Monday, December 31, 2012

Happy New Year!

Just wanted to wish all of you a very Happy New Year from Hawaii! I am very thankful for all of you and your support and appreciate all of you. Be sure to read my latest national column entry in which I discuss why Hawaii is the state to watch in 2013 and how it can be a year for reset.

May God bless all of you and grant you peace, joy, health, wealth and wisdom. The blessing and favor of God's rich grace is the key to all things and I believe God's very best for you and your family!

Thursday, December 27, 2012

My thought of the day: the politics of Ozymandias

A lot of ego and jockeying has gone on in the last few days of our national and local politics. I won't get into that. I will however share for your edification a poem which I think sums up the most important thing to remember. Before I share that, I'd like to reflect on what Reagan-era Secretary of State/Treasury James Baker once said about the time he saw a former administration's Secretary of State walking alone down the cold streets of D.C. "There he was alone," Baker said, "no reporters, no security, no adoring public, no trappings of power. Just one solitary man alone with his thoughts. And that mental picture continually serves to remind me of the impermanence of power and the impermanence of place."

And now the poem:

I met a traveller from an antique land,
Who said—“Two vast and trunkless legs of stone
Stand in the desert. . . . Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”
-Ozymandias, by Percy Bysshe Shelley

Tuesday, December 11, 2012

Hawaii's Public Land Development Corporation has too much power

Check out my latest article in my national column in which we discuss the moral hazard (and systemic risk!) that the Hawaii Public Land Development Corporation brings with its special jurisdiction. The language that created the PLDC in 2011 says that it is exempt from - not making this up - "all statutes, ordinances, charter provisions and rules of any government agency" ... can we say "Whoah!" altogether or what? When you think about it, the only thing that even comes remotely close to that kind of unlimited power is that fictional OPERATION: BLACKBRIAR unit in the Jason Bourne trilogy of movies.

I had the outstanding opportunity to interview Hawaii State Representative Jessica Wooley (D-48) on just what happened and how the system failed. Definitely make it a point to read this article. Rep. Wooley has the incredible moral distinction of being one of only nine legislators who voted down on the PLDC on the Floor, everyone else went along with the crowd. Be sure to read the article and share with all of your Hawaii friends and family.

Check out my interview with Miss Hawaii USA 2013

Brianna Acosta / Photo by Fadil Berisha
Do be sure if you haven't already done so to check out my interview today in my national column with the very smart and very awesome Brianna Acosta, Miss Hawaii USA 2013. Brianna is a senior at the University of Hawaii who is studying journalism and political science and she has a very powerful life story which I know you'll find very inspiring. In our interview, we discuss her seven-year long journey to Miss Hawaii USA as well as her perspective on the fiscal cliff, economic hard times and what the holiday season should mean for all of us.

Monday, December 10, 2012

Was Ron Paul Right? (Rhetorical question)

Do be sure to check out my latest interview with the very popular and very awesome Davis Aurini over at my national column in which we discuss the fiscal cliff and the future of America. Here's a brief excerpt:

Danny de Gracia: You recently put out a new video on your YouTube channel which was fairly technical in scope discussing how to govern in a depression. I take it that you haven't bought into the official line that we're "in a recovery" now?

D.M.J. Aurini, my favorite YouTube personality.
D.M.J. Aurini: Absolutely not. Ron Paul and Gary Johnson nailed it: All you need to do is to look at the numbers, or listen to your gut.

With the numbers we’re looking at a shell game. The Consumer Price Index, for instance: it’s supposed to be a measure of how much an average bundle of consumer goods costs for the average person – essentially a yardstick for inflation, showing you how far your dollar will go. In recent years they’ve changed which goods they use to determine its value – they’ve swapped out goods for a cheaper equivalent good, in the effort to prove that inflation isn’t a problem right now.

But what do we see when we’re at the grocery store? Common sense and the alleged numbers don’t add up. The same thing goes for the unemployment figures; they don’t match up to people’s day-to-day experience. The government claims we only have moderate unemployment, meanwhile we have people so desperate for work that they’ll hand over their Facebook passwords and consent to drug testing.

This isn’t a recovery. It’s quantitative easing. Free money for the banks. At best we’re only kicking the can down the road. This spend-through-the-nose behavior is going to catch up with us.

DDG: Why didn't the "expert" economists see this coming, prior to the 2008 banking crisis?

Aurini: Have you ever met a gambling addict who has a system they swear by?

