Warning: This Post Uses a Few Words of the Mamaloshen (slang for Yiddish, means the mother tongue) So Zei Gezunt (be healthy) and continue reading.

On Yom Kippur, the rabbi stops in the middle of the service, prostrates himself beside the bema, (the platform from which services are conducted) and cries out, “Oh, God. I am not worthy!” Saul Rosenberg, president of the synagogue is so moved by this demonstration of piety that he immediately throws himself to the floor beside the rabbi and cries, “Oh, God! “I am not worthy” Then Chaim Pitkin, a tailor, jumps from his seat, prostrates himself in the aisle and cries, “Oh God! I am not worthy!” Rosenberg nudges the rabbi and whispers, “So look who thinks he’s not worthy.”

I’m not sure if this is just an American phenom or not, but here in the US Jewish Community everyone thinks they are a “macher” (big shot), not necessarily for the weight they have in the secular world but for the weight they think they have in the Jewish Community. In most cases the people who think they are “machers” are really “pisks” (nobodies). Debbie Wasserman Schultz, chairman of the DNC is that kind of “pisk.”

Yesterday almost all the GOP candidates addressed the Republican Jewish Coalition in a candidates forum. The lone exception was Ron Paul who was not invited for his own health. The RJC was worried that the aged Paul would suffer undue stress being in a room with so many Jews (that is my theory, not the RJC’s rationale).

One by one the candidates spoke, each telling the truth about Obama’s anti-Israel policies, and his weak responses to the Iranian nuke program. Although Israel is an issue important to all Americans,  it is especially important to the ones of the Jewish faith.

Every candidate promising they would treat Israel like the valuable ally she is (based on their track records probably true). Many of them even promising to move the US embassy to Jerusalem (don’t hold your breath on that one, George W Bush failed to come through on that promise  and he was probably the most Pro-Israel president in my lifetime).

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From NPR:

Amy Myers Jaffe of Rice University says in the next decade, new oil in the US, Canada and South America could change the center of gravity of the entire global energy supply.

“Some are now saying, in five or 10 years’ time, we’re a major oil-producing region, where our production is going up,” she says.

The US, Jaffe says, could have 2 trillion barrels of oil waiting to be drilled. South America could hold another 2 trillion. And Canada? 2.4 trillion. That’s compared to just 1.2 trillion in the Middle East and north Africa.

Jaffe says those new oil reserves, combined with growing turmoil in the Middle East, will “absolutely propel more and more investment into the energy resources in the Americas.”

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“…on a day when others tried to divide us, we can regain the sense of common purpose that stirred in our hearts 10 years ago. As a nation, we face difficult challenges, and as citizens in a democratic society we engage in vigorous debates about the future. But as we do, let’s never forget the lesson we learned anew 10 years ago — that our differences pale beside what unites us and that when we choose to move forward together, as one American family, the United States doesn’t just endure, we can emerge from our tests and trials stronger than before. That’s the America we were on 9/11 and in the days that followed. That’s the America we can and must always be.”
– Pres. Barack Obama, USA Today, Sept. 8, 2011

Ten year have passed since the Islamist attacks on the United States of America; attacks that killed 2,977 people in New York, Washington, DC and Shanksville, PA. Since that time we have routed the Taliban from their haven in Afghanistan, dispatched Osama bin Laden to the icy deep and lopped off many of the heads of the Islamist terror hydra. We have grown as a people to better understand the dysfunctional relationship that the Islamic theo-political dogma has with Western Culture. And we have done our best to attain closure, for ourselves, for our society and for our country.

But closure can be hard to attain when there are no bodies to bury and no pointed victory over a vanquished foe. And when closure alludes because of unresolved issues we must always re-examine the event; the moment; the realities.

