History on July 11, yyyy
Today is Wednesday, July 11, the 193rd day of 2012. There are 173 days left in the year.
Thought for Today:
“Those people who think only of themselves, are hopelessly uneducated. They are not educated, no matter how instructed they may be.“—Nicholas Murray Butler, American educator (1862-1947).
Today’s Highlight in History:
On July 11, 1937, American composer and pianist George Gershwin, whose works included “Rhapsody in Blue,“ “Concerto in F,“ “An American in Paris,“ and “Porgy and Bess,“ died at a Los Angeles hospital of a brain tumor; he was 38.
On this date:
In 1767, John Quincy Adams, the sixth president of the United States, was born in Braintree, Mass.
In 1798, the U.S. Marine Corps was formally re-established by a congressional act that also created the U.S. Marine Band.
In 1804, Vice President Aaron Burr mortally wounded former Treasury Secretary Alexander Hamilton during a pistol duel in Weehawken, N.J.
In 1859, Big Ben, the great bell inside the famous London clock tower, chimed for the first time.
In 1922, the Hollywood Bowl officially opened with a program called “Symphonies Under the Stars” with Alfred Hertz conducting the Los Angeles Philharmonic.
In 1934, President Franklin D. Roosevelt became the first incumbent chief executive to travel through the Panama Canal.
In 1952, the Republican national convention, meeting in Chicago, nominated Dwight D. Eisenhower for president and Richard M. Nixon for vice president.
In 1960, the novel “To Kill a Mockingbird” by Harper Lee was first published by J.B. Lippincott and Co.
In 1962, American diver Fred Baldasare completed an underwater crossing of the English Channel using scuba gear, arriving in Sandwich Bay 18 hours after leaving Calais.
In 1972, the World Chess Championship opened as grandmasters Bobby Fischer of the United States and defending champion Boris Spassky of the Soviet Union began play in Reykjavik, Iceland. (Fischer won after 21 games.)
In 1979, the abandoned U.S. space station Skylab made a spectacular return to Earth, burning up in the atmosphere and showering debris over the Indian Ocean and Australia.
In 1989, actor and director Laurence Olivier died in Steyning, West Sussex, England, at age 82.
Ten years ago:
Lawmakers balked at moving the Coast Guard and the Federal Emergency Management Agency into a new Homeland Security Department despite pleas from senior Cabinet officials to stick to President George W. Bush’s blueprint. (Both agencies did end up being included in the new department.)
Five years ago:
Lady Bird Johnson, the former first lady who’d championed conservation and worked tenaciously for the political career of her husband, President Lyndon Johnson, died in Austin, Texas, at age 94.
Pakistani army commandos captured the Red Mosque from militants following a 35-hour battle.
One year ago:
Rupert Murdoch’s media empire was besieged by accusations that two more of his British newspapers engaged in hacking, deception and privacy violations.
Eight-year-old Leiby Kletzky (LY’-bee KLEHT’-skee) went missing while walking home from religious day camp in Brooklyn, N.Y. (his dismembered remains were discovered two days later; a suspect, Levin Aron, has been charged with kidnapping and murder).
So Yeon Ryu (soh yahn yoo) won the U.S. Women’s Open, defeating fellow South Korean Hee Kyung Seo (soh) by three shots in a three-hole playoff.
