Money For Nothing and Your Checks Fact Free

Fairy Godmothers, Leprechauns and the Federal Reserve.

What do they have in common? Obviously, the magical ability to create something out of nothing. In the Fed's case, it's cold hard cash. Don't believe me? Just ask PolitiFact:

Image from PolitiFact.com (Arrow added)

In this case, for once, PolitiFact deals relatively fairly with Kucinich's statement, and provides a decent analysis of what transpired regarding how the Fed created the money and how and to whom it was passed out to. For that reason there's no need to get into the details of their fact check.

The problem with this rating is their acceptance of the liberal dogma that the money is just simply created out of nothing without any tangible cost. PolitiFact even gives a "Hells Yeah!" to the success of the operation-

Eventually, all the money was repaid, with interest. But according to [Walker] Todd, rather than wipe the money off its books, the Federal Reserve chose to use much of it to further stimulate the economy by purchasing Fannie Mae and Freddie Mac mortgage-backed securities on the open market. So that money remained in circulation.

Hooray! It worked so well the magic money created even more money, and then went to support housing programs for the poor! Heck, it makes you wonder why the Fed doesn't just print a gajillion quadzillion dollars every day. Goodbye debt and deficit, helloooo Easy Street.

The reality that PolitiFact is evading is this money actually does come at a cost. It's not created out of nothing, but rather at the expense of the money that's already in circulation. This my friends, is the evil known as inflation.

To individuals, inflation is a lot like getting mugged, but not at the point of a gun in the streets. Inflation is the slow theft of your property by the very people charged with protecting it. Jonathan Hoenig has a simple explanation:

One need not be an economist to understand inflation. If you started writing checks with no money in your account, they'd throw you in jail. Yet when the government does it, at least for the time being, it's called "stimulus" and rewarded with high approval ratings, that is, until the bills come due. And they always do.

...

The law of supply and demand cannot be conned. And as the supply of money increases, prices rise, and the dollars you and other productive members of society have worked so hard to save decrease in value.

PolitiFact doesn't tell its readers that inflation, created by government tomfoolery, hurts those who save and the poor the most. And if there's any doubt about the destructive nature of inflation, Hoenig wrote another article about the chilling yet very real case of Zimbabwe:

In 2008, the Los Angeles Times reported how a beer in the Zimbabwe capital that cost 100 billion Zimbabwe dollars on July 4 had already risen to 150 billion an hour later. A few months after that, Zimbabwe issued the 100 trillion-dollar banknote, then worth about $30 (U.S.).

...

In 1980, the Zimbabwe dollar was actually worth more than the U.S. dollar. What deteriorated over those 29 years wasn't the weather or the water, but the political philosophy. Once known as Africa's breadbasket, government destroyed the currency to the point where even "billionaires" were starving in the street.

Frankly, I haven't spent $150,000,000,000 on beer since I hung out with these guys one morning in Green Bay. I can't imagine paying that for a single can of sudsy goodness.

The bottom line is PolitiFact did a serious disservice to their readers by ignoring the real cost of the Fed's magic money. It's not created out of thin air. It's a tax on income you've already earned and a tax you had no chance to vote on. Inflation devalues the wealth you have labored so hard to produce, its worth destroyed by the whim of political expediency.

History is littered with examples of the evils of inflation. Unlike magic money, inflation is real. Kucinich should be allowed a license for hyperbole. He's a politician and was speaking in a condensed television format. But PolitiFact promotes themselves as the arbiters of truth and likes to squawk about giving readers the whole story. The act of ignoring such a relevant component of this story proves they're inclined to pick and choose which facts they want their readers to know.


After Hours: I actually have a few Zimbabwean hundred trillion dollar bills that I purchased on Jonathan Hoenig's website, along with some other cool things. You should go there and buy stuff.

One Of These Facts Is Not Like The Others

Every day, PolitiFact staffers look for statements that can be checked. We comb through speeches, news stories, press releases, campaign brochures, TV ads, Facebook postings and transcripts of TV and radio interviews. Because we can't possibly check all claims, we select the most newsworthy and significant ones.