At the ten year mark, an American president is foolishly stopping short of succeeding in a generational conflict with fundamentalist Islamists…or radical Islamists…or jihadists, you pick the politically correct term the Progressive-Left elitists are sanctioning as appropriate this week. To me, they are the enemy; bloodthirsty ideologues who are committed to ideological conquest by the sword in their quest to establish a global Caliphate existing under the exclusive stricture of Sharia Law. But then, that’s just me…educated on the subject and painfully realistic in my examination. You see, I dispensed with the self-imposed mental handicap of political correctness years ago…and I feel a lot better for having done so. I also see things a lot clearer without the fog of stupidity clouding every issue.

At the ten year mark, a secularist New York Mayor – along with the Progressive elites of his ilk – is advocating for the construction of a victory mosque within the footprint of the fallen World Trade Center. New York’s Mayor Bloomberg, about as self-righteous as they come, is so certain that a “kumbaya” inclusionist approach to fundamentalist Islam will heal the rift between cultures that he refuses to examine the Islamic traditions of conquest; traditions that include building great mosques over conquered lands and, in particular, conquered religious properties. One need only understand that mosques now stand over holy places meaningful to religions that existed long before Muhammad or the theo-political creed that is Islam, established in 610 A.D., to validate this reality.

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We are hearing a great deal about a budding “Democracy movement” spreading throughout the Middle East. Many are calling it an “Arab Spring.” The belief is that after centuries of totalitarian oppression, the Arab street is suddenly pining for more freedom; rebelling against the elitist ruling class of kings, emirs, despots and tyrants. This is most likely true for a great number of those filling the streets of Egypt, Syria, Tunisia, Bahrain and myriad other Middle Eastern, predominantly Muslim nations. But there is a less than honorable component amongst the rebellion that simply waits for the “right” to a democratic vote. Contrary to how the idea of a move to Democracy presents, in the volatile Middle East there are elements in play that could make it a move in the wrong direction.

Each and every day we hear the misnomer that the United States of America is a Democracy. We hear it from the average man on the street, the mainstream media and even from those we have elected to office. But the fact of the matter is this: we are not a Democracy. We are a Constitutional Republic. A thorough and convincing exhibit of the facts surrounding this reality is presented in Notes on Democracy: And the Republic for Which It Stands. The fact that this issue is even in need of address is a scathing commentary on the constitutional illiteracy of the American electorate and serves as a sobering reminder that, often times, what sounds good – what “feels good” – isn’t always as it presents.

The distinction – between the benefits of a Democracy and a Constitutional Republic – is incredibly important, and while some describe our nation as a Democracy in an error of ignorance, others – some with schemes of political opportunism – do so with a nefarious purpose and bad intentions.

James Madison, recognized as the Father of the US Constitution, said this about factions and Democracy in Federalist No. 10:

“Men of factious tempers, of local prejudices, or of sinister designs, may, by intrigue, by corruption, or by other means, first obtain the suffrages, and then betray the interests, of the people…From this view of the subject it may be concluded that a pure democracy, by which I mean a society consisting of a small number of citizens, who assemble and administer the government in person, can admit of no cure for the mischiefs of faction. A common passion or interest will, in almost every case, be felt by a majority of the whole; a communication and concert result from the form of government itself; and there is nothing to check the inducements to sacrifice the weaker party or an obnoxious individual. Hence it is that such democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths. Theoretic politicians, who have patronized this species of government, have erroneously supposed that by reducing mankind to a perfect equality in their political rights, they would, at the same time, be perfectly equalized and assimilated in their possessions, their opinions, and their passions.”

Why is this important in the context of what is happening in the Middle East at this very moment?

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President Obama’s Middle East speech of last week created much controversy surrounding his call for the 1949 armistice lines (commonly called the pre-June 1967 borders) to be the starting point of any territorial negotiations.

While that controversy was justified, the President was deficient in a much bigger issue, one that neither the press nor the majority of the pro-Israel community has picked up on yet.

Israeli Prime Minister outlined it brilliantly in his speech before Congress the other day:

“You see, our conflict has never been about the establishment of a Palestinian state. It has always been about the existence of the Jewish state. This is what this conflict is about….

