Last night in Denver, Colorado’s appointed Senator Michael “Senator Who?” Bennett attended (briefly and at the last minute) a “townhall forum” on “comprehensive healthcare reform” put on by the self-parodyingly-named Metro Organization of People. 

As with all such townhalls, this one was strictly formatted and the questions for Back-and-Forth Bennett were given to him in advance to reduce the possibility of unfortunate gaffes and/or departures from the Obama machine’s coordinated message.  Naturally, this meant (as they reminded us several times as we waited and waited for Michael Bennett’s not-so-fashionably late arrival) that questions from the audience were not welcome and would not be addressed.

Well, I guess the closed agenda didn’t sit too well with a Ralph Nader supporter, who wore a “Nader’s Raiders” T-shirt and had clearly waited paitently for Both-Ways Bennett’s to show up to at last interrupt him on the third scripted question with his own impressively-bellowed commentary/question on “single-payer” (ie: fully socialized healthcare):

How amusing to see a juvenile tactic developed by the radical left now being turned against their one-time allies.  As Obama and the Democrats continue to disappoint the more radical members of their base, expect to see more of this sort of thing.

We’ll have a few more clips from the “comprehensive healthcare reform” forum up later today, including Senator Michael Bennett’s much-delayed and ultimately lackluster, Keanu-Reeves-style performance.  It was an interesting event, just not in the way the organizers might have intended…

Saying that California operates like a banana republic is an insult to banana republics everywhere.

This month, the People’s Republic of California will issue over $3 billion in these “registered warrants”, the first time the state has had to function this way in 27 years. According to the WSJ, “The scrip will be issued to taxpayers, vendors, local governments and others the state can’t pay because it doesn’t have enough cash. Bondholders will be paid principal and interest as usual, when due, state officials have said.”

In the meantime, Governor Arnold Schwarzenegger, largely to blame for this mess for his early cave-in to Democrats and unions after they beat him on some ballot initiatives in 2005. His response was to hire a Democrat as his chief of staff. (To be fair, Susan Kennedy, while quite liberal does have some free-market leanings.)

Now, in what is almost certainly too little and absolutely too late, the Governator is getting the fiscal responsibility religion, forcing state workers to take “furlough Fridays” and suggesting cutting the state’s guaranteed funding levels for education (a great idea that Colorado should heed as soon as possible.) Those things, while I decent start, will hardly dent California’s $26 billion budget deficit.

According to Reuters, “Spending cuts will fall hard on state workers – some losing jobs and others losing pay through furloughs – and on recipients of state aid, including local government agencies already stretched by rising jobless and homeless rates.” I say it’s about time. California, probably even more than the federal government, has a bloated public sector and out-of-control welfare system which are sucking the lifeblood from their economy. The FIRST people that budget cuts should target are state workers, in part because the state’s workforce is far too large and with the added benefit of reducing the cash going to extremely destructive (of the private sector) unions.

For a little more “inside baseball” on California’s budget process, this page of THIS Reuters article (the article’s second page) is much better than one normally expects from that source.

My wife and I have on occasion spoken of where we might live if the day comes that we move from Colorado. I have said without fail that California is a political and economic disaster and I want no part of it. Unfortunately, current events are proving me right. Can you imagine how you’d feel if you worked for the state and got a paycheck in the form of an IOU? Even Hugo Chavez would be embarrassed to do that.

Independence Day Tea Party Patriotic Celebration. Pioneer Park Pavilion, 9101 Ralston Road, Arvada, CO from 1:00 to 8:00 p.m

Unlike the April 15th Tax Day Tea Party, this event is not intended to be a massive rally, but instead a more laid-back, friendly (and family-friendly) celebration of our national Independence Day.  There will be a few speakers, around 2-3 PM, but the major focus is on observing the 4th of July among friends, either long-time or just-made.

This is just one of the many events across Colorado, and across the country, associated with the Tea Party movement this July 4th - for one in your area, refer to the Guide to Colorado Tea Parties on the Fourth of July.  To quote from that source:

On the day we remember our nation’s declaration of independence from tyranny and oppressive government, a new breed of patriots will reconvene at public spaces around Colorado and the nation. While these new patriots may be attending the tea parties for varied reasons, the common thread bringing them together is the concept that our government’s power is derived from the people.

The impromptu grassroots events that sprouted up on April 15 this year reenergized many Coloradans. They banded together to ensure that their collective voice of dissatisfaction with the course being charted by our nation’s elected officials was heard loud and clear. 

Let your voice be heard loud and clear - not only this July 4th, as we celebrate our Independence Day, but also in November 2010 at the polls. 

Vote “NO” on unjust justices in 2010 - don’t retain the Mullarkey Majority!

I don’t know because I don’t have specifics on where the state spends its money.  That’s why we need transparency.  If we can see where every dime is spent, then all of us can make suggestions.  Right now if we had full transparency, we would have almost 5 million sets of eyes, stakeholders and taxpayers, engaged in the process — coming up with their ideas for efficiency and cost savings.  Vendors and suppliers could be providing goods and services in a more competitive process.

Amy does agree with Governor Ritter’s Budget Director that TABOR, while on time-out the last five years, has helped to cushion Colorado from some of the problems that other states such as California have.  Under TABOR, Colorado lawmakers could not spend like drunken sailors on shore leave.  As the Denver Post said:

Colorado is not California and is not in any danger of becoming California with its $24.8 billion budget gap, in part because of a different budget structure.

The fact that “we are obligated to balance the budget each year has actually protected Colorado,” Saliman said.

He never mentioned TABOR by name, but Saliman also credited “constitutional budget provisions that rein in spending.” The 1992 Taxpayer’s Bill of Rights, or TABOR amendment, controls taxation and spending.

With Colorado starting fiscal year 2009-2010 nearly $400 million in the red, this budget crisis is just another reason why this state desperately needs complete transparency in all levels of government.

Starting Monday, a company called Javelin Funds has launched the first Shariah-compliant ETF (exchange traded fund), essentially a tradeable basket or index of 100 companies, based on – wait for it – the Dow Jones Islamic Market International Titans index maintained by Dow Jones & Co.

The index is made up of 100 companies outside the US whose practices are compliant with Sharia, meaning that “Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons and entertainment. Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 12-month average market capitalization; cash plus interest-bearing securities divided by trailing 12-month average market capitalization; and accounts receivables divided by trailing 12-month average market capitalization.”

Here’s some other interesting information from Dow Jones:

The Dow Jones Islamic Market Indexes were introduced in 1999 as the first indexes intended to measure the global universe of investable equities that pass screens for Shari’ah compliance. With more than 100 indexes, the series is the most comprehensive family of Islamic market measures and includes regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index. An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.

There are currently more than 150 licensees with more than US$7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes.

On another page, I found the list of the Shari’ah Supervisory Board members:

Shaykh Abdul Sattar Abu Ghuddah (Syria)

Dr. Abu Ghuddah is a senior Shari’ah Advisor to Albaraka Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law. Dr. Abu Ghuddah has published many books on Islamic Financial transactions. He was an advisor for Islamic Law Encyclopeadia (Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a member and chairman of several reputed Islamic Shari’ah Boards.

