The Food Stamp Party is Stimulating Poverty

The loss of jobs is only half of the result of the government interventionist equation.  The other casualty of an economy driven by taxation, regulation, litigation, subsidization, monetary intervention, and debt is the crippling cost of living for all Americans.  [Yes, I was about to say middle class, but we would be wise to eradicate that sort of socialist innuendo from our vernacular.]

Earlier today, the latest wholesale inflationary numbers were released.  The core PPI rose 0.4% in July, while year over year PPI is now close to a three year high at 7.2%.  Additionally, food prices rose another 0.6% in July.  These numbers are quite disconcerting, given the sharp slowdown in economic activity.  The higher wholesale costs are inevitably passed down to consumers, forcing them to pay more for basic products, such as energy, food, and transportation.

While there are many cyclical factors that affect the price of food and fuel, and by extension, everything else; nonetheless, clearly central planning from the government has kept prices artificially high.

Time to Focus on the Fed: Oppose Peter Diamond's Nomination

Say no to the advocates of failed Interventionist policies.

The Democrats have a penchant for advancing their big government dreams through the insidious use of unelected members of government.  To that end, Obama has nominated radical ideologues to judgeships and executive agencies since the beginning of his presidency. 

Another unelected body of the federal government that is rapidly becoming a fourth branch is the Federal Reserve.  Due to the vitality of their creeping economic interventions, Obama is seeking to pack the Board of Governors with radical Keynesian stimulus supporters.  His latest nominee, Peter Diamond, will be voted on by the Senate Banking Committee on Thursday.

While our fiscal policy is formulated by 535 members of Congress, our monetary policy is set by 7 unelected members of the Board of Governors of the Federal Reserve System.  In recent years, Fed Chairman Ben Bernanke, with the support of Obama, has used the power of the Fed to implement destructive monetary stimulus policies that have benefited Obama's Wall Street donors at the expense of the American consumer.  The Fed has weakened the dollar to the extent that import price inflation has spiked 11% since last year.  Obama might ramble about not raising taxes on the middle class, but he has used the unbridled power of the Fed to induce the most deleterious tax of all; inflation.

Last week, we advocated that Congress reign in the Fed's rouge policies by repealing their mandate to intervene in economic policy.  The most immediate concern, however, is to ensure that radical Keynesian stimulus supporters like Peter Diamond are blocked from becoming Governors.

Diamond, an economics professor at MIT, has long advocated for the very big government fiscal and monetary interventionist policies that are so inimical to our economic recovery.  He has even called for a second stimulus.  If confirmed to the Fed, he would undoubtedly seek to accomplish that through monetary policy, even though he has little experience in that realm.  We don't need a second fiscal stimulus to exacerbate our debt and we certainly don't need a third monetary stimulus (QEIII) to service that debt with printed money.

This is where Senate Republicans come into play.

Time to End Fed's Dual Mandate of Destruction

Let's pin the inflation tail on the big government/big Wall Street donkey.

Recent economic reports of Obamanomics have shown dismal GDP growth, rising jobless claims, an anemic dollar, and soaring inflation; all indications of stagflation.  There are two components to stagflation; high unemployment and high inflation.  The unemployment, along with the weak economic growth, is due in large part to Obama's Keynesian fiscal policy of overtaxing, overspending, over-subsidizing, and over-regulating.  While the profligate spending and corporate welfare are also responsible in part for inflation and the devaluation of the dollar, the major culprit is Obama's Keynesian monetary policy of near-zero interest rates and printing money (QE I and II). 

Both reckless spheres of Keynesian economics are supported by corporate cronies on Wall Street who benefit from true "handouts to the rich" to the determent of the rest of us through price-hiking market distortions.  Unfortunately, there is no single silver bullet to ending the cumbersome socialist fiscal policy (although, a spending amendment would go a long way).  The pernicious monetary policy, however, can be eliminated through one act of Congress; ending the Federal Reserve's mandate to control the economy (H.R. 245-Mike Pence).

In 1977, Congress vested the Federal Reserve with a dual mandate of stimulating the economy and job growth in addition to keeping a stable currency.  This has allowed the Fed to become a fourth branch of government by initiating its own stimulus policies of printing money.  These stimulus policies exacerbate the fiscal stimuli of the other branches of government by devaluing the remaining dollars that we own (non-borrowed money).

Hence, as much as Obama's trillions in stimulus and bailouts have bankrupted the country, Ben Bernanke's $600 billion monetary stimulus has attenuated the value of our remaining savings and spiked the cost of vital commodities across the world.  Additionally, their rash intervention in the credit market was one of the big culprits of the housing crisis.  Thus, while the Fed seeks to achieve a dual mandate of low unemployment and low inflation, they are ultimately inimical to both goals.  It's time for House leadership to bring Mike Pence's H.R. 245 to a floor vote and end the Fed's overreach into our economy.

The Devastation of Market Distortion is Coming Home to Roost

Let's take Rahm Emanuel's advice and seize the food crisis to obliterate socialism and corporate cronyism.
Wholesale Food Prices Highest since 74'

Food Stamps Surge in West

These two headlines are quintessential examples of the perennial cycle of government intervention.  They offer a vivid portrayal of how the Democrats perfidiously inflate the price of food so that the maximum number of people will be dependent upon their food programs, thus granting them a permanent electoral constituency.

Obama and the Democrat economists have championed a monetary policy of quantitative easing (QE2) over the past few years as a means of reviving the economy.  These economic "experts" felt that by abusing the Fed's mandate to ostensibly print extra money and offer negative real interest rates to banks, the stock market would surge and spawn an economic recovery.  It was all for the benefit of Main Street, of course.

In addition, these same selfish market interventionists have perpetuated the ethanol mandates, subsidies, and tariffs that have wreaked havoc on the global food commodities market.  As much as 40% of domestic corn is being diverted for the use of ethanol, an extremely inefficient fuel source.  The promulgation of this ineffective fuel source, along with Obama's war on all other efficacious energy sources such as fossil fuels has in turn spiked the cost of transportation of food.

Now, the socialist chickens have come home to roost.  After months of QE2 and years of fatuous ethanol and energy policies, food prices are near record highs.  The Labor Department reported today that the wholesale measure of food prices, the Producer Price Index (PPI), rose 1.6% in February: