A letter concerning economic reality

As a response to this bloomberg.com article, which declares and celebrates the end of laissez-faire economic influence, I shared with my mother (who forwarded the article to me) thoughts so relevant to the economic discussion in America today, they are worth repeating here:

This article, besides unpardonably confounding economic liberty with imperial oppression and brutal dictatorhip, grossly neglects theoretical argument, so the ignorant reader is to accept its conclusion without understanding it.  This negligence of thought is a necessary means to an unreasoned end.  So far from being worthy of publication, this article would be expensive at any price, and is not worth the time spent reading it.  By equivocating much, it says nothing.

The idea that Barack Obama will “referee the laissez-faire versus free-market debate” is laughable; as referee in that non-existent contest (laissez-faire and free-market are inseparable allies), Obama would probably sabotage both competitors and declare an interventionist victory.

I will present a few points ignored by this article that, if attended to, would render a very different image.

First, it has been over a century since we have had a free market for goods and services and private control of production and consumption.  Therefore we have not had capitalism, and it is irrational to blame economic woes on a system that does not exist; it is as reasonable to blame Martians.

Secondly, and most importantly, government fostered the economic crisis.  Behold artificially low interest rates during the tech bust of 2001-02.  The only way to keep rates so low is by printing money out of thin air.  This government-created free money combined with implicit government guarantees of new loans via Fannie Mae and Freddie Mac generated a housing bubble and subsequent financial bubble large enough to threaten the existence of the global financial system.  Because that system is naturally undeserving of its legitimacy, its collapse may be a good thing, but only if governments practice humility in the aftermath.  Governments should understand that the maximization of individual freedom is their purpose, both politically and economically.  Governments should come to know that the evils of paper money cannot be overstated.  Governments should not allow interested monopolies to control monetary bases.  Governments should focus on destroying monopolies, not turning them into unavoidable institutions.  Inexplicably, we must now rest our hopes of economic salvation upon the imminent Representative Barney Frank and Senator Christopher Dodd, both of whom promoted bad loan practices and free money policies for years, and neither of whom saw the economic crisis coming.  This is a sure case of the inmates running the asylum.

On this point, note that at least one House Representative did accurately predict the events that led to the financial bust.  In a speech to the House in 2001, he said “despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.” That Representative was ignored by almost everyone, and probably laughed at by the interventionist economists that this article aggrandizes.  That Congressman was Dr. Ron Paul, who continues to be widely ignored by popular economists, his colleagues, and our media.

Thirdly, most true free-market economists follow the “Austrian” theories of Murray Rothbard, Ludwig von Mises, and Friedrich A. von Hayek.  Free marketeers typically place more value on each of these three than Milton Friedman because their work was much more thorough, more laissez-faire, and more conclusive.  Few if any contemporary proponents of laissez-faire economics hail from the University of Chicago.

Economic science and history inform us that there will eventually be a final and all-destructive economic downturn: the fiat currency bust, which in the United States will be the destruction of the dollar.  The nature of this destruction will likely be hyperinflationary, like Germany’s post-WWI Mark or the ancient Roman denari (severe dilution of silver content in coins was the ancient “paper” money, and is still practiced).  I hope this will be followed by a return to sound asset-backed currencies and the elimination of fraudulent banking institutions, whose theft brings so much hardship to the unaware, unoffending, humble human.

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Emerson cherished gold standard, limited government

Emerson

Ralph Waldo Emerson’s writing is popular among progressives, who often share his criticisms of materialism, simony, and intolerance.  When I began reading his complete works, I wrongly expected to see “progressive” economic and political views; I did not.  I was surprised to learn that, regarding the size and scope of government, Emerson is at odds with progressives; when they use his words, they abuse his philosophy.  Emerson not only advocates the idea of limited government, but holds the political philosophy of no-government.  He certainly did not believe in what Joe Biden incorrectly calls “fairness.”

Emerson is no critic of capitalism or free markets; he sees injustice in fiat money, and cherishes the gold standard.  Logically, then, the progressive who defames the gold standard shows more respect to the economic philosophy of Richard Nixon than that of Ralph Waldo Emerson.  If Emerson were to have a conversation with Barack Obama about economics, he would probably conclude that Obama is either poorly educated, or educated to think poorly.  Emerson, being a good assessor of fitness, would probably find Obama unfit to govern in a free society.

Relative Emerson quotes:

“We live in a very low state of the world, and pay unwilling tribute to governments founded on force.”

“It is not the office of a man to receive gifts.  How dare you give them?  We wish to be self-sustained.  We do not quite forgive a giver.  The hand that feeds us is in some danger of being bitten.  We can receive anything from love, for that is a way of receiving it from ourselves; but not from any one who assumes to bestow.”

“Necessity does everything well.”

“All public ends look vague and quixotic beside private ones.  For any laws but those which men make for themselves are laughable.”

“The less government we have the better.”

“Money, which represents the prose of life, and which is hardly spoken of in parlors without an apology, is, in its effects and laws, as beautiful as roses.  Property keeps the accounts of the world, and is always moral.  The property will be found where the labor, the wisdom and the virtue have been in nations, in classes and (the whole life-time considered, with the compensations) in the individual also.”

“Since we are all so stupid, what benefit that there should be two stupidities!”

“The laborer is a possible lord.  The lord is a possible basket-maker.”

“The English dislike the American structure of society, whilst yet trade, mills, public education and Chartism are doing what they can to create in England the same social condition.  America is the paradise of the economists; is the favorable exception invariably quoted to the rules of ruin; but when he speaks directly of the Americans the islander forgets his philosophy and remembers disparaging anecdotes.”

“The ambition to create value evokes every kind of ability.”

“Another machine more potent in England than steam is the Bank.  It votes an issue of bills, population is stimulated and cities rise; it refuses loans, and emigration empties the country; trade sinks; revolutions break out; kings are dethroned.  By these new agents our social system is molded.”

“It is rare to find a merchant who knows why a crisis occurs in trade, why prices rise or fall, or who knows the mischief of paper money.”

“What befalls from the violence of financial crises, befalls daily in the violence of artificial legislation.”

“How did our factories get built?  How did North America get netted with iron rails, except by the importunity of these orators who dragged all the prudent men in?  Is party the madness of many for the gain of the few?  This speculative genius is the madness of a few for the gain of the world.  The projectors are sacrificed, but the public is the gainer.”

“I have never seen a man as rich as all men ought to be, or with an adequate command of nature.  The pulpit and the press have many commonplaces denouncing the thirst for wealth; but if men should take these moralists at their word and leave off aiming to be rich, the moralists would rush to rekindle at all hazards this love of power in the people, lest civilization should be undone.”

“Wealth brings with it its own checks and balances.  The basis of political economy is non-interference.  The only safe rule is found in the self-adjusting meter of demand and supply.  Do not legislate.  Meddle, and you snap the sinews with your sumptuary laws.  Give no bounties, make equal laws, secure life and property, and you need give no alms.  Open the doors of opportunity to talent and virtue and they will do themselves justice, and property will not be in bad hands.  In a free and just commonwealth, property rushes from the idle and imbecile to the industrious, brave and persevering.”

“Friendship buys friendship; justice justice; military merit, military success.  Good husbandry finds wife, children and household.  The good merchant, large gains, ships, stocks and money.  The good poet, fame and literary credit; but not either, the other.  Yet there is commonly a confusion of expectations on these points.  Hotspur lives for the moment, praises himself for it, and despises Furlong, that he does not.  Hotspur of course is poor, and Furlong a good provider.  The odd circumstance is that Hotspur thinks it a superiority in himself, this improvidence, which ought to be rewarded with Furlong’s lands.”

“The true thrift is always to spend on the higher plane; to invest and invest, with keener avarice, that he may spend in spiritual creation and not in augmenting animal existence.”

“To detach a man and make him feel that he is to owe all to himself, is the way to make him strong and rich.”

Open bailout opposition letter to Congress

Stolen from you by U.S.

“That government is best which governs the least, because its people discipline themselves.” – Thomas Jefferson

There is a lot of hype in Washington this week, a lot of short-term thinking, but very little honest reflection and philosophically sound governance based on the long term prospects of the American economy.  Jefferson was right: our financial markets have fallen into a cycle of government dependence and therefore no longer discipline themselves.  The American economy has lived beyond its means; to deny this is to declare yourself ignorant and unfit to govern.  We have floated on a cloud of credit, and believed ourselves to be in heaven, and though we have ventured far from earth, the latest liquidity squeeze has allowed us to see just how far we must fall when our economy’s bill comes due.  Though the $700,000,000,000 proposal before you may indeed postpone the payment date, the American people will eventually have to pay dearly for living on money that has been given value–not by production–but by irrational faith, and you can be certain that every postponement will make that future payment more painful than it would be today.  Do not be convinced that there are no free market solutions to this crisis.  The unspeakable ideal of economic freedom will pump more liquid capital into our financial markets than the government ever could, and more importantly, the money generated by such a system would be sound and valuable.  The chronic risks of moral hazard and inflation this bailout poses far outweigh the risks of a brief credit crisis caused by market-liquidated debt.

We cannot become wiser before we admit that we have been foolish in the past.  Market interference was, in most instances, foolish.  The Community Re-Investment Act was foolish.  Taxing capital gains was foolish.  Turning over Congress’ constitutional money-coining responsibility to a private, secretive organization was foolish.  Encouraging irresponsible lending through never-ending taxpayer bailouts was foolish.  Artificially low interest rates were foolish.  Price manipulation was foolish.  Giving up on sound money was foolish.  Losing faith in freedom was foolish.  Ours, however, is not a fated existence.  Nowhere is it written in stone that we must remain foolish, or that we cannot obey Constitutional principles.  If, as Senator John McCain likes to say, you “came to Washington to change Washington,” now is your chance to realize your lofty dreams.  Crisis is the proper time for reform.  Now is the time to embrace real capitalism.  The American people should not be told to fear freedom, as they are being told now, but to embrace it.  The time has come for Americans to be rewarded for their own successes, and held accountable for their own mistakes.  The time has come for the ambitious legislators in Washington to stop fiscally abusing the children of this nation.

1994, 2000: Remembering the words of Goldwater and Reagan, American median voters want smaller government and balanced budgets, so they elect Republicans; in return, they receive the most rampant growth in government (and public debt) this continent has ever known.  2006: the median American voters want out of a conflict that is unrelated to their security or welfare, so they elect Democrats; in return, the war’s funding is not cut off but greatly increased.  2008: the American people want no taxpayer bailouts, they want to end the bubble-blowing policies of the Federal Reserve, and they want to stop the growing cycle of debt that has ruined a once free economy; in return, they are presented with the largest taxpayer bailout ever, a more powerful and secretive central bank, the largest economic bubble-blowing scheme ever contrived, and more debt than they can ever afford to pay off.

The blindfold has been removed from the American people.  They are awakening to a pattern that reveals self-government as a myth.  The extraordinary actions of the federal government are only serving to remove its mask, revealing its nationalist, socialist, imperialist, authoritarian, unresponsive, evil face.  We can accurately predict that, on matters of true importance, when a particular course of action is supported by more than 70% of the American people, their government will pursue the opposite course, pretending the people are a force of no consequence–an attitude to be expected of King Louis’ court, but not of a republic’s elected leaders.  I need not remind you of the French response to that attitude.  The United States government has lost so much legitimacy that it may not survive the latest proposal, should it pass.  The American people are well-aware of the truly criminal nature of any financial bailout; a huge one will both injure and offend them.  Moreover, it will not come without consequence; their lanterns are burning, their pitchforks are raised, and they are prepared to halt the criminal acts of this government, should it become necessary for them to do so.

Sifting through the crap

Crap

99.9% of everything you will ever hear from a U.S. politician or media pundit is total crap. I present to you five widely discussed issues that do not matter, so that next time you hear them on the radio or television, you can say to yourself “this is pointless conversation”:

  1. Energy policy: The energy industry is part of the economic market. It operates most efficiently on its own and requires no help from the government (unless there is a monopoly in the market). Anyone who thinks limiting our choices on energy is a good thing is delusional. Stay away from them. It is remarkable how many believe that people can be made better off by the imposition of limitations on their choices. Here’s how it works, honestly and simply: when (and only when) gas prices become too high, an alternative energy source will become dominant.
  2. Environmental issues: If your property is being damaged by another person’s (or group’s) pollution, sue them. If you can prove your case, you will win. Chances are, you’ll be one of many, and those who choose to pollute will soon stop because of the amount of expenses they are incurring from mounting lawsuits. There are no regulations necessary–just the simple legal protection of property.
  3. Illegal immigration: The leaderships of both parties have decided nothing will ever be done to stop this. In fact, they hope to someday unify Mexico, Canada, and the U.S. under a multinational government.
  4. Racism, sexism, feminism, anti-religious sentiments, and other prejudices: You are easier to control if you think along these lines at all. Whether you are practicing these or blaming others for doing so, you are falling right in line with what the status quo wants. You are focusing on an issue that does not matter, which works out perfectly for the people trying to make sure they can continue to steal money from you without your noticing.
  5. Islamofascism: This is a huge myth. If you think radical Muslims are about to take over the United States, you are wacko. You need to see a mental health professional and talk about your irrational fears.

From now on, if you hear one of these issues mentioned on the news or anywhere else, remember that someone is trying to entertain or bewilder you, and that nothing they say can swindle you out of a wise and well-reasoned vote. The list above is far from exhaustive.

Now that you know what sorts of issues don’t matter, here’s some that do: The Constitution, Bill of Rights, fiscal restraint, and sound monetary policy (the elimination of fiat currency). If your legislators are focusing more on the first list than this one, they need to be replaced.

You’re welcome.

If we the people leave, do they the rulers win?

We have owners.  They own us.

“Truth is treason in the empire of lies.” – Ron Paul

The long-term economic outlook for this country is so grim–and this is well-researched and almost universally accepted–that I can hardly see myself sticking around to endure it. A free and great industrial republic has become a credit-addicted empire, propped up today not by human productivity and ingenuity, but by the artistic renderings of the Bureau of Printing and Engraving–a small bandage placed fruitlessly on a fatal systemic illness.

Americans, as a whole, are either unaware of their collective fate, or unwilling to alter it. Toss charges in whatever direction you wish; the real culprit is in the mirror. But no matter where we place the blame for our government’s fiscal mess, we would be wise to understand that economic laws cannot be ignored forever, that justice is a force of nature not to be denied, and that reality will set in–as soon as we accept this diagnosis, we can begin to treat the disease. Every American born today enters a society of bondage, accompanied by a $75,000 liability to a government that child did not elect. I am twenty-four years old, and I hope that in the future, American children will be born free. I am, however, reluctant to believe this will happen in my lifetime.

As we the people request greater freedoms, they the government tighten our chains, and we are left with a choice: we may stay in America and struggle against our rulers for what we once called inalienable rights, or we may seek refuge in another land. If I, as an advocate for liberty, leave America, have I allowed the totalitarian forces in this country to win? Is liberty like a game, with winners and losers? If so, is there any chance the people can ever beat the government? Should I stay and fight for America’s true cause, or should I go and find prosperity elsewhere? My dilemma is not a new one. In Hitler’s Germany, were the liberty-minded citizens who fled the country better than the liberty-minded activists who stayed and were imprisoned or killed for their beliefs? As I wonder which option is better, I am reminded of a couple of quotes:

“I am in Birmingham because injustice is here.” – Martin Luther King Jr.

“Independence is my happiness, and I view things as they are, without regard to place or person; my country is the world, and my religion is to do good.” – Thomas Paine

If I could find a truly free country, I would move there, but it seems the increasingly oppressive governments of the world have rejected the enlightened principles that many countries once embraced, and most individuals still do embrace. What keeps me here is best expressed by the following utterance, which, though relevant, is probably too clever and wise to appear alongside my earnest musings:

“You and I have a rendezvous with destiny. We will preserve for our children this, the last, best hope of man on Earth, or we will sentence them to take the last step into a thousand years of darkness. Alexander Hamilton said, ‘a nation which can prefer disgrace to danger is prepared for a master, and deserves one.’ And in that sentence, he told us the entire story: if we lose freedom here, there is no place to escape to; this is the last stand on Earth.” – Ronald Reagan

Let freedom ring.

So many reasons to love Thomas Paine

Paine

Thomas Paine was, by some accounts, the most well-read Englishman ever to live. If you are reading this, regardless of who you are, or how many Nobel prizes you have won, you can rest assured that Paine’s education was more complete than your own. When you read his commentaries on money and the role of government, it is difficult to believe that Thomas Paine was one of the most influential members of the liberal movement. I have little doubt that, if Paine were to traverse time and visit America today, and observe the frail philosophy–if it can be called that–which now occupies the title of “liberalism,” he would promptly vomit all over Barack Obama’s shoes.

Here I present Thomas Paine’s wisdom, in so many of his truthful quotes, based on nature and reason. From the spirit of revolution he carried to the American people through Common Sense in 1776, to his unwavering faith in God as expressed in his 1794 work, The Age of Reason, Paine was an indomitable figure in political history, and he would have died for his beliefs (and in many ruling minds of the time should have–he was held or tried for treason in France and England, as well as demonized worldwide for sharing his honest opinions); but Providence, it seemed, would not allow it. He was instrumental in inciting the two greatest revolutions of the Enlightenment (French and American), and worked with all his creative genius to expose both the beauty of Creation and the absurdity of monarchy, hoping through Rights of Man (1791) to incite a third revolution in Great Britain. In his words, which are relative today, as they always will be:

“There are habits of thinking peculiar to different conditions, and to find them out is truly to study mankind.” – Case of the Officers of the Excise

“The cause of America is in a great measure the cause of all mankind.” – Common Sense

“Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamities is heightened by reflecting that we furnish the means by which we suffer.” – Common Sense

“Men who look upon themselves born to reign, and others to obey, soon grow insolent; selected from the rest of mankind their minds are early poisoned by importance; and the world they act in differs so materially from the world at large, that they have but little opportunity of knowing its true interests, and when they succeed to the government are frequently the most ingorant and unfit of any throughout the dominions.” – Common Sense

“The reformation was preceded by the discovery of America, as if the Almighty graciously meant to open a sanctuary to the persecuted in future years, when home should afford neither friendship nor safety.” – Common Sense
“It is repugnant to reason, to the universal order of things, to all examples from the former ages, to suppose, that this continent can longer remain the subject to any external power.” – Common Sense

“It is not in numbers but in unity, that our great strength lies; yet our present numbers are sufficient to repel the force of all the world.” – Common Sense

“Can we but leave posterity with a settled form of government, and independent constitution of its own, the purchase at any price will be cheap.” – Common Sense

“Common sense will tell us, that the power which hath endeavored to subdue us, is of all others the most improper to defend us. Conquest may be effected under the pretence of friendship; and ourselves, after a long and brave resistance, be at last cheated into slavery.” – Common Sense

“The more men have to lose, the less willing are they to venture. The rich are in general slaves to fear, and submit to courtly power with the trembling duplicity of a spaniel.” – Common Sense

“As to religion, I hold it to be the indispensible duty of all government, to protect all conscientious professors thereof, and I know of no other business which government hath to do therewith.” – Common Sense

“Suspicion is the companion of mean souls, and the bane of all good society.” – Common Sense

“Immediate necessity makes many things convenient, which if continued would grow into oppressions. Expedience and right are different things.” – Common Sense

“When we are planning for posterity, we ought to remember that virtue is not hereditary.” – Common Sense

“Men read by way of revenge.” – Common Sense

“He who takes nature for his guide is not easily beaten out of his argument.” – Common Sense

“We have it in our power to begin the world over again.” – Common Sense

“Peace with trade is preferable to war without it.” – Common Sense

“Our plan is peace for ever.” – Common Sense

“Call not coldness of soul, religion; nor put the Bigot in the place of the Christian.” – Common Sense

“And here without anger or resentment I bid you farewell, sincerely wishing, that as men and Christians, ye may always fully and uninterruptedly enjoy every civil and religious right; and be, in your turn, the means of securing it to others; but that the example which ye have unwisely set, of mingling religion with politics, may be disavowed and reprobated by every individual inhabitant of America.” – Common Sense

“These are the times that try men’s souls.” – American Crisis

“Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value.” – American Crisis

“Though the flame of liberty may sometimes cease to shine, the coal can never expire.” – American Crisis

“A right, to be truly so, must be right within itself: yet many things have obtained the name of rights, which are originally founded in wrong. Of this kind are all rights by mere conquest, power or violence.” – Public Good

“It seldom happens that the romantic schemes of extensive dominion are of any service to a government, and never to a people. They assuredly end at last in loss, trouble, division and disappointment.” – Public Good

“Where knowledge is a duty, ignorance is a crime.” – Public Good

“Other revolutions may have originated in caprice, or generated in ambition; but here, the most unoffending humility was tortured into rage, and the infancy of existence made to weep.” – Letter to the Abbe Raynal

“Were it possible we could have known the world when in a state of barbarism, we might have concluded that it never could be brought into the order we now see it.” – Letter to the Abbe Raynal

“The philosopher of one country sees not an enemy in the philosopher of another: he takes his seat in the temple of science, and asks not who sits beside him.” – Letter to the Abbe Raynal

“Our style and manner of thinking have undergone a revolution more extraordinary than the political revolution of our country. We see with other eyes; we hear with other ears; and think with other thoughts, than those we formerly used. We can look back on our own prejudices, as if they had been the prejudices of other people.” – Letter to the Abbe Raynal

“The mind once enlightened cannot again become dark.” – Letter to the Abbe Raynal

“Of more use was one philosopher, though a heathen, to the world, than all the heathen conquerers that ever existed.” – Letter to the Abbe Raynal

“Freedom is destroyed by dependence, and the safety of the state endangered thereby.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“To hold any part of the citizens of the state, as yearly pensioners on the favour of an assembly, is striking at the root of free elections.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“Gold and silver are the emissions of nature: paper is the emission of art. The value of gold and silver is ascertained by the quantity which nature has made in the earth. We cannot make that quantity more or less than it is, and therefore the value being dependent upon the quantity, depends not on man. Man has no share in making gold or silver; all that his labours and ingenuity can accomplish is, to collect it from the mine, refine it for use and give it an impression, or stamp it into coin.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“The only proper use for paper, in the room of money, is to write promissory notes and obligations of payment in specie upon.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“When an assembly undertake to issue paper as money, the whole system of safety and certainty is overturned, and property set afloat. Paper notes given and taken between individuals as a promise of payment is one thing, but paper issued by an assembly as money is another thing. It is like putting an apparition in the place of a man; it vanishes with looking at it, and nothing remains but the air.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“Money, when considered as the fruit of many years’ industry, as the reward for labour, sweat and toil, as the widow’s dowry and children’s portion, and as the means of procuring the necessaries and alleviating the afflictions of life, and making old age a scene of rest, has something in it sacred that is not to be sported with, or trusted to the airy bubble of paper currency.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“The evils of paper have no end. Its uncertain and fluctuating value is continually awakening or creating new schemes of deceit. Every principle of justice is put to the rack, and the bond of society dissolved: the suppression, therefore, of paper money might very properly have been put into the act for preventing vice and immorality.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power. There can be no such power in a republican government: the people have no freedom, and property no security where this practice can be acted: and the committee who shall bring in a report for this purpose, or the member who moves for it, and he who seconds it merits impeachment, and sooner or later may expect it.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“Of all the various sorts of base coin, paper money is the basest. It has the least intrinsic value of anything that can be put in the place of gold and silver. A hobnail or a piece of wampum far exceeds it. And there would be more propriety in making those articles a legal tender than to make paper so.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“Nature has provided the proper materials for money, gold and silver, and any attempt of ours to rival her is ridiculous.” – Dissertations on Government, the Affairs of the Bank, and Paper Money

“A body of men holding themselves accountable to nobody ought not to be trusted by anybody.” – Rights of Man

“A single expression, boldly conceived and uttered, will sometimes put a whole company into their proper feelings; and whole nations are acted upon in the same manner.” – Rights of Man

“All the great laws of society are laws of nature.” – Rights of Man

“All the great services that are done in the world are performed by volunteer characters, who accept nothing for them.” – Rights of Man

“Are not conquest and defeat each of the same price, and taxes the never-failing consequence?” – Rights of Man

“By the simple operation of constructing government on the principles of society and the rights of man, every difficulty retires, and all the parts are brought into cordial unison.” – Rights of Man

“Every religion is good that teaches man to be good; and I know of none that instructs him to be bad.” – Rights of Man

“For a nation to love liberty, it is sufficient that she knows it; and to be free, it is sufficient that she wills it.” – Rights of Man

“From a small spark, kindled in America, a flame has arisen, not to be extinguished.” – Rights of Man

“Government is a beast.” – Rights of Man

“Governments now act as if they were afraid to awaken a single reflection in man.” – Rights of Man

“I do not believe that any two men, on what are called doctrinal points, think alike who think at all. It is only those who have not thought that appear to agree.” – Rights of Man

“If the crimes of men were exhibited with their sufferings, stage effect would sometimes be lost, and the audience would be inclined to approve where it was intended they should commiserate.” – Rights of Man

“If the good to be obtained be worthy of a passive, rational, and costless revolution, it would be bad policy to prefer waiting for the calamity that should force a violent one.” – Rights of Man

“If we examine, with attention, into the composition and constitution of man, the diversity of his wants, and the diversity of talents in different men for reciprocally accommodating the wants of each other, his propensity to society, and consequently to preserve the advantages resulting from it, we shall easily discover, that a great part of what is called government is mere imposition.” – Rights of Man

“In the representative system, the reason for everything must publicly appear. Every man is a proprietor in government, because it affects his property. He examines the cost, and compares it with the advantages; and above all, he does not adopt the slavish custom of following what in other governments are called LEADERS.” – Rights of Man

“Independence is my happiness, and I view things as they are, without regard to place or person; my country is the world, and my religion is to do good.” – Rights of Man

“Instead of seeking to reform the individual, the wisdom of a Nation should apply itself to reform the system.” – Rights of Man

“Invention is continually exercised, to furnish new pretences for revenue and taxation. It watches prosperity as its prey, and permits none to escape without a tribute.” – Rights of Man

“It can only be by blinding the understanding of man, and making him believe that government is some wonderful mysterious thing, that excessive revenues are obtained.” – Rights of Man

“It is a general idea, that when taxes are once laid on, they are never taken off.” – Rights of Man

“It is time that nations should be rational, and not be governed like animals, for the pleasure of their riders.” – Rights of Man

“Laws difficult to be executed cannot generally be good.” – Rights of Man

“Lay then the axe to the root, and teach governments humanity. It is their sanguinary punishments which corrupt mankind.” – Rights of Man

“Man has no property in man; neither has any generation a property in the generations which are to follow.” – Rights of Man

“Man is not the enemy of man, but through the medium of a false system of government.” – Rights of Man

“Man will not be brought up with the savage idea of considering his species as his enemy, because the accident of birth gave the individuals existence in countries distinguished by different names.” – Rights of Man

“Man, were he not corrupted by governments, is naturally the friend of man, and human nature is not of itself vicious.” – Rights of Man

“Nations can have no secrets; and the secrets of courts, like those of individuals, are always their defects.” – Rights of Man

“Nations, like individuals, who have long been enemies, without knowing each other, or knowing why, become the better friends when they discover the errors and impositions under which they had acted.” – Rights of Man

“Nothing is to be looked for but what has already happened; and as to reformation, whenever it come, it must be from the nation, and not from government.” – Rights of Man

“Only partial advantages can flow from partial reforms.” – Rights of Man

“Principles must stand on their own merits, and if they are good they certainly will.” – Rights of Man