Shaykh Nizam Yaquby (Bahrain)

Mr. Yaquby is a member of the Islamic supervisory boards for several Islamic institutions, including the Arab Islamic Bank and the Abu Dhabi Islamic Bank. His work has appeared in the following publications: Risalah Fi al–Tawbah, Qurrat al–’Ainayn fi Fada il Birr al–Walidayn, Irshad al–’Uqala’ila Hukun al–Qira’h min al–Mushaf fi al–Salah, Tahqia al–Amal fi Ikhraj Zakat al–Fitr bi al–Mal.

Shaykh Dr. Mohamed A. Elgari (Saudi Arabia)

Dr. Elgari is an associate professor of Islamic Economics and the director of the Center for Research in Islamic Economics at King Abdulaziz University in Saudi Arabia. He is an expert at the Islamic Jurisprudence Academy (OIC), Economics. He is also an advisor to several Islamic financial instituitons worldwide and the author of many books on Islamic banking.

Shaykh Yusuf Talal DeLorenzo (United States)

Mr. DeLorenzo is considered a leading Islamic scholar in the United States. He has translated over twenty books from Arabic, Persian, and Urdu for publication in English and has been commissioned to prepare a new translation of the Qur’an. Mr. DeLorenzo compiled the first English translation of legal rulings issued by Shari’ah supervisory boards on the operations of Islamic banks. since 1989, Mr. DeLorenzo has served as secretary of the Figh Council of North America. He is also a Shari’ah consultant to several Islamic financial institutions and was an advisor on Islamic education to the government of Pakistan.

Shaykh Dr. Mohd Daud Bakar (Malaysia)

Dr. Bakar is currently a member of the Shari’ah Advisory Council of many financial institutions in Malaysia and around the world, including the Central Bank of Malaysia, Securities Commission of Malaysia, International Islamic Financial Market in Bahrain, Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain and HSBC (Malaysia).

Are you kidding me? These guys are consultants to Dow Jones? Just a year ago, Dow Jones quietly removed one Sheik Muhammad Taqi Usmani from this Board. Apparently Usmani’s calls for Muslims to kill or enslave non-Muslims was inconvenient for Dow Jones’ brand image. The odds that one or more of the other Board members don’t have close ties to terrorist organizations borders on zero.

Yes, it might be argued that someone will do the business if DJ doesn’t, but even a dyed-in-the-wool capitalist must consider whether helping people who have sworn to kill you make money and spread their philosophy is wise.

It has been argued – and it makes sense to me – that Sharia finance is the jihadists’ nose into the tent of the world economy. Usmani’s participation is just one piece of evidence to bolster that reasonable assumption. Or HERE is one thing the Shariah-compliant profits might be buying. (Make sure you click on that link!)

There’s a very interesting (and not short at 62 minutes) presentation entitled “Sharia-complaint Finance: Benign? or Beligerent?” which I strongly recommend to anyone really interested in the subject. You can find it HERE.

I will research contact information for the CEO of Dow Jones & Company and update this note with that information when I have it. I will encourage you to contact him, as I will, to let him know that his company’s actions are aiding and abetting the most dangerous enemy this world has seen since Hitler – and possibly more dangerous than that. One would think that since the well-known conservative, Rupert Murdoch, now owns Dow Jones after its purchase by Murdoch’s News Corp., there should be at least a few sympathetic ears in the corporation. That said, I suffer no illusion that any amount of public outcry, much less the little that I can help muster, will cause them to get out of the Shariah-compliant finance business. All I can do is to avoid Dow Jones products as much as I can (difficult, given the importance of the Wall Street Journal) until they stop helping our sworn enemies.

If there is a bright side to all this, it’s that only $7 billion is so far indexed to these Dow Jones travesties. Let’s all do what we can to keep that number from getting bigger…not that we can do very much.

Moreover, I recognize that Matt Arnold took on the project on his own initiative, and he is preparing to work doggedly on this issue for many months. He faces a difficult and often thankless uphill battle.

We have the ability in Colorado to vote for judges’ retention. Next year four of Colorado’s Supreme Court justices face a retention vote. Because of their prejudicial decisions, they deserve to be thrown off the court by Colorado voters. Clear the Bench is working to educate voters in order to make that happen. If you support judicial integrity, support Clear the Bench.

(Also, while I’m praising organizations, I’ll point out that the Independence Institute hosted the wonderfully inspiring Daniel Hannan and posted his talk in four parts. Hannan, an English parliamentarian, sounds more like an American than most American politicians.)

The Ryan Frazier for U.S. Senate campaign is drawing more attention inside the Beltway — this time as noted on the “Washington Whispers” blog of U.S. News and World Report’s Paul Bedard:

We’re hearing lots of buzz about another Republican who plans to challenge Colorado Sen. Michael Bennet, named just this year to replace Ken Salazar, who was plucked from the Senate by President Obama to run the Interior Department. The word is that this potential candidate, Aurora City Councilman Ryan Frazier, is part Obama, part Reagan. 

That would be the charisma of Obama, the philosophy of Reagan. Not a bad combination.

As Bedard goes on to point out, Frazier’s “New Way Forward” video is helping to introduce more Coloradans to this rising political star.

While I have previously criticized Congressman Mike Coffman on grounds of economic and personal freedom, Coffman gave by far the best speech at the Aurora event.

Coffman, who served in Iraq, offered an overview of the situation there. He said, “I think there’s going to be an uptick in violence as we pull out of the urban areas.” He added, “I’m confident we can stay on schedule” with a “phased withdrawal.” He worried that President Obama is “not committing adequate resources to the war” in Afghanistan, risking unnecessary casualties. He also complained about Democratic pressure to “reduce funding for missile defense.”

Coffman attacked directly the Democratic argument that “cap-and-trade” energy restrictions will help the U.S. become energy independent. “The fact is that we’re dependent on imported oil because they’ve done everything they can to block our ability to do energy development, to do drilling of natural gas and oil,” Coffman said.

What cap-and-trade “will do,” Coffman continued, “is it will drive up the cost of energy. What it will do is drive jobs outside the United States… What manufacturing base we have left in America will push over to China.”

Coffman said the political pace in Washington, DC, “has been incredible” because “this president has an agenda that is very aggressive… It is not a president of the general election, it is a president of the primary. He is a liberal through and through… This is far-left stuff.”

Coffman said that the rapid pace of legislation is cutting short Congressional debate as well as public scrutiny, “so right behind cap-and-trade… we will be debating health care reform, and right on the heels of that we’ll be debating immigration reform” (where I imagine I align closer with Obama’s policies than with Coffman’s, given that I support an employer’s right to hire willing workers). Coffman also said he expects to see another move to push “card check,” empowering unions by wiping out secret ballots for unionization.

However, given the close vote for cap-and-trade, Coffman said “I think it will have a difficult time in the Senate.”

Coffman complained also that the $787 billion “stimulus” bill got minimal Congressional review before passage.

