Mandatory minimum for maximum tyranny

Sentencing Shift Gives New Leverage to Prosecutors

By RICHARD A. OPPEL Jr.

GAINESVILLE, Fla. — After decades of new laws to toughen sentencing for criminals, prosecutors have gained greater leverage to extract guilty pleas from defendants and reduce the number of cases that go to trial, often by using the threat of more serious charges with mandatory sentences or other harsher penalties.

Some experts say the process has become coercive in many state and federal jurisdictions, forcing defendants to weigh their options based on the relative risks of facing a judge and jury rather than simple matters of guilt or innocence. In effect, prosecutors are giving defendants more reasons to avoid having their day in court.

“We now have an incredible concentration of power in the hands of prosecutors,” said Richard E. Myers II, a former assistant United States attorney who is now an associate professor of law at the University of North Carolina. He said that so much influence now resides with prosecutors that “in the wrong hands, the criminal justice system can be held hostage.”

One crucial, if unheralded, effect of this shift is now coming into sharper view, according to academics who study the issue. Growing prosecutorial power is a significant reason that the percentage of felony cases that go to trial has dropped sharply in many places.

Plea bargains have been common for more than a century, but lately they have begun to put the trial system out of business in some courtrooms. By one count, fewer than one in 40 felony cases now make it to trial, according to data from nine states that have published such records since the 1970s, when the ratio was about one in 12. The decline has been even steeper in federal district courts.

Cases like Florida v. Shane Guthrie help explain why. After Mr. Guthrie, 24, was arrested here last year, accused of beating his girlfriend and threatening her with a knife, the prosecutor offered him a deal for two years in prison plus probation.

Mr. Guthrie rejected that, and a later offer of five years, because he believed that he was not guilty, his lawyer said. But the prosecutor’s response was severe: he filed a more serious charge that would mean life imprisonment if Mr. Guthrie is convicted later this year.

Because of a state law that increased punishments for people who had recently been in prison, like Mr. Guthrie, the sentence would be mandatory. So what he could have resolved for a two-year term could keep him locked up for 50 years or more.

The decrease in trials has also been a consequence of underfinanced public defense lawyers who can try only a handful of their cases, as well as, prosecutors say, the rise of drug courts and other alternative resolutions.

The overloaded court system has also seen comparatively little expansion in many places, making a huge increase in plea bargains a cheap and easy way to handle a near-tripling in felony cases over the past generation.

But many researchers say the most important force in driving down the trial rate has been state and federal legislative overhauls that imposed mandatory sentences and other harsher and more certain penalties for many felonies, especially those involving guns, drugs, violent crimes and repeat offenders.

Stiffer punishments were also put in place for specific crimes, like peddling drugs near a school or wearing a mask in certain circumstances. And legislators added reams of new felony statutes, vastly expanding the range of actions considered illegal.

These tougher penalties, by many accounts, have contributed to the nation’s steep drop in crime the past two decades. They have also swelled the prison population to levels that lawmakers in some states say they can no longer afford, and a few have rolled back some laws.

The ‘Trial Penalty’

In the courtroom and during plea negotiations, the impact of these stricter laws is exerted through what academics call the “trial penalty.” The phrase refers to the fact that the sentences for people who go to trial have grown harsher relative to sentences for those who agree to a plea.

In some jurisdictions, this gap has widened so much it has become coercive and is used to punish defendants for exercising their right to trial, some legal experts say.

“Legislators want to make it easy for prosecutors to get the conviction without having to go to trial,” said Rachel Barkow, a professor of law at New York University who studies how prosecutors use their power. “And prosecutors who are starved for resources want to use that leverage. And so now everyone acts with the assumption that the case should end with a plea.”

“When you have that attitude,” she said, “you penalize people who have the nerve to go to trial.”

Prosecutors say they are giving defendants options and are merely charging them based on what is allowed under the law for those who turn down pleas.

While legal experts say the effect is clear in persuading more defendants to forgo trials, the trial penalty is hard to quantify without examining individual cases and negotiations between prosecutors and defense lawyers.

That is because threats of harsher charges against defendants who reject plea deals often are the most influential factor in the outcome of a case, but this interplay is never reflected in official data.

“How many times is a mandatory sentence used as a chip in order to coerce a plea? They don’t keep records,” said Senior Judge John L. Kane Jr. of United States District Court in Denver, who believes that prosecutors have grown more powerful than judges. But it is very common, he added. “That’s what the public doesn’t see, and where the statistics become meaningless.”

But one result is obvious, he said: “We hardly have trials anymore.”

In 1977, the year Judge Kane was appointed to the bench, the ratio of guilty pleas to criminal trial verdicts in federal district courts was a little more than four to one; by last year, it was almost 32 to one.

Here in Florida, which has greatly toughened sentencing since the 1990s, felony defendants who opt for trial now routinely face the prospect of higher charges that mean prison terms 2, 5, or even 20 times as long as if they had pleaded guilty. In many cases, the process is reversed, and stiffer charges are dismissed in return for a plea.

