Don Luskin: Unfolding Trade and Tax Catastrophes?

Catastrophe about to unfold? I nominate Senator Reed Smoot of Utah (1862-1941) and Senator Willis C. Hawley of Oregon (1864 - 1941) the Most Evil Republicans Ever, Yes even more evil than Dick Cheney and Karl Rove. Don Luskin has it from his Wall Street Journal op-ed of October 4, 2010.

The Trade and Tax Doomsday Clocks
By Donald L. Luskin

The nearby chart is an update of one I showed on this page in early July. It depicts how the stock market over the last year and a half has followed a path eerily similar to that of 1937. This week corresponds on the chart to mid-August 1937, when the cumulative effects of massive hikes in personal and corporate tax rates, severe monetary tightening, and aggressive business-bashing by the Roosevelt administration tipped the economy into the "depression inside the Depression." From there, stocks were in for the longest and second-deepest bear market in history.
Thankfully, we're not repeating all the mistakes of 1937. But Congress and the Obama administration are flirting dangerously with one of them by failing to extend the expiring low tax rates for all Americans. What's worse, we're close to repeating the mother of all policy errors, the one made not in 1937 but in 1930—the one that started the Great Depression. We're on track to resurrect the 1930 Smoot-Hawley Tariff Act.

Read the whole thing.

Anti-Islamist Strategy for the Mosque Wars

The New English Review is an excellent resource for understanding anti-Islamist strategy and tactics in the Shariah War attack on Islam and Muslims. Jerry Gordon is consistently insightful with journalistic integrity in his reporting. The writers are sharp and stellar. The links page is a who’s who of the anti-Islamist alliance.

In his article Mega-Mosque Conflicts in America Gordon reports in fine detail the mosque controversies in Murfreesboro and Brentwood in Tennessee and Temecula in California. He lays out an anti-Islamist strategy for the mosque wars:

Tennessee as an exemplar for opposing Mosques and Sharia

Tennessee is a battleground in contending with the visible aspects of Islamization in America. It is also a testing ground for developing a multi-pronged strategy involving:

· Education and research on issues;

· Fielding informed anti-Jihad and Sharia political candidates; and,

· Developing a litigation strategy for citizen suits assuring local authorities’ exercise of police powers for investigation of collateral and background issues for clearance of Mosque development projects.

Education and research:

Tennessee’s media is dominated by print and some electronic media that are uninformed about Islamic doctrine and have a tendency to view community conflicts over mosque development and possible introduction of Sharia for domestic dispute resolution and finance through a prism of multi-culturalism. Nonetheless, education about these issues has come through alternative media and grass roots activism.

Fielding informed anti-Jihad and Sharia political candidates:

Tennessee has the good fortune of political candidates in both parties who have become knowledgeable about anti-Jihad and Sharia issues in both statewide and Congressional races. We have mentioned Lt. Gov. Ron Ramsey who is running for Governor in the GOP primary, but equally knowledgeable is Congressman Zach Wamp, of the 3rd CD covering Eastern and Middle Tennessee who is a contender in the same gubernatorial primary.

Developing a litigation strategy:

At the beginning of this article, we noted the comments of Solomon, a former Muslim Shariah jurist who raised the issue that mosques, unlike churches and synagogues or other houses of worship, may be engaged in indoctrination that could be in violation of Article Six of the US Constitution. Islam demands of its adherents complete loyalty to Sharia, with the ultimate penalty of a death fatwa for treasonous apostasy, a violation of US civil rights and religious bias laws. Thus, any evidence to that effect based on the manuals and doctrinal materials found in mosques or provided under oath by Islamic law experts might be used in litigation to question whether mosques meet the standards and definitions under Federal and State RFRA laws and statutes.

...

Thus, it would appear that local authorities can exercise Constitutional police powers to conduct investigations and due diligence of local Mosques requesting clearances to substantially modify and expand facilities.

I have not seen a clearly articulated counter-strategy from Muslims and their Jewish and Christian supporters. The anti-Islamists command an increasing wave of enthusiasm and activism supported by intellectually articulated positions at New English Review and elsewhere with Shariah: The Threat To America as their handbook.

As far as I can tell Muslims and their allies have minimized the threat of the anti-Shariah tsunami that is headed their way and need to go into disaster preparedness mode.

The Shariah Wars

The Shariah Wars have passed a milestone on the road with the publication of Shariah: The Threat to America published on September 15, 2010 by the Center for Security Policy (CSP).

