The Supreme Court and Natural Law

LvMIC:

I won a bet today.

A few weeks ago I wagered with a coworker that the United States Supreme Court would uphold the Affordable Care Act otherwise known as Obamacare.  He reasoned that the federal government has no authority under the Constitution to force an individual to purchase a product from a private company.  My reasoning was much simpler.  Because the Supreme Court is a functioning arm of the state, it will do nothing to stunt Leviathan’s growth.  The fact that the Court declared no federal law unconstitutional from 1937 to 1995—from the tail end of the New Deal through Lyndon Johnson’s Great Society—should have been proof enough.  He naively believed in the impartialness of politically-appointed judges.  For the first time he saw that those nine individuals are nothing more than politicians with an allegiance to state supremacy.
It was a tough but valuable lesson to learn.

As far as unintended effects are concerned, the economic justification for increased government regulation of the health care industry has been argued countless times up to this point.  Proponents of intervention are convinced that more bureaucracies, red tape, and central planning are the answer.  They have no knowledge of the pricing system and how it functions as the most efficient means through which consumers and producers can interact to come to an agreeable deal.  They don’t realize that the undersupply of doctors and care providers is a direct consequence of previous government intervention and occupational licensing.  Many actually believe that Obamacare wasn’t written by the insurance industry and isn’t a fascist-like appeasement of another deep pocketed lobbying campaign.

Common sense economics tells us that Obamacare will only lead to further inefficiencies and rationing as decisions of care continue to be made by third parties.  Once fully enacted, doctor offices will likely start resembling that of the waiting area of your local Department of Motor Vehicles.

All that aside, the Supreme Court’s upholding of the Affordable Care Act should serve as an eye opener to those who still believe the state exists as a protector of property and defender of the rule of law.

In the present day, the vast number of edicts coming from Washington can hardly be characterized as laws.  “But wait,” you may ask, “when legislation is passed by Congress, signed by the President, and ultimately approved by the Supreme Court, isn’t it now considered the law of the land?”  While it is certainly true that whatever scheme envisioned by the political class can be enforced by the state’s monopoly on violence, such rules of governance are more often than not laws in the traditional sense.

Historically, what was known as private or natural law rested upon the rational deduction of a set of ethically-based norms.  These norms focused on acts considered morally wrong such as assault, murder, rape, and violations of property in general.  Such aggressions were seen by classical liberal thinkers as detrimental to social cooperation.  According to 20^th century legal scholar Edwin Patterson, the concept of natural law evolved from

Principles of human conduct that are discoverable by “reason” from the basic inclinations of human nature, and that are absolute, immutable and of universal validity for all times and places. This is the basic conception of scholastic natural law . . . and most natural law philosophers.

Or as Murray Rothbard wrote in his book The Ethics of Liberty:

The natural law is, in essence, a profoundly “radical” ethic, for it holds the existing status quo, which might grossly violate natural law, up to the unsparing and unyielding light of reason. In the realm of politics or State action, the natural law presents man with a set of norms which may well be radically critical of existing positive law imposed by the State.

Positive law is the kind enacted by the state that bestows special privileges to specific individuals.  Whereas natural law is essentially negative in that it disallows for the violent treatment of others, state-sanctioned positive law is the granting of reward that is necessarily provided by confiscatory taxation or government coercion.

What the state, which is institutionalized predation and force, embodies is antithetical to natural law and the very belief that violence is morally repugnant.  To characterize the Supreme Court as some great upholder of the rule of law in spite of it being a pillar in the state apparatus is insulting to any decent person that has a basic understanding of justice.

In lieu of the upholding of the Affordable Care Act, it’s now worth asking what the U.S. government can’t do to Americans.  As of right now, a sitting president can call for the indefinite detainment and execution of both citizens and non citizens alike with no due process.  The band of thieves known as Congress can force the public to purchase a good or service and order its goons to read private communications without prior consent or knowledge.  The dollar is constantly inflated to the benefit of major financial institutions, thus destroying the purchasing power of the money Americans are forced into using.  The American people are no longer afforded their rights to their property, privacy, or own lives.  Those discretions are currently in the hands of the various marionettes of Washington.  Whether it is occupied by outright fascists or closet socialists, the state has no regard for liberty in its incremental quest for omnipotence.

As Ludwig von Mises spent his life expounding:

A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.

