United Liberty

In 1920, Italian immigrant, Charles Ponzi, developed a scheme which promised high-yield returns on the arbitrage and trade of international postal reply coupons. It sounds like a fancy scheme even today and it fooled many investors at the time. Ponzi, however, was not actually making such investments. He was taking money from new investors, drawn by the promise of high returns, to pay off past investors. A brilliant little scheme except for the fact that it is essentially stealing and fraudulent. This basic framework is now called a Ponzi scheme, and former NASDAQ chairman, Bernard Madoff, has been implicated in what may be the biggest Ponzi scheme of all time.

The Lakota people of the north-central U.S. have established the Free Lakota Bank. It is touted as the “world’s first non-reserve, non-fractional bank that issues, accepts for deposit, and circulates REAL money” in the spirit of Austrian economics.

The bank charges a fee for the protection of your savings, which are measured in ounces, and for those who wish to put their savings at risk, there is an investment fund. Deposits to the fund are frozen for one year, but have a healthy return of over 7%. Loans are granted from the investment fund are distributed to applicants based on the merit of the investment - imagine that!

The election was over three weeks ago, and most of our focus was on Barack Obama and John McCain. But, I thought it would be good to take a look at the results for the House of Representatives. It was widely publicized that Congress had very low approval ratings coming into the election. According to these polls, it has been hovering between 15% and 20%.

As Henry Paulson recently stated, an economic crisis of this magnitude only comes around once or twice a century. I’m not exactly sure what the basis for such an argument might be other than looking at a sample size of… about one century. Whether there is merit in this assumption or not, we certainly are facing an economic crisis. In times like these, our government leaders look to policy experts and lessons of history - and possibly listen to them more than usual. This doesn’t mean they stop looking to lobbyists and the next election.

Meet my new parents: the U.S. Government. The parallels are astonishing when you think about it. (Forgive my generalities… they are for illustration!)

1. Parents want their kids to be the best: Just like proud moms and dads show up at little league games and fight with other parents, help (or take over) fundraising activities so their kids will “win” by raising the most money, or argue with teachers about grades… we see the U.S. Government assert its authority all over the world - both economically and militarily - so that we can be the “greatest nation on earth”.

The other night I was perusing the national exit poll results. One statistic scared me more than anything. 51% of voters participating in the exit poll answered that the government “should do more” than it is doing today. Wow.

Senator Joe Lieberman (I-CT), the former Democratic Vice Presidential candidate with Al Gore and ardent John McCain supporter, is considering a move to the GOP. According to this story from Politico, Senate Minority Leader, Mitch McConnell (R-KY) has approached Lieberman and discussions have taken place.

Senate Majority Leader, Harry Reid (D-NV), is apparently upset at Lieberman’s support for McCain which was cemented with his speech at the Republican National Convention in September. Lieberman, who has served in the Senate since 1989, had to run as an independent in 2006 after losing in the Democratic primary. He has continued to caucus and align himself in the Senate with the Democrats.

In 1971, The Who released Who’s Next featuring one of the greatest songs of all time. It couldn’t be more fitting this week as we usher in our new boss here in the United States thirty-seven years later.

Pete Townshend tells us the story of a rebellious uprising against the ruling class. The opening verse states that there is “fighting in the streets” and that “the men who spurred us on sit in judgment of all wrong.” I can’t help but think of the parallels we have been seeing from the media-tainment industry for months driving home the displeasure that the American people have with the Bush administration and serving as pundits (or should I say puppets) by dishing out the propaganda of who is right and who is wrong.