Before new sentencing laws, the gap was narrower, and trials less risky, veteran lawyers here say. The first thing Denis deVlaming, a prominent Florida criminal defense lawyer, does with a new client is pull out a calculator to tally all the additional punishments the prosecutor can add to figure the likely sentence if the client is convicted at trial.

“They think I’m ready to charge them a fee, but I’m not,” he said. “I tell them in Florida, it’s justice by mathematics.”

No matter how strongly defendants believe they are innocent, he said, they could be taking dangerous risks by, for example, turning down a one-year plea bargain when the prosecutor threatens additional charges that carry a mandatory sentence 10 times as long.

A Power Shift

The transfer of power to prosecutors from judges has been so profound that an important trial ritual has become in some measure a lie, Mr. deVlaming said — the instructions judges read stating that the jury determines guilt or innocence, and the judge a proper sentence. The latter part is no longer true when mandatory minimums and, in many cases, sentencing guidelines apply, but jurors often do not know that.

Legal scholars like Paul Cassell, a conservative former federal judge and prosecutor who is now a law professor at the University of Utah, describe the power shift as a zero-sum game.

“Judges have lost discretion, and that discretion has accumulated in the hands of prosecutors, who now have the ultimate ability to shape the outcome,” Mr. Cassell said. “With mandatory minimums and other sentencing enhancements out there, prosecutors can often dictate the sentence that will be imposed.”

Without question, plea bargains benefit many defendants who have committed crimes and receive lighter sentences than they might after trial. It also limits cases that require considerable time and expense in court.

But many defendants who opt for trial effectively face more prison time for rejecting a plea than for committing the alleged crime.

In Mr. Guthrie’s case, he was initially charged with aggravated battery on a pregnant woman and false imprisonment. But after he rejected the plea bargains, the prosecutor, more than a year later, filed the more serious charge of first-degree felony kidnapping, based on the girlfriend’s accusation that he pulled her by the arm inside her home and, once outside, grabbed her hair and pulled her on her feet the distance of several parking spaces.

Nobody is suggesting that Mr. Guthrie, previously incarcerated for 18 months on gun, assault and drug charges, is a sympathetic figure. According to a police report, he punched and kicked his girlfriend, left her with a bruised and bloody nose and a face that “appeared to be swollen,” and threatened to cut her stomach with a knife.

The assistant state attorney handling the case, Frank Slavichak, did not return calls. The chief investigator for the office, Spencer Mann, said Mr. Guthrie’s choices dictated the course of the case.

But his lawyer, Craig DeThomasis, hired after the plea rejections, said he was “plainly being punished for exercising his right to trial.” According to Mr. Guthrie’s mother, Claudia Guthrie, the prosecutor told her son at a hearing this spring that if he did not plead guilty and take a five-year sentence, higher charges would be filed that mean “you’re going to get life.” Mr. Mann did not dispute that some sort of warning of new charges was presented.

Mr. DeThomasis said that there was no evidence the girlfriend was pregnant, and that she started the altercation by hitting him in the forehead with a pipe, landing him in the jail infirmary for a week. He pointed out that she was arrested in 2009 for attacking Mr. Guthrie after telling the police he had struck her, leading police to say in a report that she had “changed her story several times and could not explain her actions.” He also said she had a history of involuntary hospitalizations, which she declined to address in a 110-page sworn deposition in February.

Mr. Mann declined to comment on the girlfriend’s background but said none of it affected the credibility of the case.

Judges in many cases can set aside verdicts that they believe are unsupported by the evidence, but they generally have no power in mandatory-minimum cases to reduce punishments below levels established through legislation.

While the Guthrie case may be a particularly stark example of how much power one prosecutor can have over a defendant’s fate, many places have given district attorneys similar influence.

“There have been so many laws passed in the various states that just about always there is some enhancement available to the prosecutor that can be used as leverage in negotiations,” said Scott Burns, executive director of the National District Attorneys Association.

Mr. Burns, a former Utah prosecutor, did not dispute that sentencing-law changes had made trial riskier for defendants and helped drive down the percentage of cases taken to a verdict. He also acknowledged that the plea-bargain process “clearly is coercive” when defendants face harsher or more numerous charges for rejecting deals.

But he said plea bargains were also “extremely lenient in many instances because prosecutors are taking several criminal acts off the table.” He emphasized that lawmakers time and again have given prosecutors more leverage and said it was “grossly unrealistic” to criticize district attorneys for enforcing laws that they are duty-bound to uphold — even those that are ill-advised.

“There are a lot of criminal laws that are passed that we all kind of roll our eyes at,” he said. “Sometimes they are just repetitive; sometimes they are knee-jerk responses to some high-profile case, and therefore politically motivated.”

Though national statistics are not readily available, the trend toward lower trial rates is evident in a number of places.

The National Center for State Courts in Williamsburg, Va., found that the percentage of felonies taken to trial in nine states with available data fell to 2.3 percent in 2009, from 8 percent in 1976.

The number of jury trials rose slightly, while nonjury trials, where a judge decides guilt or innocence, fell sharply — all while caseloads nearly tripled. The states account for more than a third of the American population, and most have mandatory minimums or sentencing guidelines or have passed toughened sentencing laws.