In the world of centralized or constitutional government, rules are always made to be broken.  The irony in today’s Supreme Court decision is that it was never given the authority to strike down federal laws under the Constitution.  The power of “judicial review” was established by precedent in Marbury v. Madison, 5 U.S. 137 (1803) and was not explicitly granted in the language of the Constitution.  As Lew Rockwell puts it, judicial review is a

Usurped power not present in the constitution. The anti-federalists had anticipated it, however, seeing it as just another of the viciously increased federal powers to be enabled by the new constitution as versus the far more libertarian Articles, which had been overthrown in the federalist coup at Philadelphia.

Many legal scholars argue that judicial review is an implied power.  If that were so, their logic can be applied to each and every blatantly unconstitutional law enforced by the federal government.  And as history has shown, this is precisely what has occurred as the Constitution’s purposefully vague language has been the cornerstone for growing Washington’s dominance over every aspect of civil society.

The upholding of Obamacare is just more evidence of the totalitarian jackboot that continues to be pressed down upon on America’s collective throat.  Instead of Congress or the President, it was the Supreme Court’s turn to pave the way toward serfdom.  In a truly free society, all forms of violence would be condemnable and worthy of legal recourse.  Men with badges and guns would receive no special treatment such as they do today.  Thieves would be thieves.  Murders would be murders.  Counterfeiters would be counterfeiters.  And mobsters would be mobsters.  Titles such as “President,” “Congressman,” “police officer,” or “central banker” would mean nothing under a functioning system of proper law.

To those who may object to natural or proper law, it may be asked “would you not defend your life or the lives of your loved ones against potential aggressors?”  For those who answer in the affirmative, they have rationally assumed their property is theirs to protect and their life and the lives of the innocent can be defended from coercion.  The only other option would be for a society where no property, including one’s own body, is to be justifiably owned.  The widespread practice of the latter tends to be enforced through brutal totalitarianism.  The former is the foundation for peace, justice, and prosperity.

The Politics of Shared Sacrifice

LvMIC:

It’s no secret that economic conditions around the world are deteriorating.  The Eurozone crisis rages on without any tangible solution being offered by the bickering technocrats.  China’s inflation fueled property bubbles continues to deflate with the People’s Bank of China responding by cutting its lending rate recently while the federal government attempts to get the economy going with fiscal stimulus.  The U.S. economy continues to drag along with Federal Reserve money printing slowing down considerably.

Leading economic indicators in all major and emerging economies are beginning to falter.  To top it off, campaign season is well under way in America with one warmongering bankster puppet set to face off with another warmongering bankster puppet this fall.  That means talk of “coming together” and unquestioned obedience to the mother state of Washington is here and will only escalate.

The slowing economic recovery also means increased mentioning of every politician’s favorite phrase: “shared sacrifice.”  With the federal government’s debt spiraling out of control, both presidential candidates have put forth budgetary plans to address the increasing cost of government.  Of course neither proposal actually comes close to balancing Washington’s books but that hasn’t stopped President Obama or Mitt Romney from presenting their plans as the product of tough-minded choices.  In Obama’s case, this means raising taxes on the filthy rich that earn over $250,000 a year.  Don’t take this an endorsement of Romney’s plan however as his still preserves Washington’s time honored tradition of trading pork for votes.

Speaking of “responsibility” and “sacrifice” isn’t unique to the American political class either.  In Europe, Germany is under great pressure to keep the Eurozone together by submitting to either a full fiscal union or monetary prime pumping via the European Central Bank.  Its reluctance has thus far been met with vitriol by politicians in periphery governments such as Greece and by mainstream journalists and commentators who have no lack of enthusiasm for bigger, more centralized government.

Economist Paul Krugman’s latest New York Times column exemplifies what now passes for general wisdom on the pages of many prominent media publications.  In The Great Abdication he mocks the lack of responsibility on the part of the German government to come to the Eurozone’s rescue along with the hesitance by the Federal Reserve to yet again flood the world with dollars:

Why won’t the Fed act? My guess is that it’s intimidated by those Congressional Republicans, that it’s afraid to do anything that might be seen as providing political aid to President Obama, that is, anything that might help the economy. Maybe there’s some other explanation, but the fact is that the Fed, like the European Central Bank, like the U.S. Congress, like the government of Germany, has decided that avoiding economic disaster is somebody else’s responsibility.

Yes, if only Germans would accept their responsibility of paying for the mistakes of others, than this whole mess could be worked out.  This is Paul Krugman’s version of responsibility.

Time and time again, those who pass as public intellectuals refuse to admit that government owns no resources besides what it forcefully steals from the private sector.  When someone like Krugman goes on about shared sacrifice, what they are really asking for is the abdication of responsibility.  Profligacy by the few forcefully paid for by the masses is their shtick.  Many times, “shared responsibility” is paired with an appeal for higher taxes.  It is the advice every politician loves to hear.

Like the socialist dreamers of the early 20^th century, those who plea for higher taxes lack logical consistency in thinking and, quite frankly, and adult understanding of the simple concept of scarcity.  Tax apologists are children who believe that somewhere far off there exists an infinitely deep pool of resources from which politicians can tap into at their pleasure without ill effect.  As Ludwig von Mises put it:

Socialism…works on the emotions, tries to violate logical considerations by rousing a sense of personal interest and to stifle the voice of reason by awakening primitive instincts.

The state isn’t just the “organization of robbery writ large” as Murray Rothbard opined, it is institutionalized injustice for the sake of the connected to benefit off of the plundered.  In the Eurozone, taxpayers are being forced to cover the potential losses of government bondholders through various bailout schemes.  Soon enough, the European Central Bank will turn the knob on the printing press to the “high” setting to wash up the wholly insolvent banking sector with a wave of liquidity.  The political establishment will rejoice as their creditors continue to buy bonds that have a snowball’s chance in hell of being paid back in real, not inflated, terms.  The rest of Europe will have the pleasure of dealing with a debased euro and the subsequent price distortions and malinvestments that are always the result of unbacked credit expansion.  They will be told it was for their own good that banks don’t take too big of a loss and that governments remain solvent.  The same will hold true for America as Uncle Sam and Wall Street remain addicted to the Fed’s seemingly permanent easy money policy.
 
The final result of money printing is always savers and the middle class being forced to sit idly by as the money in their wallets is robbed of its value.  It erodes any sense of responsibility among the political class by allowing them to spend without outright theft.  The ideology of irresponsibility follows to the bailing out of industries closely connected with the government.  Afterward, never before, taxpayers are told that such a policy was in their best interest.  Taxes are eventually raised on the most productive in society to finance increasing government expenditures. These are all the political class’s idea of shared sacrifice.  That is, sacrifice by everyone else but them.

In the end, the politics of guilt tripping is never just a national affair.  In my own hometown of Middletown, Pennsylvania, the school board recently approved a property tax hike to pay for an increase in teacher’s salaries by 2.16% a year under a new three year contract.  The version of “shared sacrifice” envisioned by public school faculty and administrators never involves sacrifice on the part of their benefits and paycheck.  It is just another rhetorical trick for easier access into taxpayer bank accounts.
Objectivist philosopher Ayn Rand said it best by declaring:

It only stands to reason that where there’s sacrifice, there’s someone collecting the sacrificial offerings. Where there’s service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master.

Talk of shared sacrifice is only conducted by those who have no plan of having the noose tightened around their own throat.  They are almost always within line at the public trough to feed off the stolen wealth of others.

What To Do About A Growing Police State

LvMIC:

Everywhere you look it seems bath salts are becoming the hot new target of political drug warriors.  Just last month the U.S. Senate voted 96-1 to outlaw the synthetic chemicals used in the making of the hallucinogenic salts.  The measure was heavily supported by the Food and Drug Administration which banned the chemicals last fall for a one year trial period.  Thus far forty one states have banned bath salts along with instituting penalties for possessing or selling the drug.  As the FDA’s ban is set to expire, it would appear that nationwide prohibition is just around the corner.

Once enacted, the measure will be heralded as yet another instance of the state’s always watchful eye looking out for public safety.  The right to do what you wish with your body be dammed; big brother knows best for everyone.  Like any victory in the drug war though, a bath salts ban will not be a triumph for safety but for the ever-increasing police state that is becoming an everyday observance in America.

This past weekend, I visited Ocean City, Maryland for the first time in years.  Commercially, hardly anything had changed from when I visited last.  The various boardwalk venders were out peddling souvenirs that emphasized partying and heavy drinking.  Given that many high school students were visiting to celebrate their recent graduation, the atmosphere was one of youthful debauchery.  Admittedly, this writer was amongst the crowd eagerly looking forward to the same alcohol-soaked fun half a decade ago.  At a more careless age, there was nothing more celebratory than drinking away one’s brain cells for a week straight after the twelve year imprisonment known as public schooling.

But the Ocean City I saw last weekend was a far cry from the one of my teenage years.

What was noticeably different on this trip was the growth in what has become an alarming trend in the supposed “land of the free.”  On the boardwalk, it was impossible to go more than few blocks without a visible police presence.  Whether it was one armed officer or a group, their stares penetrated the crowd in an effort to weed out those dangerous perpetrators who had the audacity of breaking the government’s arbitrarily chosen drinking age of 21.

The sad thing is, scenes such as this are becoming more commonplace in the United States.  Police forces everywhere are becoming more militarized due in part to funding via Washington.  Those public servants donned in dark blue uniforms and badges have always been nothing more than legally sanctioned highway robbers.  The truth has become more apparent with the escalating number of instances where the police behave in a manner demonstrating they are no longer beholden to the same laws they enforce.  Albert Jay Nock spoke to this dual system of justice when he wrote:

the State claims and exercises the monopoly of crime. . . . It forbids private murder, but itself organizes murder on a colossal scale. It punishes private theft, but itself lays unscrupulous hands on anything it wants, whether the property of citizen or of alien.

There are examples abound of Nock’s vision of an out-of-control government in modern America.  Unmanned drones are now being supplied to local police departments for the purposes of domestic spying.  The Supreme Court recently ruled that police officers are allowed to conduct strip searches on anyone who commits even the most minor of offenses such as traffic violations.  In Colorado, 40 random drivers were recently torn out of their vehicles and handcuffed because the police suspected a bank robber may have been amongst them.  The herding officers only asked permission to search the cars after the motorists were cuffed.  At a Social Security Administration office in Florida, Department of Homeland Security officers armed with semiautomatic rifles recently conducted random identification checks.  Everyday brings reports of unwarranted aggression employed against private citizens by the state’s dutiful enforcers.

Today, the police state’s version of “public safety” involves the liberal use of batons, tazers, and the occasional cold-blooded murder.  Its goal is no longer the protection of property but intimidation and compliance to mute criticism of blatant extortion.  When James Madison spoke of standing armies as not being “safe companions to liberty,” he likely didn’t imagine domestic police forces functioning as well-armed military units.



The increased police presence didn’t end up being the only unnerving aspect of my trip to Ocean City.  On the drive down, the GPS kept alerting me to “traffic safety cameras” that would photograph red light runners so a ticket could be issued in the mail later.  Even a person with average intelligence should realize there is nothing “safe” about these cameras. They were just another innovation in the police state’s arsenal of shakedowns.

While the growth of America’s police state is alarming, its continued acceptance will only fuel its expansion.  As the United States economy, along with those of other Western countries, continues to fall victim to central bank engineered depressions, police state crackdowns will only intensify to suppress an uprising.  For all of its socialist-leanings, many of the Occupy Wall Street protests of last fall were unfairly met with police aggression.  With the Eurozone crisis continuing to unfold, protestors who have taken to the streets over unpopular austerity measures have also been subdued by riot police.  Bankocracies typically don’t like too much dissent.  Still, the public’s dependency on the welfare state has eroded the best means for fighting an overarching police state.  Those who look to the state for privilege have made way for the growth of law enforcement.  The masses have given consent to an institution that has duped them into believing it serves their best interests.

Withdrawing consent altogether is the only useful strategy of undermining an overly violent regime.  Violent clashes do very little in terms of reversing state power.

The state, after all, specializes in the deliverance of beatings and imprisonment.  As a minority, it is fruitless to engage its enforcers with violence.  But just because coercive intimidation is the main weapon employed by jackboot-wearing government brutes doesn’t mean there is not a useful strategy to employ.

Growing police states around the world can be combated by simply recognizing that guns and badges turn a man into a thug; not a protector of public safety.  Realizing this and refusing to blindly respect the government’s well dressed goons is always the first step toward a peaceful society.  Teaching others to see the truth is the next step.

As Murray Rothbard writes,

The prime task of education, then, is not simply abstract insight into governmental “errors” in advancing the general welfare, but debamboozling the public on the entire nature and procedures of the despotic State.

Propaganda, Lies, and War

LvMIC:

If I asked what the cause of the American Civil War was, would your first answer be slavery?  Would it surprise you to know that slavery was only one grievance the South had with the Lincoln administration?

Up until the first bullet was fired on Fort Sumter, Abraham Lincoln had been leading a type of economic aggression to force the South into initiating the official version of the conflict.  When Lincoln ran for president, his platform was based on Henry Clay-inspired mercantilism where he promised to maintain a high protective tariff that would serve Northern industrial interests while impoverishing the South’s still predominantly agrarian economy.  This, of course, angered the South much like it did when John Quincy Adams imposed the same type of tariff in 1828 which lead to the Nullification Crisis.  With the Morrill Tariff, which increased the tax on dutiable imports by about 70%, put in place by President Buchanan two days before he left office, the South stood ready to secede.  After Lincoln’s inauguration, he began to maneuver the seceding South into firing the first shot by breaking a previously established agreement to not attempt to restock Fort Sumter.  He secretly sent troops the Fort which escalated into what turned out to be the bloodiest war in American history.  Lincoln’s close friend and confidante Senator Orville H. Browning would go on to write in his diary:

He told me that the very first thing placed in his hands after his inauguration was a letter from Major Anderson announcing the impossibility of defending or relieving Sumter.  That he called the cabinet together and consulted General Scott—that Scott concurred with Anderson, and the cabinet, with the exception of PM General Blair were for evacuating the Fort and all the troubles and anxieties of his life had not equalled (sic) those which intervened between this time and the fall of Sumter.  He himself conceived the idea, and proposed sending supplies, without an attempt to reinforce giving notice of the fact to Governor Pickens of S.C.   The plan succeed.  They attacked Sumter—it fell, and thus, did more service than it otherwise could.

Contrary to popular belief, the Civil War was not a fight over slavery but a fight over whether the South was allowed to secede from the union.  Lincoln thought war would rally the North behind his special-interest driven agenda.  The South sent numerous commissioners to Washington in the hopes of finding a peaceful solution to secession.  Lincoln ignored all of them.  As he stated in a letter addressed to Horace Greeley of the New York Tribune:

My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union.

So why is this version of the Civil War not taught in public schools?

It’s a simple answer when you consider the driving force of statism.

When Randolph Bourne opined “war is the health of the state,” he was referring to how war is used as a means to enlarge the authority of government over everyday life.  In times of war, the citizenry is told to sacrifice their material well being and freedom for the sake of winning the war and bringing the troops home.  Taxes are raised, central banks inflate, governments borrow massive amounts of money, and economic resources are confiscated to be used in the war effort.  War quickens the state’s march toward totalitarianism as it rallies the public into unquestioned obedience.  Love of country replaces love of self and family.  Mothers and fathers give up their sons (and now daughters) to fight in the state’s bloody crusade.  The heads of government who initiated the conflict don’t let their offspring go and fight.  Their pampered lifestyles usually don’t see the sacrifice taxpayers must endure.

Romanticized retellings of war assist in convincing the masses that the campaigns of murder carried out by political leaders were for the good of the nation.  It enshrines the state as a life-saving guardian to those fortunate enough to not meet a gruesome death on the battlefield.  In the case of the Civil War, Lincoln didn’t just save the union; he has forever made secession a nonviable solution to an overreaching Washington.  Lincoln’s war of northern aggression turned these united States of America into the United States of America.  It cost the equivalent of 6 million lives today for honest Abe to destroy the volunteerism which defined the union of the states in the decades that preceded the war.

Just as the Civil War was triggered by deceit, many of the wars or military conflicts of the past century have been fought based on the lies of a political class all too enamored with their own power and place in history.
Starting with World War I and Woodrow Wilson’s quest to “make the world safe for democracy,” the popularly spun tail is that America’s entering the conflict was in reaction to Germany sinking the supposedly innocent passenger vessel the Lusitania.  After German subs sunk the ship, thereby killing women and children, popular support reversed and was now in favor of war.  What wasn’t revealed immediately is that the Lusitania was really outfitted to carry armaments for the British.  This was a strategy developed by then First Lord of the Admiralty Winston Churchill to bait a German attack and bring America into the fight.  As classical liberal historian Ralph Raico writes:

The Lusitania was a passenger liner loaded with munitions of war; Churchill had given orders to the captains of merchant ships, including liners, to ram German submarines if they encountered them, and the Germans were aware of this. And, as Churchill stressed in his memoirs of World War I, embroiling neutral countries in hostilities with the enemy was a crucial part of warfare: “There are many kinds of maneuvres in war, some only of which take place on the battlefield. . . . The maneuvre which brings an ally into the field is as serviceable as that which wins a great battle.

Then there is the often neglected role big business, especially JP Morgan & Co, played in the propagandizing of the war.  As one of the largest creditors and underwriters to war bonds issued by the governments of Britain and France, it was in the best interest of the House of Morgan to guarantee the Allies won the war.   As the American economy drifted toward one of top-down command where government cartelized industry to ensure adequate munitions for war, big business was more than happy to play along as it meant stifling regulations placed on their small-time competitors and the opportunity to keep prices elevated.  This perverted form of capitalism would serve as a model to Western nations from the war’s end to the present day.   Murray Rothbard believed the first World War was really a victory for the fascist state:

More than any other single period, World War I was the critical watershed for the American business system. It was a “war collectivism,” a totally planned economy run largely by big-business interests through the instrumentality of the central government, which served as the model, the precedent, and the inspiration for state corporate capitalism for the remainder of the twentieth century.

The beginnings of World War II were engulfed by the same collusion of big business and government along with underhanded tactics to further chip away at the American public’s noninterventionist stance.  The Morgans still had their financial ties with Britain and France while the Rockefellers wanted war with Japan since the country competed for raw materials in Southeast Asia.  Both financial powerhouses lobbied for war early on.  After Franklin Roosevelt was reelected on the platform of keeping America a neutral party, he set about provoking a Japanese attack sometime around the summer of 1941.  This resulted in an oil embargo, the forceful limiting of exports, and freezing the country’s assets within the U.S.  It was the equivalent of an economic fatal wound to resource-poor Japan.  Not only that, but in recent years it has been confirmed that Roosevelt had prior knowledge of the Pearl Harbor attack and actually withheld key information from commanders at the naval base.  As Vice Admiral and aid to the Secretary of the Navy Frank E. Beatty noted at the time:

Prior to December 7, it was evident even to me… that we were pushing Japan into a corner. I believed that it was the desire of President Roosevelt, and Prime Minister Churchill that we get into the war, as they felt the Allies could not win without us and all our efforts to cause the Germans to declare war on us failed; the conditions we imposed upon Japan—to get out of China, for example—were so severe that we knew that nation could not accept them. We were forcing her so severely that we could have known that she would react toward the United States. All her preparations in a military way—and we knew their over-all import—pointed that way.

Following World War II, every conflict the U.S. has engaged in has been either to the benefit of wealthy special interests or in reaction to its own misguided policies.  The Cold War was a four decade long gift to the military industrial complex against a supposed world power that collapsed due to its state-run economy.  The various bombings and occupations of Middle Easter countries which followed have only served as excuses to not end the flow of money into the pockets of politically connected military contractors.  And the Iraq War, as everyone now knows, was based on the lie of Saddam Hussein possessing weapons of mass destruction.

One would think with such a rich history of political patronage in the death industry, Americans would be adamantly opposed to war.  Yet the usual players in Washington are once again pounding on the war drums in the name of spreading American values.  The target this time is Iran and at least one presidential candidate in this fall’s election has vowed to use military force on a nation that hasn’t bowed down and kissed Uncle Sam’s jackboot.  The problem is Iran has the hubris of refusing to be bullied around by the U.S.  Such an attitude undermines American imperialism in front of the rest of the world.   It must be stomped out by any means necessary.

And then there is the big financial push for an Iranian war going on behind the scenes.  The pro-Israel lobbying group, the American Israel Public Affairs Committee, has been aggressively pushing for war and appealing to top lawmakers and the heads of Washington’s warmongering apparatus.  President Obama has already assured the flush lobbying group that “the United States will not hesitate to attack Iran with military force to prevent it from acquiring a nuclear weapon.”  Department of Defense Secretary Leon Panetta made the same promise.  Just last week, 44 Senators, including many Democrats, sent an AIPAC letter to the President urging him to consider military action if Iran continues with its nuclear program.  The letter essentially makes war the only option on the table as Glenn Greenwald of Salon points out:

This implication is clear: a military attack by the U.S. on Iran is at least justified, if not compelled, if a satisfactory agreement is not quickly reached regarding Iran’s nuclear program. At the same time, the letter itself virtually ensures no such agreement is possible because the conditions it imposes as the “absolute minimum” are ones everyone knows Iran will never agree to (closing the Fordow facility and giving up its right to enrich uranium above 5 percent).

Not only is the push for war bipartisan, but much of the media establishment has been devoid of criticism of the constant war rhetoric. Even though Israel has nukes of its own, many of its supporters portray the country as a weakling in dire need of assistance from the bully of the Middle East schoolyard.  Worse is the complete disregard of the fact that there is no actual evidence that Iran is concocting a nuclear weapon.  According to the CIA’s own National Intelligence Estimate of 2007, Iran put a stop to the development of nuclear weapons in the fall of 2003.  Other Western nations such as Germany, France, and Britain, deny the report’s conclusion.  Meanwhile Israeli Prime Minister Benjamin Netanyahu has gotten impatient of the reluctance by the U.S. thus far to act militarily against Iran.  Like a good politician, he wants prestige without the dirty work.  That’s what America is for.

Despite already being engaged in drone wars in Pakistan, Somalia, Yemen, and still occupying Afghanistan, the U.S. is being duped into yet another war based on shaky evidence and at the behest of deep-pocketed special interests.  This is coming even while a secretive cyber war already being waged to damage Iran’s nuclear capability.  According to the Pentagon, “computer sabotage coming from another country can constitute an act of war.”  Not only that, but the draconian sanctions thus far placed on Iran are doing enormous harm to the citizens who hardly have a say in what their government does.  The Belgium-based SWIFT payment system that facilitates most international payments has already denied service to many Iranian banks.  With the imposing of an oil embargo from the European Union just around the corner (July 1^st) that will all but make it impossible for oil tankers to be insured by Lloyd’s of London, an actual naval blockade is being floated by U.S. lawmakers.  Much like the Antebellum South and Japan, Iran too is being pushed into a corner.

What makes the campaign to extend the War on Terror to Iran is that the anti-American sentiment in the higher echelons of its government are only a consequence of previous meddling.  After Prime Minister Mohammed Mossadegh nationalized the oil industry in 1953, British Petroleum used the CIA to overthrow the popular leader and put the Shah back in power whose authoritarian rule would be financially supported by the U.S. up to the Islamic Revolution of 1979.

Then and now, wealthy special interests are a driving force behind American imperialism.  Lies will be spun till they are seen as facts.  When the truth comes out, the irreparable damage will already be done.  Like anything the state lays its filthy hands on, war is a racket.  The beneficiaries of the ruling class’s gleeful foray into mass murder are few in number.  The masses, still brainwashed into feverish nationalism, end up paying the costs with their pilfered income, eroded liberty, and, ultimately, their own lives.

As Major General Smedley D. Butler wrote in his seminal essay War Is A Racket

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

The only weapon against such an immoral system of mass murder and cronyism is to know the truth and to not fall ill with the fever of war.

Public-Private Partnership: Another Phrase for Fascism

LvMIC:

The word “privatization” is a loaded term these days.  Unions and big government worshippers scoff at the idea of any public services being in the hands of ruthless, greedy capitalists.  The left has the distorted view that people in the private sector are driven primarily by their desire to cut costs and throw workers out on the street.  To them, government workers are angels sent from heaven to do God’s work like picking up the neighborhood trash or maintaining a public pool filled with the bodily discharges of kids whose derelict parents decided to drop off and go shopping for a few hours.  On the right, conservatives who supposedly hold high regard for market forces and Ronald Reagan’s classic declaration “government is the problem,” typically have a favorable view of privatization schemes.

Given that government creates no wealth and only consumes capital, privatization of services would seem like an obvious choice; especially for cash strapped states and municipalities.  The rational behind privatizing public service is that the private sector is almost always more efficient in operation than bureaucracies unconcerned with earning a return on investment. Even leftists will grudgingly acknowledge the super quality markets tend to produce to a point.

So if common sense dictates allowing businesses with a vested financial interest in their own success to pick up the slack in delivering public services, why should free marketers be wary of such ventures?
There are just so happens to be two different forms of privatization.  The first type is genuine privatization; that is the political class and bureaucrats completely removing their hands of any dealings with the offering of a service.  Supporters of the free market should applaud this type of privatization as it means entrepreneurs and investors can freely enter into the industries the government has just vacated.  As long as consumers demand the service in question, the opportunity will exist for businessmen to devise new and profitable ways in ensuring its delivering.

The other type of privatization shouldn’t be so appealing.  That’s because it isn’t true privatization but a deceptive form of political patronage. These rackets are commonly known as “public-private partnerships” and tend to garner bipartisan support due to the crooked dealings which are almost always their sole impetus.

According to the National Council for Public-Private Partnerships, PPPs are

a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.

In other words, PPPs result in the government still maintaining the final say over the delivering of the service.  Taxpayers now have the noose of being forced to guarantee an “acceptable rate of return over the term of the partnership” to the contracted company around their neck.

Even though public-private partnerships are championed as cutting age methods to modernize the state, underhanded bribes on the taxpayer dime go back at least a century.  Perhaps the biggest, most powerful public-private partnership around is the Federal Reserve System.  The New York branch of the Fed, which has been given a monopoly on the supply of what has become the world’s reserve currency, is still technically a private entity that just so happens to have the guns of the state defending its open market operations.

Today, public-private partnerships are still offered as a way to mask ever-intrusive government.  Recently Senator Rand Paul introduced a measure in the U.S. Congress to “privatize” the crotch fondles in the TSA.  “Privatize” is put in quotations because the bill would “require that the mostly federalized program be turned over to private screeners and allow airports — with Department of Homeland Security approval — to select companies to handle the work” according to Politico.  Private screeners would still be under the guidelines of the Department of Homeland Security and be paid with tax dollars even though they would be employed by a non-government firm.  Ironically, Rand’s father, Texas Congressman Ron Paul, pointed out the flaw in his son’s proposal last July when he wrote:

What we need is real privatization of security, but not phony privatization with the same TSA screeners in private security firm uniforms still operating under the “guidance” of the federal government.  Real security will be achieved when the airlines are once again in charge of protecting their property and their passengers.

