This Fourth of July we look to the blessings of liberty and are reminded of how precious they are.

Two hundred and thirty-three years ago, a group of men, made up of merchants, lawyers, farmers, educators, soldiers, physicians and pastors, risked charges of treason, because they possessed a vision.

They recognized that liberty is a birthright, not something granted by a king. They had the courage of their convictions to pledge their lives, their fortunes and their sacred honor so that a new nation might be born.

Ours is a noble heritage marked by self-sacrifice for causes greater than any one individual. Those in our armed forces who have answered the call to service are often willing to pay the last full measure of devotion so that we can enjoy the freedoms and liberties of our great country.

With that in mind, the House of Representatives took steps to ensure that these courageous men and women have the resources they need to carry out their important missions. Last week the House overwhelmingly passed the National Defense Authorization Act, which offers critical support to our men and women on the front lines.

This bipartisan legislation provides a 3.4% pay increase for military personnel, expands TRICARE coverage, the military health care program, for members of the reserve forces and their families, and includes funding for family housing programs to support and expand the quality housing that our military families deserve.

Additionally, the legislation ensures that our service members have the necessary equipment, weapons and training to complete their missions. The funds authorized by this bill will be used to train U.S. forces, purchase protective gear, repair older equipment, and transport equipment and personnel around the world.

Our soldiers, sailors, airmen, and Marines put their lives on the line to defend our freedom and make America safe. They have made enormous sacrifices even before setting foot on the battlefield, leaving behind loved ones, and for the Guard and reserves, their livelihoods. Our troops have volunteered to defend our country wherever and whenever they are called, and they are executing their mission with professionalism and unparalleled courage.

So I encourage you in the midst of family BBQ's, parades and fireworks to remember and honor our founding fathers and their vision of a great and free nation and to also take a moment to pay tribute to the brave men and women in uniform who continue to serve the cause of freedom today and carry out the vision of our founding fathers. These noble individuals deserve our honor, respect, confidence and above all our continued prayers for their sacrifice here at home and abroad.

From my family to yours, I wish all of you a happy and safe Fourth of July.

Sarah Palin announced that she would be stepping down as Alaska's governor at the end of the month. She intends to transfer authority to Lieutenant Governor Sean Parnell on July 26th. Palin said she made her decision after much "prayer and consideration."

Governor Palin's decision sends a very strong signal that she intends to make a run for the White House in 2012. She will likely be spending her "off time" laying the groundwork for a presidential campaign.

Palin and her family have been under intense media scrutiny since she was selected as John McCain's vice-presidential running mate in August of 2008. A recent Vanity Fair article is the latest round of mud slinging aimed in her direction. 

This should get interesting...

Last week the House of Representatives narrowly passed a massive new energy tax that will have devastating consequences for every single American. Congressman Henry Waxman, Chairman of the House Energy and Commerce Committee and Speaker Nancy Pelosi pushed through the so-called “American Clean Energy and Security” legislation, which implements a cap and trade system or more accurately: cap and tax. The simple truth behind this legislation is that it raises taxes, kills jobs and will lead to more government intrusion and I have been speaking out against this legislation for months. I have a number of publications talking about the seriousness of this issue if you check my website there are far more details available to you.

The cap and tax proposal is really an $846 billion national energy tax that will be paid for by anyone who turns on a light switch, plugs in an appliance, takes a hot shower or drives a car. At a time when folks are struggling to pay the bills, we should not be adding additional costs to their utility bills. A national energy tax will do more harm than good. President Obama even said when referring to Democrats’ cap and tax plan that utility rates would ‘necessarily skyrocket.’ All for the promise of slowing temperature increases by merely hundredths of a single degree Fahrenheit by the year 2050 and not more than two tenths of a degree by the end of the century.

Additionally, moving into a cap and tax system will place the United States economy at a distinct competitive disadvantage because it would place significant additional costs on every American business, farmer, manufacturer, and family. It is estimated that the proposal will raise electricity rates 90%, gas prices 74%, and natural gas prices 55% which will cause the price of every good and service to significantly increase. All while eliminating 1.8 to 7 million jobs that our economy so desperately needs. These jobs will simply move overseas to countries where there are no cap and trade regulations.

The cap and tax legislation raises prices on consumers by hindering the development of traditional energy sources, while limiting the development of renewable energy. Coal provides the majority of the electricity generation in our country, and this bill will effectively stop coal-fired power plants from being built in the U.S. The cleanest way for utilities to control CO2 emissions is to increase the supply of carbon-free nuclear energy although nuclear is effectively ignored by the bill.

In effect this legislation turns off the ability to produce energy from reliable sources in favor of energy technologies that have not proven that they can meet the energy demands of our nation. While I believe it is important for our nation to reevaluate our energy policies, we cannot ignore that America’s economy is intrinsically linked to the availability and affordability of energy. During this economic slow-down we should adopt policies that seek to rebuild our economy and create more jobs. Instead of government mandates and bureaucracy we should focus on policies that support technological advances and consumer choices. The bottom line is that we need energy policies which encourage investment in environmentally sound, cost-effective practices without stifling innovation. Unfortunately, cap and trade legislation would only further cripple our economy.

