The Folly of Our Economic Policy

"Paper money eventually returns to its intrinsic value—zero."

—Voltaire

While Voltaire lived before Jean-Baptiste Say, the quote above implies that he had an understanding of Say's Law. Say's Law, simply stated, is that supply creates demand. However, that simple statement of it, doesn't really capture the whole story. A better formulation is "the demand for any commodity is a function of the supply of noncompeting commodities."

Within this context, think of dollars as a commodity with few competitors. As a result, the "demand for dollars" will go up if the supply of dollars goes up. This "demand for dollars" is what we commonly call the price tag on each of those noncompeting commodities. This is why debasing the currency/printing money/quantitative easing is inflationary.

Yes, I know the inflation hasn't shown up despite previous quantitative easing. I still expect inflation in the future.

Which brings us to QE2: the next round of quantitative easing. Earlier this week the Fed announced plans to print up $600 billion dollars. This round has made our trading partners nervous. Brazil's President elect had this to say: “The last time there was a series of competitive devaluations. . . it ended in world war two.”

The Hand of Providence

KTVI is reporting that Missouri Republicans shake up state senate leadership:

Southeast Missouri Sen. Rob Mayer has emerged the victor in a Republican leadership shake-up in the state Senate.

With 26 Republican seats in the Missouri Senate, a secret ballot, and two candidates (Rob Mayer and Kevin Engler), the leadership decision came down to a coin toss. My sources tell me that on multiple ballots the results came back tied at 13 a piece. Ultimately, the tie was resolved by "drawing numbers" and the hand of providence alighted upon the Tea Party-backed Rob Mayer.

Many thanks to the folks at the Missouri Leadership Project. I'm sure Senator Chuck Purgason will be in line for a committee chairmanship as a result of this vote.

It's Official: We'll Lose Money on GM

Megan McArdle of The Atlantic reports The Government Isn't Getting Its Money Back Out of GM:

Well, they've priced the GM IPO, and it looks like they've valued the firm at just about what we lent it: $50 billion. Since the government only took a 60% stake, that's well below what would be needed for the government to recover its investment. Even with the billions they've already 'paid back'--by not using all the money--Uncle Sam needed the company to be worth more like $70 billion to break even on the bailout.

GM is a zombie. It will never be able to sell cars in the quantities that it used to because its brand has been tainted with the stench of the bailout. This is exacerbated by the fact that Ford opted not to take a bailout. In so doing, Ford burnished its brand. GM (and Chrysler) are marking time until they go back into bankruptcy.

It's also ironic that the GM IPO was announced the day before we learned about a massive new round of quantitative easing (what some are calling QE2). The portion of the GM bailout that is repaid will be repaid with devalued dollars. It's a perfect metaphor for the smoke and mirrors of DC.

George Soros: 2010 Midterm Loser

The Washington Examiner observes: You know who was a big loser in this election? George Soros:

The first notable thing is Soros’ funding of the Secretary of State Project — which is basically an attempt to elect Secretaries of State around the country willing to impose Democratic-friendly election laws in an attempt to tilt the playing field in their favor on election day.

Well, yesterday Republicans won 17 of 26 races for Secretary of State taking six of those offices (Arkansas, Ohio, New Mexico, Colorado, Iowa and Kansas) from Democrats. Republicans now control 25 offices to Democrats 22.

The damage is worse than that, because that analysis does not account for the torpedo that struck the SS Robin Carnahan in Tuesday's election. Robin was not on the ballot in a Secretary of State race, but rather was the Democrat vanquished by the Roy Blunt (R-MO) Juggernaut in Missouri's US Senate race. Nonetheless, as Missouri's Secretary of State, her future viability as a candidate has to be questioned because of the extent of her loss. Between her elections in 2008 as Missouri's Secretary of State and her 2010 Senatorial bid, Robin Carnahan lost a million voters.
( CU9BC862TDWZ )

Protesting Voter Fraud in St. Louis

Members of the St. Louis Tea Party (and two Russ Carnahan campaign staffers) assembled outside the St. Louis Board of Elections to protest voter fraud in the 2010 midterm election between Ed Martin and Russ Carnahan. The video above is from that protest.

