Jan 16, 2015

Posted by John Loeffler | 0 Comments

Temple Mount, Episode 2: The Farthest

By Steve Schiller


What do the following have in common: a donkey named Lightning with the face of a woman, a middle of the night trip into heaven and back, a valuation of only five percent, and rival political leaders? The answer is the story behind how and why the Temple Mount transitioned from Jewish control to Muslim.

Last week, we traveled back three millennia to David’s purchase of the farm that would become the Temple Mount; the building of the magnificent First Temple by Solomon; the delayed construction of the smaller Second Temple in 516BC; Herod the Great’s remodel and expansion in 19BC; and the war between Jewish Zealots and the eventual destruction of the Temple in AD 70.   For a great majority of the Mount’s first thousand years, regardless of what empire ruled the region, the Temple Mount belonged to the Jews.

The next 568 years featured rule first by the Romans and then by the Byzantines. Roman Emperor Julian in AD 363 granted the Jews permission to rebuild the Temple. As with most decisions by leaders, this one was a political one. By this time, the split between Christianity and Judaism was beyond repair and thus the Christians viewed the demolished Temple as a representation of their faith as greater than Judaism. Julian had turned his back on the Christian faith, thereby politically and personally he favored the rebuilding of the Temple by the Jews.

Despite his go-ahead, the construction never got off the ground. Historians argue over the cause of this, attributing either an earthquake in Galilee or the ascension of a new pro-Christian emperor in Rome – both occurring in the summer of AD 363. The Sassanid Empire took over in AD 610 and gave control to the Jews, albeit for a short time. A partial Jewish Temple began to rise on the Mount, but five years later, the Byzantines regained control, the unfinished sanctuary was razed and the area used as a garbage dump.

Enter the Muslims. Caliph Omar took the city in AD 638. Right away he looked for a site to establish the masjid (mosque) of al-Aqsa. Al-Aqsa in Arabic means “the furthest,” thus Omar was looking to set up the famous Furthest Mosque, referenced in the Koran. The 7th surah (or chapter) of the Koran mentions the furthest mosque: “Exalted is he who took his servant by night from al-Masjid al-Haram to al-Masjid al-Aqsa, whose surroundings we have blessed, to show him of our signs.” This verse is speaking of Muhammad and his famous “night journey,” which I will explain in a moment. The mosque of Haram was located in Mecca and the location of the mosque of al-Aqsa was unknown – no reference is actually made as to its location.

Muslim tradition holds that al-Aqsa, the destination of Muhammad’s night journey, was located in Jerusalem, more specifically the Temple Mount. This would fit since Jerusalem was far from Mecca, especially at that time. The story has Muhammad, the “prophet,” being called in the middle of the night to take a journey. He rode to Jerusalem astride his heavenly donkey, al-Buraq, which translates to “lightning.” This donkey is purported to have the face of a woman and wings protruding from his thighs. Once the night journey stopped in Jerusalem, Muhammad was taken into heaven via a light ladder where he was given special instructions from Allah, and then he came back down.

But right away we encounter a problem related to Al-Aqsa and the location of Jerusalem. The problem stems from the fact that nowhere in the Koran does it mention that Jerusalem was the actual destination of Muhammad on his night journey. In the 21st century, the traditions have it fixed there and no one questions it. So how did a vague reference to a “furthest mosque” in the Koran – written 20 years after Muhammad’s death – solidify into Jerusalem becoming a new site? The answer lies partly in the Hadith, a collection of oral Islamic histories separate from the Koran.

The Hadith gives a much more detailed account of Muhammad’s night journey, including the anthropomorphic donkey and its name. Jerusalem is mentioned in there as well, and this time it is fixed as the location of the furthest mosque. The Hadith, it’s important to note, wasn’t made available in written form until the ninth century, 200 years after Muhammad died. I have to wonder, though, if the night journey surah in the Koran denotes Muhammad traveling from one mosque in Mecca to another in Jerusalem, where was the mosque on the Temple Mount he traveled to? There wasn’t one. A mosque was later built in AD 715 by Caliph Waleed – 83 years after Muhammad’s death. It was named al-Aqsa Mosque, but at no time during Muhammad’s life – and certainly not during his night journey – was there a mosque on the Temple Mount.

Prior to Caliph Waleed and the building of al-Aqsa, another Caliph named Abd el-Malik began construction in AD 691 on the Dome of the Rock, to be located in the middle of the Mount on the famed foundation stone of the original temple. It is perhaps the erecting of this shrine that further popularized the Jerusalem as destination myth of the night journey. Why did el-Malik build the Dome? Politics.

Jerusalem was not a city thought highly of by Muslim leaders – in fact, it was one of the last cities conquered during by Muslim armies after the death of Muhammad. Menashe Har-El, in his 1977 book This is Jerusalem, published a Muslim proverbs that reads, in part, “One prayer in Mecca is valued as ten thousand prayers; a prayer in Medina is valued at one thousand prayers; and a prayer in Jerusalem at five hundred prayers.” For those of you math whizzes, Jerusalem comes in at 5% of Mecca. It doesn’t seem that Jerusalem is high on the priority list.

A caliph in Mecca and Medina, the two holiest cities in Islam, controlled the mosques there and, according to records, was a rival of Caliph el-Malik. In order to compete against this political contender, el-Malik built the Dome of the Rock. Later al-Aqsa was built and Jerusalem transitioned from an obscure city unimportant to the Muslims, valued at 5% of Mecca, to that of the third holiest site in all of Islam.

Muslims controlled the Mount for another 400 years, until Christians took the city in 1099 during the First Crusade. A new order called the Poor Knights of Christ and the Temple of Solomon set up shop in al-Aqsa – an order that would become the Knights Templar.

Tenancy on the Mount began with Jews, transitioned to Muslims, then shifted to Christians – all in the first 2500 years! No wonder there is such contention today as to who has rightful ownership of one of the holiest sites in the world.

Next article will wrap up the three-part series on the Temple Mount by examining the last 500 years, bringing full-circle the tale of the Jews in Jerusalem. Well, sort of.


Steve Schiller is a producer with the Steel on Steel radio show, a weekly newsmagazine that gives you 90 minutes of solid news and commentary, much of which you will not hear elsewhere.

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Jan 9, 2015

Posted by John Loeffler | 0 Comments

Temple Mount, Episode 1: Backstory

By Steve Schiller


The Temple Mount in Jerusalem has been a flashpoint of conflict between Jews and Muslims for more than 1300 years. Scarcely a holiday goes by without the Mount being at the center of violence. There doesn’t seem to be an end in sight.

In the West, when stories like these are broken, we listen, we shake our head, and we go about watching football or surfing online for cute cat videos. OK, I don’t partake of that last part, but I’m guilty of the rest. In fact, many of us might think (because it’s too politically incorrect to say aloud), ‘another day, another bombing.’

Part of the problem is that it’s human nature for us to care more about our own lives and ignore the rest of the world. We could spend months debating that issue, and maybe we will at another time. But for now, let’s focus on another other issue –the media seem to focus on the violence only; they don’t typically give us the reasons behind it. In this day and age of blockbuster movies and their superhero backstories, maybe it would interest us to know how we got here.

I should mention the obvious: it’s impossible to chronicle the entire Israeli-Palestinian conflict in the amount of space I have, so I’m going to focus on one particular aspect – the Temple Mount in Jerusalem. When I hear reports of the Temple Mount and the Dome of the Rock and al-Aqsa Mosque, I ask myself if they’re all the same or if they are completely different structures. And why, if the Jews had built a temple and deem the area holy, do the Muslims consider the Mount to be the third holiest place in Islam? What drove them there in the first place?

To see how it all began, we must go back nearly 3,000 years. We will see how the Temple Mount first belonged to the Jews.

2 Samuel 24 and 1 Chronicles 21 recount the story of King David and his encounter with a Jebusite farmer named Araunah. Araunah owned land on Mount Moriah where he grew wheat and barley and his threshing floor dominated the summit. I can picture the encounter: farmer Araunah working his fields, minding his own business, and along came David accompanied by angels. After gulping a few times and bowing to the ground, he began a conversation with David. The Lord had directed David to build an altar to Him there. After rejecting Araunah’s offer to give him the land, David insisted on paying the farmer for it, and gave him 600 shekels (15 pounds) of gold.

On that threshing floor, David’s son Solomon built the First Temple circa 957 BC, which stood for 371 years. To put this timeframe in perspective, the United States has been a country for only 238 years, so it was well established. Babylonian King Nebuchadnezzar II destroyed Solomon’s masterpiece in 586 BC. Persian ruler Cyrus the Great commissioned the building of a new temple in 538 BC and decreed that the exiled Jews should travel back to their homeland and begin construction.

The foundation for this second temple was laid on Mount Moriah two years later by God’s chosen foreman Zerubbabel, but interestingly a work stoppage dragged on for 16 years. Why the delay? The answer lies in a very early example of non-Jews frustrating Jewish authority at the Temple Mount. Natives who had been living in the area for years while the Jews were in captivity approached Zerubbabel and offered to help in the rebuilding project. They claimed to worship and offer sacrifices to the same God. Zerubbabel, with a decree from Cyrus and more importantly God’s blessing, told the natives that the remnant would build the Temple and that God was Israel’s God (Ezra 4:2-3). Thus began a campaign by the natives to halt building on two fronts: terror and politics. Sound familiar? (There goes my political incorrectness again.)

Materials to construct the Temple would have had to be imported from neighboring areas and native counselors, who had long administered the area, interfered. The new Jews on the block didn’t stand a chance of winning that battle. If red tape existed in 536 BC, the Jewish leaders would have struggled to dig themselves out from it.

Having just arrived in Jerusalem, the Jews had not yet built homes for themselves and therefore lived in the open country, vulnerable to attack. Based on the account in Ezra 4, the native rivals troubled and terrified the people of Judah, presumably harassing them on their way into town.   Suddenly, building a home and defending your family took precedence over erecting a Temple with non-existent materials. After weeks and months, the “rebuilding fervor” waned and the Temple Project ground to a halt.

Cooler heads would prevail however (a decade and a half later), and in 516 BC construction was completed and the new Temple dedicated. Not as grand as Solomon’s shrine, this Second Temple stood virtually untouched for another five centuries. Many empires ruled Jerusalem and surrounding environs during that stretch, but the bottom line is: the Temple Mount once again belonged to the Jews.

Herod the Great remodeled and expanded the Mount in 19 BC, doubling the size of the complex to more than 35 acres. In AD 66, Jews protested and eventually attacked Roman citizens over – what else – too many taxes – a more violent Jerusalem tea party of sorts. The Romans retaliated by looting the Temple and killing thousands of Jews, which precipitated a full-blown uprising by the people. The resulting war lasted several years, but the devastating blow came in AD 70 when Roman general Titus laid siege to Jerusalem, destroying the Temple and burning most of the town.

At the beginning of this article I asked the question: what drove the Muslims to the Temple Mount in the first place? In Episode 2 next week, we’ll explore the mysterious beginnings of Islam outside of Saudi Arabia, which includes a donkey with the face of a woman, a ride up to and back down from heaven, and an interesting interpretation of the term “al Aqsa.”


Steve Schiller is a producer with the Steel on Steel radio show, a weekly news magazine that gives you 90 minutes of solid news and commentary, much of which you will not hear elsewhere.

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Jun 9, 2014

Posted by John Loeffler | 0 Comments

Perfect is the Enemy of Good

Perfect is the Enemy of Good

I wrote a post earlier today extolling the electability and rise of Ted Cruz. I have been called and written to by several people complaining about a number of problems they see with Cruz. I will not debate them here at length. I will just state flatly here and now that I feel that Ted Cruz is our best shot at a Constitutional candidate — the best we have seen in many years, as a matter of fact.

It strikes me that so many on the ‘so-called’ Right have made it their priority to attack Cruz on his eligibility (Constitutionally I believe he is eligible), or his wife for working with Goldman Sachs, or the fact that he is in their eyes ‘unelectable’ because he has alienated too many in Washington (that’s a plus in my book). We are spending so much time attacking our own, I think we have forgotten who the real enemy is. If we will only elect a perfect candidate, we will never elect one again on our side. None of us is perfect and all of us have made bad calls in our life. Ted Cruz is an honest, decent, true Conservative and he is not the enemy.

The perfect is the enemy of the good is an aphorism or proverb meaning that insisting on perfection often results in no improvement at all. The phrase is commonly attributed to Voltaire whose moral poem, La Bégueule, starts:

Dans ses écrits, un sage Italien
Dit que le mieux est l’ennemi du bien.

(In his writings, a wise Italian
says that the best is the enemy of the good)

Cruz is the strongest Constitutional Conservative out there. He is not beholden to anyone on either side. He stands by what he says and means it. He may stand alone, but that shows character, not unelectability. We should support our strongest candidates and get behind them — not nitpick them to death or tear them apart. Notice that the Left does not do this. For all of Hillary’s warts (and there are many), the Progressive Marxists are behind her.

A friend of mine and occasional contributor to the blog, Citizen Scribe, had this to say about what he calls “The Myth of Electability” as a concept:

In every election cycle I find myself in any number of discussions about the best candidate for this or that. Inevitably someone in the discussion trots out the ‘electability’ trope. It’s a way to win arguments without having to present any actual data. It’s an assertion that’s simply not provable, as it depends on facts not in evidence. It is a form of inspired laziness. It is pretended wisdom (“I know something you don’t”).

Reagan was unelectable … or was until he was elected. Lincoln was unelectable. Bush 41 was a shoo-in … until he wasn’t. The history of elections in the United States is strewn with egregious predictions and declarations. Dewey Defeats Truman! Except, well, he didn’t.

