Last week, supporters of the current administration rejoiced over job numbers released by the Bureau of Labor and Statistics (BLS). For the first time since the administration came to power, the official unemployment number fell below 8%. Keynesian cheerleaders all claimed the numbers meant we are surely on the road to economic recovery, just in time for Christmas, and also, the election. Others saw through this ruse.
The situation on the ground looks nothing like a recovery. 23 million people are still out of work or chronically underemployed. This number is expected to rise dramatically next year. The situation in Washington should not give anyone cause for optimism. Politicians refuse to look honestly and intelligently at the cause of our economic malaise, and so real solutions are not taken seriously or acted upon. It is much easier and less painful to simply recalculate the numbers and redefine the terms until a rosier picture is presented. There is only blind hope that at some point, for some reason, things might change. But nothing will change for the better if we only stay the course.
The truth is the long term solutions to our economic quagmire involve some short term pain. Re-evaluating the economic role of an institution as insidious and behemoth as the Federal Reserve will inconvenience some people, and those people happen to have a lot of power. Similarly, the idea of ending government programs and closing down superfluous departments will always upset someone because it means someone will stop getting a government check.
No one wants to upset the apple cart, even if all the apples are rotten.
Not all of the unemployed are counted in the BLS unemployment numbers. This is no secret. In 1994 government statisticians came up with the term "discouraged worker" to remove entire swaths of people from the unemployment statistic. Now all the government has to do to improve the unemployment numbers is discourage people from looking for a job.
Far more unintended consequences are created in Washington than jobs.
Ideally, the business sector should be able to depend on sound numbers from the BLS, but smart business leaders know that trust in these numbers leads to bad decisions and failure. In regards to the recent jobs numbers, investor Jim Rogers recently stated “I have learned not to take advice from the government, especially the US government, which frequently misleads its citizens." He also noted the election just around the corner, suggesting timing as an extra incentive to keep fudging the statistics.
The real drivers of the productive economy can't afford to take risks based on false numbers. This is why economist John Williams created Shadow Government Statistics, utilizing more traditional methodologies and definitions to show business decision makers the real economic picture, warts and all. He shows the real unemployment rate to be a staggering 22.8%.
This is a difficult figure to accept as the actual truth. Perhaps if the politicians did, the people would finally demand real change and real solutions. Perhaps they would consider that all of the so-called stimulus spending, quantitative easing and mountains of regulation from Washington has only crippled the economy. Perhaps people would come to understand that fewer checks handed out from the public sector would mean more checks available in the private sector, and a return to real prosperity instead of just the appearance of it.
Thursday
Wednesday
WHAT I THINK........ANDREAS KELLY
So 47% of the vote will go to the Democrat? Ron Paul can get more, by leading non-voting Americans to stand up and be counted. 42.63% of Americans didn’t vote in the 2008 presidential election. He can easily add his supporters to that figure, for more than 50% of all eligible voters, and take the next step in peaceful revolution.
As many Americans, I became a devoted Ron Paul supporter during his bid in the 2008 presidential campaign. Although my disillusionment with American politics and economics pre-dated my contact with Ron Paul, it came from a different perspective. Probably, it was rooted in an inherited fundamental distrust of the "establishment," which I learned to perceive as being increasingly tyrannical. Through Dr. Paul, I have been able to connect a lot of dots, involving things like economic policy, foreign policy, and civil liberties. As many, I was disappointed, to say the least, that the Republican Party didn’t nominate him, and even blocked his delegates in various states and at the convention. It seems the mainstream media has succeeded in silencing him, at least for this presidential election.
The media, educational institutions and every governmental institution suggest we have a duty to vote, and try to inspire us to vote, regardless of who we vote for. Should I really vote for the "lesser of two evils" in this bipartisan election? Many argue that the Republican candidate, for example, would save a few unborn babies by changing a policy regarding planned parenthood or international funding for abortions. However, the Republican party has proven that it will never take any serious action to stop abortion. Democrats claim their candidate will help the poor, but that help will be short-lived, and, in the long term, harmful to the poor. The ridiculous war on drugs is supported by both candidates, as are the wars against so-called terrorists and dictators on foreign soil, and American foreign military presence all over the world. Neither party will do anything to protect Americans from the continuing debasement of the dollar, or the catastrophic fiscal practices enacted by the Federal Reserve. As for our civil liberties, they will continue to be eradicated up by either candidate, to "protect national security." Thus, "voting the bum out" doesn’t have any effect in modern presidential elections. There just aren’t any substantive differences between the coke and pepsi presidential candidates. Obama may drive the train at full throttle over the cliff; Romney claims he’ll pull back the throttle, but only a tad, and he certainly won’t change direction. Our only real hope is to stop the train, dismantle it, and imprison those who designed, installed and managed it from its inception. Neither party really acknowledges the pending disaster.
