August, 2008


In the 1929 Wall Street crash stockbrokers were leaping from the windows of office towers in New York. Bankers back home found their former wealth to now be about the same as their former customers: penniless. Justice in a way: these were the people who created the commercial paper bubble that exploded across the nation and the world.

There have not been any casualties from Wall Street windows yet due to the present debacle. It turns out our government assures citizens there is to be little effect on depositors, homeowners or even for most bankers from all of this. The government's credit card is to buy everyone out and take the losses


Immediate federal spending on the various bailouts proposed in the last week's time comes to much more than a trillion dollars standing alongside the all-time record budget deficit. All this is happening with no public debate in our spineless, money-driven Congress. President George Bush continues to entirely run the nation's affairs due to the lack of other leadership even being suggested by anyone.

The floor-prone position of the government would be a good measure of justice, too: if only the federal treasury were synonymous with the political class of Washington, D.C. The fuel at play in the real estate bubble, after all, was the policy of the federal government, some of it corrupt, some stupid and some merely misguided.

1. Creating a government monolith in the mortgage business that dominates the secondary market in real estate commercial paper. So-called Fannie Mae and Freddie Mac constitute 90% of the secondary market in mortgages and presently own well over one-half of all of the mortgage notes in the nation. Little wonder why given that Fannie Mae pays full price and assumes all of the risk of the mortgages never being notes paid. There is every reason to sell mortgages to the feds and keep the quick profits for so many from every home closing. The result througout the housing industry was to churn home closings as quickly as possible and then step away from the risk. Whether the loans would actually be repaid became a secondary issue a long time ago. All that really matters is meeting the federal guidelines to sell.

2. Dumbing down the requirements to qualify as a federally purchased mortgage to the point where just about any mortgage made qualified. This was heralded under the political rubric of expanding the percentage of homeowners in America. Our recent Congress is most responsible for this several trillion dollar taxpayer shakedown, especially Democrats who have stood in the way of a taxpayer defense for six years, quite corruptly.

3. Keeping interest rates artificially low at the heart of the bubble thereby increasing its impact to more like a Category Five storm. Official talking-up of the bubble for fear of it falling was policy for years. Infallible Fed Chairman Alan Greenspan led this folly with Ben Bernanke following rabidly in his footsteps.

4. Favoring home ownership and development excessively under the federal tax code.

5. Escalating irresponsible borrowing with unproductive federal deficit spending. What an obscene model to make for the nation.

Combined with Wall Street mirrors and hubris this toxic dose will now be administered to the peasant federal taxpayers. All of the billions unfairly made along the way will stay in the pocket of the many players in and out of government who profited throughout the biggest real estate scam in history. Obviously, Washington has quietly decided no liabilities will ever apply to this mega federal rip-off.

Yet, instead of leaping out a window as an honorable person might, the solution advocated by Barack Obama and most of Washington is to empower Congress even more when it comes to home ownership. To its tremendous discredit, the American public seems to agree with that course.

A proper course would be to end direct federal involvement in the national mortgage market altogether. That is the Constitutional course to take. That is the path to long-term economic growth in the traditional American way.

Our nation has or will come to the precipice of its mindless spending and borrowing spree, just like all other unsustainable bubbles have. The price of falling to reality will be the value of the United States Dollar and a worldwide economic calamity like none before.

Mighty America will then bear the clothes of a failed, tinhorn dictatorship: supplicant to China and Middle Eastern potentates. That fate seems inevitable now even if true reform of Washington finances were enacted against all odds. But even small measures of fiscal sanity remain impossible given the pathology that is Washington, D.C.

Hopefully, the coming historic meltdown will finally jolt our nation back to the path of freedom it founded long ago, and has abandoned for so long to its great loss.


Bears are attracted to the smell of a nice dinner. Bears tend to chase and kill any fast-moving objects nearby. Georgian President Michael Saakashvili learned these lessons well from his country's thrashing by Russia in their weeklong war. When Saakashvili decided to take firm action against rebel provocations by sending tanks and troops, Georgian forces were smashed by the Leviathan along with the nation's infrastructure. Large chunks of the country were gobbled up.

