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In Defense of the 1%(Peter Schiff takes on OWSers)
Safe haven /Europacific Capital ^ | Oct 28, 2011 | Peter Schiff

Posted on 10/28/2011 6:43:38 PM PDT by sickoflibs

Last week, I spent the afternoon visiting the Occupy Wall Street demonstrations in lower Manhattan. I brought a film crew and a sign that said "I Am The 1%, Let's Talk." The purpose was to understand what was motivating these protesters and try to educate them about what caused the financial crisis. I went down there with the feeling that much of their anger was justified, but broadly misdirected.

Indeed, there were plenty of heated discussions. I did little more than ask how much of my earnings I should be allowed to keep. In return, I was called an idiot, a fool, heartless, and selfish. But when we started talking about the issues, it seemed like the protesters fell into two categories: those who generally understood and agreed that Washington caused this mess, and those who could only recite Marxist talking points. It was the latter who usually resorted to calling names once I pointed out the hypocrisy of their positions. They might shout, "the banks have taken over the regulatory agencies, so we need more regulations!" Obviously, this is paradoxical. If they're blaming government for causing this problem, why would they suggest more government as the solution?

I think some of the leadership of Occupy Wall Street comes from this kind of radical Marxist background - and perhaps they're smart to intentionally keep quiet about their goals. Because the vast majority of protesters I met did believe in capitalism - they're just tired of being screwed over by crony capitalism. Noted school-choice activist Michael Strong calls it "crapitalism," and that's what it is. It's a rotten deal for everyone, and they know it.

The problem is that many of these people are under the mistaken impression that Wall Street banks are to blame for this state of affairs. That's like blaming the dogs for getting into the trashcan. Sure, it's bad behavior, but the ultimate responsibility lies with the authority figures - in this case, Washington. After all, it's not the New York metro area that has benefitted the most from this crisis. Rather, the counties around DC are now ranking as the wealthiest in the country. And while wealthy New Yorkers have historically made their living providing essential financial services to the global economy, Washington has always made its living one way: at our expense.

That's why I have trouble sympathizing with people calling themselves the "99%", implying they stand in opposition to wealth no matter how it's earned. I own a brokerage firm, but I didn't receive any bailout money. In fact, I have to work twice as hard to compete with bigger financial firms that are propped up by the US government. The least I deserve is the ability to keep what I earn.

Remember, if the IRS weren't taking so much from the wealthy who have earned it, there would be that much less for Wall Street bailouts. A hundred years ago, major banks had no business lobbying Washington, because compared to their free-market earnings, the government simply didn't have that much money to dole.

The other tool the government didn't have to use against us back then was the Federal Reserve. Even if we drastically reduce taxes, the Fed might decide to do what it has been doing: printing money to finance government profligacy. This acts as a secret tax on everyone with a bank account, and is critical in transferring wealth from hardworking Americans to politically connected elites. So, really, the protests shouldn't be on Wall Street but around the corner on the ironically named Liberty Street, site of the New York Federal Reserve Bank - the heart of this dishonest system.

Until these twin sources of financial oppression are brought under control, the average American's standard of living will most likely continue to fall, more jobs will leave for increasingly capitalist emerging markets, and more young kids will be left with nothing better to do than block traffic.

One common refrain I heard at the protests was that our problems result from the rich not paying enough taxes. Most feel that economy was better when marginal tax rates were higher, and that lower rates are a cause of financial decline. Forget about the faulty logic of this assumption, it ignores two key points. First, while it's true that marginal tax rates were much higher after World War II, the tax code also used to contain many allowances and exceptions, such that very few people actually paid the nominal rate. Second, prior to 1913, the rich paid no income taxes at all; yet, lower- and middle-class living standards rose much faster in the 19th century than in the 20th!