In order to know that someone is unelectable, you have to be privy to some piece of knowledge denied the man in the street. Now, if you are Stalin, or one of his minions, you know that (famously) it’s not who votes that counts, it’s who counts the votes. Said differently, if you know there’s going to be a fiddle, and you yourself are the fiddler, then you may indeed declare who shall be unelectable.

It’s a favorite insiders’ game in Washington DC to pronounce someone as unelectable, especially if he is a DC troublemaker, rabble-rouser, or boat rocker. It’s the DC equivalent of Damning With Faint Praise, where you can pretend to like someone while cursing him as ‘unelectable.’

Electability is a simple matter. If enough of the population likes and and votes for you, then you are, by definition, electable. But you won’t know that until after the fact. By pretending to know the mind of the citizenry, you attempt to create a self-fulfilling prophecy by predisposing the electorate to abandon a candidate on the grounds that “nobody else will be voting for him, so why should I?”

“Electability as peddled by press and politicos is a myth. It is arrogance of pretended knowledge. To the voter I say this: vote your conscience. To the candidate I say this: speak your mind and speak your heart; speak to the voters only, do not play the pundits. You are as electable as the voters — individually — decide you are on election day.

“We are the electorate. Speak to us. Listen to us. We will vote for you. And the gods of Olympus and DC be damned.”

In the end, each of us must vote for the one who he feels is the best fit, the strongest candidate. It is an individual choice as it should be. But sometimes I worry that we are our own worst enemy.

Perfect is the enemy of good and we have met the enemy and they are ours. What our Founding Fathers knew is as true today as it was in their day: We must all hang together, or assuredly we shall all hang separately.


Want more resources on these topics? Here are some previous programs you might find interesting:
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Jul 23, 2008

Posted by John Loeffler | 1 Comment

The Sad Road to Socialism

What happens When Private Property is No Longer a Right

by John Loeffler, Steel on Steel
(c) 2008 All Rights Reserved

July 23rd, 2008

“But if the government undertakes to control and to raise wages, and cannot do it; if the government undertakes to care for all who may be in want, and cannot do it; if the government undertakes to support all unemployed workers, and cannot do it; if the government undertakes to lend interest-free money to all borrowers, and cannot do it; if …. ‘The state considers that its purpose is to enlighten, to develop, to enlarge, to strengthen, to spiritualize, and to sanctify the soul of the people’ — and if the government cannot do all of these things, what then? Is it not certain that after every government failure — which, alas! is more than probable — there will be an equally inevitable revolution?”

-Frederic Bastiat, “The Law,” June, 1850


It’s been more than 150 years since Frederic Bastiat wrote his treatise, The Law, a small work, challenging the ravages of failing socialism thrust upon France as a result of the French revolution.

In that unique pamphlet, Bastiat points out that when the law of any country supports the moral belief systems of a people, defends the rights of said people and their property, the law is perceived as being moral; a defense against evil and those who flaunt it as being immoral. Payment of taxes and civic obligations are perceived as a virtue and those who flout this as criminals.

However, when the law becomes a source of plunder or pits itself in opposition to the morals of the people, the people perceive the law to be immoral and widely despise it. Indeed, in those times, flouting the law is extolled as virtue.

Another book by contemporary author Hernando Desoto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, points out much the same thing, that the security of ownership of private property guaranteed by law for the lower and middle classes has been the essential ingredient resulting in the prosperity enjoyed by many western countries. Without this security, where the state becomes an impediment to commerce or property ownership, the people are forced to operate their economies outside of law, which is once again perceived as evil, rather than a force for good.

In essence, when a government goes from being a protector of private property to a plunderer of it, it places itself on a course of chaos, economic ruin and its own ultimate self-destruction.

The Three Steps of Socialism

Socialism is the mechanism which transforms government from its noble role as a protector into a predator and, since the citizens of our fine country seem determined to plow through socialism to its bitter end, we should examine the territory through which these three sad steps lead. The core result of socialism is the destruction of private property and wealth.

The events described in this piece are a composite of the ravages of socialism experienced in other countries. While each country does experience all the events portrayed, all socialist countries follow the same miserable path. The U.S. doesn’t have to go down this path, but it seems determines to do so.

We’re Off to See the Wizard

One of the great dangers of any government by the people is that sooner or later their politicians discover they can vote largess from the public trust. Their first experiment at this bold new adventure invariably revolves around social programs enacted in the name of morality and the public good or even solving some current crisis. Who could oppose that? “After all,” it will be argued, “don’t you care about people, or the welfare of the country, or the environment?”

