a healthy economy.

Total employment is still about 2 million less than when the recession started. That is a shocking figure, but perhaps the most shocking statistic of all is that the labor participation rate is the lowest in 35 years, going all the way back to 1978.

The graph shows that the poor performance during Obama's presidency essentially took place after the end of the recession. He took office on January 20, 2009, and the Great Recession officially ended in June 2009, according to the National Bureau of Economic Research. (The graph ends with a slight uptick as of Q3 2013, but the 1.8% gain was lost in the fourth quarter of 2013.)

Scarcely three weeks after Obama's inauguration, Congress on February 14 passed his $787 billion stimulus bill (later adjusted to $812 billion.) When Obama took office, the unemployment rate was 7.4%. The Obama administration link link promised that if the stimulus bill was passed, the rate would not exceed 8%, and Obama himself stated it would decline to 5.6% by July 2012. Instead the rate rose to 10% and remained above 9% for more than forty months.

The argument that Obama inherited a severe recession that requires a longer recovery time is without merit, says John B. Taylor, an economics professor at Stanford University. He cites the research of Michael Bordo and Joseph Haubrich of the Cleveland Federal Reserve Bank as having “blown holes in that argument.” He writes, “Recoveries from deep recessions with financial crises have been stronger, not weaker, than recoveries following shallower recessions. These strong recoveries average about 6% real GDP growth per year, compared to only 2% per year in this recovery.” With holes blown in this possible defense of Obama's record, it is clear that the blame for the poor economy from 2009 to today in 2014 rests entirely on the misguided policies of Obama.

The administration said the stimulus spending would create three to four million new jobs. Of course, the unemployment figures alone tell you that never happened. And the jobs that were created were incredibly costly and wasteful. According to the Congressional Budget Office, every job created by the stimulus program cost the taxpayers between $500,000 and $4 million.

The idea that government spending would stimulate the economy can be traced to John Maynard Keynes.  He claimed government spending produced a multiplier effect through a chain reaction of additional spending in the economy. The gigantic spending of the stimulus program was sold to Congress on the basis of a Keynesian multiplier of 1.5, meaning the GDP will increase by $1.50 for every dollar of government spending. But in my new book, The Impending Monetary Revolution, the Dollar and Gold, I point out that extensive research has shown the Keynesian multiplier is always less than 1.0.  That means the money that is spent over and over again in the private sector from the government spending is always less than the cost of the programs.  If it weren't, the U.S., Greece, and other spendthrift countries wouldn't be going broke—they'd be getting richer the more they spent!  My book quotes Brian Westbury, former chief economist for the Joint Economic Committee of the U.S. Congress, who wrote “the larger the government share of GDP, the higher the unemployment rate. In other words, when it comes to jobs, government spending has a multiplier of less than one—government spending destroys jobs.” Also, Harvard Professor Robert Barro, who has studied Keynesian multipliers as thoroughly as anyone, concludes, “There is no meaningful theoretical or empirical support for the Keynesian position.”

Franklin Roosevelt adopted Keynes' economic ideas to try to pull the country out of the Great Depression of the 1930s, but extensive research has shown the opposite effect: they prolonged the depression. It should not be a surprise that similar policies by Obama produced similar effects regardless of promises of “hope and change” and exclamations of “Yes we can!”

The futility of the Keynesian approach was explained to the House Ways and Means committee late in FDR's second term by his treasury secretary and good friend Henry Morgenthau Jr. On May 9, 1939, he testified: “We have tried spending money. We are spending more than we have ever spent before and it does not work....After eight years of this Administration we have just as much unemployment as when we started....And an enormous debt to boot.” In May 1939 the unemployment rate edged above 20%.

Hunter Lewis, author of the book Where Keynes Went Wrong, says, “There is no evidence” that spending ever cured a recession, and Keynes “wasn't particularly interested in evidence.” Keynes believed spending—for anything—was the driver of the economy. He even endorsed printing money with expiration dates so people would be forced to spend it. That, of course, would destroy savings, leaving the people unable to provide for their future (and dependent on the government), and eliminate investments needed for economic growth. Lewis says Keynes

suggested that the government could print new money. That money would flow into the economy in the form of debt, and that would take the place of savings, but there is just no evidence for that at all, there is no logic behind that. In fact, if you want a good economy, what you need is savings, and you need then to invest those savings, and you need to invest those savings in a wise way...Of course, Keynes completely ignores the issue of how you are investing. For him, not only is any investment equivalent to any other investment, but spending is equivalent to investment. (Emphasis added.) link 

Of course, if that is the case then it is unimportant that every new job from the stimulus program costs $500,000 to $4 million. That investment is as good as any other. If that doesn't work, print more money. The important thing is the spending. In an article in Redbook magazine in 1934, in answer to the question “Can America spend its way into recovery,” Keynes answered, “Why, obviously, the very behavior that would make a man poor, could make a nation wealthy.”

Keynes intent was “positive social improvements,” namely, the redistribution of wealth. In his 1940 book, How to Pay for the War, Keynes wrote, “I have endeavored to snatch from the exigency of war positive social improvements. The complete scheme now proposed...embodies an advance toward economic equality greater than any which we have made.” (emphasis added.)

You can see why Keynes' ideas are so appealing to Obama, who in December 2013  declared economic inequality is the “Defining challenge of our time...That’s why I ran for president....It drives everything I do in this office.”

On the floor of the Constitutional Convention on June 26, 1787, Alexander Hamilton declared, “Inequality will exist as long as liberty exists. It unavoidably results from that very liberty itself.” Our Founding Fathers chose liberty; Obama has chosen economic equality—necessarily at the expense of liberty. When he told “Joe the plumber” during the presidential campaign in 2008, link “I think when you spread the wealth around, it's good for everybody,” he was advocating the redistribution of wealth at the expense of not only Joe's liberty and property but of his inalienable right to use his own money for the pursuit of his own happiness. The Founders expected property rights to be the principal means for exercising that right. The distribution of wealth was to be determined not by force but by freedom, not by government but left to the people to determine for themselves by exercising their rights. It would be whatever distribution results from the labor of free men and their free (voluntary) exchanges with each other. A free-market economy is the only one appropriate for a free people.

The word “liberty” is mentioned in both the Declaration of Independence and the Constitution. The former says it is an “unalienable right” in the famous phrase that links it to the rights to life and the pursuit of happiness. The Premable of the Constitution gives “to secure the blessings of liberty to ourselves and our posterity” as a reason to “establish this Constitution.” Nowhere do either of these two founding documents of our government mention economic equality or redistribution of wealth. The “defining challenge” of our time is not economic inequality. It is preventing people such as Obama from perverting his office and our Constitution and making the U.S. more representative of Karl Marx's class warfare and his dictum “From each according to his ability; to each according to his need” than to the ideas of our Founding Fathers.

The “transformational change” Obama promised has been very expensive. Regulations have proliferated. On August 1, 2013, Sam Batkins, director of regulatory policy at the American Action Forum, testified  before a congressional subcommittee that “major” regulations (those costing $100 million or more) and the amount of federal paperwork “have increased significantly over the last five years.” He also said that delays are often the result of “hundreds of new requirements from Dodd-Frank and the Affordable Care Act [Obamacare].” He noted, too, that there are more than 9,100 different collections of information for managing the regulatory programs.

In 2010 Congress passed 129 private-sector mandates, the highest ever recorded. In addition to recording the sheer number of mandates, the Congressional Budget Office records whether mandates exceed the statutory threshold (currently $150 million) under the Unfunded Mandate Reform Act. In 2010, Congress passed 25 mandates that would likely exceed the statutory threshold, easily the highest figure on record and more than triple the yearly average from 2002 to 2008. In 2011 more than 340 regulations (“major” as well as lesser ones) were proposed, and the Federal Register noted that more than 4,200 others were in the pipeline.

The CBO also tracks the unfunded mandates on states and local entities. In 2009 and 2010 there were 116 of these unfunded mandates.

Batkins noted, “It is clear that current regulatory burdens have legislative roots of historic proportions. These figures on mandates are important because they eventually become federal regulations and translate into real costs for private entities and states.”

In addition to tracking mandates and rulemakings, the American Action Forum tracks the paperwork burden imposed by federal agencies. “Based on our current data for 2013, the federal government has imposed 85 million paperwork burden hours...[and] Americans spend more than 10.34 billion hours annually completing federal paperwork. The supposed cost for this paperwork is $72.8 billion, or $7.04 per hour, less than the federal minimum wage. There are two other measures to monetize the nation’s 10.34 billion hour burden: the median wage of a 'compliance officer' ($31.23) or the real Gross Domestic Product per hour worked ($60.59).  Using these two figures, the monetized burden of federal paperwork ranges from $322 to $626 billion annually.  These figures include only the paperwork costs of regulation, not deadweight losses or other capital costs.”

 

“It is undeniable that federal red tape is growing, and will likely continue to trend upwards with the implementation of the Affordable Care Act and Dodd-Frank.  Based on the most recent Information Collection Budget of the U.S., the federal government added 355 million hours in the last fiscal year. To put this figure in perspective, assuming a 2,000-hour work year, it would take 177,500 employees to comply with the new paperwork.  Added regulatory burdens, however, should not be thought of as a jobs program.”

The Office of Information and Regulatory Affairs reported that 2012 was the costliest year on record, at $29.5 billion (in 2001 dollars) and surpassed the second highest total by 57%.