Gambling’s never been particularly attractive to me for the simple fact that I understand how probability works. Let’s take slot machines: If you play a slot machine once in your life you have a – let’s say – 1/20,000 chance of winning $10,000. Those are stupidly bad odds, of course, but it only gets worse from there. Most people don’t just play once; they’ll pull the arm hundreds of times in their life. And the longer you play, the more normalized to the curve you become and the worse your odds become. Even if you do win that $10,000 eventually, it’s only after having spent $9,000 on tokens.

And yet gambling addicts swear they have a system.

Sometimes the system is a misunderstanding of mathematics, other times it’s a personification of luck, but regardless of what it is there are two mental errors which support their system: One, they assign meaning to an apparent pattern, which is truly a result of random chance; and two, they are more likely to remember evidence which supports their theory than evidence which discredits it. A few chance wins early on, and they’ll continue to butt their head up against the wall for years.

This is precisely how most ‘expert’ economists think. The only difference is that four years at the School of Voodoo Economics allows them to make their ideas sound more sophisticated than they actually are. In the end what most of them are doing is nothing but high level rationalization.

Yikes! IRS seizes Lindsay Lohan's bank accounts

I was reading an update on which mentioned that in an effort to collect some $233k in back taxes, the IRS has apparently seized Lindsay Lohan's bank accounts. The problem that we have is that as the economy gets worse -and by this I mean as the currency debases more and inflation accelerates - history shows that government shakes people down more and more for cash. This comes in the form first of legislators demanding a tax hike on persons like Lindsay Lohan aka "the very wealthy" and later in the form of new fees, fines and mandates imposed on all citizens in general. The rule of law no longer becomes about protecting private property or persons against injury but rather revenue collection and continuity of government.

As I have said so many times before, the issue is not state revenues the issue is state spending and currency debasement. You cannot tax your way to prosperity. We are at the cusp of a hyperinflation crisis which means that current budgets will not be sufficient to cover expenditures as inflation raises the cost of goods and services. If government keeps using the same formula it's always done, it will simply say, "Oh, we need to raise taxes this year" (just like they did last year). But no matter how much they tax you, it won't be enough because the government - like you - can't keep pace with inflation. The best example of this is how in 2005/6 the Hawaii State Legislature had to keep pumping emergency appropriations into various agencies because the instability of energy markets had caused them to have cost overruns in overhead. Only now we're looking at this on a global scale.

Rose Wilder Lane famously said, "A 'planned economy' destroys Government because when men use force in an attempt to control productive energies, they have no means of knowing real costs, and these costs automatically increase at an increasing rate until the people can no longer pay them." Yes, to my critics out there, government can and has caused prices to reach near infinity throughout history (see Weimar, Zimbabwe et al). Gresham's Law tells us bad money drives out good under legal tender laws. This all comes down to a lack of a stable currency.

An interim solution would be to allow people to use competing currencies and to immediately shrink the size of government and to reduce taxes. Government's "toolbox" in a hyperinflation crisis only makes things worse.

My controversial interview

If you haven't already seen my interview last week with TAC's legal analyst Blake Filippi regarding the legal implications of the Feinstein Amendment to the 2013 NDAA, please be sure to take a look. This is one my more controversial articles that I've done and as you can imagine many people have differing views on this one but please be sure to take a look.

The reason I do these interviews is because I feel it is important to have an open, transparent, public discussion about our national policy. This is, after all, a Republic which was founded to be a government of the People - not of Congressional committees and White House Office of Legal Counsel alone. A few highlights from my interview (read more here):

Danny de Gracia: A lot of our readers out there aren't familiar with what exactly the NDAA does or how it potentially impacts the way U.S. citizens will be treated by law enforcement or by intelligence agencies. Could you tell us for clarification what the current, status quo framework does and what it means in terms of the big picture for the average American?

Blake Filippi: It is a pleasure, Danny. I’m glad you all facilitate discussion of this most important topic. The short of it is that the USA has essentially been declared an active war zone with regard to allegations of supporting terrorism; where our most fundamental constitutional rights are undercut. What this means is that the President has been granted powers over the domestic citizenry that are normally reserved for active battlefields. To understand why this is so complex, please bear with me.

The current status quo is pursuant to the 2012 NDAA and the 2001 Authorization to Use Military Force because the 2013 NDAA has not been enacted yet. Since the 2001 AUMF, the Executive branch, under both administrations, has contended its War Powers include authority to indefinitely detain as enemy combatants, without charge or trial, all persons within the United States, including citizens.

Our Supreme Court has not ruled post- 9/11 whether persons captured in the USA may be indefinitely held as enemy combatants.  Then Congress passed the 2012 NDAA, which legislatively authorized the Executive’s professed domestic war powers, and then some.