Later in the day, Ed Martin's campaign held a press conference. I was unable to attend Ed's press conference; however, he issued the following statement:

Too Many Questions

Call for Investigation into 3 Main Questions

(ST. LOUIS, MO.) Nov. 3, 2010 –There are a number of questions surrounding the votes in Missouri’s 3rd district race. The people deserve to have these questions investigated and answered so they are assured our election process is fair and their votes are counted.

The three glaring factors which stand out involve the Secretary of State’s office, the sole decision of a newly appointed Democratic chair at the City Elections Board, and an unprecedented number of votes coming in late from the city.

The Secretary of State first of all is Congressman Carnahan’s sister, Robin Carnahan. She reported having irregularities and computer glitches early in the day. We have heard from countless voters who want those problems scrutinized. Many point out that the Department of Justice pursued, for three years, a case against Missouri for failing to clean up the process. “When filed in 2005, one-third of Missouri counties had more registered voters than voting-age residents. What's more, Missouri Secretary of State Robin Carnahan,… contended that her office had no obligation to ensure individual counties were complying with the federal law mandating a cleanup of their voter rolls.” (Wall Street Journal, John Fund, July 8, 2010)

People also question the motive behind a newly appointed St. Louis City Board of Elections Democratic Chairwoman, Eileen McCann, hiring a security company with close ties to Congressman Carnahan. Special Services was called on by Congressman Carnahan to do security for him as recently as August 26th. Carnahan paid the company $1400 at that time which can be seen in a quick review of his FEC filing.

Then just before midnight seven precincts within the city and county delivered an astounshing late night dump of votes. In such a hotly contested race and with so many voters concerned it only makes sense to make sure in fact every vote counts. Since Missouri’s Secretary of State is in fact Congressman Carnahan’s sister it is suggested she recuse herself from the investigation and appoint an independent investigator to look into these three main points of question.

“The people of this district want to make sure their voices were in fact heard and I pledged to them that I would fight to ensure it happens. We need to make sure the election process was in fact fair and that the numbers are correct. I saw several issues in my time at the St. Louis City Board of Elections and serious issues like this should and need to be addressed,” said Ed Martin.

We have been hearing about voting irregularities from a large number of constituents and are looking into all of these matters. We ask anyone who may have witnessed any sort of questionable acts regarding votes, ballots and the general election that they contact our office.

Congratulations!

It's been a good night for conservative Americans with Republicans picking up at least 58 house seats across the country. While the GOP will not take control of the Senate, they have picked up 6 seats.

In Missouri's CD4, Vicky Hartzler (R-MO) beat Ike Skelton (D-MO). Statewide, Roy Blunt (R-MO) beat Robin Carnahan (D-MO) in a 14 point blow out. Robin still holds the record of most votes ever received by a candidate in a general election in Missouri—1.7 million in 2008—but with only 0.7 million in 2010, she's gotta be thinking that another million woulda been nice. Has there been a candidate in Missouri history who has lost a million voters in the span of two years? Wow. That's unreal.

I was puzzled when I saw polls showing Robin's unfavorable numbers at 53%. I never thought she was that unlikable. Obviously, the voters disagreed. Nonetheless, I just checked The Gematriculator and they confirm that the Missouri Secretary of State website (www.sos.mo.gov) is only 41% Evil. That's about the same as Robin's 40.5% of the vote. Things that make you go: hmmm......