What then, are we to do? How do we continue to support Ron Paul? Do we look to Rand? Will Ron run in 2016 at 80, and if so, will he do so as a Republican?
We can’t wait for 2016, Rand won’t or can’t take Ron’s torch, and the relationship between Ron and the Republican party seems meaningless at this point. But, like many Americans with some political awareness and will, I’d follow Ron Paul anywhere. Not because of his ideology, though I agree with most of it, but because he is one of few honest politicians in history, and certainly in my memory. Since the good doctor seems to have abandoned his presidential bid, and is retiring from the Congress, how can he lead us now? In his "retirement," I expect that he will write, speak and lecture, and continue to educate Americans. But what can he do politically?
Ron Paul has captured the attention of millions, who are waiting for his next move. Voter turnout for the presidential election was at 57.37% in 2008, according to Wikipedia; it has been under 65% since 1908. Not voting may reflect apathy, but to paraphrase George Carlin, it also gives us the right to say, "don’t blame me; I didn’t vote for him!"
Refusing to vote speaks volumes, though its easy to ignore non-voters. No one has ever harnessed the power of that refusal. Ron Paul can do it, by refusing to endorse the Republican, or the Libertarian, or any other candidate, because their policies will continue to harm America, because no candidate is willing to do what this country needs. Ron can rally his supporters to join the non-voting bloc, and lead us into the next phase of peaceful revolution. He might even pick up a lot of moderates and undecideds. He can speak on a national stage, and encourage us to refuse to vote in the presidential election. Ron, I implore you: Unite us! Unite the disillusioned and the rejected, vocalize our silent voices, and keep leading us in peaceful revolution!
As many Americans, I became a devoted Ron Paul supporter during his bid in the 2008 presidential campaign. Although my disillusionment with American politics and economics pre-dated my contact with Ron Paul, it came from a different perspective. Probably, it was rooted in an inherited fundamental distrust of the "establishment," which I learned to perceive as being increasingly tyrannical. Through Dr. Paul, I have been able to connect a lot of dots, involving things like economic policy, foreign policy, and civil liberties. As many, I was disappointed, to say the least, that the Republican Party didn’t nominate him, and even blocked his delegates in various states and at the convention. It seems the mainstream media has succeeded in silencing him, at least for this presidential election.
The media, educational institutions and every governmental institution suggest we have a duty to vote, and try to inspire us to vote, regardless of who we vote for. Should I really vote for the "lesser of two evils" in this bipartisan election? Many argue that the Republican candidate, for example, would save a few unborn babies by changing a policy regarding planned parenthood or international funding for abortions. However, the Republican party has proven that it will never take any serious action to stop abortion. Democrats claim their candidate will help the poor, but that help will be short-lived, and, in the long term, harmful to the poor. The ridiculous war on drugs is supported by both candidates, as are the wars against so-called terrorists and dictators on foreign soil, and American foreign military presence all over the world. Neither party will do anything to protect Americans from the continuing debasement of the dollar, or the catastrophic fiscal practices enacted by the Federal Reserve. As for our civil liberties, they will continue to be eradicated up by either candidate, to "protect national security." Thus, "voting the bum out" doesn’t have any effect in modern presidential elections. There just aren’t any substantive differences between the coke and pepsi presidential candidates. Obama may drive the train at full throttle over the cliff; Romney claims he’ll pull back the throttle, but only a tad, and he certainly won’t change direction. Our only real hope is to stop the train, dismantle it, and imprison those who designed, installed and managed it from its inception. Neither party really acknowledges the pending disaster.
What then, are we to do? How do we continue to support Ron Paul? Do we look to Rand? Will Ron run in 2016 at 80, and if so, will he do so as a Republican?
We can’t wait for 2016, Rand won’t or can’t take Ron’s torch, and the relationship between Ron and the Republican party seems meaningless at this point. But, like many Americans with some political awareness and will, I’d follow Ron Paul anywhere. Not because of his ideology, though I agree with most of it, but because he is one of few honest politicians in history, and certainly in my memory. Since the good doctor seems to have abandoned his presidential bid, and is retiring from the Congress, how can he lead us now? In his "retirement," I expect that he will write, speak and lecture, and continue to educate Americans. But what can he do politically?
Ron Paul has captured the attention of millions, who are waiting for his next move. Voter turnout for the presidential election was at 57.37% in 2008, according to Wikipedia; it has been under 65% since 1908. Not voting may reflect apathy, but to paraphrase George Carlin, it also gives us the right to say, "don’t blame me; I didn’t vote for him!"
Refusing to vote speaks volumes, though its easy to ignore non-voters. No one has ever harnessed the power of that refusal. Ron Paul can do it, by refusing to endorse the Republican, or the Libertarian, or any other candidate, because their policies will continue to harm America, because no candidate is willing to do what this country needs. Ron can rally his supporters to join the non-voting bloc, and lead us into the next phase of peaceful revolution. He might even pick up a lot of moderates and undecideds. He can speak on a national stage, and encourage us to refuse to vote in the presidential election. Ron, I implore you: Unite us! Unite the disillusioned and the rejected, vocalize our silent voices, and keep leading us in peaceful revolution!
GOVERNMENT DEPENDENCY WILL END IN CHAOS
The media insists on characterizing statements about dependency on government handouts as controversial, but in truth such statements are absolutely correct. It's not that nearly half of Americans are dependent on government; it's actually more than half. If one includes not just people on food stamps and welfare, but also seniors on Medicare, Social Security and people employed by the government directly, the number is more like 165 million out of 308 million, which is 53%.
Some argue that Social Security and Medicare benefits are a right because people pay into these programs their whole lives, or that we need a government safety net in place for people who fall on hard times. However, this all becomes a moot point when the funds people depend on become worthless due to government default or rampant inflation.
This is less an issue of dignity or dependence on government, and more about the deceitfulness of government promises.
The Fed recently announced that it plans to keep interest rates near zero and keep buying near worthless assets from banks indefinitely. This enables Congress to spend without having to take deficits or the debt seriously and there is every indication they intend to spend with impunity until the system collapses. There are no brakes on the runaway train. The federal debt ceiling law does nothing to limit spending. The ceiling will have to be raised yet again perhaps before the year is out. What is happening in Greece with austerity measures and riots in the street
will happen here within a decade according to some realistic estimates if we do not find some way to fiscally restrain our government.
There is little point in a debate about being entitled to healthcare or food or shelter from fellow taxpayers if the whole system has collapsed. And, with the way our politicians have taken over and
mismanaged vast amounts of resources, collapse seems almost unavoidable. Yet the number of Americans who have significant dependency on government is dangerously high, and I honestly fear for them.
Worse,
corporate welfare is also at an all-time high with no signs of diminishing. Though it is hard to quantify, Tad Dehaven at Cato has estimated that the government spends nearly twice as much on corporate welfare than on social welfare. Both parties are equally guilty. More and more, the business sector is learning to rely on taxpayer largesse in one form or another. They used to be solely concerned with providing a better product to the consumer at a better price. Now, success on Wall Street depends entirely too much on having the best lobbyists on K Street. If one includes the employees of "private" businesses who depend on government contracts, grants or bailouts, there are even more people dependent on government in some way.
Government does not create resources when it taxes people and prints money; it merely redistributes the wealth, while supporting a massive, wasteful bureaucracy along the way. Government is a giant, blood-sucking parasite on our otherwise healthy economy. For too long we have entrusted too much economic power and influence to irresponsible politicians in Washington. It's the chaos that ensues after they run the system into the ground that will be so painful for so many people. But realigning our economy with the free market and away from government mandates and handouts must happen in order for it to thrive again.
The answer is not to keep asking government to do more. The answer is to
extricate our economy and ourselves from the grasp of Washington DC as much as possible now, before our dependency becomes our downfall.
Some argue that Social Security and Medicare benefits are a right because people pay into these programs their whole lives, or that we need a government safety net in place for people who fall on hard times. However, this all becomes a moot point when the funds people depend on become worthless due to government default or rampant inflation.
This is less an issue of dignity or dependence on government, and more about the deceitfulness of government promises.
The Fed recently announced that it plans to keep interest rates near zero and keep buying near worthless assets from banks indefinitely. This enables Congress to spend without having to take deficits or the debt seriously and there is every indication they intend to spend with impunity until the system collapses. There are no brakes on the runaway train. The federal debt ceiling law does nothing to limit spending. The ceiling will have to be raised yet again perhaps before the year is out. What is happening in Greece with austerity measures and riots in the street
will happen here within a decade according to some realistic estimates if we do not find some way to fiscally restrain our government.
There is little point in a debate about being entitled to healthcare or food or shelter from fellow taxpayers if the whole system has collapsed. And, with the way our politicians have taken over and
mismanaged vast amounts of resources, collapse seems almost unavoidable. Yet the number of Americans who have significant dependency on government is dangerously high, and I honestly fear for them.
Worse,
corporate welfare is also at an all-time high with no signs of diminishing. Though it is hard to quantify, Tad Dehaven at Cato has estimated that the government spends nearly twice as much on corporate welfare than on social welfare. Both parties are equally guilty. More and more, the business sector is learning to rely on taxpayer largesse in one form or another. They used to be solely concerned with providing a better product to the consumer at a better price. Now, success on Wall Street depends entirely too much on having the best lobbyists on K Street. If one includes the employees of "private" businesses who depend on government contracts, grants or bailouts, there are even more people dependent on government in some way.
Government does not create resources when it taxes people and prints money; it merely redistributes the wealth, while supporting a massive, wasteful bureaucracy along the way. Government is a giant, blood-sucking parasite on our otherwise healthy economy. For too long we have entrusted too much economic power and influence to irresponsible politicians in Washington. It's the chaos that ensues after they run the system into the ground that will be so painful for so many people. But realigning our economy with the free market and away from government mandates and handouts must happen in order for it to thrive again.
The answer is not to keep asking government to do more. The answer is to
extricate our economy and ourselves from the grasp of Washington DC as much as possible now, before our dependency becomes our downfall.
Monday
GOLD IS GOOD MONEY
Last year the Chairman of the Federal Reserve told me that gold is not money, a position which central banks, governments, and mainstream economists have claimed is the consensus for decades. But lately there have been some high-profile defections from that consensus. As Forbes recently reported, the president of the Bundesbank (Germany's central bank) and two highly-respected analysts at Deutsche Bank have praised gold as good money.
Why is gold good money? Because it possesses all the monetary properties that the market demands: it is divisible, portable, recognizable and, most importantly, scarce - making it a stable store of value. It is all things the market needs good money to be and has been recognized as such throughout history. Gold rose to nearly
$1800 an ounce after the Fed's most recent round of quantitative easing because the people know that gold is money when fiat money fails.
Central bankers recognize this too, even if they officially deny it. Some
analysts have speculated that the International Monetary Fund's real clout is due to its large holdings of gold. And central banks around the world have increased their gold holdings over the last year, especially in emerging market economies trying to protect themselves from the collapse of Western fiat currencies.
Fiat money is not good money because it can be issued without limit and therefore cannot act as a stable store of value. A fiat monetary system gives complete discretion to those who run the printing press, allowing governments to spend money without having to suffer the political consequences of raising taxes. Fiat money benefits
those who create it and receive it first, enriching government and its cronies. And the negative effects of fiat money are disguised so that people do not realize that money the Fed creates today is the reason for the busts, rising prices and unemployment, and diminished standard of living tomorrow.
This is why it is so important to allow people the freedom to choose stable money. Earlier this Congress I introduced the Free Competition in Currency Act (H.R. 1098) to permit people to use gold as money again. By eliminating taxes on gold and other precious metals and repealing legal tender laws, people are given the option between using good money or fiat money. If the government persists in debasing the dollar – as
money monopolists have always done – then the people would be able to protect themselves by using alternatives such as gold that are both sound and stable.
As the fiat money pyramid crumbles, gold retains its luster. Rather than being the barbarous relic Keynesians have tried to lead us to believe it is, gold is, as the Bundesbank president put it, "a timeless classic." The defamation of gold wrought by central banks and governments is because gold exposes the devaluation of fiat currencies and the flawed policies of government. Governments hate gold because the people cannot be fooled by it.
Why is gold good money? Because it possesses all the monetary properties that the market demands: it is divisible, portable, recognizable and, most importantly, scarce - making it a stable store of value. It is all things the market needs good money to be and has been recognized as such throughout history. Gold rose to nearly
$1800 an ounce after the Fed's most recent round of quantitative easing because the people know that gold is money when fiat money fails.
Central bankers recognize this too, even if they officially deny it. Some
analysts have speculated that the International Monetary Fund's real clout is due to its large holdings of gold. And central banks around the world have increased their gold holdings over the last year, especially in emerging market economies trying to protect themselves from the collapse of Western fiat currencies.
Fiat money is not good money because it can be issued without limit and therefore cannot act as a stable store of value. A fiat monetary system gives complete discretion to those who run the printing press, allowing governments to spend money without having to suffer the political consequences of raising taxes. Fiat money benefits
those who create it and receive it first, enriching government and its cronies. And the negative effects of fiat money are disguised so that people do not realize that money the Fed creates today is the reason for the busts, rising prices and unemployment, and diminished standard of living tomorrow.
This is why it is so important to allow people the freedom to choose stable money. Earlier this Congress I introduced the Free Competition in Currency Act (H.R. 1098) to permit people to use gold as money again. By eliminating taxes on gold and other precious metals and repealing legal tender laws, people are given the option between using good money or fiat money. If the government persists in debasing the dollar – as
money monopolists have always done – then the people would be able to protect themselves by using alternatives such as gold that are both sound and stable.
As the fiat money pyramid crumbles, gold retains its luster. Rather than being the barbarous relic Keynesians have tried to lead us to believe it is, gold is, as the Bundesbank president put it, "a timeless classic." The defamation of gold wrought by central banks and governments is because gold exposes the devaluation of fiat currencies and the flawed policies of government. Governments hate gold because the people cannot be fooled by it.
INTEREST RATES ARE PRICES
One of the most enduring myths in the United States is that this country has a free market, when in reality, the market is merely the structural shell of formerly free institutions. Government pulls the strings behind the scenes. No better illustration of this can be found than in the Federal Reserve's manipulation of interest rates.
The Fed has interfered with the proper function of interest rates for decades, but perhaps never as boldly as it has in the past few years through its policies of quantitative easing. In Chairman Bernanke's most recent press conference he stated that the Fed wishes not only to drive down rates on Treasury debt, but also rates on mortgages, corporate bonds, and other important interest rates. Markets greeted this statement enthusiastically, as this means trillions more newly-created dollars flowing directly to Wall Street.
Because the interest rate is the price of money, manipulation of interest rates has the same effect in the market for loanable funds as price controls have in markets for goods and services. Since demand for funds has increased, but the supply is not being increased, the only way to match the shortfall is to continue to create new credit. But this process cannot continue indefinitely. At some point the capital projects funded by the new credit are completed. Houses must be sold, mines must begin to produce ore, factories must begin to operate and produce consumer goods.
But because consumption patterns have either remained unchanged or have become more present-oriented, by the time these new capital projects are finished and begin to produce, the producers find no market for their goods. Because the coordination between savings and consumption was severed through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity. Resources that would have been used in productive endeavors under a regime of market-determined interest rates are instead shuttled into endeavors that only after the fact are determined to be unprofitable. In order to return to a functioning economy, those resources which have been malinvested need to be liquidated and shifted into sectors in which they can be put to productive use.
Another effect of the injections of credit into the system is that prices rise. More money chasing the same amount of goods results in a rise in prices. Wall Street and the banking system gain the use of the new credit before prices rise. Main Street, however, sees the prices rise before they are able to take advantage of the newly-created credit. The purchasing power of the dollar is eroded and the standard of living of the American people drops.
We live today not in a free market economic system but in a "mixed economy", marked by an uneasy mixture of corporatism; vestiges of free market capitalism; and outright central planning in some sectors. Each infusion of credit by the Fed distorts the structure of the economy, damages the important role that interest rates play in the market, and erodes the purchasing power of the dollar. Fed policymakers view themselves as wise gurus managing the economy, yet every action they take results in economic distortion and devastation.
Unless Congress gets serious about reining in the Federal Reserve and putting an end to its manipulation, the economic distortions the Fed has caused will not be liquidated; they will become more entrenched, keeping true economic recovery out of our grasp and sowing the seeds for future crisis.
The Fed has interfered with the proper function of interest rates for decades, but perhaps never as boldly as it has in the past few years through its policies of quantitative easing. In Chairman Bernanke's most recent press conference he stated that the Fed wishes not only to drive down rates on Treasury debt, but also rates on mortgages, corporate bonds, and other important interest rates. Markets greeted this statement enthusiastically, as this means trillions more newly-created dollars flowing directly to Wall Street.
Because the interest rate is the price of money, manipulation of interest rates has the same effect in the market for loanable funds as price controls have in markets for goods and services. Since demand for funds has increased, but the supply is not being increased, the only way to match the shortfall is to continue to create new credit. But this process cannot continue indefinitely. At some point the capital projects funded by the new credit are completed. Houses must be sold, mines must begin to produce ore, factories must begin to operate and produce consumer goods.
But because consumption patterns have either remained unchanged or have become more present-oriented, by the time these new capital projects are finished and begin to produce, the producers find no market for their goods. Because the coordination between savings and consumption was severed through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity. Resources that would have been used in productive endeavors under a regime of market-determined interest rates are instead shuttled into endeavors that only after the fact are determined to be unprofitable. In order to return to a functioning economy, those resources which have been malinvested need to be liquidated and shifted into sectors in which they can be put to productive use.
Another effect of the injections of credit into the system is that prices rise. More money chasing the same amount of goods results in a rise in prices. Wall Street and the banking system gain the use of the new credit before prices rise. Main Street, however, sees the prices rise before they are able to take advantage of the newly-created credit. The purchasing power of the dollar is eroded and the standard of living of the American people drops.
We live today not in a free market economic system but in a "mixed economy", marked by an uneasy mixture of corporatism; vestiges of free market capitalism; and outright central planning in some sectors. Each infusion of credit by the Fed distorts the structure of the economy, damages the important role that interest rates play in the market, and erodes the purchasing power of the dollar. Fed policymakers view themselves as wise gurus managing the economy, yet every action they take results in economic distortion and devastation.
Unless Congress gets serious about reining in the Federal Reserve and putting an end to its manipulation, the economic distortions the Fed has caused will not be liquidated; they will become more entrenched, keeping true economic recovery out of our grasp and sowing the seeds for future crisis.
Friday
WHAT I THINK.......TOM DiLORENZO
Unlike Romney and Obama, Ron Paul is neither a repeater of Republican Party platitudes about "America’s greatness" nor a mumbler of silly socialist platitudes that sound like they were paraphrased directly from The Communist Manifesto ("From each according to his ability, to each according to his needs"). Ron Paul is a seriously learned man when it comes to economics and political philosophy. He is very familiar with the writings of all the classical liberals, especially Austrian School economists such as Ludwig von Mises, Henry Hazlitt, F.A. Hayek, and Murray Rothbard. As such, he must know that Rothbard considered John C. Calhoun, the nineteenth-century U.S. Senator, Secretary of War, and Vice President of the United States to have been one of America’s greatest political philosophers as well.
Because of his educational background, Ron Paul would have articulated Romney’s truthful comment about how the moochers and parasites of American society ("the 47%") are on the verge of overwhelming the producers politically. He would not have gotten involved in the mindless media "debate" over whether it is 47 percent or 49 percent of American adults who pay no income taxes but receive benefits from government. He likely would have quoted or paraphrased Rothbard’s favorite American political philosopher, Calhoun, from his magisterial 1850 Disquisition on Government instead.
When once formed," Calhoun wrote, a political community "will be divided into two great parties – a major and minor – between which there will be incessant struggles on the one side to retain, and on the other to obtain the majority . . . . " Consequently, "some portion of the community must pay in taxes more than it receives back in disbursements; while another receives in disbursements more than it pays in taxes."
The community is thus divided into "two great classes – one consisting of those who . . . pay the taxes . . . and the other, of those who are the recipients of their proceeds." This will in turn lead to "one class or portion of the community [being] elevated to wealth and power, and the other depressed to abject poverty and dependence, simply by the fiscal action of the government."
This has certainly come true. The real "One Percenters" that should have been the object of the "Occupy Wall Street" protesters are not American capitalists per se, but the politically-connected, subsidized and bailed out ones, combined with the political class itself, including all politicians, bureaucrats, and their ideological minions in the media and academe. Even the lowliest "city manager" of a small California town can retire on a pension in the range of $800,000/year, the media sensationally reported a year or so ago.
Calhoun further warned that the power to tax will inevitably be used "for the purpose of aggrandizing and building up one portion of the community at the expense of another," which will "give rise to . . . violent conflicts and struggles between the two competing parties." Stay tuned, Americans, and pay attention to what has happened in places like Greece.
Calhoun also understood that the totalitarian-minded enemies of a free society (i.e., most politicians of all parties) would say and do anything to destroy all roadblocks to their totalitarian dreams. Thus, "it is a great mistake," Calhoun wrote, to suppose that a written Constitution would be sufficient to protect individual liberty because the party in power "will always have no need of [constitutional] restrictions." As Andrew Napolitano pointed out in his book,
The Constitution in Exile, the U.S. Supreme Court failed to strike down a single piece of federal legislation as unconstitutional from 1937 to 1995, and precious little since then. The government’s "Supreme Court" long ago became what Alexander Hamilton wanted it to become: a rubber stamp operation for anything and everything the state ever wants to do.
Such men as Hamilton and his political descendants would use "cunning, falsehood, deception, slander, fraud, and gross appeals to the appetites of the lowest and most worthless portions of the community," Calhoun predicted, until "the restrictions [of the Constitution] would be ultimately annulled, and the government be converted into one of unlimited powers." Calhoun wrote this in 1850; the succeeding 162 years proved him to be prescient.
Representative government and a written constitution were good things in Calhoun’s eyes, but would never be sufficient to thwart tyranny and economic collapse unless some mechanisms could be adopted that would allow the people themselves to interpose their will directly on government. That’s why he proposed nullification, a "concurrent majority" of citizens that could veto unconstitutional federal legislation, and secession, the principle idea of the American revolution.
Because of his educational background, Ron Paul would have articulated Romney’s truthful comment about how the moochers and parasites of American society ("the 47%") are on the verge of overwhelming the producers politically. He would not have gotten involved in the mindless media "debate" over whether it is 47 percent or 49 percent of American adults who pay no income taxes but receive benefits from government. He likely would have quoted or paraphrased Rothbard’s favorite American political philosopher, Calhoun, from his magisterial 1850 Disquisition on Government instead.
When once formed," Calhoun wrote, a political community "will be divided into two great parties – a major and minor – between which there will be incessant struggles on the one side to retain, and on the other to obtain the majority . . . . " Consequently, "some portion of the community must pay in taxes more than it receives back in disbursements; while another receives in disbursements more than it pays in taxes."
The community is thus divided into "two great classes – one consisting of those who . . . pay the taxes . . . and the other, of those who are the recipients of their proceeds." This will in turn lead to "one class or portion of the community [being] elevated to wealth and power, and the other depressed to abject poverty and dependence, simply by the fiscal action of the government."
Calhoun further warned that the power to tax will inevitably be used "for the purpose of aggrandizing and building up one portion of the community at the expense of another," which will "give rise to . . . violent conflicts and struggles between the two competing parties." Stay tuned, Americans, and pay attention to what has happened in places like Greece.
The Constitution in Exile, the U.S. Supreme Court failed to strike down a single piece of federal legislation as unconstitutional from 1937 to 1995, and precious little since then. The government’s "Supreme Court" long ago became what Alexander Hamilton wanted it to become: a rubber stamp operation for anything and everything the state ever wants to do.
Such men as Hamilton and his political descendants would use "cunning, falsehood, deception, slander, fraud, and gross appeals to the appetites of the lowest and most worthless portions of the community," Calhoun predicted, until "the restrictions [of the Constitution] would be ultimately annulled, and the government be converted into one of unlimited powers." Calhoun wrote this in 1850; the succeeding 162 years proved him to be prescient.
Representative government and a written constitution were good things in Calhoun’s eyes, but would never be sufficient to thwart tyranny and economic collapse unless some mechanisms could be adopted that would allow the people themselves to interpose their will directly on government. That’s why he proposed nullification, a "concurrent majority" of citizens that could veto unconstitutional federal legislation, and secession, the principle idea of the American revolution.
Monday
CONSEQUENCES OF AN INTERVENTIONIST FOREIGN POLICY
The attack on the US consulate in Libya and the killing of the US Ambassador and several aides is another tragic example of how our interventionist foreign policy undermines our national security. The more the US tries to control the rest of the world, either by democracy promotion, aid to foreign governments, or by bombs, the more events spin out of control into chaos, unintended consequences, and blowback.
Unfortunately, what we saw in Libya last week is nothing new.
In 1980s Afghanistan, the US supported Islamic radicals in their efforts to expel the invading Soviet military. These radicals became what is known to be al-Qaeda, and our one-times allies turned on us most spectacularly on September 11, 2001.
Iraq did not have a significant al Qaeda presence before the 2003 US invasion, but our occupation of that country and attempt to remake it in our image caused a massive reaction that opened the door to al Qaeda, leading to thousands of US soldiers dead, a country destroyed, and instability that shows no sign of diminishing.