Section 1021 provides the President with the authority to designate all persons – including citizens captured within the USA – as enemy combatants, whom the President unilaterally determines “substantially supported” Al-Qaeda, the Taliban, or “Associated Forces.”

Section 1021 is subject to abuse because the vague “substantial support” and “associated forces” are undefined. Importantly, Section 1021 does not require one’s substantial support to be knowing and willful.

Theoretically, under section 1021, the Florida flight school trainers of the 9/11 hijackers, a fertilizer dealer whose fertilizer is used in a terrorist’s bomb, and someone who unwittingly donates to a charity that funnels that money to terrorists, all may be designated as enemy combatants under the 2012 NDAA.

Of utmost importance is that section 1021 of the 2012 NDAA authorizes the “armed forces to detain [such] covered persons” pending disposition by the President according to the Law of War. Thus, the armed forces are purportedly authorized to detain all persons within the USA; an implicit and wholesale repeal of posse comitatus, the post-reconstruction ban on the military exercising a police function over the domestic civilian population.

Over the past year, we have since seen an expansion of military activities within the civilian population. Domestic military police are a dangerous proposition for our Constitutional Republic.

Section 1021 then expressly provides that the President may then dispose of such covered persons according to the Law of War, including indefinite detention without charge or trial, military tribunals and extraordinary rendition (the act of disappearing someone out of the country to a foreign government or entity). Such treatment violates a litany of fundamental rights enshrined in the Constitution’s 1st, 4th, 5th, 6th, 8th and 14th Amendments.

Friday, December 7, 2012

An amazing warning from James Madison

Just wanted to share this quote, I think you'll see why it's so thought-provoking:

"In time of actual war, great discretionary powers are constantly given to the Executive Magistrate. Constant apprehension of War, has the same tendency to render the head too large for the body. A standing military force, with an overgrown Executive will not long be safe companions to liberty. The means of defence against foreign danger have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people."

-James Madison

Thursday, December 6, 2012

Remembering Dec. 7th, 1941

Pearl Harbor as it appears today.
The plaque  reads "I will never forget."
Tomorrow as you know is one of the most solemn of all Hawaii traditions - the commemoration of the December 7, 1941 airstrikes by carrier air forces of the Imperial Japanese Navy against the anchored fleet at Pearl Harbor. 

If you are able to make it to Oahu (or you live here in the Hawaiian Islands) definitely make it a point to visit the Arizona Memorial and the surrounding historical sites - Ford Island, Ewa Field and others - to connect with the past and consider the implications for our future. As I mentioned in my national column today, for years I've made it a point to regularly visit the WWII sites and battlefields because it helps me as a political scientist to remain aware and humble to the fact that policies don't just exist in a vacuum, they impact human lives and have serious implications for generations to come. Hawaii is very blessed to enjoy liberty and freedom and I know all too well that this life we enjoy did not come without great sacrifice.  So this being said, be sure to take a time out tomorrow if you can and visit the Arizona Memorial. The National Park Service has brand new, expanded and renovated facilities at Pearl Harbor which offer an incredible historical and educational experience for visitors.

I don't want to contaminate this moment in American history with politics so all I will say is this: thank you to all those men and women who served and sacrificed in the line of duty; thank you to men like Ensign Francis Flaherty of the USS Oklahoma who died at his post with his flashlight on, even as the ship capsized and sunk, so that his crew could survive; thank you to all of the families who lost a loved one in the defense of freedom; and thank you to God Almighty for allowing us to prevail through that war. Having been born on the island of Guam, I personally owe a deep debt of gratitude to those who liberated the Pacific and enabled us to live in freedom from tyranny.

Wednesday, December 5, 2012

Fiscal Cliff?! We could save America this afternoon - if we wanted to

Today I wrote in my national column that really, when you think about it, nothing is stopping anyone from averting the fiscal cliff. There are free market solutions that don't involve forcing people to pay more taxes or slashing so-called "essential" programs (that is, assuming they are so critical that they're actually worth paying for with private money). I wrote:

(Photo by U.S. Treasury)

Peter Schiff once famously said that “Washington is full of one-trick ponies, and the only trick these guys know is how to spend our money.” Today as the political-media complex builds the fear and counts the days to the pending fiscal cliff, we are led to believe that the only cure to this crisis is a big government solution that involves some combination of higher taxes and more spending to prevent the economy (and our way of life) from being destroyed. But why does government intervention always have to be the only solution people can come up with?

In the free market, when investors recognize the value of something, they take ownership of it and responsibility for it. When times are hard and a company that produces a valuable product or service starts to fail, it isn’t uncommon for investors to step up and bail the company out with their own money because they see the value in saving it.