On health care, Coffman called the “public option” a “bait and switch for socialized medicine,” a “single-payer system” that “will continue to drive the deficit.”

Coffman said, “We have a deficit this year of $1.7 trillion. We will have a deficit for as far as I can see, at about a trillion dollars and rising. That’s unsustainable… It got so bad that the Chinese publicly stated that they were worried about the U.S economy” in terms of inflation and interest rates.

Answering a question, Coffman said, “It’s truly a European-style welfare state that this president and Congressional leadership are seeing.” He noted that various Europeans are trying to get of such systems.

Coffman said 2010 will be a referendum “that will define the direction of America. It will define whether or not we are a European-style welfare state. It will define whether America is simply a country of large labor organizations, big business like Chrysler and GM where government has a stake in them or ownership in them — big government, big business, and big labor. Or are we a country based on individual rights and responsibility, and anybody being able to start a small business with that entrepreneurial effort.”

I also respected Coffman’s answer regarding bringing military jobs to Colorado: “I like the fact that defense dollars come to Colorado, as long as we’re competitive for those defense dollars. I will not lift a finger to compromise the ability of our military by forcing them into Colorado. And so what I want to do… is make sure… that they have the right tools to succeed in Colorado.”

Concluding, Coffman said the central choice is “whether we have a free market economy or whether we have an economy that’s managed by the government for its own interests.”

All day (aside from my speech), Coffman’s discussion of individual rights and a free market economy was the clearest expression of a guiding political philosophy.

Shown above from left to right: Mike Morison (volunteer with Bob LeGare), Adam Eidelberg (volunteer for Dan Maes and Bruce Peterson), Andrew Goad (candidate for state house district 32), and Brian Cambell (candidate for the Seventh Congressional). (Thanks also to Micah for filling in some of these names.)

Bruce Peterson is running for Arapahoe county commissioner.

Loraine Buck, Ken Buck (candidate for U.S. Senate), and Micah Marmaro.

Check back — more to come!

Natalie Menten and Face the State cooperated to show us just how much the General Assembly raised fees in the last legislative session. 

59 bills were introduced during the 2009 session that established or changed fees. Of the lot, only eight were killed, with the balance signed by the governor for a total of $562,969,430 in revenue for fiscal year 2009-2010.

Pick your favorite fee by checking out the 2009 Fee Increase Spreadsheet.  The new fees provide some 560 million reasons why Coloradans need complete transparency.

Take another look at the video and help us keep this spandex sporting, goofy guy starring video going!

Obama tax pledge up in smoke

If Cap and Trade Passes the Senate;

The Wall Street Journal reports:

The Congressional Budget Office… estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That’s about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all 5 of them).

Then there is the cost of socialized medicine (which has a much better chance of becoming law than cap and tax).

Washington politicians are pushing us toward more socialized medicine at an estimated minimum cost of $1.17 trillion over the next 10 years - more than $100 million a year for 10 years. Remember, this is the minimum estimate. When is the last time a government project was completed with the amount of money originally estimated?

Another way to look at it is that it will cost $326 for every man, woman, and child in the country - over $1,300 a year for a family of four. READ THE REST at the Democrat

Tweet Quote of the morning;

“Can someone open a window? The fetid odor of Hope and Change is really starting to stink up the joint.“ http://is.gd/1k5Pd

This week’s “Outside the Box” is very appropriate material for my blog, fitting in well to the issues of political economy which are important to me (and I hope to my readers.)

Here’s the letter…and again I encourage you to check out John’s other offerings….

A 20-Year Bear Market?

By David Galland, Casey Research

In November of 1997, my partner and co-editor of The Casey Report, Doug Casey, wrote an article titled “Foundations of Crisis,” which leaned heavily on the research of Neil Howe and the late William Strauss.

Howe and Strauss have written many books on how generations determine the course of history and how they will shape America’s future. Their forecasts on a wide variety of indicators have turned out to be amazingly accurate. They were among the first to predict (back in the late 1980s) the rise of Boomer-driven culture wars and the simultaneous rise of Gen-X-driven free agency and distrust of government. And they were completely alone back then in predicting, for the post-X “Millennial Generation” (a label they coined), a decline in youth crime and risk taking and an increase in youth civic engagement that would first become apparent around the year 2000. Guess what? For the last ten years, everyone has been noticing exactly these trends among teens and 20somethings.

Howe and Strauss also made extensive predictions, based on generational aging, on how America’s entire social mood would likely change, in dramatic fashion, during our current 2000-2010 decade. To quote Doug’s prescient 1997 article, which was reprinted in Outside the Box late last year…

“… an excellent case can be made the U.S. is approaching another time of secular crisis, a Fourth Turning, with an expected due date of 2005 – seven years from now – plus or minus a few years in either direction.

The Stamp Acts catalyzed the American Revolution, the election of Lincoln catalyzed the Civil War, the Crash of ‘29 catalyzed the Depression/WW II era. What might precipitate the elements now floating in solution? The answer is practically any random event that’s sufficiently traumatic. Any of the theses of current disaster/action novels and movies will do nicely. Perhaps the accidental or intentional release of a super plague vector. The crashing of an airliner into the Capitol during a joint session. An all-out assault on the IRS computers by an armed group – or perhaps the computers just melting down due to the Year 2000 Problem. Perhaps a financial disaster that cascades into the Greater Depression. In any of these, or a hundred other scenarios, the federal government would almost certainly act precipitously and with a heavy hand, which would bring on a whole other set of consequences.

There’s no way of telling where the Crisis will lead, or how it will end. That’s going to depend not only on exactly who’s in control, but what they do, who they’re up against, and a hundred other variables we can’t even anticipate.

One thing that seems certain is that real crisis brings out strong leadership. Because of its age and size, it will come from the Boomer generation, and it will be in the mold of Roosevelt or Lincoln – both very dangerous precedents. The boomers in elderhood will be dogmatic, harsh, puritanical, and quite willing to burn down the barn in order to destroy whatever rats they see. Admix that attitude to a time resembling the Revolution, the Civil War, or WW II, overlain with today’s ethnic strife, urbanization, financial overextension, and powerful, compact new weaponry in the hands of foreign fanatics out to teach the Great Satan a lesson and it’s a real witch’s brew.

As eye-opening as Doug’s predictions were, they brought us only to the onset of the current crisis. Consequently, we thought it both timely and important to check back with the source of much of the research he relied on. And so it was that I spent several hours talking with Neil Howe, co-author of the seminal work on generational cycles, The Fourth Turning, and, just recently, the subject of the DVD “The Winter of History.” Howe is not just an historian, but also a Washington DC-based economist and demographer. While our conversation covered a great many topics, the overriding focus was on how things are likely to unfold from here.

Many bullish readers won’t be thrilled to hear Howe’s latest findings about the future, but given his predictive track record, dismissing them out of hand could be a costly mistake.

The summary outlook, according to Howe, is that we are in the very early stages of a 20-year period of economic and institutional upheaval – an era denominated by a crisis during which we’ll likely witness the tearing down and reconstruction of many aspects of society as we know it.

As individuals, understanding Howe’s views and taking some reasonable precautions makes a lot of sense. As investors, those views also have the potential to make us a lot of money.

Following is my high-level recap of my long conversation with Neil Howe, along with some general thoughts on the investment implications of a 20-year bear market.

Remember the Sixties?

If you’re old enough – or possess even a rudimentary sense of history – think back to the 1950s, with roller-skating waitresses, crew cuts, and nuclear families of the sort represented by the iconic Leave it to Beaver. Fathers worked, while many mothers stayed home. Life had a certain predictable quality and, as far as anyone knew, would continue along the same lines for time immemorial.

But then something happened… the 1960s. Literally no one saw it coming. It was as if someone had flipped a switch that electrified America and, quickly, the world. Most everything changed, and a society accustomed to conformity was blown away with a fierce individualism expressed with long hair, sex, drugs, and rock and roll, topped off with civil disobedience and bloody riots in the streets.

What happened?

According to Neil Howe, in the mid-1960s, generational change pushed society around a dramatic corner as idealistic, individualistic young Baby Boomers (born 1943 to 1960) rebelled against the midlife leadership of their G.I. Generation parents (born 1901 to 1924).

These periods of transitions are part of a larger cyclical pattern made up of four distinct eras, or “Turnings,” each lasting approximately 20 years. It can be helpful to think of the four turnings as you might think of the four seasons, repeating predictably in their own natural rhythm. A full cycle of turnings takes place over a period of about 80 to 90 years – roughly the span of a long human life. A new turning begins as a new youth generation comes of age, bringing a new social ethic that compensates for the excesses of the midlife generation then in power.

While we don’t have the space here to go into the full details of Howe’s research, it’s important to the topic at hand that we quickly recap the Four Turnings.

The First Turning is referred to by Howe as a High. As this follows a period of crisis, one of the hallmarks of a First Turning is a heightened sense of community and collective optimism, driven in part by the fact that the society has just come through a difficult and challenging time. Consequently, during First Turnings, societal institutions tend to be strong while individualism is weak. The post-World War II “High” of the mid-1940s through early ’60s is the most recent example of a First Turning.

The Second Turning, called an Awakening, typically starts out feeling like the high tide of a High, with signs of progress and prosperity everywhere. But just as everything seems to be going along swimmingly, large swaths of society begin to chaff under the social conformity of the High, beginning to gravitate to more individualistic pursuits and demanding that their personal interests come first. You may recognize the “Consciousness Revolution” of the mid-1960s through early 1980s, correctly, as the Second Turning.

Next up, the Third Turning, which Howe calls an Unraveling, is much the opposite of a High. To wit, individualism dominates, while institutions are increasingly weak and discredited. Quoting Howe on the Unraveling…

“This is a time when social authority feels inconsequential, the culture feels exhausted, and people feel bewildered by the number of options available to them. It is a time of celebrity circuses and a tremendous amount of freedom and creativity in our personal lives, but very little sense of public purpose.

The most recent Third Turning began in the mid-’80s with Morning in America, and continued through the ’90s. Previous periods of Unraveling in American history were also decades of cynicism and bad manners. Think of the 1920s, the 1850s, the 1760s. And history teaches us that the Third Turnings inevitably end in Fourth Turnings.

Finally, there is the Fourth Turning, called a Crisis. The recent Third Turning appears to be winding down, and we are currently on the cusp of a Fourth Turning. This is a time of great turmoil, when society’s basic institutions are torn down and rebuilt, and seemingly insurmountable problems are addressed. During Fourth Turnings, America engages in a struggle for its very survival and redefines its identity as a nation. Large wars are often a part of this process. The American Revolution, Civil War, Great Depression, and World War II were all features of past Fourth Turnings.

In sum, Howe’s research has shown that, with remarkable predictability, history is not a straight line extending toward a better and brighter (or increasingly awful) future, but rather a repeating cycle of the four distinct social eras. These four turnings have recurred with remarkable consistency throughout Anglo-American history, as Neil Howe outlines at length in Generations and The Fourth Turning. It is therefore no accident that America has experienced great cataclysms or “Crises” about every 80 years. Travel back eighty years from Pearl Harbor Day, and you land in the middle of the Civil War. Eighty years before that takes you to the Revolutionary War. If the rhythms of history hold, America is now poised to enter another Fourth Turning.

Bad News, Potentially Good News

You don’t need me to tell you that the United States and in fact the world are now facing a plethora of intractable problems. The world’s former powerhouse economy, the U.S., is now the world’s largest debtor nation – and by a wide margin. The nation has trillions in unpayable liabilities coming due on Social Security and Medicare, to name just two of many broken government programs weighing on the country. And our much vaunted democracy is increasingly dysfunctional – rotten to the core, truth be known – thanks largely to entrenched special interests and a voting public clamoring for their own piece of the pie, while trying to hand the bill off to somebody else.

Meanwhile, the economy – despite rigorous jawboning by the government and its many friends in the large banking institutions – is in serious trouble, with the housing market buffeted by tsunami-like waves of defaults, foreclosures, overvaluations, historic levels of personal debt, and tight credit that has left the U.S. government as the sole lender in many markets.

Bernanke and his ilk may see green shoots, but what they’re really seeing is the deep, green sea rising up once again to bury the economy.

That’s the bad news.

The potentially good news, if you credit Howe’s research, is that the Crisis we’re now entering will change pretty much everything. While this change will entail a great deal of pain and a reduced standard of living for a large number of people, by the time the Crisis subsides, society will have pretty much remade itself in ways that no one can predict at this point.

Put another way, today’s intractable problems will be solved… one way or another.

What’s Next

When discussing what’s likely to follow next, Neil Howe turns to his generational profiles and points out that the rising societal power today belongs to the generation he calls the Millennials, individuals born between 1982 and 2004. They are a “Hero” generation, just like the G.I. Generation that coped so well with the turmoil of the Great Depression and World War II – the last Fourth Turning. Coddled as children, the G.I.s were ultimately called upon to help society through a dark and dangerous period and rose to the occasion. Again, quoting Howe on the Millennials…

“These are today’s young people, who are just beginning to be well known to most Americans. They fill K-12 schools, colleges, graduate schools, and have recently begun entering the workplace. We associate them with dramatic improvements in youth behaviors, which are often underreported by the media. Since Millennials have come along, we’ve seen huge declines in violent crime, teen pregnancy, and the most damaging forms of drug abuse, as well as higher rates of community service and volunteering. This is a generation that reminds us in many respects of the young G.I.s nearly a century ago, back when they were the first boy scouts and girl scouts between 1910 and 1920.

Unlike the Baby Boomers, who are largely individualistic and anti-establishment, the Millennials are good team players. We hear a lot these days about working together for a common cause, volunteerism, and the need for stronger government institutions, largely because these are the new priorities of the Millennial Generation.

As you may recall, out of the devastation of World War II, a spate of transnational political and economic institutions were born, including the United Nations, the World Bank, the World Health Organization, and the International Monetary Fund. By the time the current Fourth Turning is over, expect more of the same – but probably even bigger and more ambitious.