-Principles of PolitiFact

Last week my good friends at PolitiFact Ohio reviewed the controversial accusations recently being made by Dennis Kucinich (D-Ohio). His comments have been making the rounds on blogs, news highlights and YouTube, so it's no surprise they felt compelled to weigh in on his outrageous insinuation that none of the programs slated to be cut by the GOP budget "appeared on the GAO's list of government programs at high risk of waste, fraud and abuse."

Huh?



Newsworthy and significant indeed.

This is simply PolitiFact's latest relapse while battling their addiction to selection bias. This time however, their article featuring an obscure statement made by Kucinich regarding the GOP's spending plans has proven especially fortuitous for us fact checker fact checkerers that like to keep tabs on the liberal bias of the supposedly non-partisan truth seekers.

The statement PolitiFact rated was made during a must-see tv House Oversight and Government Reform Committee hearing on Federal Government Spending Oversight. Still awake? Because that's not all! Kucinich made the comments on February 17th, over a month prior to publication of the fact check on March 28th.

So they're a little slow in getting around to this one. "What's the big deal?" you might ask.

The issue is that during the same week this rating was published, Kucinich was making the rounds on news networks suggesting President Obama has committed an impeachable offense by launching military strikes in Libya without Congressional approval.

Here he is on MSNBC, March 22, armed with his trusty pocket Constitution-



You can find more videos of Kucinich making similar claims on Bill O'Reilly and Fox's America's Newsroom amongst others. Here's a few newsworthy and significant quotes-

-"The president needs to explain to the nation why he went outside the Constitution to order this attack."

-"Congress should be called into session immediately to decide whether or not to authorize the United States’ participation in a military strike. If it does not, the action of the President is contrary to U.S. Constitution."

-"It would appear on its face to be an impeachable offense..."

-"He didn't have Congressional authorization, he has gone against the Constitution..."

-"[Obama] knows clearly that he has not complied with the Constitution. And that's a very serious matter because he's using the ultimate authority of a president."

All fun stuff! And every one of those statements meets PolitiFact's criteria for being chosen-



One can only imagine the sky high stack of emails sent to PolitiFact that asked-

"I was watching the House Oversight and Government Reform Committee hearing on Federal Government Spending Oversight and was wondering if it's true that none of the budget items selected to be cut in the GOP plan were identified by the Government Accountability Office as having a high risk of waste, fraud and abuse? Do you mind checking this out? I've heard a lot of people repeating this claim."

The amount of readers asking if Kucinich was being accurate when he very publicly and repeatedly accused the Commander in Chief of violating the United States Constitution by unilaterally engaging in a very unpopular and violent military action, and therefore may be subject to impeachment, was apparently nil.

The truth is that PolitiFact isn't rating the obvious Kucinich blurb because it would force them to confront an issue that reflects poorly on Obama.

To be fair, PolitiFact did acknowledge Obama's Flip-Flop on the Libya issue. As a candidate he said-

"The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation."

They gave him a Full Flop, but even that rating is couched in tu quoque justifications. And the fact is flopping on an issue is an irrelevant and much less serious charge than violating the supreme law of the land. Politicians flop on all kinds of issues all the time. Obama is no different, and by calling him on a flop they're not really "sorting out the truth" of anything. But violating the Constitution and committing an act that rises to the level of impeachment is a serious offense. Why the silence?

What this teachable moment has exposed is that PolitiFact's bias isn't always as obvious as simply picking more statements on the left or the right or rating one group more harshly than the other. Their bias is evident in the specific claims and specific people they choose to rate as well as the things they choose to ignore.

Subtle bias can be far more destructive than obvious campaigning. PolitiFact's dishonesty is especially damaging because of their fraudulent non-partisan, objective, truth seeking monicker. The truth is that PolitiFact is nothing more than cleverly labeled propaganda. The evidence is clear to see once you look at what they aren't checking as much as what they are.