In Libya we worked with, among others, the rebel Libyan Fighting Group (LIFG) which included foreign elements of al-Qaeda. It has been pointed out that the al-Qaeda affiliated radicals we fought in Iraq were some of the same groups we worked with to overthrow Gaddafi in Libya. Last year in a television interview I predicted that the result of NATO’s bombing of Libya would likely be an increased al-Qaeda presence in the country. I said at the time that we may be delivering al-Qaeda another prize.
Not long after NATO overthrew Gaddafi, the al Qaeda flag was flown over the courthouse in Benghazi. Should we be surprised, then, that less than a year later there would be an attack on our consulate in Benghazi? We have been told for at least the past eleven years that these people are the enemy who seeks to do us harm.
There is danger in the belief we can remake the world by bribing some countries and bombing others. But that is precisely what the interventionists – be they liberal or conservative – seem to believe. When the world does not conform to their image, they seem genuinely shocked. The secretary of state’s reaction to the attack on the US consulate in Benghazi was one of confusion. “How could this happen in a country we helped liberate, in a city we helped save from destruction,” she asked.
The problem is that we do not know and we cannot know enough about these societies we are seeking to remake. We never try to see through the eyes of those we seek to liberate. Libya is in utter chaos, the infrastructure has been bombed to rubble, the economy has ceased to exist, gangs and militias rule by brutal force, the government is seen as a completely illegitimate and powerless US puppet. How could anyone be shocked that the Libyans do not see our bombing their country as saving it from destruction?
Currently, the US is actively supporting rebels in Syria that even our CIA tells us are affiliated with al Qaeda. Many of these radical Islamist fighters in Syria were not long ago fighting in Libya. We must learn from these mistakes and immediately cease all support for the Syrian rebels, lest history once again repeat itself. We are literally backing the same people in Syria that we are fighting in Afghanistan and that have just killed our ambassador in Libya! We must finally abandon the interventionist impulse before it is too late.
Unfortunately, what we saw in Libya last week is nothing new.
In 1980s Afghanistan, the US supported Islamic radicals in their efforts to expel the invading Soviet military. These radicals became what is known to be al-Qaeda, and our one-times allies turned on us most spectacularly on September 11, 2001.
Iraq did not have a significant al Qaeda presence before the 2003 US invasion, but our occupation of that country and attempt to remake it in our image caused a massive reaction that opened the door to al Qaeda, leading to thousands of US soldiers dead, a country destroyed, and instability that shows no sign of diminishing.
In Libya we worked with, among others, the rebel Libyan Fighting Group (LIFG) which included foreign elements of al-Qaeda. It has been pointed out that the al-Qaeda affiliated radicals we fought in Iraq were some of the same groups we worked with to overthrow Gaddafi in Libya. Last year in a television interview I predicted that the result of NATO’s bombing of Libya would likely be an increased al-Qaeda presence in the country. I said at the time that we may be delivering al-Qaeda another prize.
Not long after NATO overthrew Gaddafi, the al Qaeda flag was flown over the courthouse in Benghazi. Should we be surprised, then, that less than a year later there would be an attack on our consulate in Benghazi? We have been told for at least the past eleven years that these people are the enemy who seeks to do us harm.
There is danger in the belief we can remake the world by bribing some countries and bombing others. But that is precisely what the interventionists – be they liberal or conservative – seem to believe. When the world does not conform to their image, they seem genuinely shocked. The secretary of state’s reaction to the attack on the US consulate in Benghazi was one of confusion. “How could this happen in a country we helped liberate, in a city we helped save from destruction,” she asked.
The problem is that we do not know and we cannot know enough about these societies we are seeking to remake. We never try to see through the eyes of those we seek to liberate. Libya is in utter chaos, the infrastructure has been bombed to rubble, the economy has ceased to exist, gangs and militias rule by brutal force, the government is seen as a completely illegitimate and powerless US puppet. How could anyone be shocked that the Libyans do not see our bombing their country as saving it from destruction?
Currently, the US is actively supporting rebels in Syria that even our CIA tells us are affiliated with al Qaeda. Many of these radical Islamist fighters in Syria were not long ago fighting in Libya. We must learn from these mistakes and immediately cease all support for the Syrian rebels, lest history once again repeat itself. We are literally backing the same people in Syria that we are fighting in Afghanistan and that have just killed our ambassador in Libya! We must finally abandon the interventionist impulse before it is too late.
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