Vladimir Putin's Russia has been spoiling for a fight in the Caucuses, especially with Mr. Saakashvili and his ilk. That region is the energy-rich crossroads from Asia to Europe. Russia has been using its natural gas pipelines to Germany and beyond as blackmail against Western influence. Ukraine's prices were quadrupled overnight and then cut-off for non-payment. Russia's military spending has been sharply increasing from the time before the recent boom in oil prices.

Putin believes the dissolution of the Soviet Union was the greatest disaster of the 20th Century: worse than the age of Hitler and Stalin. Does Putin dream of a Soviet model restoration? The beginning point would be gaining overwhelming influence again over former republics of the Soviet Union like Georgia and Belarus.


Straddled atop the Eurasian land mass, Russia is a nation where rivers flow north to the vast Arctic. Russia's history of aggression over centuries has focused on achieving warm water ports to the outside world. The greatest prize is the Black Sea port of Sevastopol in the Ukraine. That port is now uneasily shared by the Russian western fleet and by independent, western-oriented Ukraine.

What might happen if Russian ships are ordered to leave Sevastopol by the Ukraine and instead Russia sends land forces to overwhelm southern Ukraine? Will NATO go to war? It makes for quite dangerous times again in Europe.

The response of the European Community and the United States to Russia's occupation of the Georgian provinces of South Ossetia and Abkhazia has been roundly criticized as too weak. Even George Bush failed to return a decisive blow. It seems Russia has gotten away with its small war.

But below the surface the Russian bear has encountered a fundamental weakness from this war that is all new to the beast.

Since the collapse of communism Russia has become a part of world economic globalization. The money and standard-of-living of Russians for the first time are now directly tied to worldwide, free market economics.

The free market has delivered a decisive thumbs down on Mr. Putin's military adventure. The Russian stock market has tanked. Foreign direct investment has gone from disappointing to dismal overnight. Russians are losing billions and billions without a shot being fired from the West.

Even a leader as fearsome as Vladimir Putin has taken notice of the sudden hole in Russia's pocket. Putin's most recent statements on relations with America emphasized Russia's history of successful cooperation going back to the time of the American Civil War and the need for multilateral solutions to common problems.

Time will tell whether being a member of the global trading club is more important to Russia than taking a path to the sea and a new empire


It is only natural for a nation that increases in wealth to spend more on educating the young. There is no more important investment for children or for mankind's future. Creative insight stirred by education with humility is the source of human achievement: scientific, technological and moral.

Education in the 21st Century America remains embedded in the curriculums of our government: local, State and now federal. The end long ago for students to attend a school within walking distance has had little impact on education choices. By far most Americans still receive their education at a designated, government-owned school near their home. The education monopoly is the largest government enterprise in our nation.

On might wonder how the wealthiest nation in history falls on the embarrassing downside in global tests scores of students. Yet, that has been true in America for more than two generations. The present “no child left behind” requirements for high school graduation are far lower than the knowledge needed to pass an 8th grade test in 19th Century America.

But there is no understating the appetite of the education beast for taxpayer dollars. A public education is far more costly than a private one. The gap has been growing.

In the city of Virginia Beach the cost of a public education, K-12, comes to $12,000/year. Even impoverished Portsmouth somehow pays $8,500/year per student enrolled. A student can attend most private elementary school for less than $6,000 in annual tuition and fees. An education at Catholic High School comes to $11,000 annually for non-Catholics. Almost all private schools far surpass educational achievement in public schools.

So, how has the public education spending bonanza been floated for so long with no visible profits for students or taxpayers? In past decades when inefficiency, poor performance and just the desire for more taxpayer generosity arose it was quite the controversy in City Halls. Education budgets grew only modestly.

In recent years the Beast has been gorging on the national economic bubble that has now exploded.

The education monopoly's spending in Virginia and in most of the nation is directly tied to the revenue produced by the real estate tax. With ever rising property values education budgets have soared while student numbers have fallen. There has been no need for city councils to directly raise taxes to pay for the escalating spending on schools. Indeed, council members have basked in the canard that tax cuts were being passed when the levy rate was reduced even though spending on all things was growing sharply. It was the era of the automatic tax increase each year.

