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.

Who are the true patriots?

Young Ron Paul

“Complacency and fear drive our legislation without any serious objection by our elected leaders.  Sadly though, those few who do object to the self-evident trend away from personal liberty and empire building overseas are portrayed as unpatriotic and uncaring.

Though welfare and socialism always fail, opponents of them are said to lack compassion.  Though opposition to totally unnecessary war should be the only moral position, the rhetoric is twisted to claim that patriots who oppose the war are not supporting the troops.  The cliche ‘support the troops’ is incessantly used as a substitute for the unacceptable notion of supporting the policy no matter how flawed it may be.  Unsound policy can never help the troops.  Keeping the troops out of harm’s way and out of wars unrelated to our national security is the only real way of protecting the troops.  With this understanding, just who can claim the title of patriot?  Before the war in the Middle East spreads and becomes a world conflict for which we will be held responsible, before the liberties of all Americans become so suppressed we can no longer resist, much has to be done.

I am assured that our course of action should be clear.  Resistance to illegal and unconstitutional usurpation of our rights is required.  Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes.  But let it not be said that we did nothing.  Let not those who love the power of the welfare-warfare state label the dissenters of authoritarianism as un-patriotic or uncaring.  Patriotism is more closely linked to dissent than it is to conformity and a blind desire for safety and security.  Understanding the magnificent rewards of a free society makes us unbashful in its promotion, fully realizing that maximum wealth is created and the greatest chance for peace comes from a society respectful of individual liberty.” – Ronald E. Paul, M.D.

Patriotism is not blind nationalism.  In my view, there is none more foolish than the man who pledges his whole life to a government, only because it currently rules the accidental location of his birth.  True patriots are not loyal to a land mass, a government, a person, or group of people; they are loyal to ideas–the ideas that nature and history prove righteous to their own reflection, such as self-government and individual liberty.  It is not only the flag to which true patriots pledge allegiance, but also the republic for which it stands: one nation, under God, indivisible, with liberty and justice for all.  Sadly, these simple lines, which we have recited for as long as we can remember, have nearly lost their meaning for most Americans.

Perhaps we are so long removed from the origination of a free society that we have forgotten its price.  Perhaps we have forgotten what freedom is: the absence of government coercion.  Perhaps we have forgotten that truly beneficial policies almost always stand on their own merit, without the aid of massive government enforcement agencies.  Perhaps we have begun to take liberty for granted, so we allow it to be chiseled away each year by just a few more taxes, just a few more regulations, just a few more unconstitutional spending programs, just a few more harmless potheads turned into untouchable felons, just a few more unwarranted surveillance operations, just a few more troops on our streets to suppress the political dissenters, just a few more unfounded arrests and detainments, just a few more unnecessary casualties in the never-ending war for universal authority, just a few more computerized balloting systems, and just a little bit more government control.  After all, most of us feel we can still go about our business uninterrupted by these controls and live adequately, if not freely.  I fear now that by the time we realize that this is no longer true, by the time our old friends and fellow citizens–educated, hard-working, freedom-loving people of integrity–are declared dangerous enemies of the state, it will be too late to change the authoritarian direction of our nation, and it will be easier for us to act nationalistic and tolerated, silent and unencumbered, compliant and alive, than to be honest and endangered, righteous and imprisoned, patriotic and dead.  The false patriots will have won, successfully driving freedom out of the only safe harbor it has ever known.  American freedom, having long treaded in tempestuous weather, is drowning in the vast seas of prosperity and contentment it produced.  Its only lifeline is We the People.

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.

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.

Patriotism and Partisanship in America

Give me back my country!

“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.” – Thomas Paine

“I am a Democrat.”  What does this mean?  “I am a Republican.”  What does this mean?  Does anyone even know anymore?

I contend that I have never met a Democrat or a Republican.  I have met Americans, and I have met aristocrats.  Almost every American I know is exactly the same in political philosophy, differing only in historical knowledge (or lack thereof) and political application of that knowledge (or ignorance).  The typical American approach to politics, at its root, is this: always do what is best for our nation and our freedoms.  This is the basic political thought of the majority of Americans, regardless of political affiliation, and it matches the intent of our founders. 