The Bureau of Justice Statistics, after studying partial data on state-court felony prosecutions nationwide, found that from 1986 to 2006 the ratio of pleas to trials nearly doubled.

The shift has been clearer in federal district courts. After tougher sentencing laws were enacted in the 1980s, the percentage of criminal cases taken to trial fell to less than 3 percent last year, from almost 15 percent, according to data from the State University at Albany’s Sourcebook of Criminal Justice Statistics. The explosion of immigration prosecutions, where trials are rare, skews the numbers, but the trend is evident even when those cases are not included.

Nearly nine of every 10 cases ended in pleas last year, the federal data show, while one in 12 were dismissed (the percentage of dismissed cases was substantially higher a generation ago).

The number of acquittals dropped even further. Last year, there was only one acquittal for every 212 guilty pleas or trial convictions in federal district courts. Thirty years ago, the ratio was one for every 22.

More Plea Bargaining

Experts like Ronald Wright, a former federal prosecutor and now a professor of law at Wake Forest University, say they fear that the steep decline in acquittals stems partly from more defendants, who might have winnable cases, deciding not to risk trials and reluctantly accepting plea bargains instead.

Some federal prosecutors worried that their power would be weakened by a 2005 Supreme Court ruling that made sentencing guidelines advisory only. But academics say the ruling had much less effect than what some predicted as many judges still largely follow the guidelines, and the ruling did not affect other laws that have given prosecutors more power.

While sentencing changes allowed legislators in this state to take credit for being tough on crime, they have also worked against their goal of trimming prison costs, leaving prosecutors caught in the middle.

“There is a big disconnect,” said Bill Cervone, the state attorney in Gainesville and the chief prosecutor in six counties that make up Florida’s Eighth Judicial Circuit. “There is subtle and not so subtle pressure” to reduce the numbers sent to prison.

Mr. Cervone, who was head of the Florida Prosecuting Attorneys Association, added, “Our position is, ‘Please don’t pass any new crime laws while you are also cutting our budgets.’ ” His budget has been cut 20 percent in four years.

The fiscal strains extend to judges, who face pressure to keep dockets moving. Some do not appreciate defendants who refuse pleas and then lose a time-consuming trial, he and other lawyers say.

“There are some judges who will punish you for going to trial,” Mr. Cervone said. “Legally, you cannot impose a longer sentence on someone because they exercised their right to trial,” he said, speaking of judges. “Factually, there are ways to do it.”

In some cases, he added, he wished judges had more discretion, instead of having to automatically impose an inflexible punishment.

So, too, do many judges faced with cases where legislatively mandated penalties do not square with their idea of justice.

Like the one in Polk County, Fla. that began when Orville Wollard said he fired his registered handgun into his living room wall to scare his daughter’s boyfriend out of the house after he repeatedly threatened his family.

In Mr. Wollard’s view, he was protecting his family and did not try to hurt the boyfriend, who was not hit, though the judge said the bullet missed him by inches. But after Mr. Wollard turned down a plea offer of five years of felony probation, prosecutors won a conviction two years ago for aggravated assault with a firearm. Because the gun was fired, a mandatory-minimum law required a 20-year term.

At his sentencing, Mr. Wollard said he felt as if he were in “some banana republic” and described the boyfriend as a violent drug dealer. But prosecutors said the judge had “no discretion” because of the state law.

Reluctantly, the judge agreed. “If it weren’t for the mandatory minimum aspect of this, I would use my discretion and impose some separate sentence,” he told Mr. Wollard, adding that he was “duty bound” to impose 20 years.

Twilight in Amerika

The Police State Abolishes the Trial

by Llewellyn H. Rockwell Jr

Several years ago, the police entered the office of a young professor at a reputable university and arrested him for an online crime. They took the professor away, booked him, and then offered him a deal: admit guilt and get off easy.

The professor said to the few people to whom he was permitted to speak that this was crazy because he was innocent.

His lawyer warned him: fight this and you could get life; admit guilt and you will get a suspended sentence. He took the deal. It was a trick. Now he languishes in jail, his life wrecked as far into the future as he can see.

This doesn't happen in America, does it? Yes, it does. Not only that, it is increasingly the norm. Those raised on a steady diet of courtroom television shows believe that they are true to the way justice is meted out. This is completely naive. Trials in federal criminal cases are rare. Nine in ten cases are settled in pleas like the above case. Only 3 percent of the cases go to trial. Among those that go to trial, the defendant wins once in every 212 times.

What this means is that there is no way out for the accused. The prosecutors have all the power. Not even the judge has discretion, because lawmakers have mostly taken that liberality away in the name of cracking down on crime. This happened all through the 1980s and 1990s, and the prosecutorial dictatorship has entrenched itself to become the norm since 2001. For the last ten years, the police state has had free rein.

It was not "liberals" or "conservatives" who did this. It was both parties acting with the massive support of the American public, as tyrants in the public sector licked their chops. This was a result of security-minded madness, and even now hardly anyone cares.