A coup d'état is usually, at the very least, an unpleasant usurping of a legitimate government. The erosion and dismissal of a constitutional government, however, is worse.  This is exactly what ousted Honduran President Manuel Zelaya was attempting to do in conjunction with Hugo Chavez of Venezuela, Raul & Fidel Castro of Cuba and Daniel Ortega of Nicaragua. 

Honduras is approximately the size of the state of Connecticut with a population of nearly 7 ½ million people.  A constitutional republic with three branches of government - Executive, Legislative and a Supreme Court - the constitution limits the president to one four (4) year term in office.  Honduras has had a stable constitutional government for nearly 30 years.  Before that, military juntas would periodically overthrow one another.  In the last 30 years, however, Honduras has been a key ally in the region for the United States.  During the Reagan Administration, Honduras was pivotal in support of the freedom-fighting Contras in their fight against the Soviet-backed Sandinista regime.  Some have even referred to the country as an “unsinkable aircraft carrier” for the U.S. 

So, who is Manuel Zelaya and what transpired last week that lead to his ouster? Elected in 2005, Mr. Zelaya, a wealthy landowner, comes from the timber and cattle industries of Honduras.  Active in the Liberal Party of Honduras since the 1980s, his alliance with the leftist Hugo Chavez drew sharp criticism from the more conservative opposition party.  In 2007, his second year in office, Zelaya ordered the country’s radio and television stations to run government propaganda for two hours each day.  Zelaya defended this move by stating, "We find ourselves obligated to make this decision to counteract the misinformation of the news media about our 17 months in office."  Later that same year, Zelaya became the first sitting President of Honduras to visit the Communist state of Cuba in 46 years.  Early this year, Zelaya led the battle cry to allow Cuba’s possible return, after a 47 year ban, to the membership of the Organization of American States. 

No one questions Zelaya’s desire to change the constitution.  The only apparent change he sought , however, would allow him to have more time as the head of the government.  Regardless of his aspiration, the ability to change the law of the land does not rest with him as president.  As Mary Anastasia O’Grady points out in The Wall Street Journal (June 30, 2009), “A constituent assembly can only be called through a national referendum approved by its Congress.”  Zelaya ignored that bit of the law and imported ballots from Venezuela and his dear friend Hugo Chavez.  You will recall that Chavez has “reformed” Venezuela’s constitution, ending presidential term-limits and giving him broad and nearly unlimited power over the nation.  It appears that Zelaya was a poor student of Chavez.

The Supreme Court of Honduras deemed Zelaya’s actions unconstitutional and the Congress and country’s Attorney General agreed.  Zelaya’s hubris raised its dirty head once more when he ordered his military chief to immediately distribute the Venezuelan-produced ballots for the referendum.  In a legitimate Honduran election, the military is tasked with the security and distribution of ballots and the military chief, citing the Supreme Court’s ruling that the referendum was unconstitutional, respectfully declined the order.   General Romeo Vasquez Velasquez was immediately fired by Zelaya.  Acting as the constitutional check and balance, the Supreme Court ruled that General Velasquez could not be terminated.  Zelaya then took it upon himself, with the aid of leftist loyalists, to break into the military base where the ballots were housed in order to distribute them for Sunday’s unconstitutional referendum.  That was the tipping point for the other two branches of government.

On Friday, June 26, 2009, a detention order, signed by a Supreme Court Judge, was issued for President Zelaya.  The legal document accused him of treason and abuse of authority.  Early Sunday morning, June 28, 2009, the military carried out the order swiftly and without casualties.  He was taken from his home to a Honduran air base and transported to Costa Rica.  The military would later defend their reasoning to remove him out of the country to prevent violence and to avoid any lingering tensions.

We now have President Obama and his Secretary of State, Hillary Clinton, calling the legal actions of a foreign government “…not legal…” and to “…respect democratic norms (and) the rule of law”.  How ironic that the President of the United States is siding with someone who was doing just the opposite!  In protest, our Administration has ceased all joint military operations.

Manuel  Zelaya has now come to the United States and spoken to the United Nations General Assembly pleading his case as the victim.  Calling the actions of the Honduran government illegal he stated, “I’m going to try to open a dialogue and put things in order.”     Whose order, Mr. President?  Your order?  Hugo Chavez’s order?  Or will it be the rule of law that keeps order in Honduras?

Currently in Honduras, there are large rallies for democracy and in support of the new interim President.  People are back to work and the economy is running as smoothly as the impoverished nation can.  Yet, led by the Obama Administration, nations around the world have turned their backs on Honduras.  The World Bank has stopped funding and Hugo Chavez has threatened to invade Honduras with the Venezuelan military to re-install Zelaya as head of the government. 

Honduras has yearned for a stable government and they have had one for the past 30 years.  Communism has surrounded Honduras, but the people have strived to remain free from the heavy hand of totalitarian rule.  Honduras stood with the United States long before it was an ally against Communist attempts to invade Latin America in the 80s.  The U.S. military trained Honduran troops during World War II.  The brothers of the Greatest Generations were ready to go and fight for freedom, side-by-side with our troops, in a far off land against the tyranny of Hitler.  This fact is dear to this author’s heart, as my father was one of those trained and ready to defend freedom. 