They were simply unwilling to end the conflict. And I regret to say this: They continue to educate their children to hate. They continue to name public squares after terrorists. And worst of all, they continue to perpetuate the fantasy that Israel will one day be flooded by the descendants of Palestinian refugees.”

My friends, this must come to an end. President Abbas must do what I have done. I stood before my people, and I told you it wasn’t easy for me, and I said… “I will accept a Palestinian state.” It is time for President Abbas to stand before his people and say… “I will accept a Jewish state.”

In his Middle East address President Obama called Israel a Jewish State…

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Ishmail Khaldi, Israel’s Advisor for Arab Affairs to discuss his beginnings as a Bedouin living in a tent until he was 8, the Arab Spring, and how the upheaval in the Middle East may effect Israel.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Ishmail Khaldi
A Shepherd’s Journey: the story of Israel’s first bedouin diplomat
Israeli Bedouin questions American-Jewish apathy
Coffee & Markets: Will the Arab Spring Lead to a War Against Israel?

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The Democratic Party should be ashamed of itself. Today its members proved themselves to be nothing but partisan hacks who care more about party politics than doing the right thing. While President Obama’s speech regarding Middle East generated much criticism from Republicans, on the Democratic side, even amongst supporters of the Jewish State, there was either positive spin or total silence.

As you know by now the President today gave an address to the nation that for all intents and purposes threw one of our closest allies, Israel, under the proverbial bus.  His public call for Israel to retreat to the 1949 armistice lines, broke existing agreements that the United States had made with Israel, probably hurt the quest for an Israeli/Palestinian deal and quite possibly moved the region closer to a new Middle East war.

That 1949 armistice line was created solely because that’s Israeli and Arab forces stopped fighting at the end of the War of Independence (with some added adjustments in certain sectors). It was if the whistle blew and everyone dropped their gear. The line people call 1967 border, is really only a military line. It was never intended for the Armistice lines to mark final borders, and there is plenty of documentation to that fact.

There is not much doubt that at the end of a deal, the two parties will exist with borders somewhere near that armistice border. In fact Israel has offered specific maps of final borders along the lines of what the President said publicly today, once under the Premierships of Ehud Barak the other under Ehud Olmert (in both of those cases the Palestinian leadership rejected the offer).

The difference is that in both of those cases, The return to those”1967 borders” was  the end point of negotiations, yesterday Obama severely damaged Israel’s negotiating position by making it the staring point.

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From CBSNews:

In an interview with Steve Kroft for this Sunday’s 60 Minutes, President Obama says he won’t release post-mortem images of Osama bin Laden taken to prove his death.

Video of the comments will appear on the CBS “Evening News” on Wednesday.

Republican House Intelligence Committee Chairman Mike Rogers said Wednesday that the Obama administration should not release the gruesome post-mortem images, saying it could complicate the job for American troops overseas. Rogers told CBS News he has seen a post-mortem photo.

“The risks of release outweigh the benefits,” he said. “Conspiracy theorists around the world will just claim the photos are doctored anyway, and there is a real risk that releasing the photos will only serve to inflame public opinion in the Middle East.”

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech discuss the world’s challenges providing food for booming populations in China, India and elsewhere.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Ben: The New Geopolitics of Food
Welcome to the 21st-century food wars
South Korea to Set Up Grain-Trading Company in Chicago in 2011
What is causing food prices to soar and what can be done about it?
Coffee and Markets: The Real Costs of Inflation

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Caveat emptor: The first-quarter economy is slowing and inflation is rising. A month ago, economists were optimistic about the potential for 4 percent growth. Now they are marking down their estimates toward 2.5 percent. Behind this, consumer expectations are falling while inflation fears are going up.

A recent CNBC All American Economic Survey revealed that 37 percent of respondents expect the economy to get worse in the next year. That’s up about 15 percentage points from the December poll. The key reasons? Worries over rising food and fuel costs. Respondents anticipate prices to climb 6.6 percent over the next year. That’s double the 3 percent inflation registered in the December survey.

Supporting the CNBC poll, the early March consumer sentiment index from the University of Michigan dropped sharply, with the reading for consumer expectations falling 14 points. Additionally, one-year inflation expectations have risen to 4.6 percent in March from 3.4 percent in February.

Of course, everyone has been badly shaken by the terrible disaster in Japan. For the U.S. economy, supply-chain disruptions will damage growth. Also, the civil war in Libya and the broad unrest across North Africa and the Middle East has fueled a mild oil-price shock, also subtracting from U.S. growth.

So if the economy ending in the March quarter slows to less than 3 percent, it would mark the fourth-straight sub-3-percent GDP reading. Despite the strength in the manufacturing sector and rising corporate profits, that reading would underscore the softness of this recovery cycle.

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Inside the Obama administration, a debate is raging. In the face of the uprisings in the Middle East, Barack Obama has opted to sit on his hands. He has a talent for that. Robert Gates, who is extremely wary – one might even say, excessively wary – of commitments abroad, is happy about the President’s passivity; Hillary Clinton, who had hoped that we would act to tip the balance in Libya, is not. It would not be hard to imagine her resigning from the cabinet over this issue. The tensions are starting to mount.

In his comedy routine last week at the Gridiron Club, the President reportedly delivered remarks that had a certain edge. “I’ve dispatched Hillary to the Middle East to talk about how these countries can transition to new leaders – though, I’ve got to be honest, she’s gotten a little passionate about the subject,” he is said to have remarked. “These past few weeks it’s been tough falling asleep with Hillary out there on Pennsylvania Avenue shouting, throwing rocks at the window.” And in an interview yesterday with Wolf Blitzer on CNN, when Mrs. Clinton was asked four times whether she would agree to serve in any post under Barack Obama if he were re-elected in 2012, she responded on each occasion in the negative and refused further comment.

Here is what The Daily Caller reports: “Obviously, she’s not happy with dealing with a president who can’t decide if today is Tuesday or Wednesday, who can’t make his mind up,” a Clinton insider told The Daily. “She’s exhausted, tired.”

He went on, “If you take a look at what’s on her plate as compared with what’s on the plates of previous Secretary of States — there’s more going on now at this particular moment, and it’s like playing sports with a bunch of amateurs. And she doesn’t have any power. She’s trying to do what she can to keep things from imploding.”

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While many people are cheering the revolts going on throughout the Middle East and shudder at the horrible violence few people are discussing the possible effect that these revolts will have on the world/US Economy.  Should these revolts continue to spike up the cost of oil, the world will be thrown into an economic crisis worse than the recession that began in 2007.

Certainly the crash of the sub-prime housing boom, which was caused by the progressive belief that owning a home was a right, is the primary reason behind the financial crisis and what was to become known as the  “great recession.”  The part that most people forget is that the “pin” that pricked the housing bubble, and led us down the economic abyss was oil prices.  In fact every rescission we have had since the mid-1970s has shown an accompanying spike in oil prices. It is not a coincidence that the worst recession in that period has been accompanied by the largest oil  price spike.

Economist Jeffrey Rubin said in 2008:

Curiously, an over-500% increase in the real price of oil gets virtually ignored as a culprit behind today’s economy, eclipsed by the ongoing crisis in financial markets. Yet the run-up in real oil prices this cycle is over twice the spike in oil prices that occurred during the first or second OPEC oil shock. And those oil shocks produced two of the deepest recessions in the entire post-war period, including the 1980-82 double dip.

The price of oil influences more than just how you heat your house or drive your car.

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The Federal Reserve’s QE2 stimulus has stoked a fire storm of global of inflation. What began in the Middle East and North Africa as a rebellion against rising food and basic essentials for some of the poorest people on earth has now spread to supposed success stories, like China. Over the weekend, rioting broke out in Beijing, Shanghai and 11 other major cities to the chant of “We want food, we want work, we want housing, we want fairness”. As inflation moves on from food to rising fuel costs and then mounting raw material imports; the U.S. is about to be hammered by the combination of higher prices squeezing consumer discretionary spending and higher material costs hurting business profits. Americans need to be prepared this fall for the economy’s ugliest witch’s brew: STAGFLATION.

Chinese police deployed in large numbers this weekend to quash what is being called the “Jasmine Revolution”. China’s authoritarian Communist leadership is trying to short-circuit dissent before it spins into the type of popular uprisings seen in Egypt, Tunisia, Bahrain, Yemen, Algeria and Libya; where over 500 people have died. Although Chinese law enforcement tried to crack down on Internet communications, cell phone pictures and videos of protestor’s resentment and desperation is leaking out.

Americans should not be fooled that these protests are someone else’s problems. We may only spend about 10% of our income on food, but much of the rest of the world spends 1/2 their income on food. When people who have little or nothing see what little they have evaporating, there is no downside to violent confrontation with the establishment.

As Federal Reserve Chairman Ben Bernanke is caught in the headlights of world anger over the inflationary ravages from his flooding the world with cheap dollars; he lashed out at investors for fanning inflation.

Blaming investors is disingenuous in the extreme; it has been the financial engineering of the US Federal Reserve’s serial paper money printing that continues to cause havoc around the world. The Fed’s repetition of stimulus spending was the father of the 1990’s tech stock bubble and 2000’s US housing bubble. Like all government intrusions into the economy, the eventual pay-back was the mother of two of the worst economic crashes since the Great Depression and is destined to cause more grief in this cycle.

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Barack Obama and the U.S. government have called for a “peaceful transition” in Egypt, in response to massive protests, riots and escalating anarchy. But I wonder if President Obama is taking notes? I wonder if he realizes just how close America is to facing a similar crisis that could result in riots, revolt in the streets, and economic paralysis. I wonder if President Obama would act much different than President Mubarak in Egypt. So far, small signs hint that Obama might turn out to be just as intolerant to dissent as Mubarak.

Think it couldn’t happen here? Think again. Let’s review the economic crisis that America faces at this very moment. Just in the days since Obama’s State of the Union speech there have been numerous signs that the U.S. faces an economic Armageddon. Dark storm clouds are fast approaching:

• The U.S. budget deficit is far more than even economic experts imagined.
• Unemployment is up yet again — far more than the experts projected.
• Social Security shortfalls are bigger and have happened sooner than any expert predicted — a decade sooner.
• Fourth Quarter GDP was lower than projected — and even the figure released was merely the result of the Fed printing fake money 24 hours a day, to create false consumer confidence, to prop up a U.S. economy that is falling off a cliff.
• The foreclosure crisis is deepening beyond what any expert imagined. As a result, real estate prices are falling even further, thereby threatening not only consumer spending, but the very survival of major banks.
• Inflation is skyrocketing on the two things that matter most — food and energy prices. One more disaster — perhaps the fall of Egypt, leading to an oil crisis — could lead to a hyperinflation that could turn America into a combination of Zimbabwe and the Weimar Republic.
• We already face economic Armageddon on a state and local level. U.S. cities, counties and states are teetering on the verge of bankruptcy. Their grave financial condition is the result of massive unsustainable spending and debt, caused in large part by irresponsible public employee salaries, pensions and health benefits. The worst part of this crisis is that the stimulus money is gone and the federal government is bankrupt, unable to bail itself out, let alone the cities, counties and states.
• There are early signs of revolt and anarchy here in America — with a record number of policemen shot and killed during a two-week period in January.
• The Middle East threatens to turn into a powder keg that could lead not to democracy, but to radical Islamic control of many Arab countries. This grave new threat to America, American interests, and the survival of our ally Israel, would lead to more military spending and a potential oil crisis that could engulf and overwhelm the U.S. economy. In our current vulnerable economic state this tragedy could set off a worldwide economic panic.
• Japan’s credit rating was downgraded on what most economists agree is a disastrous slide toward oblivion. Japan’s debt is so huge it can never be repaid. As one famous economist describes the crisis they are facing: “Japan is a bug in search of a windshield.” Japan’s impending implosion could also trigger a worldwide economic panic.
• Spain just announced unemployment of over 20%. Not only does this news threaten the survival of the EU, it also drives a stake through Obama’s strategy for saving the U.S. economy by creating green jobs. Spain proves there is no market for green jobs. The whole idea is a mirage created by leftist progressive politicians desperately grasping for straws.

Can you imagine that all of this toxic news has occurred in only the few days since Obama’s State of the Union?

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We are navigating through truly uncharted political and economic territory.  Members of the financial cognoscenti have freshly alluded to the notion of the ‘government bubble’ as the next blow to the world economic order.

Since 2008 we have seen the housing, financial, and insurance markets hit on a global level, one after the other.  At one point, they all burst because they were unsustainable.  You don’t have to be a politico to know that the sovereign debt crisis is real.  Just look around.  As European countries (Portugal, Ireland, Italy, Greece, Spain, and Belgium) reshuffle hundreds of billions of dollars to lighten rising government deficit and debt levels, Republican appropriators here at home futilely attempt to get our books in order.  Ladies and gentleman, something is afoot.

The recent crisis in Egypt has only intensified discussion on the stability of the world economic order. No one knows what’s going to happen.  In an ideal situation, a peaceful transition of power will re-stabilize what has triggered a sell-off in equity markets and posed more geo-political uncertainty in the region as energy commodities are poised for gains based on fear.  And the bad news just keeps pouring in.

According to Reuters,

Adding to Cairo’s financial woes, ratings agency Moody’s downgraded the country’s debt rating on concern the Mubarak regime may spend more to placate protesters.

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Today we’re giving you a special advance preview of Monday’s Coffee and Markets with an interview with Elliott Abrams, a former senior national security adviser to George W. Bush and assistant secretary of state for Ronald Reagan and a leading expert on politics and the Middle East. We’ll ask him about what the future holds for Egypt, whether President Obama has had the right response to the crisis, and whether other nations will soon follow.

We’re brought to you as always by Stephen Clouse and Associates. You can find our iTunes feed at CoffeeandMarkets.com. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Abrams: Bush Was Right About Freedom in the Arab World
Abrams: Lessons of January
Hamid: Obama Got Egypt Wrong
Muravchik: Three Scenarios in Egypt
RS: Egypt Approaches the Abyss
Abrams: Pressure Points Blog

Chairman of the Federal Reserve Ben Bernanke launched a second round of Quantitative Easing (QE2) in October, following over a year of growth in the economy at a robust rate of over 3%. Most analysts pooh-poohed QE2 as an insufficient economic stimulus to create enough inflation to reduce unemployment. I warned that QE2 was like pouring inflationary lighter fluid on the world and then lighting a match. With food inflation now running at 15% in poor countries, the Middle East is just the first area to burn, but fire is smoldering in much of the world and other fires will break out soon.

QE2 is a program by the U.S. Federal Reserve to inject $600 billion of U.S. dollars in the financial system by repurchasing an equivalent amount of U.S. Government bonds. Once the money is paid to the former bondholder, they deposit the cash in banks. Banks take deposit dollars and leverage them by 6 to 10 times creating $3.6 to $6 trillion in credit. Given that the Gross Domestic Product of the U.S. economy is only about $14 trillion annually, it would impossible to immediately purchase 25-40% of the entire economy. Consequently, the reality of Quantitative Easing is that the money will be invested in the stock and commodity markets. The theory is that the financial assets rise on the huge inflows of QE cash, investors will feel wealthier and go to the malls and the car dealerships to “shop till they drop”.

The problem with theory is that QE2 money quickly drove up commodity food prices around the world. This price rise is barely noticeable to Americans who only spend 10% of their personal income on food for three meals a day; but the impact of food inflation is devastating the over half the world that spends approximately 50% of personal income on food for two meals a day. The 15% QE2 induced commodity food price increase has reduced the amount of food poor people can purchase by almost 1/3.

The riots and revolutionary activity burning down Tunisia, Yemen, and Egypt are about gut-level economics. Do you think Americans would riot and throwing out our government if we were forced to cut back to eating 1 1/3 meals a day? Once riots start people in cities hoard food to survive and becomes dangerous for farmers to transport food. This is exacerbates food shortages and drives prices even higher.

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The one good thing about sitting through the painful lies and propaganda of Obama’s State Of The Union address was seeing the new Speaker of the House, John Boehner, in Nancy Pelosi’s seat. Seriously, you know it was killing her. I am sure they had to pry the gavel from her stone cold hands.

As for Obama’s speech, don’t make me laugh. That was not a State Of The Union Address as much as it was a campaign speech. Obama will do what he needs to do to get elected and that’s it. Period. Listening to this collectivist laud individualism was insulting. He was stealing my material, which is more than OK, but in deed, my good man. In deed. Do it.

His solution for the incomprehensible 14-trillion-dollar debt is more debt. More stimulus. More enslavement of free men. And, of course, the political fraud of more environ-mentalism, aka “clean” energy. It is insanity to create massive unemployment, destroy whole industries, make rich annihilationist jihad nations and bankrupt America in pursuit of a hoax. All these nature lovers should move out of technologically advanced nations and start their own society in nature. There are plenty of unpolluted places; let these self-made savages move there.

Foreign policy is a disaster. Look around; the world is descending into chaos. Ambassador John Bolton tweeted, “With no foreign policy victory of his own & many failures, bizarre that Obama would take credit for restoring America’s leadership in world.”

Bizarre and worse than bizarre.

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Since the early twentieth century, periods of real or perceived national emergency have been “critical episodes” in the growth of government’s size, scope, and power in the United States and in many other countries. Hence, the concise conceptualization: Crisis and Leviathan (the main title of my 1987 book on the growth of government in the United States from the late nineteenth century to the late twentieth century).

In the past century, the first five such critical episodes in the United States were: World War I; the Great Depression; World War II; a multi-faceted set of crises associated with the civil-rights revolution and the Vietnam War, roughly coincident with the presidencies of Lyndon B. Johnson and Richard M. Nixon; and the post 9/11 events associated with the so-called War on Terror and the U.S. attacks on and occupations of Afghanistan and Iraq. We are now amid another such critical episode, which springs from the housing bust that began in 2006, the economic recession that began late in 2007, and the financial debacle that reached its climax in September 2008.

The current troubles are complex and raise a multitude of questions. Many books and articles no doubt will be written to analyze these various issues in scholarly depth and detail, and certainly anything we might say today must be regarded as preliminary, at best. I focus here on a few aspects of the present episode that relate closely to my own research on the growth of government, a field of study to which I have returned again and again over the past thirty years.

I

The current recession has elicited many comparisons with earlier business downturns, especially with the Great Depression. Federal Reserve chairman Ben Bernanke is often described as an expert on the Great Depression who takes its lessons, as he understands them, deeply into account as he formulates and implements Fed policies. Likewise, many other economists have revisited the Great Depression recently in search of lessons applicable to current policy-making. In all of these reflections, the mainstream economics profession in general has distinguished itself by an astonishing superficiality of historical knowledge and lack of theoretical prowess.

The swiftness with which a great many mainstream economists have reverted to the simplistic “vulgar Keynesianism” that had its heyday from the late 1940s to the late 1960s has been nothing short of shocking, given that by the end of the 1970s such old-fashioned Keynesianism seemed to have been completely discredited and superseded in the leading echelons of the mainstream economics profession. Now it has come roaring back.

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