Overall, I think there was a real lack of understanding of basic economic principles among the Occupiers. Protesters thought that the rich owed a duty to share their wealth with society. However, they failed to see that in true capitalism, the rich can only acquire their wealth by serving others. No one succeeds in a vacuum. Consider the late Steve Jobs. He became a billionaire by sharing his wealth. Think about the millions of people around the world whose lives are vastly better because of Apple products. Think of all the Apple employees who benefit from high-paying jobs he created. Think about all those investors who made money from Apple stock. Steve Jobs shared his wealth with the entire planet before he ever paid one dime in taxes. In fact, any money Steve Jobs did pay in taxes likely prevented him from creating and sharing even more wealth. Had Jobs tried to hoard his wealth instead, he never would have acquired it in the first place. Of course, the idea that Occupy Wall Street protesters have a right to share directly in the private profits earned by others is immoral. The protesters were correct in being outraged by having to share in Wall Street's losses. But if they do not want to share the losses, they have no right to demand a share of the profits! One protester equated the low wages paid by Wal-Mart to slavery, yet thought the government should take 70% of my income. In the case of Wal-Mart, employees are free to choose other jobs. What choice would I have when faced with a 70% income tax? They call it "slavery" when Wal-Mart offers workers better opportunities than they could find elsewhere, and "justice" when government enslaves me by forcibly taking 70% of the fruits of my labor. Another protester challenged my claim that businesses create jobs by stating that consumers create the jobs by spending money. When I asked him where the consumers got their money, he replied "from their jobs," which actually proved my point. Without jobs, consumers have no purchasing power. And without production, there is nothing to purchase.

I'm calling for these protesters to educate themselves on the causes of the current financial decline and not to waste their time attacking the wrong target. They have every right to be angry, but also an obligation to be part of the solution. Yes, I am the 1% - but I've earned every penny. Instead of trying to take my wealth away, I hope they learn from my example.


TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: economy; ows; schiff; schifflist
The Peter Schiff/Austrian Economics ping. (Washington Bankrupting our Nation by Spending your past, present and future money!)

If you realize both parties in Washington think that our money is theirs and you trust them to do the wrong thing, this list is for you.

If you think there is a Santa Claus that has some magic easy cure for the economy; someone who is going to get elected in Washington and fix everything just by cutting your taxes, investing (more government spending) a few trillion more we don't have and will never have, and who will just command some countries to lower their prices and others to raise their prices all to suit your best interests, then this list is not for you.

You can read past posts by clicking on : schifflist , I try to tag all relevant threads with the keyword : schifflist.

Ping list pinged by sickoflibs.

To join the ping list: FReepmail sickoflibs with the subject line 'add Schifflist'.

(Stop getting pings by sending the subject line 'drop Schifflist'.)

The Austrian Economics School’s Commandments plus :From : link

1) You cannot spend your way out of a recession
2) You cannot regulate the economy into oblivion and expect it to function
3) You cannot tax people and businesses to the point of near slavery and expect them to keep producing
4) You cannot create an abundance of money out of thin air without making all that paper worthless
5) The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever
6) You cannot live beyond your means indefinitely
7) The economy must actually produce something others are willing to buy
8) Every government bureaucrat should keep the following motto in mind when attempting to influence the economy: “First, do no harm!”
9) Central bank-supported fractional reserve banking is an economically distorting, ethically questionable activity. In particular, no government should ever do anything to save any bank from the full consequences of a bank run, no matter what the short-term consequences.
10) Gold is God’s money.

Add mine:

1) Businesses don't hire workers just because of demand for products or services, they hire because it makes them money. Sorry to have to state the obvious.
2) Government spending without taxing is still redistribution
3) Taking one man's money and giving it to another is not a job.
4) Paul Krugman and Bernake have been wrong about everything, as well as the other best and brightest Keynesian's who have been fixing our economy for over a decade.
5) Republicans in the minority (esp out of the White House) act like Republicans, in the majority they act like Democrats .

Equity bubble rules:

1)If something goes up too fast, it is going down faster,
2) By the time it looks like everybody is getting rich, it’s too late, stay out!
3) To get rich you have to get in early start of recovery and get out at the first really 'bad' news, and ignore the experts that claim that they will stop the next crash(our buddy Bernake.).
4) Don't invest money you will probably need, or worse money you don't really have.

1 posted on 10/28/2011 6:43:40 PM PDT by sickoflibs
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To: sickoflibs

“I did little more than ask how much of my earnings I should be allowed to keep. In return, I was called an idiot, a fool, heartless, and selfish.”

Shoulda saved the trip and come here and said you thought a flat tax was the most equitable. Same result, and you wouldn’t have to leave your armchair.


2 posted on 10/28/2011 6:47:09 PM PDT by jessduntno ("They say the world has become too complex for simple answers... they are wrong." - RR)
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To: LMAO; DeaconBenjamin; April Lexington; murphE; RipSawyer; Tunehead54; preacher; 1234; coloradan; ...
The Peter Schiff/Austrian Economics ping. (Washington Bankrupting our Nation by Spending your past, present and future money!)
3 posted on 10/28/2011 6:50:03 PM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: sickoflibs
5) Republicans in the minority (esp out of the White House) act like Republicans, in the majority they act like Democrats.

Truer words never spoken...

4 posted on 10/28/2011 6:54:02 PM PDT by Bushbacker1 (I miss President Bush greatly! Palin in 2012! 2012 - The End Of An Error! (Oathkeeper))
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To: Bushbacker1
RE :”5) Republicans in the minority (esp out of the White House) act like Republicans, in the majority they act like Democrats.......
Truer words never spoken.

Thanks
I stole that one from Peter in early 2009. It was in a video or editorial I posted of him here. I really liked it and it ruffled a few feathers then, now it's like a mantra here.

5 posted on 10/28/2011 7:02:13 PM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: sickoflibs

I’m the 1%, I’m the 99% - excuse me, but it seems like the singular goal of the ‘99%’ is to drag down the 1% so that they’re earning just as little as the rest to provide for the bloodsucking 5% who never intend to ever lift themselves off of government dependence. A better question should be: How hard should a few people work so that so many can simply sit on their rumps and do nothing?


6 posted on 10/28/2011 7:04:54 PM PDT by kingu (Everything starts with slashing the size and scope of the federal government.)
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To: jessduntno
RE :"Shoulda saved the trip and come here and said you thought a flat tax was the most equitable. Same result, and you wouldn’t have to leave your armchair."

I hope you are not talking about Perry's not-so-flat 'flat' tax.

I prefer a consumption tax and I liked Cain's 9-9-9 plan except for the elimination of the payroll deduction that Schiff pointed out last week.

7 posted on 10/28/2011 7:09:48 PM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: jessduntno

No, I think the guy who went out and engaged the OWS did more good.


8 posted on 10/28/2011 7:19:59 PM PDT by ngat
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To: ngat

No, I think the guy who went out and engaged the OWS did more good.”

Heh heh. And had better feedback.


9 posted on 10/28/2011 7:24:35 PM PDT by jessduntno ("They say the world has become too complex for simple answers... they are wrong." - RR)
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To: ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; rabscuttle385; mkjessup; Gilbo_3; ...
It's entertaining to see Schiff jump in looking for an argument:

Full 'Schiff takes on OWS Marxists' video :

Peter Schiff Speaks for 1 Percent at Occupy Wall Street (video)

10 posted on 10/28/2011 7:45:19 PM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: sickoflibs

Schiff did a great job!


11 posted on 10/28/2011 8:00:11 PM PDT by ConjunctionJunction
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To: ConjunctionJunction
RE :”Schiff did a great job!

One big reason that I started posting Schiff late 2008 was he has a gift of making clear easy to understand points defending capitalism, and he making it entertaining too.

Compare him within Ron Paul who also believes in Austrian economics, Paul is no communicator and is many times counterproductive when he speaks.

12 posted on 10/28/2011 8:13:38 PM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: sickoflibs

Of course Schiff is correct. But what good does it do to argue with Idiots? 90 something percent of these people are economic ignoramuses. Most of these people will show up at any type of protest. They are part of the “rent-a-mob” crowd that’s prevalent in NY, SF, LA & a lot of other places. They are incapable of logic & reason, & I think Peter Schiff is wasting his time trying to reason with them. But this video is good because it reveals just what types of idiots are in this OWS movement.


13 posted on 10/28/2011 8:20:13 PM PDT by truthguy (Good intentions are not enough.)
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To: truthguy; Marine_Uncle; ConjunctionJunction; jessduntno; ngat; ding_dong_daddy_from_dumas; ...
RE:"Of course Schiff is correct. But what good does it do to argue with Idiots?"

Because he does it on camera and shows millions of people around the world that the OWS protestors are idiots.

14 posted on 10/28/2011 9:33:28 PM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: sickoflibs

Exactly. He might also have educated one or two of them, and that’s one or two more than before.


15 posted on 10/28/2011 9:37:11 PM PDT by ConjunctionJunction
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To: sickoflibs

I can’t sit through this.....listening to these morons : )


16 posted on 10/28/2011 9:39:08 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: sickoflibs

The problem with 9-9-9 is that the politicians are not going to keep those numbers at 9 for long. Herman is adding a new tax, and inevitably, they will all increase. Reagan fell for the Democrats’ promises when he accepted the elimination various deductions in exchange for lower rates. Well, didn’t stay lower, and the deductions were not restored.


17 posted on 10/28/2011 9:50:34 PM PDT by Pining_4_TX ( The state is the great fiction by which everybody seeks to live at the expense of everybody else. ~)
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To: sickoflibs
RE: "Because he does it on camera and shows millions of people around the world that the OWS protestors are idiots."
It really is sad. Many of them mean well. Some most likely have been employed for years in various job descriptions. Their not all total idiots. Just taken in by the last ten or so years of drastic downturn in the economy that lead to so many loses of jobs etc..
Those that are not idiots and really stupid left wing adherents most likely will start to leave the movement. They will wise up. Go back to their jobs etc.. Or if UN-employed perhaps not give up hope to find useful employment.
Hopefully in their reflections of the movement they may just start to question the idiotic Federal Government moves since 2008 and upward, in trying to play real job producer in a meaningful capitalistic way.
In whatever case. Soon. The wrath of winter shall decend on much of the east coast, Oregon and Washington. Perhaps the movements in Sunny Cal may continue, but I have a feeling these poor folks are in for quite a winter. And if they last through the end of January 2013 when the Republicans take back the White House, just what will be their next objective. Things are going to change. Who knows what will happen to various ACORN and other organizations in the near future. Let them clump around on their snow shoes between cold tents this winter and give it some thought.
18 posted on 10/28/2011 10:47:42 PM PDT by Marine_Uncle (Honor must be earned.)
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Comment #19 Removed by Moderator

To: sickoflibs

bflr


20 posted on 10/28/2011 10:50:40 PM PDT by Captain Beyond (The Hammer of the gods! (Just a cool line from a Led Zep song))
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To: Pining_4_TX; sickoflibs; All

” The problem with 9-9-9 is that the politicians are not going to keep those numbers at 9 for long. Herman is adding a new tax, and inevitably, they will all increase. Reagan fell for the Democrats’ promises when he accepted the elimination various deductions in exchange for lower rates. Well, didn’t stay lower, and the deductions were not restored. “

TEXAS WINS THE KEWPIE DOLL !

Reagan cut the top individual tax rate to 28%. The scumbag politicians and libs eventually raised it to 39%. Cutting taxes at any given time does not preclude the future criminal politicians from raising them back!


21 posted on 10/29/2011 4:04:36 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: Pining_4_TX
RE :”The problem with 9-9-9 is that the politicians are not going to keep those numbers at 9 for long. Herman is adding a new tax, and inevitably, they will all increase

That's an easy to debunk argument.

Obama still has not successfully raised the income tax, instead he extended Bush tax cuts. He had two years with the supermajority to do it where Republicans couldnt stop it.

The federal gas tax has not been raised in 18 years since Clinton did 1993.

Democrats did start taxing lots of new things never taxed before in Obama-care.

Democrats will still want the same taxes they do no raised regardless of any new tax replacing the old. So the above is NOT a valid reason to improve our system taxing consumption instead of production.

22 posted on 10/29/2011 11:35:06 AM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: kingu

The use of the 99/1 is to begin the tactic of isolating groups of people and making them feel pitted against an angry mob.

The implied message is, “We have you outnumbered and we have you surrounded. Come out with your hands up and your pockets empty or we will come in and take whatever we want.”

Expect to see the same tactic played out in different “mob scenarios.” The racial mob will be sure to be employed next year if it looks like Obammie the Commie will not win.

Other mob scenarios will include the union mob, the homo mob, and the multi-culti mob.


23 posted on 10/29/2011 11:38:41 AM PDT by Ghost of Philip Marlowe (Prepare for survival. (Karl Denninger has jumped the shark. Do not visit his blog.))
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I’ve been thinking for a while that we should change the meme of what we complain about in paying taxes. Many of us in the 53% who do pay taxes actually have 9-5 40 hour a week jobs. Many of us own businesses, are on salary, or work a lot of over time or have more than one job...so I would guess that a very large percentage of us work well over 40 hours a week. Especially for the business owners, and salary people, who get paid basically the same no matter how many hours are worked, which means there per hour payment becomes less and less the more hours they work.

The point is, we should not be complaining necessarily about the number of dollars we have to contribute to welfare moms squirting out babies, we should complain about how much of our time these people think they have a right to.

Let’s say 20% of your income goes to support these people. If you work 40 hours, that is 8 hours (or one full work day of your time). If you work 80 hours, then that makes 16 hours of your time. And so on. So the question is if I work 80 hours in a week, why does somebody feel they have a right to 16 hours (or two “Normal” work days)? Otherwise stated, 9.5% of all of my time during an entire week (including sleeping), is for the benefit of enormous women with obnoxious children to fill up the shopping carts with steaks and junk food. And since I am on salary, the more hours I work, the higher percentage of my time goes to freeloaders.

So the question should be how much of my time do other people think they have a right to.


24 posted on 10/29/2011 11:41:39 AM PDT by dsrtsage (One half of all people have below average IQ...In the US the number is 54%)
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To: stephenjohnbanker; Pining_4_TX
RE :” The problem with 9-9-9 is that the politicians are not going to keep those numbers at 9 for long. Herman is adding a new tax, and inevitably, they will all increase. Reagan fell for the Democrats’ promises when he accepted the elimination various deductions in exchange for lower rates. Well, didn’t stay lower, and the deductions were not restored. “ TEXAS WINS THE KEWPIE DOLL !

Obama still has not successfully raised the income tax, instead he extended Bush tax cuts. He had two years with the super majority to do it where Republicans couldn't stop it.

The federal gas tax has not been raised in 18 years since Clinton did 1993.

Democrats did start taxing lots of new things never taxed before in Obama-care.

Democrats will still want the same taxes they do no raised regardless of any new tax replacing the old. So the above is NOT a valid reason to improve our system taxing consumption instead of production.

Democrats hate the idea of a sales tax replacing the income tax because it's not progressive even if it is a more productive tax. It is interesting to see Republicans joining Democrats against it.

25 posted on 10/29/2011 11:43:37 AM PDT by sickoflibs (Cain :"My parents didn't raise me to beg the government for other peoples money")
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To: sickoflibs
RE:"Of course Schiff is correct. But what good does it do to argue with Idiots?"

Because he does it on camera and shows millions of people around the world that the OWS protesters are idiots.

Yes, this is exactly what I said in the last sentence:

But this video is good because it reveals just what types of idiots are in this OWS movement.

Note the use of question mark. This is a rhetorical question to which I answered in the next few sentences. This video was meant to show the viewer just what type of degenerates are in the OWS movement. Schiff is a bright guy and he knows that trying to change the minds (if these people even have minds) of these protesters is an exercise in futility (to use a worn out expression). So I think we are of the same mind on this.
26 posted on 10/29/2011 12:32:45 PM PDT by truthguy (Good intentions are not enough.)
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To: sickoflibs; stephenjohnbanker; DoughtyOne; rabscuttle385; mkjessup; Gilbo_3

Schiff and Daniel Hannan (conservative English parliament member and author) discuss the European and USA debt on Huckabee (fox news) this weekend. We have the TV muted because my wife is asleep now but it looks pretty good. It shows Schiff in the midst of the OWS hooligans too. Repeats Sunday night.


27 posted on 10/30/2011 12:33:01 AM PDT by ding_dong_daddy_from_dumas (Budget sins can be fixed. Amnesty is irreversible.)
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To: ding_dong_daddy_from_dumas

I’ll check out Daniel’s writings, thanks.


28 posted on 10/30/2011 4:57:13 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker
I can heartily recommend this one.....

The New Road to Serfdom: A Letter of Warning to America [Paperback] Daniel Hannan (Author)

29 posted on 10/30/2011 6:07:41 AM PDT by mewzilla (Forget a third party. We need a second one.)
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To: mewzilla

I will read it, and thanks much.


30 posted on 10/30/2011 6:21:05 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker; sickoflibs; DoughtyOne; rabscuttle385; mkjessup; Gilbo_3
When he started getting media attention because of the following speech in 2009, he mocked himself by saying he couldn't think of a more boring topic than a speech to the European Parliament.

Youtube link: "You have run out of our money!"

31 posted on 10/30/2011 7:23:26 AM PDT by ding_dong_daddy_from_dumas (Budget sins can be fixed. Amnesty is irreversible.)
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