There exists, however, an opinionated and vocal minority that will not rest until our freedoms are stamped out, our nation is unrecognizable, and our humanity is enslaved under the self-destructive goals of maximum employment and minumum wage.  This powerful minority has already succeeded beyond measure.  If Jesus Christ returned today, he would not recognize the religion that bears his title, because most of its members ignore his simple teachings; nor would Jefferson, Madison, or Washington claim the nation they helped to create, because it now resembles the opposite of what they intended during the revolution, before the rise of the new tyrannical minority.  The minority to which I refer is the corporate political establishment–the new aged robber barons–repackaged with mythical concerns for the community and environment, and freedom.

The corporate version of freedom is carefully defined.  Everyone should know that freedom is the absence of government coercion, but that definition of freedom does not do much to support government plunder.  It takes a very careful explanation indeed, for a people to understand why they must work five days every week and then receive pay for working only three, especially if the practice is to be perpetuated for fifty or more years of their lives.  This is why the definition of freedom must be skewed, and the process still requires what Orwell branded “doublethink,” because we all know, as individuals, that no one is better equipped to make decisions about our money than ourselves.   Liberty’s central thesis is this: no authority will ever be able to meet my needs better than I can (with the help of nature or nature’s God).  “Liberty or death” is the battle cry of the able American patriot, whether fighting the British crown in the eighteenth century, or the United States Congress in the twenty-first.

I believe it is time once again for the American people to unite against a tyrant that does not meet the nation’s basic human needs for civil liberties and free markets, and does not even give them the option of choosing leaders who actually do believe in these things, as the corporate media sees a peoples’ statesman as a serious threat to their own control over the political process.  Even media types will complain about apathy and blame themselves for it, but as soon as citizens get excited about the process, you can bet the media will call them whackjobs and undermine their efforts. 

If you don’t believe this, research Ron Paul’s presidential campaign.  Look him up on youtube or meetup, and you will see what I’m talking about.  By far the most popular candidate, Paul was intentionally crushed by the media for telling the truth too often and getting credibility amongst real people (he received more donations from military members than every other candidate in both parties combined).

Government submits to God, who wants to leave us alone

God at his computer.

This story is, of course, fictional.  If you see this headline in the newspaper tomorrow morning, you will need to pinch yourself–and if that does not wake you–realize that you have in fact died and gone to heaven.  As I imagine it, there are no tax collectors in heaven.  Upon entry into heaven, I could pick up the Times and read the following:

Today God announced major cutbacks in everything government. 

God called for an immediate end to all hostilities in Iraq, and condemned George W. Bush for lying to His people and killing His children without just cause.  “You’ll burn in hell for this,” God ordained matter-of-factly, in an unusually calm damning ceremony.  Taking questions after the announcement, God explained the departure from the usual thunderbolt display.  “Our traditional ceremony was a little over the top, and we’re trying to cut expenditures in these ceremonies anyway.  After the Falwell incident, I don’t really trust the lightning machine anymore–he wasn’t supposed to burn until he actually got to Hell.  I am not one to deprive Lucifer of his fun, but I am told he has still had plenty of it with Falwell.”  He then belted maniacal laughter for over three minutes.

God’s announcement expectedly drew some disfavor from President Bush, who backwardly believed he was doing God’s work.  “But God–” he started to say, but The All-Knowing knew what was coming and responded before Bush could finish.  “I do my own work, thank you,” God thundered.  “Love thy neighbor.  It’s simple, really.  Why couldn’t you just do it?  Jesus!”

The military will be mostly dissolved by mid-year, much to the dismay of the military industry.  Sources tell us that one CEO was particularly opposed to God’s will.  God quieted his argument, saying, “I never intended for you people to go around killing one another because of your petty arguments about me.  I’m going to let you keep fire and subsequent technological advancements.  Don’t push your luck with this fighting fetish you’ve developed.”

God called for the immediate dissolution of the CIA, FBI, the Department of Homeland Security, and all government secrecy.  He said His “reasoning here is simple: if people really want to be free, information must be free to them.  Besides, there is no reason for a good government to have secrets.  Good governments do not need protection, because people find no fault in them worth attacking.  If anything is going to be mysterious in this world, it’s going to be Me.”