Now that property values have plummeted will city council reduce school and municipal spending to reflect the lowered assessments? After all, property owners have already been ripped-off for years by the imaginary property values of the recent past.

We all know that it is quite impossible to reduce public education spending. Instead, city assessors will become blind to actual, lower property values. Borrowing and taxation by the State and the federal government will increase to support local education budgets that have never achieved effective results. Local tax levies will also have to increase absent fundamental reform in school spending. Like the peasants of the Middle Ages, our betters will decide where the economic pain from the exploded bubble will fall. It will not fall much on the central pillar of modern American government.

The best side-effect of the financial meltdown would be the realization by Americans that their children could receive a far better education at a lesser cost if the government education monopoly were abolished and a free market in school ownership were allowed to become the American way.

Then our nation would begin the greatest economic boom the world has ever seen.


In January of this year, Detective Jarrod Shivers of the Chesapeake Police was shot and killed while serving a search warrant for a marijuana cultivation operation at the home of Mr. Ryan Frederick. Frederick is awaiting trial for capital murder.

There are a number of troubling questions in the case.

  1. The warrant was obtained on the statement of a confidential informant who claimed to have seen hydroponics equipment and marijuana plants in the unattached garage of the residence. We have since learned that the confidential informant burglarized Frederick's home prior to giving the statement on which the warrant was obtained, conducting an illegal search with police approval and possibly at police direction. If the police are sending criminals as surrogates to make illegal searches, and then using those same criminals as confidential informants to secure search warrants based on what they learned in the course of their crimes, there is no Fourth Amendment protection any more.

  2. Frederick was given no opportunity to accept the warrant peaceably. His door was breached as soon as movement was seen inside the house in response to the police knocking on the door and announcing. Frederick claims he heard no announcement and was awakened by the barking of his two large dogs and fired on what he thought was an intruder. The suspected marijuana plants were alleged to be in a detached garage. There was little contraband that could be easily disposed of. No reasonable justification has been provided by the Chesapeake Police for serving the warrant in such a dangerous manner.

  3. Less than one-half ounce of marijuana was found in the home. Frederick has been charged with felony manufacturing of marijuana for distribution.

  4. The search inventory also states that three shell casings were recovered on the scene, two .380 ACP pistol cases from Frederick's handgun and one .223 rifle cartridge case. No explanation has been provided for the presence of the rifle round casing. Frederick did not have such a rifle. The Chesapeake Police have denied that any of the officers there fired a round, though .223 rounds are commonly used in police SWAT team weapons. A bullet hole in the rear of Frederick's home was photographed by private investigators working for the defense, but was later found to have been patched after police conducted an additional search of the property.

  5. Frederick has been charged with premeditated murder though no evidence had been advanced indicating he was aware police were at his door. He claims he believed he was defending his home against intruders.

  6. At a pre-trial hearing, prosecutor Paul Ebert sought a change of venue on behalf of the prosecution, a highly unusual request from the State. In support of that request, assistant prosecutor Richard Conway alleged that Frederick telephoned one of the burglars and threatened to ambush police when they came to his door. Without identifying the informant, Conway laid out the prosecution's case for premeditation with a series of what can only be called logical absurdities.

The informant/burglar who was working with the police for two months on his own decided to break into Frederick's garage three days before the raid and stole half of the marijuana he found but left the rest.

Frederick was smart enough to know the police would be coming, but dumb enough to warn the informant by phone before the raid that he would resist arrest.

Frederick was smart enough to get rid of the plants in the garage before the police raid, but dumb enough to keep magazines on cultivating marijuana and a misdemeanor amount of pot in his house.

Having gotten rid of the felony evidence of cultivation, Frederick decided, instead of letting police search and write him a summons for misdemeanor possession, he would go to war with a large number of heavily armed police with only a low powered handgun and no hope of gaining anything by doing so. Having killed one officer Frederick then changed his mind and surrendered.

The refusal of the police to answer reasonable questions regarding the procedures used in that raid has eroded public trust and brought into question our justice system's dedication to Constitutional protections. Frederick has been held without bond since the raid. He will have been in jail at least a year before coming to trial. and are blogs following this case for updates.

Donald Tabor, Vice-Chairman Tidewater Libertarian Party