Today, every single citizen, no matter how free he or she may feel in daily life, is in reality a sitting duck. You can be made to disappear. There is essentially no way you can escape once the feds sweep you into their net. There is no justice. The total states of the past used to pretend to have trial-based convictions. The total state of the present doesn't even bother. It just puts a sack over your head and takes you away.

What happens then? Your loved ones cry. They try to move close by to where you are holed up, typically several states away. They are bankrupted and ruined. And what of your coworkers, your friends, your social set? They might want to help. They might feel bad for you. But the fact is that you pleaded guilty, and you have not even a chance to tell your side of the story. For all anyone knows, you got exactly what you deserved. So they do the only thing they can do: they forget about you.

And there you languish until the system decides you are taking up too much room. Perhaps it is ten years. Maybe twenty. At some point, the doors open again and you are free. But you are ruined: bitter, talentless, emotionally changed, physically debilitated, and — if you are young and slim — gang raped. There is no point in contacting the friends that abandoned you. Members of your family have moved on; they have lives, too, and had to live them out. In terms of employment, you are a washed up ex-con.

The United States has the largest prison population in the world — 2.3 million people. That's almost 1 in 100 people. That's more than the population of Latvia or Slovenia. That's nearly the entire population of Nevada. That's Wyoming, DC, North Dakota, and Vermont combined. If the prison population had congressional representatives, they would have four seats.

These people are politically, socially, culturally, and economically invisible. How many are actually guilty? We can't know. How many could be let out today to make a wonderful contribution to building a productive society? We don't know. How many are completely nonviolent, not even guilty by any normal standard of law but only guilty according to the letter of the current dictatorship? Probably a majority. Perhaps a large majority. In the New Testament, visiting prisoners is equated, as a good deed, to visiting the sick. And we do not think of the sick as guilty.

Yet the rise and entrenchment of the American police state are rarely questioned. Public opinion is mostly happy with the whole thing. There can never be too much prosecutorial power, never too many police, never too many prisons, never sentences that are too long. No one says, "We should not be so tough." The entire ethos is the opposite. A rare story such as the one in the New York Times recently is too little to wake anyone up.

How could this have happened in America? Well, looking back, it seems that it all stems from a single flaw: the belief that the most essential institution in society is the state that protects us from criminality and must maintain a monopoly over justice. Some of the greatest defenders of freedom otherwise have been happy to make this one concession to the state. And this one concession is now a major source of our undoing as a free people.

There are reforms that we can make. No more plea bargains in federal cases. Restore basic human rights. Give judges and juries back their discretion to evaluate each case, and permit them to rule on the merit of the law, too, in the common-law tradition. A push back to grant basic constitutional protections would be a good first step.

However, in the end, what is really needed is a fundamental rethinking of the notion that the state rather than private markets must monopolize the provision of justice and security. This is the fatal conceit. No power granted to the state goes unabused. This power, among all possible powers, might be the most important one to take away from the state.

The great toxic alphabet soup

Due diligence never done on Obama

By MARK STEYN

"The way I think about it," Barack Obama told a TV station in Orlando, "is, you know, this is a great, great country that had gotten a little soft."

He has a point. This is a great, great country that got so soft that 53 percent of electors voted for a ludicrously unqualified chief executive who would be regarded as a joke candidate in any serious nation. One should not begrudge a man who seizes his opportunity. But one should certainly hold in contempt those who allow him to seize it on the basis of such flaccid generalities as "hope" and "change": That's more than "a little" soft. "He's probably the smartest guy ever to become president," declared presidential historian Michael Beschloss the day after the 2008 election. But you don't have to be that smart to put one over on all the smart guys. "I'm a sap, a specific kind of sap. I'm an Obama Sap," admits David Brooks, the softest touch at The New York Times. Tina Brown, editor of Newsweek, now says of the president: "He wasn't ready, it turns out, really."

If you're a tenured columnist at The New York Times, you can just about afford the consequences of your sappiness. But out there among the hundreds of thousands of your readers who didn't know you were a sap until you told them three years later, soft choices have hard consequences. If you're one of Obama's core constituencies, the ones who looked so photogenic at all the hopeychangey rallies, things are really hard: "Young Becoming 'Lost Generation' Amid Recession" (CBS News). Tough luck, rubes. You got a bumper sticker; he got to make things worse.

But don't worry, it's not much better at the other end of the spectrum:

"Obama's Wall Street Donors Look Elsewhere" (UPI). Gee, aren't you the fellows who, when you buy a company, do something called "due diligence"? But you sunk everything into stock in Obamania Inc. on the basis of his "perfectly creased pant leg" or whatever David Brooks was drooling about that day? You handed a multitrillion-dollar economy to a community organizer, and you're surprised that it led to more taxes, more bureaucracy, more regulation, more barnacles on an already rusting hulk?

Hard statism is usually murmured in soft, soothing, beguiling terms:

Regulation is about cleaner air, healthier restaurants, safer children's toys. Sounds so nice. But federal regulation alone sucks up ten per cent of GDP. That's to say, Americans take the equivalent of the Canadian economy and toss it down the toilet just in complying with federal paperwork. Obama and the great toxic alphabet soup of federal regulation – EPA, OSHA, SEC, DHSS – want to take that 10 percent and crank it up to 12, 14, 15 percent.