No more personal taxes or tax identification numbers.  God seemed particularly frustrated by these human measures.  “I don’t know what nation is before me now, when I look at these income taxes,” God offered.  “Soviet Russia? Nazi Germany? Oceania?  Certainly not one nation, under Me, indivisible, with liberty and justice for all.  There’s no liberty in assigning everyone a number and staking claim to their labor–it’s as if you’ve modeled your society after Hell.”

God ended drug laws as well, and allowed all non-violent drug offenders to leave prison.  He called for a cutback of over 85% of the nation’s local police forces.  “You’ve got a lot of nerve,” He reprimanded Congress.  “Do you think I put cannabis on this planet so that you could spend your days trying to destroy it?  It’s not going away.  I put it here for your enjoyment.  Don’t tell people what they are allowed to do with what I put here.  I ought to damn you all to Hell for this!  As I look around, you’re all headed there anyway–oh, except for you, Dr. Paul of Texas: the Lot of Washington D.C.  What’s that, Ron?  Alright, you can bring Duncan along too.  No, Kucinich burns with the rest of them!  Alright, you may rescue Barney Frank from damnation as well, as we cannot fault the mentally handicapped.”

In perhaps related news, the Federal Reserve Board has disappeared.  No one can find any of them anywhere.  God did not explain where they went, but did say they will not be back.  “Gold and silver will always back the currency, to protect My people’s savings from confiscation.  The market, which I created, will determine rates of interest.”

To cap off His day of governing, God smote Mike Huckabee.  “Huckabee is a false idol,” decreed God, “almost as bad as the pope.”  The Almighty went on to relate Huckabee to the ancient Golden Calf, and his followers to ancient pagans because of their lack of respect for what God called “civic virtue.”

Fear is Tyranny was able to catch up with God during an evening prayer session.  We asked Him if He was done with governing for awhile.  “Absolutely not,” He said, “this is just the first day.  I’ve got five more to go before I rest.  My motivation here is very basic and has never changed: I gave people the capacity to think so that they might use it to guide themselves, and I am simply taking steps to encourage individual thought.”  Pray for similar results tomorrow.

Letter to the regulatory proponent

More regulation is not helping America

“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 had otherwise been had government policy not actively encouraged over-investment in housing.” – 07/12/2002 (in House, Congressman Ron Paul, R, TX)

The economic problems we are experiencing now are a result of regulation, and we actually wanted them to happen, so that we could have an excuse to propose more regulation. We predicted this recession would happen way back in 2002. We knew it would happen all along, and we were actively warned about it, and we listened, and we decided to let it happen anyway. The Democrats knew it would happen, and so did the Republicans, and they could have stopped it. They didn’t because, quite frankly, they don’t give a sh** about you or me, or anyone else in this country that doesn’t directly help them gain or retain power, or help propagandize people like us. If you think regulation is the answer, read up on Adam Smith and Friedrich Hayek, because you’ve been relying on the “news” for economic information, and they’ve got you painfully brainwashed. Americans now live like feudal serfs, working all of their lives, and never controlling their directions. Socialism is more similar to the tyranny of the past than to the prosperity of the future.

Other things you should know, in your infinite economic wisdom, before you take over the free market and start planning the economy: medical care is only expensive because it is overregulated. any economist will tell you that competition brings down prices, and the government is helping big health/drug companies keep competitors out. the market mechanism actually works pretty well with very little regulation, as long as collusion and monopoly are avoided wherever possible.

And lastly, the reason people work all of their lives at a grueling job for little pay is because the government makes it really hard for them to offer their services at a marketable price, by creating artificial labor surpluses. Workers also give a sizeable percentage of their earnings to government. They also have difficulty using their skills for their own profit because starting a business requires them to fill out long, expensive licensing forms, and they often are discouraged by the added tax burden. Many feel like they can’t go out on their own because they do not know the tax laws well enough, and are afraid they will break the law while trying to help themselves. However, all of these situations help the corporation for which they endlessly slave away, because it keeps the upstarts down. Hooray for taxes.