What Does This Mean to You?

Most importantly, if Howe is right, this crisis is far from over. In fact, when I asked him where we are today on a scale from 1 to 10 – with 10 representing as bad as the crisis will get – he replied that we are at either 2 or 3. In other words, the worst is very much yet to come. And, per above, he expects this period of turmoil to take 20 years to play out. Thus, if nothing else, you may want to continue approaching matters of personal finance cautiously.

Secondly, if you’re the type of individual that tends to get steamed up by larger and more intrusive government programs, you may want to take a few deep breaths and resolve yourself to the fact that this phenomenon is likely to get far worse before we see a return to celebration of individual rights. (And the cycle shows that we will see such a return – about 40 to 50 years from now, when the next Second Turning comes around.)

If it is any consolation, the Millennial Generation places a great deal of weight on teamwork and the notion of doing things “smart.” That doesn’t mean, of course, that the various programs that are kicked off in an attempt to fix the many problems now confronting society will in fact turn out to be technically smart. But they will almost certainly be better thought out than some of the numbskull initiatives we’ve seen over the last 20 years.

You can also take some comfort in the fact that Millennials are builders, not destroyers. By contrast, the individualistic Boomers that dominate today’s aging political class are world-class dissenters, radio talk show aficionados always ready to scrap it out for their beliefs. Millennials want to skip the philosophical debate and get straight to fixing things.

Other insights about Fourth Turning periods gained from my conversation with Neil Howe…

* Government grows powerful, and sweeping new legislation is enacted. The old 1990s rule was: just compete and stay off the state’s radar screen. The new 2010s rule will be: better have a presence in Washington so you’re not dealt out of the “new” new deal. One political party tends to dominate. The Democrats under FDR during the last Fourth Turning offer a good example. While Neil Howe doesn’t think it will necessarily be the Democrats this time around, they are certainly in the pole position at this point.

* While public history speeds up, personal life slows down. Families will spend more time together, like in the old Frank Capra movies. Ever more households will be multi-generational, a trend now spurred by Boomers with large, empty McMansions and Millennials without jobs. There will be a blanding of the pop culture, with the entertainment of the young (put Miley Cyrus or “High School Musical” on fast forward) increasingly regarded as tamer than the entertainment of the old.

* Innovation tends to stagnate, while a few new technologies will be chosen to be adopted on a large scale. We will see the equivalent of canals or railroads or interstates being built across America. To borrow from Carlotta Perez’ four-stage description of technological revolutions, we are moving from the “innovation” to the “implementation” stage.

* New laws and regulations will do less to referee a free market and more to pursue one or another national priority. They will increasingly favor the large producer over the retail buyer, investment over consumption, planning over risk, debt over equity. Businesses will hustle to reposition themselves. Anti-trust legislation will weaken.

* The authority and obligations of community will strengthen at all levels, from local to national and possibly beyond (if our alliances prove durable). Personal reputation and membership will matter more. A “new localism” will reshape town and urban planning. A global slide toward national or regional protectionism will loom as a real danger.

* It is too early to tell whether the crisis will ultimately be inflationary or deflationary, though we at Casey Research come down on the side of inflation for the simple reason that the government possesses the means to inflate. Due to the gold standard, that was not the case early in the Great Depression.

* In the past, Fourth Turning periods have always resulted in the nation redefining who we are in some essential way. That was certainly the case during the American Revolution, when we transitioned from a British colony into a collection of independent states – and the Civil War, when those states were hammered into a single nation. And, again, after World War II, when the U.S. went from being a relatively isolated nation to a global empire. A wild card, for instance a terrorist nuke going off in a city anywhere on the planet, could similarly take the country, and the world, into unforeseeable new directions.

* Baby Boomers will continue to be respected for their cultural achievements (it’s not a fluke of history that Boomer music and other entertainments are still wildly popular among the young), but will be increasingly ignored in the political debate. The term “senior citizen,” already in decline, will disappear entirely. And if push comes to shove, Boomer’s financial interests – including Social Security – will be subjugated “for the greater good.”

* There will be a growing push to rebuild the middle class. The wealthy and the impoverished alike will both come under pressure thanks to new pro-middle class initiatives. If you are a high-income earner, it’s a certainty your taxes are going up, and likely by a lot. If you want to make a fortune, don’t pursue the niche or the “long tail.” Invent the next big brand that will appeal to Everyman.

Don’t Worry, Be Happy

That is, at best, a sketch of my long conversation with Neil Howe and doesn’t do justice to his research. If nothing else, however, I hope I’ve succeeded in giving you at least some sense of the man and his unique research and encouraged you to think outside the box about the nature of today’s crisis.

A couple of final observations.

First, Neil Howe is not a negative person, nor a professional doomsayer. Rather, he is a social scientist and historian with decades of experience in the social sciences. As you speak to him, you get the sense that he doesn’t view the world through any particular philosophical bias, but rather is simply reporting what his research is telling him about the current players on the global stage, and which act we are currently in.

Secondly, speaking as a Baby Boomer and someone with a lifelong distrust of government and its meddling institutions, talking to Neil left me feeling oddly relaxed – letting go, if you will, of some of the frustration that has been building within me as I watch the nanny state grow more and more bloated.

That is not to say we won’t continue to speak out against government waste and prolificacy. We will. But it seems increasingly clear that we’re now caught up in a powerful trend toward bigger, not smaller, societal institutions – and that these institutions will, over the period ahead, change the world as we know it.

Of course, being active investors, at the same time we raise our voices in protest, we’ll deal with the reality of the situation by strategically positioning our portfolios to profit from the coming changes.

And so, like the Rockefellers and J.P. Morgan during the Great Depression, we’ll make the trend – to matter how negative – our friend. You may want to consider doing so yourself.

Both George Will and Greg Mankiw basically argue that we don’t need a government role because we can trust the market to work — hey, we do it for groceries, right?

Um, economists have known for 45 years — ever since Kenneth Arrow’s seminal paper — that the standard competitive market model just doesn’t work for health care: adverse selection and moral hazard are so central to the enterprise that nobody, nobody expects free-market principles to be enough. To act all wide-eyed and innocent about these problems at this late date is either remarkably ignorant or simply disingenuous.

Check out Brian Caplan’s response here. After making good points in response (government controls make the problems worse & that there’s advantageous selection), Caplan adds:

Unlike Krugman, I not going to dismiss everyone who doesn’t know these facts as “remarkably ignorant or simply disingenuous.”  What I will say, though, is that if you don’t know them, you have a lot to learn from nobody.

Thank you, Brian for demonstrating the class that Dr. Krugman does not.

Also check out David Henderson’s post: Krugman Misstates Arrow.  Here’s part of it:

if by “standard competitive model” you mean “perfect competition,” doesn’t work well even with gasoline stations and repair shops. When a company can invest in reputation, what Ben Klein called “brand name capital,” the perfectly competitive model goes out the window. But if you read just Krugman’s short post, you might think that Arrow is arguing for a government role in health care, as Krugman is, right? And I would bet that Krugman wants you to think that. Yet, nowhere in Arrow’s article can I find such an argument.