Duplication resulted in huge costs. Based on 17 areas of duplication, the AAF “found 642 million paperwork hours, $46 billion in costs, and 990 forms of federal overlap.  For example, ten different agencies are involved in renewable energy programs and produce 96 related forms.” There were more than 600 different forms relating to veterans' claims, “imposing millions of paperwork burden hours.”

All of these regulatory measures cost a great deal of money. They impose enormous costs on the private sector, making it increasingly difficult for the economy to grow. But the largest and most dangerous cost is the one that will be paid by everyone for the destruction of the dollar through Keynesian spending by the government and Keynesian printing of money by the Federal Reserve. In his first term of office, Obama added as much to the national debt as all the presidents from George Washington through George W. Bush combined. In the fifteen months following collapse of the housing/mortgage bubble in 2008, the Fed created more money than in all the years combined since 1913 when it was founded.

The recent 19-day partial shutdown of the federal government over raising the national debt ceiling shows it is politically impossible to avert the coming disaster. The fight over the debt ceiling was not about actually cutting government spending—making government live within its means—but about raising the debt ceiling so spending could be increased.

Obama had previously appointed a bipartisan National Commission on Fiscal Responsibility and Reform, headed by Erskine Bowles and Allan Simpson, both highly respected. This sounded good. It allowed the president to pretend he was serious about the problem. He even promised, “Once The Bipartisan Fiscal Commission Finishes its work, I will spend the next year making the tough choices necessary to further reduce our deficit and lower our debt. link." That promise was worth as much as his promise that people could keep their health insurance. That he was insincere about promising to reduce the debt was evident when it came time for dealing with the budget deficit and the national debt ceiling. He totally ignored his NCFRR commission's calls for immediate and steep cuts and instead insisted on further increases in spending. Finally, the Republicans, anxious to avoid another government shutdown, agreed to a $1.1 trillion spending bill that would pile another $45 billion onto the $17 trillion national debt. The agreed compromise does nothing to reduce government spending, merely kicks the can a little further down the road.

Continuing to increase federal spending is far more serious than might appear. More is at stake here than simply passing a huge cost onto our children and grandchildren—which would be bad enough in itself, and immoral as well—but the problem is worldwide. Every central bank in the world is following the same Keynesian policies, which aren't working, but they keep doing them anyway. The Fed, the European Central Bank, and the central banks of Japan, Switzerland and China have printed an astounding $10 trillion since 2007, tripling the size of their combined balance sheets. To expect governments to repair the economy is to expect the cause to be the cure.

The U.S. has not—yet—suffered the same results for its extravagant spending as, for example, Greece because of the dollar's status as the world's reserve currency dating from the Bretton Woods Agreement in 1944. The dollar became the basis of international trade, but that status is being threatened by a loss of confidence because of our debt. Countries are starting to abandon the dollar as an intermediary in foreign trade, turning instead to other currencies and gold. China and Japan, the world's second and third largest economies, have agreed to trade in their national currencies, the yuan and the yen, instead of using the dollar as an intermediary. Russia and China trade is in rubles and yuan. India no longer buys Iranian oil in dollars but in rupees. India and Japan have signed a new $15 billion currency swap. Brazil became the first South American country to sign a currency swap agreement with China, bypassing the dollar. Reuters has reported, “France intends to set up a currency swap line with China to make Paris a major offshore yuan trading hub in Europe, competing against London.” South Africa, Venezuela, Germany, Cuba, Pakistan, Argentina and others are said to be set to join currency arrangements for trading without the dollar. link  

The BRICs (the large developing nations Brazil, Russia, India and China) are said to have agreed to trade in other currencies and periodically settle differences in gold. You can hear this and other interesting comments by Karen Hughes at Karen Hudes Predicts "Permanent Gold Backwardation" . She is a woman with 20 years experience at the World Bank, where she was general counsel. She is no longer at the bank, having departed after being a whistleblower on corruption at the bank.

In my book I noted that the argument put forth that 85% of foreign exchange transactions being denominated in dollars means the dollar won't be displaced for a very long time. But that 85% figure developed from the dollar's relative stability and safety over many decades. I wrote that the 85%would erode as people lost confidence in the dollar and that people will likely be surprised by the suddenness of its ultimate collapse. Now the movement away from the dollar is already underway and proceeding faster than I expected.

I shall close with mentioning an article on the problems facing the Federal Reserve, by Phil Gramm and Thomas R. Saving. Gramm, a Ph.D. and former U.S. senator, was a university professor of economics before turning to politics. Thomas Saving,Ph.D., is a professor of economics at Texas A&M university. Their article is quite technical so I won't discuss it here. If interested, you may find it at link.  I shall only quote their ending: “The full bill for this failed policy has yet to arrive. No such explosion of debt has ever escaped a day of reckoning and no such monetary surge has ever had a happy ending.”