Who could have foreseen that? The most dismal thing about that David Brooks column conceding that "yes, I'm a sap... remember, I'm a sap... as you know, I'm a sap" was the headline his New York Times editors chose to append to it: "Obama Rejects Obamaism."

In other words, even in a column remorselessly cataloguing how one of its smartest smart guys had been repeatedly suckered by Obama on jobs, on Medicare, on deficits, on tax reform, etc, The New York Times chose to insist that there is still something called "Obamaism" – prudent, centrist, responsible – that for some perverse reason the man for whom this political philosophy is named insists on betraying, 24/7, week in, month out, spring, summer, autumn, tax season. You can set your clock by Obama's rejection of "Obamaism."

That's because there's no such thing. There never was. "Obamaism" was the Emperor's new centrism: To a fool such as your average talk-radio host, His Majesty appears to be a man of minimal accomplishments other than self-promotion marinated in a radical faculty-lounge view of the world and the role of government. But, to a wise man such as your average presidential historian or New York Times columnist, he is the smartest guy ever to become president.

In part, this is a natural extension of an ever more conformist and unrepresentative establishment's view of where "the center" is. On issues from abortion to climate change, a Times man or Hollywood activist or media professor's notion of "centrism" is well to the left of where American opinion is. That's one reason why a supposedly "center-right" nation has wound up regulated into sclerosis, drowning in debt and embarking on its last decade as the world's leading economy.

But in the case of Obama the chasm between soft, seductive, politico-media "centrism" and hard, grim reality is too big to bridge, and getting wider all the time.

You would think this might prompt some sober reflection from an American mainstream media dying in part because of its dreary ideological conformity. After all, a key reason why 53 percent voted for a man who was not, in Tina Brown's word, "ready" is that Tina and all her pals assured us he was. Occidental, Columbia, Harvard Law, a little light community organizing, a couple of years timeserving in a state legislature: That's what America's elites regard as an impressive resume rather than a bleak indictment of contemporary notions of "accomplishment." Obama would not have withstood scrutiny in any society with a healthy, skeptical press. Yet, like the high-rolling Wall Street moneybags, they failed to do due diligence.

Three years on, nothing has changed. Obama is proposing to raise taxes because of some cockamamie yarn Warren Buffett has been peddling about his allegedly overtaxed secretary. Yet the court eunuchs of the media persist in taking Buffett seriously as a archetypal exemplar of the "American business community" rather than as an especially well-connected crony. Sometimes, Obama cronyism is merely fiscally wasteful, as in the still underreported Solyndra "green jobs" scandal.

One sympathizes with reporters assigned to the story: It's hard to get all the public monies and Solyndra-exec White House visit logs lined up in digestible form for the casual reader. But sometimes Obama cronyism is murderous: Eric Holder, a man unfit to be attorney general of the United States, continues to stonewall the "Fast and Furious" investigation into taxpayer-funded government gun-running to Mexican drug cartels. It is alleged that the administration chose to facilitate the sale of American weapons to crime kingpins south of the border in order to support a case for gun control north of the border. Evidence keeps piling up: The other day, a letter emerged from ATF supervisor David Voth authorizing Special Agent John Dodson to buy Draco pistols to sell directly to known criminals. Over 200 Mexicans are believed to have been killed by "Fast and Furious" weapons – that's to say, they were killed by a U.S. government program.

Doesn't The New York Times care about dead Mexicans? Doesn't Newsweek or CBS News? Isn't Obamaism with a body count sufficiently eye-catching even for the U.S. press? Or, three years in, are the enablers of Obama still so cynical that they accept it as a necessary price to pay for "change you can believe in"? You can't make a hopenchange omelette without breaking a couple hundred Mexican eggs?

Obama says America has "gotten a little soft." But there's nothing soft about a dead-parrot economy, a flat-line jobs market, regulatory sclerosis, "green jobs" multibillion-dollar squandering – and a mountain of dead Mexicans. In a soft nation, "centrist" government is hard and cruel. Only the media coverage is soft-focus.

It was predictable

Euro-Collapse

By CONRAD BLACK

The admirable Seth Lipsky of the New York Sun, formerly of the Wall Street Journal and the (English-language) Jewish Forward, seems to be the first American commentator since Walter Lippmann to recognize the prescience, in post–World War II matters, of Charles de Gaulle. He was referring especially to de Gaulle’s recommendation of a restored gold standard as de Gaulle and his chief economic adviser, Jacques Rueff, feared what would happen to the world’s currencies if they were valued only in relation to one another.

Their fear was not misplaced; the U.S. dollar, euro, and yen are all engaged in wholesale inflation, thinly disguised by phony calculations of domestic inflation and by relatively stable relationships between one another, because they are in almost free fall together, like three mountain climbers all sliding down the face of the peak and toward a hard landing.

As Ron Paul pointed out to Federal Reserve chairman Ben Bernanke a few weeks ago, in eight years the U.S. dollar has lost 85 percent of its value opposite an ounce of gold, and this is not the roseate picture revealed by official inflation figures.