These are the men and women now running the war.

Thanks to the fortitude of the previous administration the surge worked, the streets are safe (less people are killed in Iraq than many major US cities) but is it too soon? The troops sure want to come home…they always do, the job for the most part sucks. But if we withdraw too quickly, the Iraqi’s will suffer. Even today, the terrorists celebrated our leaving too…by killing 27 people.

Pray that Obama will have more wisdom than Richard Nixon and the Democrat controlled house and senate did in 1972.

Politicians did a similar thing in Viet Nam, our brave soldiers won nearly every battle and pushed the enemy back, but in the end the politicians withdrew allowing the enemy to overun the innocents in the country. We wrung our hands..and watched millions massacred…just so we could feel good that we finally got out.

Enjoy those freedoms while they last–and keep up the good fight for liberty!

Liberty on the Rocks:

People’s Press Collective:

Complete Colorado:

Rocky Mountain Alliance 2.0:

Face the State:

Clear the Bench Colorado:

Amendment 54, a campaign censorship law passed by (bare) majority last year, thankfully has been suspended by a Denver court. This is not a surprise, given the measure violates the First Amendment of the U.S. Constitution and contradicts Article II, Section 10 of the Colorado Constitution, which states:

Freedom of speech and press. No law shall be passed impairing the freedom of speech; every person shall be free to speak, write or publish whatever he will on any subject, being responsible for all abuse of that liberty; and in all suits and prosecutions for libel the truth thereof may be given in evidence, and the jury, under the direction of the court, shall determine the law and the fact.

This is hardly ambiguous text.

I was therefore surprised to read an article at Clear the Bench Colorado endorsing Amendment 54. The article reminds us that the measure “passed by a vote of the citizens of Colorado.” So what? Since when do Republicans endorse pure democracy? The entire point of constitutional government is to protect individual rights from mob rule.

Here is the central argument from Clear the Bench:

Once again, a judge has acted on the behalf of special interest groups intent on “gaining favor and contracts from public officials” through political contributions — “probably triggering a flood of campaign contributions” from those seeking to curry favor while the ‘temporary injunction’ remains in effect.

The same argument could apply to McCain-Feingold. Does Clear the Bench also endorse the federal censorship law and decry the Supreme Court’s limitation of it?

The purpose of Amendment 54 (now part of Article 28 of the Colorado Constitution) is to prevent recipients of no-bid government contracts from contributing to campaigns. The reasoning behind the restriction is obvious enough: people who benefit from tax dollars ought not influence the spending of those tax dollars. But while that reasoning points to a legitimate problem, it does not justify censorship.

With governments at all levels spending so much money through forced wealth transfers — about 45 percent of the total economy — political pull is just the way things operate. The only real way to solve that problem is to cut government spending and restore a free market. Until that happens, campaign censorship laws only further violate our rights without addressing the fundamental problem.

At a less fundamental level, if there is a problem particularly with no-bid contracts, then the solution is to restrict or eliminate no-bid contracts (and open contracts to bidding).

If we were to extend the argument that people who receive government funds should be censored, that would apply also to every student who takes government-backed loans, every senior citizen who accepts Social Security or Medicare, every employee and contractor of the government, and so on. In other words, given today’s mixed economy and high rate of government spending, the logical conclusion of Amendment 54 is near-universal censorship.

Amendment 54 is shockingly broad; its limitations extend far beyond any direct connection between a no-bid contract and related taxes. Consider the details:

* Amendment 54 prevents contractors, “for the duration of the contract and for two years thereafter,” from contributing to any political party or state or local candidate. There need be absolutely no connection between the political race and the contract.

* A contractor cannot “induce by any means” a campaign contribution “on behalf of his or her immediate family member.” An “immediate family member” is defined as “any spouse, child, spouse’s child, son-in-law, daughter-in-law, parent, sibling, grandparent, grandchild, stepbrother, stepsister, stepparent, parent-in-law, brother-in-law, sister-in-law, aunt, niece, nephew, guardian, or domestic partner.” In other words, a contractor cannot seek to persuade these people that they ought to financially support any candidate. To be enforced, the measure requires thought police.

* The measure also prohibits campaigns from “intentionally” accepting funds proscribed by the measure. What is “intentional?” How is that proved? What this does is allow big-moneyed interests to go after candidates they don’t like, discouraging potential candidates who can’t afford a team of lawyers from running.

Amendment 54 is bad law. It is unjust law. It is unconstitutional law. It deserves to be thrown out.

Conservatives need to learn that the opposite of “judicial activism” is not mob rule. Judges play a legitimate role in protecting the rights of the individual from the whims of the majority.

It is a shame that Clear the Bench, which has undertaken a good and noble cause in advocating courts that uphold the rule of law, has muddied the waters by endorsing censorship. Let’s hope that organization and conservatives more broadly correct that failing.

We are all seeing the consequences of America being fooled by a leftist into the highest office once again. It is happening much quicker than even those of us who warned you about Obama thought possible.

It seems that in extreme blind hatred for George Bush and anything Republican (fueled by the Democrat run media) the American people have elected a far left socialist candidate bent on taking over society, overwhelming the system (see ACORN manifesto) to make life “fair” for all people…. using your tax dollars of course.

Of course Obama didn’t run as a leftist,because America is still conservative, but his record showed he was the farthest left member in the senate, his radical associations showed he would hang out with Marxists and America haters. He counted on ignorance…and he got it…especially from young people, and from the “minority” community.

Millions chose to elect him based on what he “said” rather than what his record showed. Many in the minority community and some in the Anglo chose to elect Obama because of his color…and proved themselves to be racists (people who judge the worth of someone based on race rather than content of character.)

Which brings us to Obama’s first nominee to the supreme Court. A woman who admittedly believes white men can’t judge as well as her because she is Latino. What if a white judge said he was better suited to judge because he was not a minority, black, Latino or whatever? That the black’s experiences would make him or her unable to render sound judgment? They would RIGHTLY be called a racist. We have proof now from the supreme court that Sonya Sotomayor is a racist.

COLORADO JUDICIAL NETWORK

For Immediate Release: June 29, 2009

Contact: Jim Pfaff, jim@iresearchanddata.com. 303-957-8600

Not one Supreme Court Justice Approved Sotomayor ruling in Ricci Case

Sotomayor guilty of “poor performance” in her ruling

DENVER, CO: The United States Supreme Court today ruled that Frank Ricci and his fellow New Haven, CT firefighters should not be subject to “reverse discrimination.” In a 5-4 decision, the court overturned the summary judgment ruling in the 2^nd Circuit of New York by Judge Sonia Sontomayor and her fellow panelists. And all nine Supreme Court Justices determined that the Sotomayor panel was in error in ruling on the case without considering its constitutionality.

“Frank Ricci finally got his day in court, despite the judging of Sonia Sotomayor, which all nine Justices of U.S. Supreme Court have now confirmed was in error,” said Wendy Long, Chief Counsel for the Judicial Confirmation Network and a former U.S. Supreme Court Clerk.