Actor Tab Hunter is 81
Actress Susan Seaforth Hayes is 69
Singer Jeff Hanna (Nitty Gritty Dirt Band) is 65
Ventriloquist-actor Jay Johnson is 63
Actor Bruce McGill is 62
Singer Bonnie Pointer is 62
Actor Stephen Lang is 60
Actress Mindy Sterling is 59
Actress Sela Ward is 56
Reggae singer Michael Rose (Black Uhuru) is 55
Singer Peter Murphy is 55
Actor Mark Lester is 54
Jazz musician Kirk Whalum is 54
Singer Suzanne Vega is 53
Rock guitarist Richie Sambora (Bon Jovi) is 53
Actress Lisa Rinna is 49
Rock musician Scott Shriner (Weezer) is 47
Actress Debbe (correct) Dunning is 46
Actor Gred Grunberg is 46
Wildlife expert Jeff Corwin is 45
Actor Justin Chambers is 42
Actress Leisha Hailey is 41
Actor Michael Rosenbaum is 40
Pop-rock singer Andrew Bird is 39
Country singer Scotty Emerick is 39
Rapper Lil’ Kim is 37
Rock singer Ben Gibbard is 36
Rapper Lil’ Zane is 30
Pop-jazz singer-musician Peter Cincotti is 29
Actor David Henrie is 23
Actor Connor Paolo is 22
WV Lottery - 07.10.12
03-11-19-23-36 Mega Ball: 21 Megaplier: x 4
State-Wide Support Spreads For Gilmer County’s Battle With Dr. Marple’s Run Amuck DOE
Gilmer County, citizens throughout West Virginia support your struggle against the politically motivated surprise seizure of your schools by the DOE.
Your supporters know that the DOE’s unprovoked attack set a precedent of not giving your elected Board of Education time to address alleged problems within a prescribed time prior to a seizure.
The outcome of your struggle is critical with important implications for what will be done to get the State’s failed K-12 education system off its 48th place among the 50 states.
Unfortunately, the Charleston Gazette and other major hard copy newspapers have avoided stories about Gilmer County’s school system plight.
That pattern of neglect is being mitigated electronically with use of cell phones, e-mail, iPADs, Droids, Face Book, and iPhones.
Part of the State-wide citizen backed electronic offensive involves establishment of information dispensing nodes in various counties with an expanding network.
The message includes exposure of roles of Senator Joe Manchin’s family in contributing to the DOE’s dictatorial actions.
While governor, Senator Manchin demonstrated nepotism by appointing his wife Gayle to a $65,000 a year position with the State Board of Education that oversees the DOE.
She vehemently supported the seizure of your schools as proven by her videotaped attack against Gilmer County when the DOE intervened.
Her display of disdain for Gilmer County will be posted on U-Tube soon for all West Virginians to observe. Also, citizens will be reminded of WVU’s free degree scandal involving Senator Manchin’s daughter while he was Governor.
In addition to using electronic media as a force multiplier to increase the public’s demand for revamping Dr. Marple’s failed DOE, West Virginians are participating in forums in eight cities and the gatherings are sponsored by West Virginia’s Vision Shared organization.
The purpose of the forums is to obtain suggestions from citizens for critically needed changes to reverse the DOE’s failed performance including its arbitrary practices in seizing and administering county school systems.
Governor Earl Ray Tomblin deserves respect from West Virginians for his courageous leadership in initiating the forums.
Negative publicity regarding the DOE’s ineptness in managing the State’s K-12 school system has caused more unwanted national ridicule to be focused on us, and much worse, the severe disaster has denied West Virginia’s children quality educations to enable them to compete better in today’s world economy.
The information blitz, designed to forge badly needed change with how the DOE operates, will empower voters to make wiser decisions at the polls in November.
Overall, the grass roots effort is a 21st century version of the axiom that the pen is mightier than the sword.
Instead of hard copy print inking out messages to West Virginians, electrons are getting that task achieved speedily with laser-like targeting.
Similar to the Revolutionary War naval hero, John Paul Jones, we have just begun to fight and it will continue with bulldog tenacity to achieve badly needed K-12 education reforms in Gilmer County and throughout our State.
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Mon Power: Many Homes in Gilmer and Area Counties Still without Power
As of Monday morning, there were 27,000 homes and businesses, serviced through Mon Power, without electric service.
Some of those outages were new additions from storms on Sunday as well.
First Energy Spokesperson Patti Michael said their goal was finish most of the restoration work by the end of the day Monday.
First Energy is the parent company of Mon Power.
However, she says, “What we’re finding is that, as we’re moving into these hard hit areas, we’re finding additional restoration needs and additional damage that has occurred,“ Michael said.
More than half of the homes and businesses in West Virginia lost power in the June 29, 2012 Derecho.