I am not convinced that a return to the gold standard is the answer, as gold is an impractical metal and this would confer undue economic influence on speculators, prospectors, and mining engineers. My suggestion is for a composite standard: one-third gold, one-third oil, and one-third a basic consumer-price, essential-spending, basket. Any such yardstick will reveal the distressing crash of the value of units of currency and anything producing a fixed yield: It is a tale not only of scandalous official profligacy and failed stewardship of the value of savings and many categories of investment, but also of official dissembling, misinformation, and pusillanimity.

It is of a piece with the great drive of Presidents Clinton and George W. Bush to swallow the free lunch of expanded family home ownership (and payoffs to the building trade unions and residential-real-estate speculators), by ordering and legislating pelagic immensities of non-commercial (i.e. worthless) residential mortgages.

Charles de Gaulle was born in Lille in 1890, to the family of a monarchist schoolteacher. De Gaulle was a Flaubertesque haut bourgeois, as well as an officer of the French army when it was rivaled only by the German army as the greatest in the world, and was unrivaled as the most storied army of all. He was imbued with the middle-class concept of the value of savings, frugality, pay-as-you-go. To him, greatness and security could never be bought or sustained on the installment plan. And mere politicians, whom he considered a lesser breed swimming in a sticky fondue of moral weakness and opportunism, could never be trusted to resist the temptation to pander, devalue, or seek short-term gain.

De Gaulle’s farsightedness was not confined to national projections of household economics; he also warned of the dangers of Euro-integration. He was the chief architect of the Franco-German friendship treaty of 1963, and — as a veteran of the terrible hecatomb of the Battle of Verdun and a World War I prisoner of war of the Germans, as well as the founder of the Free French in World War II — he knew as well as anyone the horrors of the centuries-long conflict along the Rhine. He also favored a common market and the end of violent ancient rivalries among the many European nationalities. But he always saw a homogenized, centralized Europe as a dangerous fantasy. He believed that a Continental interest, composed of as many as 20 or 25 languages and cultures, would be only an alphabet gruel, blended and stirred by faceless bureaucrats from the little countries, and not representing any real popular interest at all.

He thought that the original Common Market of France, West Germany, Italy, and Benelux could be used by France, effectively maneuvering between the U.S. and the USSR, and between Germany and the Russians, to project and amplify France’s — and, more particularly, his own — influence. Up to a point, while the U.S. was mired in Vietnam, and before European Communism became too enfeebled to challenge the West (which de Gaulle also foresaw), he was correct. But he believed that an unlimitedly accessible Europe would become an incoherent Tower of Babel, governed by bureaucratic intermeddlers in the name of feckless politicians, and liable to excessive outside influence, including from the U.S.

He would never have subscribed to the romantic fraud that Europe, with its many nationalities standing on each other’s shoulders, could have resumed its place as the political epicenter of the world that it had forfeited when it trooped deliriously off to war in the summer of 1914. But it is the merest speculation to suppose that even de Gaulle would have foreseen that an over-united Europe would so soon degenerate into a dyspeptic, demographically dwindling, Islam-raddled lumpen mass of welfare addicts. From 1965, when he was reelected president of France, to now, the reproductive rate of native Europeans of traditional stock has declined by about 40 percent, to levels that will lead to an extinction as easily plotted as that of the American carrier pigeon (which darkened the skies in its numbers in Audubon’s time, and passed into posterity at the Cincinnati Zoo in 1922). GDP growth in Europe in the first three post-war decades fell by over 50 percent over the last three. As Bret Stephens recently pointed out in the Wall Street Journal: “In 1973, Europeans worked 102 hours for every 100 worked by an American. By 2004 they worked just 82 hours for every 100 American ones.”

All the proud, confident predictions of Europe as a world force have mercifully almost ceased. Britain and France ran out of air-to-ground missiles to fire at Qaddafi after ten days; the turbines in the aircraft carrier Charles de Gaulle don’t work as well as did those in the great liner Normandie, which took the Blue Riband in 1935. Britain is building two aircraft carriers, but is uncertain of having sufficient funds to put aircraft on them. The last European military gasp was Tony Blair’s contribution of 20,000 men to the Iraq War.

Even de Gaulle would not necessarily have foreseen that a united European currency zone would accept insolvent countries (which had not supported a hard currency for 3,000 years) being overpaid on entry based on false prospectuses. No one could see that, in 2011, migrant workers, after twelve weeks of evading police, would enjoy the same benefits as permanent workers; that artists would, for 70 years, receive a share in the resale profits on sales of their work; that, if a small enterprise laid off one of six workers, all six must reapply for work.

The worst nightmares of de Gaulle and other Euroskeptics have been exceeded. The United States carried the luxury-goods industries of France and Italy and the engineered-products industries of Germany on its back for decades, but it will not and cannot do it anymore. Decline is reversible; more complicated is a death wish as thoroughly installed in the attitudes and practices of whole peoples as that of most of Europe.

If Europe cannot spark a demographic renewal, with a work force comprising fully half the people, flexible labor markets, tax rates that encourage savings and investment, an end to stealthily galloping inflation, and a reactivation of the economic and military muscle that alone confer credibility, it will quietly perish.