The case, decided by Judge Sotomayor, raised significant questions regarding race and merit-based promotion in America’s workplaces. In Ricci, a group of fire fighters challenged the City of New Haven’s refusal to certify test results for promotion within the fire department. According to test results and department protocol, only white and Hispanic fire fighters would be eligible for promotion. None of the black test takers placed high enough to claim any of the available positions. Fearing a lawsuit by minority applicants, New Haven refused to certify the exam results and no one was promoted. The City’s decision was allegedly based upon a desire to comply with the Civil Rights Act of 1964. This was despite the substantial efforts taken to ensure a race-neutral examination.

“No case can give us a better view of Judge Sotomayor’s judicial philosophy than her decision in Ricci vs. DiStefano,” said Colorado Judicial Network spokesperson, Jim Pfaff, “This case strikes at the heart of advancement in our society.”

“Usually, poor performance in any profession is not rewarded with the highest job offer in the entire profession,” said Wendy Long. “What Judge Sotomayor did in Ricci was the equivalent of a pilot error resulting in a bad plane crash. And now the pilot is being offered to fly Air Force One.”

Long continued, “The firefighters in New Haven who protect the public safety and worked hard for their promotions did not deserve to become victims of racial quotas, and the Supreme Court has now confirmed that they did not deserve to have their claims buried and thrown out by Judge Sotomayor.”

One hundred-eighteen people took the promotional exams administered by the New Haven Fire Department. One exam was for promotion to Lieutenant, and the other to the rank of Captain. The racial breakdown of test takers included 68 white, 27 black and 23 Hispanic applicants. The breakdown of those who passed the tests included 41 whites, 9 blacks and 6 Hispanics.

Eighteen white fire fighters and one Hispanic fire fighter brought suit for discrimination under the Equal Protection Clause of the United States Constitution and the very same Civil Rights protections cited by the City.

“The impact of this decision on workplaces is staggering,” said Pfaff, “If merit-based opportunity is not the best standard for promotion, what is? Should promotion be based on racial quotas? Could an otherwise qualified applicant be denied advancement because there are too many of his race already promoted? How will these decisions impact the workplace?”

“Judge Sotomayor’s logic was clearly flawed as it runs counter to the American system that has made us the greatest country in the world,” said Pfaff, “The Supreme Court’s decision to uphold or reverse Judge Sotomayor’s decision will have an important impact on employment law in the United States. It puts a bright light on the necessity of have judges who follow the U.S. Constitution and the stated law instead of personal opinion or ‘empathy.’ The Court’s decision may also very well determine the fate of Judge Sotomayor’s nomination to the Supreme Court.”

The Colorado Judicial Network is a coalition of citizens joined together to educate Coloradans on the Federal Courts and its nominees. In partnership with the Judicial Confirmation Network (www.judicialnetwork.com), Colorado Judicial Network works to ensure that the confirmation process for all judicial nominees is fair and that every nominee sent to the full Senate receives an up or down vote.

Colorado Judicial Network Members are as follows:

• John Andrews, President, Backbone America. Former Colorado Senate President.
• Jon Caldara, President, Independence Institute.
• Mark Hillman, former State Treasurer.
• Jeff Crank, State Director, Americans for Prosperity.
• Jim Pfaff, Judicial Confirmation Network Colorado coordinator. former State Director, Americans for Prosperity and former President/CEO, Colorado Family Institute.
• Kevin Lundberg, Colorado State Senator

For additional information about Sotomayor, visit www.aboutsoniasotomayor.com

The debate we should be having is over whether restraint in our use of medical services should be initiated by government officials or left to consumers. The Democrats want to avoid that debate. Instead, they make it sound as if they can make excess health-care spending disappear by magic. But even if we were to stipulate for the sake of argument that all of the supposed savings from preventive care, electronic medical records, and eliminating the waste and greed supposedly inflicted by insurance companies and doctors will actually materialize, the excessive use of medical procedures would still be the main problem with our health-care system.

OK, I’ll quote more. I like these parts especially:

Our health-care system is wasteful. … That would be of little concern if individuals were wasting their own money. However, because close to 90 percent of personal health-care spending is paid for by third parties, we are wasting each other’s money.

And:

…private health insurance should be deregulated. Affordable health insurance requires radical changes to the way health-insurance policies are designed today. In order to get there, we need less regulation of health insurance, not more. My hope is that the industry would come up with plans that pay claims to only those who fall within the top 2 or 3 percent in terms of health-care needs; those who need basic care would pay out of pocket. Health insurance would look like fire insurance. Few of us would make claims, and premiums would be affordable.

Read the whole thing, and tell Arnold what you think of it (hopefully positive) here.

Sotomayor’s ruling was, in my opinion, obviously wrong. In fact, the 5-4 decision somewhat masks the fact that all or nearly all of the Justices disagreed with her handling of the case even if they upheld her decision. As the editors of National Review note, “The only consensus the nine justices found was that the handling of case by Sotomayor’s three-judge appeals-court panel was shoddy. Even the four dissenting justices agreed that the Second Circuit applied the wrong legal standard.” And as the WSJ points out, “In footnote 10 of her dissent, Justice Ginsburg wrote that while she disagreed with the decision to reverse the lower court ruling, there were questions about how it was decided. Based on the lower court’s mistaken focus on intent, she wrote, ‘ordinarily a remand for fresh consideration would be in order.’”

So I don’t know what troubles me more, the fact that Sotomayor ruled the way she did or the fact that 4 Supreme Court justices agreed with her.

Here’s a quote from the WSJ’s take on the case which bears repeating:

Ginsburg opens her opinion by observing that “the white firefighters who scored high on New Haven’s promotional exams understandably attract this Court’s sympathy.” To which Alito replies:

“Sympathy” is not what petitioners have a right to demand. What they have a right to demand is evenhanded enforcement of the law–of Title VII’s prohibition against discrimination based on race. And that is what, until today’s decision, has been denied them.

Of course, Alito hits the nail on the head when it comes to the major question surrounding Sotomayor. She’s said specifically that she does not believe impartial application of the law is possible – and seems to question whether it’s even desirable. Don’t forget that Sotomayor’s decision was obviously racist: whether you want to say it was against whites or for non-whites, it was made on the basis of race. So much for Obama’s claim to represent post-racialism.

Monday’s Supreme Court decision, on the last day of their term, will be great ammunition for believers in the Constitution who want to challenge Sotomayor’s nomination (or for Republicans who just want to challenge her for partisan political purposes.) That said, I don’t think it substantially diminishes her chances of being approved which I believe remain very high if no other smoking gun is found to show her to be unqualified – which she surely is.

Justice Ginsburg’s arguments were remarkably weak, something you’d expect from a partisan leftist law student, for example arguing that Sotomayor’s decision was OK because the white fire fighters had no guarantee of a promotion and because nobody else had been given a promotion. She must have twisted her cerebral cells into knots trying to find a way to claim that invalidating the results of THE test that was to decide promotions simply because not enough minorities passed is somenow not racist.

According to AP’s article about the decision, “Ginsburg said the court should have assessed ‘the starkly disparate results’ of the exams against the backdrop of historical and ongoing inequality in the New Haven fire department. As of 2003, she said, only one of the city’s 21 fire captains was African-American.”

Her rhetoric assumes that “diversity” trumps equal protection, that diversity is a paramount goal in itself, and that diversity would for some reason make the fire department a better place (or at least not worse), which for a place as results-oriented as a fire department is very hard to believe.

Again, it is simply remarkable that 4 Justices could find that Sotomayor’s obvious racist and improper decision was OK. At least she lost, but the closeness of the vote says a tremendous amount about how political our Supreme Court has become – a great tragedy for our nation.

In the long run, unless one of the “conservative” Justices leaves, I expect the Court to be somewhat more aggressive in challenges to “civil rights” legislation as people who fall victim to the tendency of such legislation to penalize whites will argue that society has generally moved past the need or acceptability of such provisions. And they will be right.

In the meantime, the poster child for affirmative action will be elevated to one of the most prestigious and important jobs on Earth, simply because the man who has the right to nominate her was elevated to the most important job on earth for no real reason other than his color.

For those of you who are jarred by that suggestion, ask yourself this: Would a white junior senator from the Midwest with less experience (in government, the private sector, or anything else really) than any other candidate ever get even close to either party’s nomination? Of course not. Really, go through the list of US Senators and ask yourself honestly if any of the 10 or 20 most junior members of the Senate (at least those who have never been a governor) would stand a chance? Again, of course not. Yes, that’s right: Barack Obama is president primarily because he’s black…and that would be fine if he had a clue about the Constitution – but he doesn’t. And now he want’s to poison the most important court in the world by appointing someone with as little understanding of our nation and as much contempt for the vision of the Founders (including, not least, the rule of law rather than feelings or whims) as he has.

The Supreme Court has ruled that white firefighters in New Haven, Conn., were unfairly denied promotions because of their race, reversing a decision that high court nominee Sonia Sotomayor endorsed as an appeals court judge.

This decision must be considered a victory for the rule of law over “preferred outcome” jurisprudence.  The ruling majority in the case, Ricci vs. DeStefano, upheld the rights of New Haven firefighters under Title VII of the Civil Rights Act of 1964, which “prohibits intentional acts of employment discrimination based on race, color, religion, sex, and national origin, 42 U. S. C. §2000e-2(a)(1).”

The city of New Haven, CT had refused to certify the results of an examination given to firefighters seeking to qualify for promotion once it became apparent that none of the black candidates qualified, “based on the statistical racial disparity” and responding to public pressure.  The Supreme Court found

There is no genuine dispute that the examinations were job-related and consistent with business necessity. The City’s assertions to the contrary are “blatantly contradicted by the record.” (p.33)

The City, moreover, turned a blind eye to evidence that supported the exams’ validity. (p.33)

The majority ruling was clear in upholding the rights of ALL Americans to equal treatment under the law:

The record in this litigation documents a process that, at the outset, had the potential to produce a testing procedure that was true to the promise of Title VII: No individual should face workplace discrimination based on race. Respondents thought about promotion qualifications and relevant experience in neutral ways. They were careful to ensure broad racial participation in the design of the test itself and its administration. As we have discussed at length, the process was open and fair. (p.37)

The problem, of course, is that after the tests were completed, the raw racial results became the predominant rationale for the City’s refusal to certify the results. (p.38)

Racial discrimination is abhorrent to the principles expressed so eloquently in the 4th of July 1776 American Declaration of Independence (which must be seen as the philosophical source of our system of laws) and enshrined in the U.S. Constitution: that ALL men are created equal, and deserve equal treatment - as individuals, not categories or representatives of groups - before the law.  Supreme Court Justice Antonin Scalia makes this point explicit in his concurring decision:

“[T]he Government must treat citizens as individuals, not as simply components of a racial, religious, sexual or national class.” Miller v. Johnson, 515 U. S. 900, 911 (1995)  (p.40)

However, some ‘justices’ apparently don’t see things this way, viewing people as mere manifestations of group (race, class, gender, etc.) identity, to be advanced (or denied advancement) due to their identification or affiliation, based on the sympathies (or “empathy“) of judges interpreting the law.

 The logic (or lack thereof) in Justice Ruth Bader Ginsburg’s dissent is illuminating:

The white firefighters who scored high on New Haven’s promotional exams understandably attract this Court’s sympathy. But they had no vested right to promotion. Nor have other persons received promotions in preference to them. (p.55)

Justice Ginsburg’s stance - that “white firefighters” have no “vested right” in fair and equal application of the law and due process in applying for promotion, only because no one else received preference instead - is ludicrous.  Moreover, her position damages not only the “white firefighters” (and Hispanics) denied promotion as a direct result, but ALL firefighters and citizens of New Haven.  In the six years since the city rejected the results, NO firefighters have been promoted to the rank of Lieutenant or Captain AT ALL.  This cannot be of benefit to the firefighters (even those not making the cut) or anyone in the city.  Typical of preference-based treatment, everybody suffers.

Justice Samuel Alito’s opinion concurring with the majority decision - which also exposes the undue influence exerted by political allies of New Haven Mayor DeStefano in throwing out the test results - provides perhaps the best summary of the underlying principles of the case:

Petitioners were denied promotions for which they qualified because of the race and ethnicity of the firefighters who achieved the highest scores on the City’s exam. The District Court threw out their case on summary judgment, even though that court all but conceded that a jury could find that the City’s asserted justification was pretextual. The Court of Appeals then summarily affirmed that decision.

The dissent grants that petitioners’ situation is “unfortunate” and that they “understandably attract this Court’s sympathy.” Post, at 1, 39. But “sympathy” is not what petitioners have a right to demand. What they have a right to demand is evenhanded enforcement of the law-of Title VII’s prohibition against discrimination based on race. And that is what, until today’s decision, has been denied them.  (p.54, emphasis added)

Whether in the Supreme Court of the United States, or in Colorado’s Supreme Court: citizens have a right to demand evenhanded enforcement of the law.  The “Mullarkey Majority” in Colorado has repeatedly demonstrated incapacity or unwillingness to live up to this standard.  We demand better; vote “NO” on retaining the unjust justices of the Mullarkey Court (Justices Bender, Martinez, Rice, and Chief Justice Mullarkey) in 2010.  Let’s Clear The Bench, Colorado!

As Justice Kennedy wrote in the majority opinion:

We conclude that race-based action like the City’s in this case is impermissible under Title VII unless the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute.

[Emphasis mine.]

Note that the court’s decision didn’t actually say that the specific practice of discriminating based on race is illegal - it simply said that the way the city of New Haven did it wasn’t the right way in which to do it.

This means that, ultimately, the Court ruled that it’s quite fine for a hiring body to discriminate against one group in favor of another in order to avoid a “disparate-impact” to a minority group. As a consequence, hiring is as much as game of racial politics as ever, rather than a process in which employers seek out the best qualified applicants.