In a socialist society, when government or a majority faction wants something, conflict is used to take it. Under socialism, people look for conflicts to exploit and groups to demonize as a pretext for giving government more power to control things. It is therefore no accident that today the political-media complex constantly pits rich against poor, old against young, men against women, straight against gay, employed against unemployed and so forth: conflict is essential to justifying confiscation of private property.

Today, we see the evil socialist streak in both major U.S. parties. One party tells its members,“Unless we do something about the fiscal cliff, businesses will belly up across the country and Wall Street will crash!” Another party’s representatives say “Unless we raise taxes now to avert the fiscal cliff, old people will not be able to get access to medication and the vulnerable will be even more vulnerable!” The entire country is presently wrapped up in fear of what will happen next and common sense is daily being thrown out the window in the name of stopping some existential threat.

In a free market, investors take an active role in personally preserving the things that are essential to their future. Private investors make themselves responsible for their own success. Like the Gospel parable of the Matthew 13:44 investor who purchased an entire field just to have rights to the treasure that was on it, so a discerning and wise investor puts his own money to worthy causes.

So let’s look at the United States of America. Since the early 1960s, America’s currency has been in decline and her debts have been on the rise. Congress over the years has manipulated taxes here and there, the Federal Reserve has tweaked interest rates up and down, America has had occasional moments of boom and bust, but all things taken into consideration, America is poorer and more lacking in value now than she has ever been before.

Let’s say for the sake of argument that if no resolution is made on the fiscal cliff, the market will tank and businesses all across the country will go belly up and people will lose their jobs, en masse. Rather than taking the position of a socialist and looking for who we should send the government to shake down for some change, why not approach this from an investor’s perspective: if saving America is so important to business, then maybe America’s top businesses ought to invest in saving the U.S. Government and sending checks to Washington to pay down the debt and finance essential government operations – especially the companies that received bailouts from the U.S. Government in the wake of the 2008 financial crisis.

Everyone wants to tax the so-called “very wealthy” – so why don’t the billionaires who advocate raising taxes simply invest in the U.S. Government and make princely donations towards financing Social Security, Medicare/Medicaid, Defense, energy subsidies and so forth? Imagine what would happen if today every single American company donated freely – without compulsion – millions or billions of dollars towards saving their own country or forgave debts? After all, aren’t these the same individuals who say cutting these “essential” government programs would result in disaster? If keeping these programs are so important, then maybe it’s time private investors paid to keep them.

John F. Kennedy said “our problems are man-made, therefore they can be solved by man.” Imagine what we could do if America cared enough about America to take private and personal responsibility for investing in its future without forcing others to pick up the tab.

James Madison said “In Government, the real power lies in the majority of the Community, and the invasion of private rights is chiefly to be apprehended, not from the acts of Government contrary to the sense of its constituents, but from acts in which the Government is the mere instrument of the major number of constituents.” Let us not use the institution of democracy for theft any longer. We don’t have to choose between a Republican vision or a Democratic vision to save America. It’s time for a new vision, one that involves Americans saving America.

Fiscal cliff? No problem. We could save America this afternoon – if we really wanted to. Private investment, volunteerism and charity is what built civilization and if given a chance, will save and rebuild our United States of America.

Monday, December 3, 2012

"As I Walk These Broken Roads" is the must read book of the year

I wanted to mention to all my friends and fans out there, if you are looking for a great gift idea this upcoming holiday season, be sure to order from As I Walk These Broken Roads by D.M.J. Aurini. I recently reviewed his book and personally rated it the must read book of 2012.

The story takes place in a post-apocalyptic future ravaged by nuclear war and without giving away any spoilers, it's a tale of civilized men trying to survive in an uncivilized world full of degenerates and helpless fools. It is at its core a clever allegory for our modern day Western civilization where value, knowledge and passion have been "nuked" by the culture wars and a few of us are but men wandering the world in search of a country to call home (where none exists). This book is incredible.

So as they say on Reading Rainbow "you don't have to take my word for it" ... be sure to buy either the softcover copy (which I did) or get the e-book version from If you grew up during the whirlwind 1970s or 80s I know especially this book will connect with you in a very powerful way.

Sunday, December 2, 2012

China demolishes the famous "House in the Middle of the Street"

Some of you may have seen on Facebook and Twitter viral pictures being circulated of a multi-story apartment in China which stands oddly in the middle of a street because the owners refused to move. Today The Atlantic reports that structure has now been torn down after an agreement was apparently made. Check out the article and the large photos of the event here ...