As our U.S. Constitution works, so does the Constitution of Honduras.  We must not abandon our friends in Central America.  We have to stand firm with their resolve to maintain peace and liberty as outside forces attempt to stifle the people of Honduras.

After nine months of explosive monetary and fiscal stimulus, you’d think economic recovery would be upon us. But the June jobs report tells a much different story.

Non-farm payrolls fell by 467,000 as the unemployment rate edged up to 9.5 percent. This isn’t nearly as bad as the 700,000 monthly job losses of last winter, but it’s still a rough number. Equally disappointing is the household survey -- often a key turning-point signal since it captures the health of small businesses -- which has dropped 811,000 in the past two months.

Donald Marron, a former senior economist with the Council of Economic Advisors and the CBO, calls it “a grim jobs report.” Marron, digging deep into the Labor Department Statistics, says the continued decline in hours worked by private-sector employees, now 7 percent over the past year, is especially troublesome. He writes, “The economy is thus losing jobs and, for the jobs that remain, is losing hours worked. That doublewhammy
is bad news for the economy.”

I would add that along with manufacturing and construction, the service sector continues to shed jobs, with a 244,000 drop in June. Inside that category, the important professional-and-business-services sector lost 118,000 jobs. The wage data is equally disconcerting. Over the past three months, average hourly earnings barely rose at 0.7 percent annually.

There are still some bright spots that strongly suggest the recession has bottomed. The ISM manufacturing report for June held a number of positives. Auto sales, retail sales, and home sales look to be bottoming. And May factory orders climbed as inventories crashed. So businesses, including automakers, may be increasing production in the months ahead.
 
In fact, even while second-quarter real GDP is expected to fall by 1 to 2 percent annually -- much better than the 6 percent declines of recent quarters -- the third quarter could show a small positive GDP score. Much smaller GDP subtraction from inventories, housing, and business cap-ex bodes statistically well for growth.

But there won’t be a real recovery until jobs start rising. The unemployment rate is a lagging indicator. But jobs are the most important coincident indicator of the economy. Until they turn around, nobody should expect anything resembling real economic growth.
 
Leading indicators -- especially monetary, financial, and credit-market signals -- are flashing “go” for future growth. The Fed has pumped roughly $1 trillion into the economy since last August. Key money-supply measures are growing at 10 to 15 percent annually. Short-term rates are near zero. The Treasury curve is steeply upward-sloping. Corporate-bond-market spreads have declined significantly. And commodity prices are off their lows. This is all good.

But for all the Fed’s stimulus, which has had a salutary effect on the banking crisis, the lags are long and variable. And as former Dallas Fed head Robert McTeer has written, much of the central bank’s balance-sheet expansion is being hoarded by commercial banks, with banks holding about $800 billion more than what they’re required to hold. Until these excess reserves come way down, the impact of the Fed’s monetary stimulus will be more muted than has traditionally been the case in Milton Freidman’s monetarist model.
 
And as Washington economist Bruce Bartlett has written, Obama’s $800 billion fiscal-stimulus package has yet to stimulate. Bartlett notes that 60 percent of the stimulus package goes to transfer payments and tax credits with no incentive effects. Meanwhile, the rest of the package, aimed at public works that might produce growth, is spending out at a snail’s pace.

As an old-fashioned supply-side guy who is out of date with contemporary Washington policies, I would add that Obama’s biggest mistake was not cutting marginal tax rates for individuals, businesses, and investors. Instead of the fiscal profligacy that is driving spending and borrowing sky-high, lower tax rates with true incentive-reward effects would have reignited the animal spirits that are sagging so badly.
 
But Obama’s temporary tax credits and social spending offer no growth effects. At the same time, the government’s fiscal nymphomania has scared everyone into thinking the U.S. is going bankrupt. The president himself has said there’s no money left. It’s scary enough to keep your savings under the mattress.
 
And if you add all the talk of nationalizing health care and energy (cap-and-trade) to the rest of Bailout Nation, it’s not hard to understand why people are shying from risk.

Stocks are the single-best barometer of our nation’s future economic health, and the stock market began to rise in early March. But over the past month, with all these new big-government tax-and-regulatory threats, the stock rally has stalled. And the June jobs report caused an immediate 2 percent sell-off for equities.

I do the best I can to be optimistic about our nation’s future. But realistically, the current picture is not particularly good.
 

Readings:

His Brother's Keeper (The Wall Street Journal)

Providing For The Common Defense Uncommon In White House (The Heritage Foundation)

Krugman: Opponents Of Climate Change Bill Are Traitors To Planet Earth (American Thinker)

Krauthammer: Obama Is Wrong (Great Video 1:41 Minutes)

Taxes Or Growth? (Investor's Business Daily)

The Censorious Left's Global Warming Denier Deniers (David Limbaugh, Nationally Syndicated Columnist)

Saving Democracy In The Honduran 'Coup' (American Thinker)

Health-Care Policy In Wonderland (Thomas Sowell, Nationally Syndicated Columnist)

Would The Founders Remake America? (Human Events)

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