The lure of this argument has been absolutely irresistible from the Roman Empire to the French and Bolshevik revolutions to Socialist Parties (D) and (R) in the USA today.

Step One – The Moral Argument: A Promise of Something for Nothing

The moral argument that we can finally solve poverty, pain, sickness, and hunger with “free” money seems just to good to be true. It usually is but it sells to the public. To fund these allegedly moral programs, the assets of the gentle citizens must be quietly taxed in the name of the public good.

Only a few wise and isolated voices warn that this baby dragon they have just hatched will grow up to be a fire-breathing monster. But not to fear, the wise voices are generally shouted down by the gentle politicians, who fiercely demonize protestors as selfish “whabbledygots” blocking the road to the perfect society. After all, how could something so noble do anything bad to the country?

At first the rich are the only ones asked to pay more of their “fair share.” In the U.S. income tax originally only affected upper-bracket individuals. In this early stage, few complain and everyone seems happy, except for those nagging voices still warning of dire consequences ahead; the ones the gentle legislators wish would just shut up. Other than that they have little to fear because the gentle legislators appear to be heroes placing our feet firmly on the road to utopia. Soon they promise all the have-nots will have and those who do have, will have just a little less. After all, as we said, it’s just their “fair share.”

Ah but time rumbles onward, and the number of people dependent upon these programs swells along with the number of “free” government programs. Free things do sell, and that’s what politicians want to do: sell their programs.

As the programs swell, they become unwieldy, requiring large bloated bureaucracies to administer them to ward off the inevitable fraud and corruption, consuming an ever greater part of the tax booty and servicing less to the originally intended recipients. In order to control the chaos of a large group of people cueing up to get something for nothing, large volumes of laws and regulations have to be written to control who gets what and where and when and who the givers and who the takers are. Now, the bureaucrats who administer these programs are also dependent on them for their livelihoods. This entrenches the program and assures its progression to Stage Two.

The Magic Dragon Isn’t Cute Anymore

Somewhere along the line, the gentle legislators discover that their baby dragon has grown and it’s snarling at them a lot. It wants much food. They’re not controlling it; it’s controlling them. However, in order to retain their prestigious position, ever-increasing sources must be found to feed their growing rapacious raptor.

The food source (tax burden) shifts rapidly downward into the middle class, as the gentle politicians coo that only the rich are being soaked. Concomitant with the increase of taxation, the miracle of hidden taxation through monetary inflation is discovered as central banks print more and more money to allow the good times to continue over and above what direct taxation will allow.

This process of monetary inflation results in debasement of the currency, causing the citizens to work harder and harder and run faster and faster to keep up with the loss of their currency’s value and the concomitant rise of prices. It’s slow at first but accelerates along an insidious exponential path. Ultimately it destroys everything the middle class works for.

Additional reptilian food sources called “revenue streams” are created. More fees, fines, “mitigation payments” and permits are required to do almost anything, driving the cost of doing everything upwards. Coupled with this is a bewildering array of regulation and laws making the business of life more and more difficult to accomplish. Big businesses can absorb this but the middle class ultimately buckles under the strain. The dragon is never satisfied.

Stage 2: Silent War Between Government and Its Citizens

At some point, the unwashed masses suspect their politicians aren’t really gentle any more much less benevolent. This is where a silent war between government and people erupts. It’s a blurry transition through never-never land when the politicians still claim to be gentle but the people sense that they have gone from being protectors of the public good and private property to a plunderers of it; from morality to immorality.

The “Bastiat” transition doesn’t take place all at once but, one by one, members of the working class realize they’re toiling like mad and getting no where. What they do make is confiscated in taxes or destroyed in inflation. They have little left over and their life’s savings are being destroyed while the politicians tell them all is just fine, creating cognitive dissonance between the hardship workers experience and the good times the politicians promise.

But those friends of the dragon on the dole still insist the dragon’s intentions are moral, even if its methods are not. As tax rates push ever higher into confiscatory ranges, self-preservation kicks in and the people take defensive action against what they no longer perceive as moral duty but legally-sanctioned plunder. They do this at the same time they pretend the gentle politicians are correct even though they know better.

The rich catch on and move their assets offshore and sometimes themselves out of the reach of the dragon; they expatriate. They have the means to structure their finances in such as way as preserve wealth. Besides, the politicians are frequently among this class so they aren’t about to let the dragon loose on themselves.

Unfortunately, the middle class doesn’t have this option, so it fights the dragon by engaging in evasive maneuvers. Citizens cheat on taxes, and seek to conceal taxable assets. Whenever possible transactions are shielded from the ever-prying eyes of the hungry dragon.

As the ravages of taxation and inflation eat out the middle class’s substance, a vibrant underground economy springs up, utilizing barter, cash, foreign currencies, precious metals or other means to conceal taxable activity. Regulatory laws are flouted as people try to “see what they can get away with.” Often times this underground economy has an organized crime component vis a vis the former Soviet Union.

The second half of Stage Two of the war kicks into gear as the dragon responds to the rising opposition and imposes a growing panoply of laws and regulations with increasing fines, penalties and prison sentences. To block the rampant flouting of law, the dragon wants to monitor everything the citizens do in order to assure that plunder shall be paid, all in the name of the rule of law, public order and morality. Civil rights break down, all in the name of morality and public security.

Every once in a while the beleaguered middle class pleads with the gentle politicians to fix the problem, unaware that it was the gentle politicians, who created it all in the first place. But politicians are more than happy to be seen as dragon slayers, and create a series of scapegoats for the problem, transferring blame for the mess and enacting a new series of programs to supposedly fix the problem. In reality, they just delay the pain, put the dragon on steroids and making the problem far worse.

The war is not without casualties. As it becomes ever more difficult for small businesses to function in the poisoned atmosphere of taxes, fees, fines, regulations and prosecutions, more of the middle class throws up its hands and goes elsewhere or becomes part of the the dependent poor. Small business goes out of business or operates illegally. As inflation devours life savings, people are wiped out. Retirees have a difficult time getting on as their lifetime achievements are destroyed. Most of the middle class slides inexorably down the slope into poverty.

There is a moral consequence as scandals erupt in the politico and monied classes. Disrespect of law is common. In the free-for-all, everyone is in it for himself and no one can afford to obey the law. Jails swell with those unfortunate enough to get caught. As more complex laws are steadily passed, finally all citizens become law-breakers.

This enables the dragon to seek pretexts for seizing the assets of citizens. Businesses are nationalized. Wage and price controls are instituted. Property ownership is forcibly transferred from those who oppose the dragon to those who support it. Retirement plans are brought under the “protection” of government and their owners left with government-issued IOUs. Assets are seized on the mere allegation of criminal activity. Indeed, law enforcement agencies encourage their members to plunder. They even make arrangements with organized crime at times. The list of plunder-and-defend possibilities is astounding.

In an effort to stem the hemorrhage, the middle class starts throwing out the rascal politicians, only to elect another group of rascals. This has little effect, since the dragon is now a self-existing monster that doesn’t require gentle politicians. By this stage it’s clear: Small and middle class businesses, ranchers and farmers all know who the enemy is: the dragon. There is no illusion that the politicians are gentle or acting in their best interests.

As the security of property ownership declines, investments flee and the economic environment becomes unstable, no one wants to invest where earnings will be heavily taxed, or even the possibility of direct confiscation on the allegation of having violated a plethora of unknowable, unobservable laws. Doing business is just too dangerous.

As doing business becomes dangerous, investments die, jobs go out of existence, increasing the pain of the working lower and middle classes. Small business is always the primary creator of employment and it is the most abused. In the end, the rich are never soaked, the middle class is destroyed and the poor discover that there is no free lunch.

Stage Three: Dies Irae: A Day of Wrath and Mourning

Ultimately the dragon cannot keep its promises. This last stage is where events turn nasty and chaotic. It is a dangerous time. It is a time no country should ever wish to reach.

Politicians are perceived as ravenous wolves. Blame and finger-pointing frenzies among politicians erupt to deflect responsibility for the chaos they have caused as they attempt to hold onto their privileged status.

Faith in government dissolves along with faith in the currency. Widespread flouting of law is common and tax payments quit. If it gets bad enough, crime flourishes, both organized and random. The domestic economy collapses into a depression and the currency just collapses.

By this time there are several violently outraged groups of people: the first group consists of those who have been dependent on the dragon for their free programs, and once the dragon reneges on its promises to provide these, they are outraged at the violation of their imagined rights to a free lunch. This group can include pensioners who paid the dragon money but discover the dragon spent it all before they retired.

The second group is the middle class, who have been beaten to death to feed the dragon and his cronies. They have lost all their livelihood and property. This is the point where many revolutions occur. Sometimes the revolutions are non-bloody and occur only at the voting booths; sometimes they are bloody and violent. It is a dangerous time because the chaos caused by the breakdown of economic and political order coupled with the collapse of morality often requires brute force to restore order, and brute force is the fertile ground for dictators and the destruction of rights.

One of the great ironies of history is that those who started the mess and benefitted greatly from it are rarely ever called to pay for the crimes and carnage they caused.

Finally the dragon dies.


No country trapped in socialism goes through all the events described above, which is a composite of past histories. It can turn itself at any time providing it is prepared to discipline itself the undergo the pain required to get off the public dole, much like coming off an addiction. Few societies ever want to face that, so they condemn themselves to all three stages. And the longer they wait to enact the necessary changes, the worse the pain becomes.

From currency, to energy to property rights, issues today are clouded with so much static and partisan bickering that the average person has little real comprehension of what is happening. Frequently Democrats and Republicans blame each other when often they’re both responsible and fiddle while Rome burns.

America is truly at an economic and moral crossroad, having already started into Stage Two of the sad road to socialism. Whether or not we plow through all three stages remains to be seen. It takes great moral courage to prevent this but politicians tend to be neither moral or courageous.

Thus it is up to what actions are moral, legal and necessary to see us, our families and friends safely through the tempest. But as a ray of hope, it is here where Americans in times past have always shown themselves most noble.


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Jan 15, 2004

Posted by John Loeffler | 0 Comments

The Battle of Pockets Deep

How Local, State and Federal Governments are doing Battle with their Citizens

by John Loeffler, Steel on Steel (www.steelonsteel.com)
(c) 2004 All Rights Reserved

January 15, 2004

“How did it come to this?” muses King Theoden in Tolkien’s Lord of the Rings as the Battle of Helm’s Deep was about to commence. The residents of Middle Earth never saw their time of trial coming until it had grown to a level of grave crisis and so it is today. Look about you resident of Middle Class, the Battle of Pockets Deep is about to begin as Lord Taxman wages war.

Last week the media gasped when former Treasury Secretary Paul O’Neil announced that the Bush administration had planned to attack Iraq long before 9/11. (I’m shocked, aren’t you?). Seems like Mr. O’Neil was privy to a lot more than he told.

Last November a Fortune magazine article featured Professor Lawrence Kotlikoff of Boston University relating a study Mr. O’Neil executed during his tenure as Secretary of the Treasury, examining the U.S. government’s capability to meet its future unfunded liabilities, notably Social Security and Medicare. The answer staggered even the Secretary.

By the end of the decade there will be a gut-wrenching $44T abyss between what the government will be required to pay to retiring baby boomers and what it currently absorbs in taxes. The only solution – if there is one – will be a staggering 95% increase in payroll taxes on an already overtaxed populace or massive monetary inflation. Either way the result is the same: the bailout will have to be rolled over onto the middle class, not the rich.

Needless to say the Treasury study became a victim of partial birth abortion and the Bush administration proceeded to fire Mr. O’Neil as well. No team player there and ignore that man behind the curtain. But sit down Mrs. Middle Class, there’s more.

Sixty years of social(ist) programs, deficit spending, monetary inflation and Keynesian economics have left the U.S. economic system in a shambles. We are currently in the middle of a prolonged bear market rally with no real recovery, because little debt was discharged at the so-called “bottom” and thus we’re fueling the current “recovery” with even more debt and consumer spending. The slide into a massive recession will continue over time. Viva the “jobless recovery!”

Official government numbers are cooked, whether reports on GDP, unemployment etc, being jimmied to provide pre-determined outcomes which will convince the American public it isn’t as bad as it seems and persuading them to stay in the game. There is not one market where there is not some form of often illegal meddling, price manipulation or regulation by the government or its Federal Reserve partners.

In reality all overspending from Roosevelt’s New Deal to Lyndon Johnson’s Great Society and beyond, instituted to help yesterday’s “little guys,” is now due and payable. The bill will be bled from the backs of today’s “little guys,” and even now one hears the fining, feeing and taxing turbines spooling up for takeoff in the various states. An increasingly-wise public is already engaging in the three historical defenses of abusive taxation: fraud, flight or fight. They either cheat, flee the taxation jurisdiction, or fight – either at the polls or sometimes violently.


So-called “untax” programs are doing a booming business, regardless of legality or illegality. The IRS makes public truck of prosecuting some prominent promoters but the untaxers are convinced they’re right and for every one prosecuted, dozens more drop out. For those who “stay in the system,” under-reporting of income, fake deductions, cash, and barter are traditional ways to evade taxation.

Of late Lord Taxman has informed us his evil eye is focused on tax abuse using credit cards issued by offshore banks, whereby income is deposited in those banks, the account holders fail to report it as income, and then use the credit cards to bring the money back into the country by paying for living expenses with the cards. This will have some effect but it will be only temporary. Everybody knows the system is broken.