The leaders of Britain, Germany, France, and Italy, however unlikely they may be, should put the hopeless and dangerously misguided European Commission in trusteeship; put Giscard d’Estaing’s cynical monstrosity of a constitution to the shredder; send the dirigiste apparat that regulates everything down to the supermarket display of bananas and the size of condoms, packing; stop propping up defaulting countries and support the lending banks instead; and let all member states keep the common market and cede only as much jurisdiction as they wish.

Not to be forgotten or forgiven prematurely is the blindness of American policymakers, who, except for Nixon and Reagan, bought into this Euro-fable. The only cause for political optimism Obama’s floundering America now has is a glance at how much farther down the well Europe is.

Pimps and bureaucrooks

Roundup of Europe’s Meltdown

 

by Taki

OK. Things are heating up in the old continent after a boiling summer. October will be the cruelest month, as the poet didn’t exactly say, but it might also be crunch time. Europeans seem more sophisticated than the parochial, law-abiding, taxpaying suckers in the good old US of A, but they’re no better than the pompous, self-proclaimed elite within the Beltway. Multiculturalism (human rights for those who don’t respect others’ human rights), high taxation, and open borders are what the bureaucrooks in Brussels are all about. So what is there to say about the old continent, except that it’s a rotten ship ready to sink unless Carla Bruni-Sarkozy has triplets? (It will ensure Nicolas Sarkozy’s reelection next year). Talk about a gang that can’t shoot straight.

Earlier this year, a failed asylum-seeker in England who claimed to be a lesbian won an injunction against deportation. A Ugandan illegal, she said she would face persecution in her homeland for seeking sexual solace with women. A judge, however, ruled that she wasn’t a lesbian after all and was to be removed from the green and pleasant (just joking) land of England. But the decision was overturned by a higher court that ruled she still “could be suspected of being Sapphic,” a word that the Ugandan did not comprehend. She remains in Britain on benefits, as does a man from Togo who has committed numerous crimes against women and children but claims that in Togo he’s a no-no, hence a possible victim.

“I don’t understand why European governments and courts continue to indulge this scum.”

How do you run a country when well-known criminals with records claim persecution back home and are allowed to stay in Europe thanks to the EU Human Rights Act’s unelected judges? When I was busted at Heathrow Airport 27 years ago for carrying two grams of cocaine in my pocket, I was warned I could be deported after serving my four-month sentence in one of Britain’s toughest prisons. The Home Secretary at the time waived the rule because of my previous exemplary conduct—not even the proverbial parking ticket in either continent—so I was allowed to stay and did not need to appeal. The great Maggie Thatcher told me years later that although she was appalled to hear that I might be deported, she had done nothing about it. Rules were rules. But that was then, this is now.

Which brings me to Kelly Brook, a model whose figure—to borrow Raymond Chandler’s words—a bishop would smash in a priceless church stained-glass window to peek at. Kelly is a naughty girl, and why not? A large poster of the Playboy model posing as a large-breasted angel was recently defaced by two young men because she pouted provocatively while thrusting her heaving chest in their direction. The poster was on the side of a London bus shelter. That is when Mohammed Hasnath and Muhammed Tahir went to work. They painted a burqa over her, telling the fuzz who arrested them that it was a sin for a woman to be uncovered in public. They paid a small fine and were set free. Muslims regularly deface posters in Europe with impunity on decency grounds. Hasnath said to the hacks covering the case that if non-Muslims were to look at their women in a lascivious manner, blood would be spilled. That, of course, does not stop the myriad Saudi and Kuwaiti kleptocrats who have overrun Britain to ogle white women and send their pimps over to try and pick them up. What is good for Mohammed Bouf Kaka does not apply to John Q. Smith.

Hasnah and Tahir remind me of those Victorian women who used to cover up table legs lest they get men horny. Muslims in Europe now feel free to impose Sharia customs and laws into our society. There are areas in all major British cities which boast of “Sharia-Controlled Zones.” Hard to believe, but true. In France, especially in the northern working-class suburbs of Paris, the situation is even worse. I don’t understand why European governments and courts continue to indulge this scum. If I made a homosexual joke in any of the magazines I write for in Europe, I’d be fired quicker than you can say, “Christopher Street.” Yet Muslim preachers are allowed to scream abuse at gays daily and ask the faithful to behead them.

It is the same philosophy that permits Serena Williams to abuse umpires and linesmen in the US Open and call a Greek female umpire “unattractive.” (She then thought it over and added the word “inside.”) If I were any member of the Williams family, I’d keep the “u” word—as in “unattractive”—away from my vocabulary. Any white player would have been heavily fined or suspended; Williams was fined 2,000 devalued greenbacks, a sum she spends on bubble gum for her and her entourage per week.

These were some light anecdotes about the sinking old continent (plus one about the sinking new continent) and how unelected EU officials and judges have turned the old lady into a laughingstock for the…Chinese.