Mon Power Customers still without Power on Tuesday, 07.10.12 - 2:49 AM (11 Days after the storm):
Doddridge County Grand Jury Indictments – July 2012
The Doddridge County grand jury has returned indictments against nine people in the July 2012 term:
• James America, age 55 of West Union, WV was indicted on one count of third or subsequent offense driving while license suspended or revoked for driving under the influence of alcohol.
• Tonalea Lahneen Chapman, age 52 of Salem, WV was indicted on one count of transporting a controlled substance onto the grounds of the North Central Regional Jail.
• Justin Travis Flesher, age 23 of West Union, WV was indicted on one count of breaking and entering, one count of conspiracy to commit breaking and entering and one count of petit larceny.
• Shane Michael Gray, age 38 of Greenwood, WV was indicted on one count of escape.
• Ryan P. Lavoie, age 27 of Salem, WV was indicted on two counts of delivery of a controlled substance.
• Thomas Jay Smith, age 41 of West Union, WV was indicted on one count of accessory after the fact.
• Amy Stickle, age 34 of Clarksburg, WV was indicted on one count of transporting a controlled substance onto the grounds of the North Central Regional Jail.
• James Blair Strahin, Jr. , age 42 of Salem, WV was indicted on one count of burglary and one count of breaking and entering.
• Alicia Williams, age 29 of Salem, WV was indicted on one count of entering without breaking and one count of petit larceny.
New Research Shows No Marcellus Shale Water Pollution, but Suggests Areas for Future Concern
New research on Marcellus Shale gas drilling in Pennsylvania may only add to the debate over whether the industry poses long-term threats to drinking water.
A paper published on Monday by Duke University researchers found that gas drilling in northeastern Pennsylvania did not contaminate nearby drinking water wells with salty brinewater, which is a byproduct of the drilling.
But the researchers say that deep naturally-occurring pathways can bring the brine up into shallow aquifers, and that could potentially bring drilling fluids to the surface in some areas.
Environmentalists have claimed that gas drilling can pollute drinking water aquifers. The industry and many state and federal officials say the practice is safe when done properly, but there have been cases where faulty wells caused pollution.
Gilmer County Commission Meeting - 07.10.12
GILMER COUNTY COMMISSION
Agenda for Regular Meeting
Tuesday, July 10, 2012 @ 9:00 AM
Location: Gilmer County Commission Room, 10 Howard Street, Glenville, WV
Call meeting to order
Pledge of Allegiance to the U.S. Flag
Discussion and/or action on:
• 09:15 AM Clark Ramsey – FEMA Land
• 09:30 AM Angel Ball – Human Resources
• 09:45 AM John Utter – Lignetics
• 10:00 AM Norma Hurley – Commission Policy
Discussion and/or action on:
• Exonerations and/or Consolidations
• Approve estate qualifications and estate settlements
• Budget Revisions
• Control Report
• Board Appointments and/or Resignations
• Approve invoices for payment
• Approval of the minutes of the County Commission
Discussion and/or action on:
• Courthouse Handicap Parking Space
• Building Commission Oath
• Courthouse ATM Bids
• Board of Education/Annex – Central Air Unit
• Concreting Front of Courthouse
• Revoking Authority of Estate
• Flood Plain Settlement
• Wifi for County Clerk Office
Study: Knee Ligament Injuries May Be More Common in Men
Men have a greater number of knee ligament injuries than women, despite research suggesting that women’s knees are more prone to anterior cruciate ligament (ACL) tears and surgeries to fix them, according to a Swedish study.
The report, published in the American Journal of Sports medicine, counted the injuries across the entire Swedish population, not just among players of particular sports or in certain regions.
The ACL is the key stabilizing ligament in the knee, and is most often injured during sports that involve quick turns or pivoting movements, such as basketball, soccer and skiing. It has been estimated that 80,000 cruciate ligament injuries - the majority of them ACL - take place in the United States every year, with almost half surgically repaired.
“I think the difference is that earlier studies studied at-risk populations,“ said Richard Nordenvall, of Karolinska University Hospital in Sweden.
“In those studies, women are more prone to get injured. The difference with this study is that we studied the general population.“
Nordenvall and his colleagues used a nationwide database of patients to see how many Swedes had knee ligament injuries and how many had surgical repairs between 2002 and 2009.
Overall, 56,659 people in Sweden tore a knee ligament during the study period. The researchers say that works out to an average of 78 tears for every 100,000 Swedish citizens.
Men accounted for about 34,000 of the tears, or 60%.
Men also had 59% of the reconstructive surgeries associated with knee ligament injuries.
Swedish women tended to experience ACL injuries at a younger age - between the ages of 11 and 20, versus 21 to 30 for men.
When Nordenvall and his colleagues looked just at the age groups with the highest injury rates, men still had far more knee troubles. The numbers worked out to about 144 tears per 100,000 women between 11 and 20 years old, and 225 tears per 100,0000 men aged 21 to 30.
Darin Padua, director of the Sports Medicine Research Laboratory at the University of North Carolina at Chapel Hill, said he was not surprised by the findings.
No one can say for certain why women seem to tear their knee ligaments earlier in life compared to men, Padua said, but it probably has to do with the body’s development and movement patterns.
“It’s a common injury and it’s more common than what has been thought of earlier,“ Nordenvall said.
Padua echoed this, adding that it helps to show that both men and women should be taking part in injury prevention programs.
Tough ID Laws Could Block Thousands of 2012 Votes
When Edward and Mary Weidenbener went to vote in Indiana’s primary in May, they didn’t realize that state law required them to bring government photo IDs such as a driver’s license or passport.
The husband and wife, both approaching 90 years old, had to use a temporary ballot that would be verified later, even though they knew the people working the polling site that day. Unaware that Indiana law obligated them to follow up with the county election board, the Weidenbeners ultimately had their votes rejected—news to them until informed recently by an Associated Press reporter.
Edward Weidenbener, a World War II veteran who had voted for Mitt Romney in the Republican presidential contest, said he was surprised by the rules and the consequences.
“A lot of people don’t have a photo ID. They’ll be automatically disenfranchised,“ he said.
As more states put in place strict voter ID rules, an AP review of temporary ballots from Indiana and Georgia, which first adopted the most stringent standards, found that more than 1,200 such votes were tossed during the 2008 general election.
During sparsely attended primaries this year in Georgia, Indiana and Tennessee, the states implementing the toughest laws, hundreds more ballots were blocked.
The numbers suggest that the legitimate votes rejected by the laws are far more numerous than are the cases of fraud that advocates of the rules say they are trying to prevent. Thousands more votes could be in jeopardy for this November, when more states with larger populations are looking to have similar rules in place.
More than two-dozen states have some form of ID requirement, and 11 of those passed new rules during the past two years largely at the urging of Republicans who say they want to prevent fraud.
Democrats and voting rights groups fear that ID laws could suppress votes among people who may not typically have a driver’s license, and disproportionately affect the elderly, poor and minorities. While the number of votes is a small percentage of the overall total, they have the potential to sway a close election. Remember that the 2000 presidential race was decided by a 537-vote margin in Florida.
A Republican leader in Pennsylvania said recently that the state’s new ID law would allow Romney to win the state over President Obama.
Supporters of the laws cite anecdotal cases of fraud as a reason that states need to do more to secure elections, but fraud appears to be rare. As part of its effort to build support for voter ID laws, the Republican National Lawyers Association last year published a report that identified some 400 election fraud prosecutions over a decade across the entire country. That’s not even one per state per year.
ID laws would not have prevented many of those cases because they involved vote-buying schemes in local elections or people who falsified voter registrations.
Election administrators and academics who monitor the issue said in-person fraud is rare because someone would have to impersonate a registered voter and risk arrest. A 2008 Supreme Court case drew detailed briefs from the federal government, 10 states and other groups that identified only nine potential impersonation cases during the span of several years, according to a tally by the Brennan Center at New York University.
Michael Thielen, executive director of the Republican lawyers group, said its survey was not comprehensive and he believes vote fraud is a serious problem.
“Most of it goes unreported and unprosecuted,“ he said.
Several election administrators, even those who support ID laws as a barrier to potential fraud, said the rejected ballots in their counties appeared to be legitimate voters who simply did not fulfill their ID obligations.