When the real hammer drops and national personal buying power continues to fall, the concept of scaling back sprawling government and its “essential services” will remain unthinkable, so local, state and federal agencies will require a flawless collection engine to prosecute public plunder. Thus the system is already arming itself under guise of fighting the War on Terror with steadily increasingly monitoring of citizens in all facets of their lives. What better way to close the current loopholes than by having detailed snooping capability at the push of a button?


In state legislatures there is not a drip of recognition that the country has been bled dry. We really have a spending problem, not a taxation problem. California ‘s recall election was a microcosm of future events. A battle is brewing between Governator Schwarzenegger and the state legislature, which is determined to balance its wildly out of control budget on the backs of “rich people” ($50K plus per annum) and business.

But – horror of horrors, businesses and producing people are fleeing the state and thousands more are planning to do so. Even the rich Hollywood types are moving their assets to safe havens, while they preach socialism in their films. When it comes to their money, Hollywood liberals behave like those conservatives they’re always demonizing.

The Fight

Some predictions:

(1) When governments are forced to cut back, rather than cut the fat, they will go directly for the services they are supposed to provide for the public, so the public feels the pain! Meanwhile fees charged for every government service will increase.

(2) As people try to legally avoid excessive taxation, they will be demonized by government officials and the media as selfish and unpatriotic. There will be much hand wringing about the horrible deficits as if these somehow just appeared out of nowhere and how the public is now responsible for them.

As businesses flight from California increases for example, the state may even institute an “exit tax” or something like it, whereby leaving will be made as financially painful as possible. California is in the unsustainable position of swelling ranks people on the dole, over-controlled businesses, and impossible environmental regulations coupled with a declining tax base, which cannot pay for it. Long live the dead goose that lays golden eggs that everyone wants! We’ll just pretend the goose hasn’t quit laying.

(3) Anyone who counsels others on how to avoid abusive taxation and protect their assets will be demonized as unpatriotic. Look at this deficit! We may well witness prosecutions of financial advisors under the guise of “conspiracy to commit domestic economic terrorism,” covered by abstruse and obscure provisions of Patriot Act “X.” This will be designed to panic the rest of the financial industry into getting in line with the plunder program.

(4) Those who think they have escaped the system by untaxing will find new systems they have to join, which will be linked to the old, only to find this difficult because questions will be asked as to where they were all these years. Naughty Naughty. Oh yes, beware a national sales tax or worse a value added tax without repealing the income tax!

(5) As the Social Security and Medicare crisis becomes unmanageable – after all it is a Ponzi scheme in every sense of the word – the national government will thrash around looking for plunderable assets to feed a dying dragon. Private retirement plans will afford an overwhelming temptation. Under some law bearing a title such as the “Retirement Security Act of 20XX,” government may well seize private retirement plans etc., leaving an IOU for the owners, while assuring them their assets will be well managed and “protected” and available to them when they need it.

(6) Federal, state and local governments will waffle on their promises and raise the bar so high for benefits programs of all kinds that only a limited number will qualify. Thus little will be paid out while much will be consumed. The only alternative to save the system at the federal level is massive inflation of the currency, which will deflate the value of the dollar. You’ll get your promised money but it won’t be worth anything. Expect Alan Greenspan to be dumping cash out of helicopters.

(7) The trend to raising fees for government services for which the public already pays taxes will continue. As tax-fine-fee-inflate burdens grow to unbearable levels and the quantity of services and benefits falls, the potential for civil unrest among the squeezed populace will grow in direct proportion. This will be exacerbated when increasing numbers of working people realize their hard-earned, desperately-needed income is being transferred to faceless bureaucrats and non-working recipients against their will.

(8) Even with total information collection, officials will be hard pressed to digest it so the rat system will be broadened by means of “public-private partnerships,” whereby doctors, dentists, counselors, bankers, teachers et al. will be encouraged (read coerced) to spy on their clientele and report “suspicious” activities, which will come to mean virtually everything. The public-private partnerships also offload bloated government programs and responsibilities onto private groups, which must then bear the cost even though taxes were paid to have George do it.

Lenin understood that socialism and a heavily graduated income tax inevitably destroys the middle class because it ALWAYS bears the full brunt of this system, which collapses of its own imponderable weight, leaving the middle class impoverished at the bottom and a small group of rich elites at the top. There just aren’t enough rich people to soak!

I would love to argue myself out of this scenario, especially the potential for civil unrest, but nevertheless, the Battle of Pockets Deep of the War of Middle Class has begun. However did it come to this?

(Hint: Ask your congressman, who has exempted himself from the burdens laid on you and whose richly generous retirement pension is funded and guaranteed, regardless of the fate of the promises he made to you.)


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