Now we come to money. Europe is totally broke except for the Germans, who finally have the opportunity to take over the continent without a single Wehrmacht grenadier being killed. If the euro is to survive, the Germans will have to bail out the rest of the countries. The price will be for Germany to take sufficient control over the indebted countries. Personally I’d be delighted, but there are others with long memories. Politically, there is no hope that a fiscal union would save the euro. Yet the bureaucrooks that run the EU insist on it. Again, I’d love to see the euro disappear as long as those lunch-bucket pilferers and smiling wallet-lifters who run Brussels disappear with it. But it ain’t gonna happen. The bureaucrooks married a whore—the EU—and dragged her down to their level. It was a good idea back in 1957. A trade agreement. Then the crooks decided the idiotic people were too stupid to see what they were doing—a dictatorship of bureaucrooks—and you know the rest. Have a good autumn.

Interesting Lies

Why Interest Rates Tell Lies About Inflation, Growth And Just About Everything Else

By Jerry Bowyer

The job of an interest rate is to tell us the truth about ourselves.

Interest rates are a kind of statistical mirror of the nation. If we are a nation of savers, interest rates tell us that by falling. If we are a nation that lives for the moment, consuming all we make and then some, interest rates will reveal that uncomfortable fact to us by rising. If we are a nation of promise breakers who borrows with no sense of the moral imperative to repay, our IOUs become worthless. If our word is our bond, bonds rise. If our word is not our bond, then bonds fall. If we prefer to have our central bank do our defaulting on our behalf, then eventually inflation risk premiums will reveal themselves throughout the yield curve.

Yes, interest rates tell us the truth about ourselves, and that’s exactly the problem. You see, we don’t want to hear the truth about ourselves. We can’t handle the truth. And like any dysfunctional system that can’t handle the truth, we need an enabler.

Our chief enabler is our own central bank. When credit is short because capital accumulation is not occuring, our central bank creates credit out of thin air. When savings rates rise, but savers hoard, rather than invest, the central bank pushes its newly created money out of short-run credit markets and out into the whole yield curve. They don’t try to deal with the underlying problem, which is that holding high cash balances are a rational response to anti-wealth creation policies and regime uncertainty. They simply declare the existence of an unexplained  “liquidity preference” because of a lack of Keynesian “animal spirits” and tell us that the only way to get out of a “liquidity trap” is easy money, and then they rev up the printing presses once again, as they are doing now.

But if large businesses are holding on to money, they have a reason to do so. And it’s not “greed.” Greed doesn’t cause you to save money in cash accounts yielding nearly zero percent. Fear does. But for the government to admit that it has caused a climate of fear is to admit an uncomfortable truth, and they can’t handle the truth. So they print money to tell themselves and us a lie, just as easy Fed policy and massive purchases of Treasury securities tell the government the lie that it is creditworthy.

One of the biggest lies that interest rates are telling us at the moment is that there is little danger of inflation in the United States. Two  commentators in particular have been making this case: Carpe Diem blogger Mark Perry of the American Enterprise Institute and New York Times columnist Paul Krugman. One of them is a terrific economist and the other one has a Nobel Prize. Both believe that the fact that the spread between inflation protected treasury bonds (TIPS) and conventional Treasury bonds is very low, indicates that the danger of inflation is quite low.

The reasoning behind this is that the difference between an interest rate which has to compensate you for the risk of inflation and an interest rate that does not have to compensate you for that risk is a measure of the market’s estimate of inflation risk. It is often called “inflation expectations” or sometimes the “break even rate.”

This argument would make perfect sense if Treasury bond rates were set by the market. But they are not. Treasury bond rates are set by government, and in the current situation the government’s policy has been to buy massive tranches of Treasury bonds as part of two rounds of quantitative easing. When the Fed buys almost a trillion dollars worth of bonds, unsurprisingly that sudden influx of money drives bond rates down to incredibly low levels.

The thing that is remarkable is not that the Fed can push rates down, but rather that someone could look at America’s tortuously distorted yield curve and think that the message it sends is the message of the market. Krugman, in fact, has gone so far as to argue that free-market economists are hypocritical because we don’t believe what the Treasury bond market is telling us. What market? The whole point of the QEs is for the Fed to expand its interest rate policy influence to the whole yield curve.

The statistics bear this out: The inflation expectations metric based on the spread between treasuries and TIPS correlates very badly with inflation, in some cases as badly as negative 80%. This is exactly what Hayek told us to expect. Inflation reflects itself first in a lowering of the actual rate of interest beneath the natural rate. The initial phase of inflation is low bond yields, then as the boom reveals itself to be false and price inflation begins to work its way into the system, rates rise to reflect inflation risk.

Probably the worst thing about all of this is that the Fed itself has been using this distorted metric to argue for easy money, claiming in several recent FOMC statements that there is subdued risk of inflation partly because the inflation expectations are low. How could they be so blind? Can’t they see the circularity of their argument? They set the rates! And then they use the rates which they’ve set to claim that the market does not see a risk of inflation. But the market does see it.

Gold prices are not set by government edict and even after the massive recent sell-offs, gold is still screaming “inflation”  to anyone who will listen. And as food prices continue their rise, the inflationary reality will over time become impossible to ignore, even by economists.