Ed Martin's race against Russ Carnahan is in limbo with neither candidate conceding. I'd like to submit this tape as evidence in support of an Ed Martin victory before deciding the election:

There were some tremendous Tea Party wins in the Show Me State in races for the state house and senate. The names that come immediately to mind are: Gary Fuhr, Marsha Haefner, Brian Nieves, Paul Wieland... Paul beat Tea Party hater Jeff Roorda. On two occasions Roorda in open floor debate in the Missouri house denounced "tea baggers". Hey, Roorda, you've been bagged, so here's a sign for you:

Most importantly, the premiere Tea Party candidate, a candidate who is firmly committed to principals over politics, Paul Curtman won by 13 points in a Democrat district. He did this the old fashioned way: just knocking on doors one at a time. Here he is:

Historical Perspective

Over at the Weekly Standard, Jay Cost writes: "you have to go all the way back to 1928 to find an election where the popular vote margin resembled anything close to what Gallup is predicting."

2010 Midterm Predictions

Ed Martin wins in a close one. I haven't seen any polling, so this is little more than betting on your favorite team to win.

For the past decade or three, only 1 in 10 blacks have voted Republican. I think that will change Tuesday. My conservative estimate (based on a PJTV poll) is 1 in 4 blacks will vote Republican. This will be the news story Tuesday evening and will cause significant problems for the Democrats over the next two years. Depending on where that 25% is distributed—it wont be evenly distributed and I think there will be areas of Georgia where Republicans get 33% or more of the black vote—depending on the distribution, Republicans may pick up some seats in close districts. Missouri's Third Congressional District (Ed Martin vs Russ Carnahan) might be one of them. About 9% of MO-3's population is black.

As I've said before, I don't think the GOP has done a very good job courting the African American vote. The establishment changes slowly, but if Republicans net 25%+ of the black vote on Tuesday, the Republican Party will notice and, hopefully, change faster.

Here are a couple of videos I've put together for fellow conservatives who happen to be black. The simple message is: "We want your vote. Vote Republican."

• An Invitation to Black Americans to Vote Republican
• Stephanie Rubach: We Plan on Taking Over the Black Caucus

St Louis Tea Party Coalition Endorses Missouri Leadership Project

FOR IMMEDIATE RELEASE (November 1, 2010)

The St Louis Tea Party Coalition announced Monday their support of the Missouri Leadership Project in the selection of Missouri State Senate leaders in Jefferson City. The project focuses on the selection process for the Senate President Pro Tem, which occurs on November 4th in an informal meeting of state senators. Among other things, the President Pro Tem of the Senate has the power to place senators on various committees and to select leadership of those committees. These appointments have a profound effect on which proposed legislation will actually make it to the floor for consideration. Senate tradition is that the Majority Floor Leader be awarded the position based on longevity and prior assignment, but the St Louis Tea Party agrees with other members of the project that an election should be based on the best outcome for Missourians instead of an outdated tradition from a time when term limits were not in place.

The addition of new Senators and the limiting of time served in Jefferson City deserves a new process for selecting leadership. While seniority plays a large role in Missouri politics, it should not be the sole determining factor. Across the nation, we are finding the effects of politicians using tradition to blunt the impact of new voices elected to the political process. On the eve of historic elections driven in large part by the unwillingness of elected leaders to listen to their constituents, we believe that progress demands Senators vote based on a reasoned process, and not simply based on archaic political rules.

Hundreds of Missourians have signed on to the Missouri Leadership Project petition, as well as dozens of grassroots organizations who believe in greater transparency in government. That so many care about a process that in the past was a minor anointing should bring attention to the subject. The St Louis Tea Party Coalition does not endorse a specific candidate – that is up to the Senators elected across the state. We do urge our members to educate themselves about the matter, and call their senator to express their support for the election of a senator based on who will govern with conservative principles.

For more information about the Missouri Leadership Project, visit www.MoLeadershipProject.com.

The St Louis Tea Party Coalition is a loosely assembled group of people and small grassroots organizations focused on clean government, honest elections, and constitutional governance. Persons interested in volunteering or learning more about the St Louis Tea Party Coalition, please contact Jen Ennenbach 314-200-5860, or contact information@stlouisteaparty.com. For additional information on the St Louis Tea Party Coalition, visit www.stlouisteaparty.com

Stephanie Rubach: We Plan on Taking Over the Black Caucus

Stephanie boils down the vision for the 2010 midterm election. There's still work to do, so don't get cocky. Get out there!