“Public money ought to be touched with the most scupulous consciousness of honor. It is not the produce of riches only, but of the hard earnings of labor and poverty.” – Rights of Man

“Reason and discussion will soon bring things right, however wrong they may begin.” – Rights of Man

“Reason obeys itself; and ignorance submits to whatever is dictated to it.” – Rights of Man

“Taxes were not raised to carry on wars, but wars were raised to carry on taxes.” – Rights of Man

“That there are men in all nations who get their living by war, and by keeping up the quarrels of nations, is as shocking as it is true; but when those who are concerned in the government of a country, make it their study to sow discord, and cultivate prejudices between nations, it becomes the more unpardonable.” – Rights of Man

“The American constitutions were to liberty, what a grammar is to language: they define its parts of speech, and practically construct them into syntax.” – Rights of Man

“The greatest of all ridiculous things are acted in governments.” – Rights of Man

” Commerce needs no other protection than the reciprocal interest which every nation feels in supporting it.” – Rights of Man

“The instant formal government is abolished, society begins to act. A general association takes place, and common interest produces common security.” – Rights of Man

“The most unprofitable of all commerce is that connected with foreign dominion. To a few individuals it may be beneficial, merely because it is commerce; but to the nation it is a loss. The expense of maintaining dominion more than absorbs the profits of any trade.” – Rights of Man

“The name of the Creator ought not to be introduced to witness the degradation of his creation.” – Rights of Man

“The probability is always greater against a thing beginning, than of proceeding after it has begun.” – Rights of Man

“The right of war and peace is in the nation. Where else should it reside, but in those who are to pay the expense?” – Rights of Man

“There is existing in man, a mass sense lying in a dormant state, and which, unless something excites it to action, will descend with him, in that condition, to the grave.” – Rights of Man

“What at first was plunder, assumed the foster name of revenue.” – Rights of Man

“What inducement has the farmer, while following the plough, to lay aside his peaceful pursuit, and go to war with the farmer of another country?” – Rights of Man

“Whatever is my right as a man, is also the right of another; and it becomes my duty to guarantee, as well as possess.” – Rights of Man

“When governments are at war, the attack is made on the common stock of commerce, and the consequence is the same as if each had attacked his own.” – Rights of Man

“Why do men continue to practice themselves the absurdities they see in others?” – Rights of Man

“Wisdom degenerates in governments as governments increase in age.” – Rights of Man

“It is a dangerous attempt in any government to say to a nation, “thou shalt not read.” – Letter Addressed to the Addressers of the Late Proclamation

“The principles of and conduct of any government must be bad, when that government dreads and startles at discussion, and seeks security by a prevention of knowledge.” – Letter Addressed to the Addressers of the Late Proclamation

“It is error only, and not truth, that shrinks from inquiry.” – Letter Addressed to the Addressers of the Late Proclamation

“Principles have no connection with time, nor characters with names.” – Letter Addressed to the Addressers of the Late Proclamation

“It is only in governments founded on assumption and false principles, that reasoning upon, and investigating systems and principles of government, and showing their several excellencies and defects, are termed libellous and seditious. These terms were made part of the charge brought against Locke, Hampden, and Sydney, and will continue to be brought against all good men, so long as bad governments shall continue.” – Letter Addressed to the Addressers of the Late Proclamation

“If, to expose the fraud and imposition of monarchy, and every species of hereditary government–to lessen the oppression of taxes–to propose plans for the education of helpless infancy, and the comfortable support of the aged and distressed–to endeavour to conciliate nations to each other–to extirpate the horrid practice of war–to promote universal peace, civilization, and commerce–and to break the chains of political superstition, and raise degraded man to his proper rank; –if these things be libellous, let me live the life of a libeller, and let the name LIBELLER be engraved on my tomb.” – Letter Addressed to the Addressers of the Late Proclamation

“I have written a book; and if it cannot be refuted, it cannot be condemned. But I do not consider the prosecution as particularly levelled against me, but against the general right, or the right of every man, of investigating systems and principles of government, and showing their several excellencies or defects.” – Letter Addressed to the Addressers of the Late Proclamation

“Whatever the rights of people are, they have a right to them, and none have a right either to withhold them, or to grant them.” – Letter Addressed to the Addressers of the Late Proclamation

“A thing, moderately good, is not so good as it ought to be. Moderation in temper is always a virtue; but moderation in principle is a species of vice.” – Letter Addressed to the Addressers of the Late Proclamation

“If you now enjoy freedom and happiness, you should be conscious of the reasons for your contentment.” – An Essay for the Use of New Republicans in Their Opposition to Monarchy

“A person educated in the belief that he has a right to command others is inevitably bound by his surroundings to lose all sense of reason and justice.” – An Essay for the Use of New Republicans in Their Opposition to Monarcy

“Why assume an evil solely for the purposes of providing a remedy?” – An Essay for the Use of New Republicans in Their Opposition to Monarchy

“It is our duty as legislators not to spill a drop of blood when our purpose may be effectually accomplished without it.” – Reasons for Preserving the Life of Louis Capet

“I have always strenuously supported the right of every man to his own opinion, however different that opinion might be to mine. He who denies to another this right, makes a slave of himself to his present opinion, because he precludes himself the right of changing it.” – Age of Reason

“All national institutions of churches, whether Jewish, Christian or Turkish, appear to me no other than human inventions, set up to terrify and enslave mankind, and monopolize power and profit.” – Age of Reason

“It is necessary to the happiness of man that he be mentally faithful to himself. Infidelity does not consist in believing, or in disbelieving; it consists in professing to believe what he does not believe.” – Age of Reason

“The commandments carry no internal evidence of divinity with them; they contain some good moral precepts, such as any man qualified to be a lawgiver, or a legislator, could produce himself, without having recourse to supernatural intervention.” – Age of Reason

“That many good men have believed this strange fable, and lived very good lives under that belief (for credulity is not a crime), is what I have no doubt of. In the first place, they were educated to believe it, and they would have believed anything else in the same manner.” – Age of Reason

“Whenever we read the obscene stories, the voluptuous debaucheries, the cruel and torturous executions, the unrelenting vindictiveness, with which more than half the Bible is filled, it would be more consistent that we called it the word of a demon than the Word of God. It is a history of wickedness that has served to corrupt and brutalize mankind; and, for my part, I sincerely detest it as I detest everything that is cruel.” – Age of Reason

“There is not, throughout the whole book called the Bible, any word that describes to us what we call a poet, nor any word which describes what we call poetry. The case is that the word prophet, to which latter times have affixed a new idea, was the Bible word for poet, and the word prophesying meant the art of making poetry. It also meant the art of playing poetry to a tune upon any instrument of music.” – Age of Reason

“Had it been the object of Jesus Christ to establish a new religion, he would undoubtedly have written the system himself, or procured it to be written in his life-time. But there is no publication extant authenticated with his name. All the books called the New Testament were written after his death. He was a Jew by birth and by profession; and he was the Son of God in like manner that every other person is–for the Creator is the Father of All.” – Age of Reason

“Do we want to know that God is? Search not the book called the Scripture, which any human hand might make, but the Scripture called the creation.” – Age of Reason

“As to the Christian system of faith, it appears to me a species of Atheism–a sort of religious denial of God. It professes to believe in a man rather than in God.” – Age of Reason

“Wealth is no proof of moral character; nor poverty of the want of it.” – Dissertation on First Principles of Government

“When all other rights are taken away the right of rebellion is made perfect.” – Dissertation on First Principles of Government

“The moral principle of revolutions is to instruct, not to destroy.” – Dissertation on First Principles of Government

“There are cases in which silence is a loud language.” – Letter to George Washington

Thank you for displaying true liberalism, Tom–not whatever the modern “liberal” wackos espouse today.

Free money: explaining 2008 U.S. stocks

Leaning on thin air?
Investing tip: put all of your money in the stock market the afternoon before a Federal Reserve announcement.  Take it all out the next afternoon.

 U.S. stocks have been in free fall this year, except on the days when the Federal Reserve announced it would be pumping extra cash into the banking system.  Every rate cut and liquidity facility has brought with it a great day on the trading market, and today is no exception.  An investor who times his market participation with Federal Reserve action has seen a phenomenal return in 2008.

Market strategists can be found all over mainstream news, having weird little greed orgasms every time the Federal Reserve “takes decisive action” to inject free money into the market, but anyone with a compassionate perspective and a basic understanding of economics asks the question: What is the price of one good day on the stock exchange?

The exact answer to that question is slippery.  The what is simple: hyperinflation and stagflation.  Who is affected? Everyone, but inflation is regressive, and will affect the middle class much more, as their wages will be unable to keep up with rising prices across the market.  Much of the nation’s capital will be invested in more lucrative, less expensive ventures overseas, so employment will be difficult to find in the U.S.  It is difficult to say when this will happen, but it is an inevitable law of money.  Nothing is free.  Only productive labor can give value to currency, so the Federal Reserve’s “free money” stock jumps are worthless.  Market strategists do not see hyperinflation coming, just like they did not see the depth of the subprime mortgage mess (they still don’t see that).  By the end of the summer, however, they will realize the price of a few days of good trading–a price paid by the extreme efforts the American middle class will have to exert to sustain their families, most of whom do not care about artificially inflated stock prices.

The Federal Reserve is not saving the economy.  It is exploiting the middle class to conserve malinvested wealth, and it is delaying and harshening an unavoidable market correction.