Donna Sharp, the administrator of elections in Hawkins County, Tenn., said she saw no signs of fraud. Of the seven people who cast absentee ballots, six didn’t come in to confirm their identity. Sharp knew one of them personally.
But Sharp said she supports the ID law despite initial concerns. She said most people were aware of the requirement and able to provide their identification, and she thought the rules provided an extra layer of security.
“We want to protect those voters who do need their vote to count—the people who are doing things in an honest manner,“ Sharp said.
Some administrators speculated that voters who didn’t return to verify their identity may have deduced that the ballot wouldn’t alter the outcome of the election.
Indiana, Georgia and Tennessee require that voters provide a photo ID at the polls. Failing that, voters can use a temporary ballot that can be verified later, when they must meet with local elections administrators to sort out the matter.
Pennsylvania is putting a similar law in place for the November election. Kansas has comparable rules. Mississippi, South Carolina, Texas and Wisconsin are moving in that direction of having rules set for this year if they survive court challenges and federal approval.
Virginia had a rule allowing voters without proper ID to sign an identity statement; a false claim could make them subject to felony punishment. Under a new law awaiting final approval from the Justice Department, voters who do not bring proper ID, which doesn’t necessarily have to have a photo, must use a temporary ballot and later provide ID to the local election board.
Georgia had 873 rejected temporary ballots because of ID from the 2008 general election while only about 300 ID temporary ballots were counted. The state also had 64 ID-related temporary ballots tossed in the presidential primary this year.
Indiana counties that maintained information from the 2008 election reported having hundreds of ballots tossed, and more than 100 more were rejected in the primary this year. The numbers can vary greatly depending on the election: Tippecanoe County, for example, had no ID-related temporary ballots excluded in the primary vote this year compared with 47 in the 2008 general election.
Tennessee had 154 blocked ballots in its March primary.
Keesha Gaskins, a senior counsel at the Brennan Center who has opposed voter ID laws, said she believes the numbers are significant and also underestimate the impact of voter ID laws. She said those numbers don’t take into account people who were discouraged from showing up to vote in the first place or who may be turned away by poll workers. Even voters in states with less-strict ID laws may not get the proper explanation about how the process works without ID.
Beyond that, Gaskin said, rejecting even hundreds of ballots in an election is significant.
“These are still people who attempted to vote and who were unable to do so,“ Gaskins said. “When you compare that to the actual evidence of fraud, the difference is exponential.“
Agency Seeks Bond Power to Fix WV Courthouses
Most of West Virginia’s 55 county courthouses need structural repairs or improvements. But there is not enough funding to do all the projects, the West Virginia Courthouse Facilities Improvements Authority said.
The authority gets about $2 million annually from various courthouse fees, such as marriage licenses, and distributes the funding to counties. Authority officials believe they could stretch those dollars if the agency could issue bonds.
Legislation that would have given the agency bonding authority stalled in the House Finance Committee in the final hours of this year’s regular session. Executive director Melissa Garretson Smith said the authority will try again in 2013.
A plan presented by Smith to a legislative interim committee would allow the authority to invest half of its annual income in bonds.
“For example, $1 million could turn into $15 million, and then we would be able to make more significant changes and repairs at courthouses,“ she told The Register-Herald .
Only one county courthouse in the state does not need any work. Morgan County had to build a new structure after a fire destroyed its courthouse in 2007.
Most courthouses were built more than 50 years ago and are showing their age.
“Computers have changed so much in the past several years. Courthouses were not just wired to handle the type of computers we have now and the routers and different networking. We have some major wiring issues. We also have a lot of roof issues, some structural problems. We’re putting a new roof on the Monroe County Courthouse this cycle. That project alone was about $200,000, and it’s a smaller courthouse,“ Smith said.
The authority estimates it would cost $300 million to do all the needed repairs and upgrades, an achievement that is unlikely.
“We’ll never get enough money to restore them all,“ Smith said. “But we could make a significant impact with maybe $80 million.“
Report: About 1 in 5 West Virginia Students Truant 5 Days
The state Department of Education says about one in five West Virginia public school students had five or more unexcused absences this year.
More than 29,000 students, or 9% of students statewide, were truant more than 10 days.
The Charleston Gazette reports that Webster County has the state’s highest truancy rate.
About 36% of students there skipped five or more days without permission, and almost half the student body was truant 10 or more days.
At Webster County High School, nearly 7 out of 10 students were truant five days or more.
Webster School Superintendent Martha Dean acknowledged it is a big problem and she said school officials are working to correct it.
State Expected to Seek Federal Disaster Declaration for Public Assistance
West Virginia Homeland Security and Emergency Services Director Jimmy Gianato does not believe the June 29, 2012 storm caused enough damage for a federal disaster declaration for individual assistance but he says it probably did for public assistance.
FEMA and the state plan to begin reviewing the damage from the Derecho wind storm Tuesday, July 10, 2012.
Gianato says although a number of homes and vehicles were damaged by fallen trees, it probably does not reach the level for a disaster declaration that would help individual residents.
He says a declaration for public assistance is different.
“Anything like public utilities, government agencies, schools—-any agency like that which incurred damage during the storm,“ he said.
West Virginia Transportation Secretary Paul Mattox says cleanup of highways following the storm has cost the DOH about $14 million.
“Most of that cost was in cleanup costs, taking debris from the roadways,“ Mattox said.
Mattox is hoping for a federal disaster declaration which could provide up to 75% reimbursement for the cleanup cost.
Gianato says the state will work with FEMA to explore other options that may help some residents.
He says FEMA does not cover food lost during power outages or anything that is normally covered by homeowner’s insurance.
There are currently dozens of generators from FEMA that were sent to the state under an emergency declaration.
They have been helping out across the state with things like health care and water service.
Gianato says the generators will have to be returned to FEMA.
“Those generators are part of a FEMA cache that they keep for events just like this,“ Gianato said. “They will be retrieved, reconditioned and put back into service for the next event.“
VVV: Frozen Meat for Those without Food Stamps - Wednesday and Friday
Visions, Vessels, and Victory, Inc. understands the concern for the elderly and working class/middle class that do NOT receive food stamps and have no way of replacing the food they lost during this power outage.
Therefore, if you do NOT receive food stamps and live on a modest to low income and are wondering what you are going to do for meat that you lost, VVV is going to try to help you.
On Wednesday, July 11, 2012 and Friday, July 13, 2012 from 10:00 AM until Noon VVV will be handing out frozen meat to those who lost their meat due to the power outage.
This is ONLY for those who do NOT receive food stamps.
You do NOT have to be a pantry member to receive this food.
It is for all those in need in Gilmer County that do NOT receive food stamps.
Be mindful though, we operate solely on donations and each box of meat costs us, therefore, we will not be able to stock your freezers and we may run out before we get to the end of the line.
As always, it is first come first serve.
We will not open until 10:00 AM.
Our heart is to help you as much as we can though.
So, come to Appcon Lumber in Glenville on Wednesday morning July 11, 2012 and Friday morning, July 13, 2012 from 10:00 AM until Noon if you need some frozen meat.
Little Pioneer Football & Cheer Last Sign-up Day - 07.20.12
Little Pioneer Football & Cheer
Last Sign-up Day!!!
Date: Friday, July 20, 2012
Time: 5:00 PM
Place: Gilmer Courthouse Lobby
For more information call 304.997.6394
Glenville: 7th Annual Health Fair 2012 – July 18, 2012
Rosedale Baptist Church Vacation Bible School - July 15-20, 2012
Rosedale Baptist Church Vacation Bible School
Sunday, July 15, 2012 – Friday, July 20, 2012
6:45 PM to 9:00 PM
Classes for all ages
Larry Fisher, Pastor
Glenville: Gilmer County FRN Bath Salt Presentation - 07.12.12
Ron Paul: Fractional Reserve Banking, Government and Moral Hazard
Last week my subcommittee held a hearing on fractional reserve banking and the moral hazard created by government (taxpayer) insured deposits. Fractional reserve banking is the practice by which banks accept deposits but only keep a fraction of those deposits on hand at any time. In practice, nearly 100% of deposits are loaned out, yet depositors believe that they can withdraw the full amount of their deposit at any time. Loaned funds are then redeposited and reloaned up to the limit of the bank’s reserve requirements, compounding the effect.
As Murray Rothbard put it, “Fractional reserve banks ... create money out of thin air. Essentially they do it in the same way as counterfeiters. Counterfeiters, too, create money out of thin air by printing something masquerading as money or as a warehouse receipt for money. In this way, they fraudulently extract resources from the public, from the people who have genuinely earned their money. In the same way, fractional reserve banks counterfeit warehouse receipts for money, which then circulate as equivalent to money among the public. There is one exception to the equivalence: The law fails to treat the receipts as counterfeit.“ *
While mainstream economists extol this “money multiplier” as a nearly miraculous process that results in a robust economy, low reserve requirements actually enable banks to create trillions of dollars of credit out of thin air, a process that distorts the structure of production and gives rise to the business cycle. Once the boom phase of the business cycle has run its course and the bust commences, some people will naturally look to hold cash. So they withdraw money from their bank accounts in order to hold physical currency. But bank deposits consist of a huge amount of credit pyramided on top of a small of amount of original cash deposits. Each dollar of cash that is withdrawn unwinds the multiplier, resulting in a contraction in credit. And if depositors en masse attempt to withdraw more funds than are available in reserves, the entire of house of cards comes crashing down. This is the very real threat facing some European banks today.
Since the amount of deposits always exceeds the amount of reserves, it is obvious that fractional reserve banks cannot possibly pay all of their depositors on demand as they promise – thus making these banks functionally insolvent. While the likelihood of all depositors pulling their money out at once is relatively rare, bank runs periodically do occur. The only reason banks are able to survive such occurrences is because of the government subsidy known as deposit insurance, which was intended to backstop the stability of the banking system and prevent bank runs. While deposit insurance arguably has succeeded in reducing the number and severity of bank runs, deposit insurance is still an explicit bailout guarantee. It thereby creates a moral hazard by encouraging bank deposits into fundamentally unsound financial institutions and contributes to instability in the financial system.
The solution to the problem of financial instability is to establish a truly free-market banking system. Banks should no longer have a government backstop of any sort in the event of failure. Banks, like every other business, should have to face the spectre of market regulation. Those banks which engage in sound business practices, keep adequate reserves on hand, and gain the confidence of their customers will survive, while others fall by the wayside.
Banking, like any other financial activity, is not without risk – and the government should not continue its vain and futile pursuit of trying to eliminate risk. Get government out of the way and allow the market to function. This will result in a more stable system that meets the needs of consumers, borrowers, and investors.
* Murray N. Rothbard, The Mystery of Banking, 2nd ed. (Auburn, Alabama: Ludwig von Mises Institute, 2008), p. 98.
Bon Appétit: California Avocado Burger
1/4 cup finely diced white onion
1/8 cup finely diced bell pepper
3/8 cup cut in half and thinly sliced white mushrooms
2 teaspoons steak sauce
1 pound lean ground beef
4 whole wheat buns
2 teaspoons steak sauce
8 leaves lettuce
4 slices large beefsteak tomato
1 ripe Fresh California Avocado, peeled, seeded, and sliced
1 batch Lite Ranch Sauce (optional, recipe below):
4 tablespoons light ranch dressing
2 tablespoons steak sauce
In a bowl mix together the onion, bell pepper, mushrooms, steak sauce and lean ground beef.
Mix very thoroughly with your hands to combine all ingredients.
Divide the mixture into equal portions.
With your hands press each portion into a ball and then shape into a patty.
In a saute pan or on a flat griddle over medium low heat place the patties and grill for about 4 minutes, flip and grill an additional 4 minutes or until meat is thoroughly cooked.
While beef and veggie burgers are grilling toast the buns.
Top each bun base with the beef and veggie burger, then drizzle each with 1/2 tsp. steak sauce.
Top with the lettuce, tomato, Fresh California Avocado and bun top.
Optional: serve with Lite Ranch Sauce for dipping.
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