The report is a watershed event. Though skirmishing has gone on for several years over the religious law of Islam, the report is a manifesto and a declaration of war. It has been enthusiastically received and adopted on the political and religious right and has been commended by Republican congressmen and candidates for office in the mid-term election, which occurs in less than a month.

In its most accurate meaning Shariah refers to the vast literature of theological and juridic interpretation of the Qur'an and the Sayings of the Prophet accumulated over the 1300 year history of Islam.

In the sense used by anti-Islamist combatants in the Shariah Wars it means "a hateful and barbaric law code which compels all Muslims to subjugate non-Muslims violently overthrow governments and establish Shariah as the only legal system."

The attackers in the Shariah Wars are the anti-Islamists, and the defenders are Muslims. Muslims are categorized generally as following into Moderates and Islamists (or Extremists, Salafis, or Jihadists).

A useful distinction is made between Moderates and Puritans by Professor Khaled About El-Fadel at UCLA Law School, most likely the greatest expert in Islamic Jurisprudence in the United States. His foremost concerns are interpretations of Shariah among Islamic jurisprudents, among whom there has been a civil war raging throughout the latter half of the twentieth century on the fundamental issue of the relationship of Islamic Law to liberal democratic values and constitutional law systems.

A more insightful categorization is of Islam, Islamism, and Militant Islamism used by Saudi-American US Navy officer CMDR Youssef H. Aboul-Enein in his recent book Militant Islamist Ideology, which has been given a rave review by the respected Austin Bay.

Stakes are high in the Shariah Wars. Upon its outcome depends our ability to effectively engage in the ongoing transnational effort to defeat Militant Islamism.

The report asserts that all interpretations of Shariah are inherently seditious, and those who adhere to it are to be denied positions of trust in government and the military. All imams who advocate Shariah are to be jailed for preaching sedition.

Useful books for analyzing the report and judging its merits are the following:

Khaled Abou El-Fadel: The Great Theft, Wrestling Islam From The Extremists

CMDR Youssef H. Aboul-Enein: Militant Islamist Ideology

Mohammad Hassan Kamali: Shari'ah - An Introduction

Fool's gold and the real thing

The catastrophe unfolds: Don Luskin lays it out. When the European Central Bank needs dollars to stave off disaster where are they going to get them? The Fed will print them.

He makes the point that we are in a V-shaped recovery and not a V-shaped expansion. When an objection is raised about how good the numbers look to many Luskin responds, "They were saying the same thing in 1935."

Robert Samuelson: Depression 2010?

Robert Samuelson is an economics pundit who always has insightful things to say and is noticeably free of partisan passion of the Right and the Left.

Today in Depression 2010? he writes:

Against that backdrop, today's unresolved problems -- over the welfare state, leadership in the global economy -- become more ominous. They suggest that major adjustments won't be made until they're compelled by some sort of crisis. This possibility defines the present economic drama. Will the recovery encourage conscious changes? Or is recovery providing a false sense of security? The stakes are, of course, enormous, because -- as everyone knows -- the economic suffering of the Great Depression transformed many countries' politics for the worse and led to World War II.

I don't see that we have the political will nor the moral moxie to counter the unfolding catastrophe. As the unfunded mandates of social programs wreck havoc actually in Greece, Spain, and Portugal, as well as in California and many other states and potentially everywhere else it is clear governments don't have the will to address these issues. Indeed, the present Administration is busy re-duplicating European social democracy just when its contradictions are undermining the foundations of the entire socio-economic order.

As for us, we lack the moral moxie to realize that we desire the moon and have increasingly no desire for personal responsibility. In a system where we all want "the government", i.e., other people and anyone else but us, to pay for everything we want, it should come as no surprise governments lack the will to address issues threatening to destroy the present order. They are pandering to us and giving us what we want.

Depression 2010? I think Samuelson is on the money when he writes:

"Now, as then, we may be prisoners of deep and poorly understood changes to the world economic system."

The Unfolding Catastrophe

I am increasingly pessimistic that the world will be able to avoid an economic catastrophe of the magnitude of the Great Depression. I see neither wisdom nor will on the part of both the political classes and electorates, i.e., us, to do what needs to be done.

What has motivated me to start writing this is Don Luskin's remarks on Larry Kudlow's show on May 10, 2010. He recommended to the individual investor to buy gold because people want a currency they can count on and neither the dollar, the euro, nor any other currency is maintaining credibility.

We have spent so many resources on the necessary tasks of preventing systemic catastrophe in a world we have less to stave off other financial crises. He says that we have established a Maginot line, and we need to hope that it holds. Maginot line - that pretty much says it all.

Gold is "a perfect response to a world that is printing its way back to prosperity."