President Barack Obama has proposed public private partnerships numerous times during his time in office; namely in childhood education and infrastructure development.  Last year when Obama pushed for an infrastructure bank to pool together capital already swindled from taxpayers to form a quasi-banking institution which would take out loans in order to pay for the rebuilding “roads, bridges, and ports and broadband lines and smart grids,” both the U.S. Chamber of Commerce and AFL-CIO were in favor of it.  Along with the banksters who stood to make a hefty profit by charging above-market fees to finance such deals, the support of the CC and AFL-CIO should be a no-brainer considering unions and construction companies would most likely be paid to do the “shovel-ready” legwork.  It was a PPP even the left could get behind since a portion of the funds went to their supporters.

Public-private partnership schemes haven't been limited to just America lately.  In Canada, the province of Ontario has recently considered granting a private company, Teranet Inc., the rights to operate its online service which delivers such things as birth certificates and driver license renewals.  According to the World Bank, many European and Central Asian countries are opting for public private partnerships after tax receipts plunged in the wake of the financial crisis.  PPPs are still popular among various governments for precisely one reason.

There is actually another, more accurate term for public-private partnerships.  It’s called fascism; plain and simple.  Private business may act as an administrator but the state still pulls the reigns.  From a political perspective, public-private partnerships are quite ingenious.  Politicians remain in control while convincing voters they believe in the efficiency of a robust private sector.  And when issues arise over the performance of a service, whatever private firm granted the monopolistic privilege of delivery can be treated like a scapegoat despite having to operate within government established guidelines.  The state escapes criticism as the public ignorantly clamors for more protection from those evil hearted businessmen.  To the ruling establishment, public-private partnerships are “heads I win, tails you lose.”

What the non-exploitive supporters of public-private partnerships tend to forget is that it isn’t just the administration of the service in supposedly private hands that adds to its betterment.  Why the market function so well is that it is driven by competition from businesses that don’t rely on assistance from the band of thieves who occupy the offices of the state.  Government assistance gives some businesses an upper hand on competitors which can lead to diminishing innovation.  Why compete when Uncle Sam has your back to ensure a decent rate of profit?  Then there are government grants of monopoly which give the chosen company absolutely zero incentive to cut costs.  All of the advantages of private ownership become effectively nullified in public-private partnerships to the detriment of the taxpayer.

In our world of unceasing centralization of power, lawmakers are finding more deceptive ways to mask their lust for dominance.  Public-private partnerships are the embodiment of what Mussolini dubbed “corporatism;” that is the “merger of state and corporate power.”  Under corporatism, the ruling class is able to expand unbeknownst to the Boobus Americanus and its equivalent in other countries.  The Average Joe still has his wallet forcefully stripped of its contents but now the state’s cronies get to partake in the plunder.  Meanwhile the same big businessmen who benefit from government privilege still maintain their praise for free markets while working with politicians to forcefully subdue their competition.

Murray Rothbard was quick to recognize why such parasites of men are dangerous for the blurring of the line between public and private when he wrote:

What’s needed is a corporate spokesman who embraces the government-business partnership with enthusiasm and joy – a kind of Big-Businessman-as-Philosopher. When such a champion emerges, Mr. and Ms. America, keep a sharp eye on your wallets – you are about to be fleeced.

Distinguishing between genuine privatization and outright fascism is the only way to make sense of the state’s manipulation of words and their meaning.

Can the State Produce Wealth?

LvMIC:

In his latest speaking gaffe, President Obama once again demonstrated his ignorance on all things economics when he declared at a White House press conference that the “private sector is doing fine.”  Obama, who once remarked on how automated teller machines are putting people out of work, blamed the stagnating economy on public sector layoffs at the state and local level:

Where we are seeing weaknesses in our economy, had to do with state and local government, often times cuts initiated by governors or mayors who are not getting the kind of help that they have in the past from the federal Government, and who don’t have the same flexibility as the federal government in dealing with fewer revenues coming in

To those laid off government workers, let me be the first to proudly declare good riddance!  The state can only function off of the wealth it forcefully takes from the private sector.  Every public sector layoff means a relaxing of the burden every taxpayer faces by being coerced into supporting such nefarious leeches.  That may sound heartless but not when we analyze what the creation of wealth actually means.

According to the champion of compassionate liberalism himself, Paul Krugman, if state and local governments had not cut their employment rolls:

the unemployment rate would be much lower than it is — something like 7.3 percent instead of 8.2 percent. It sure looks as if cutting government when the economy is deeply depressed hurts rather than helps the American people.

Going by what Krugman contends, it would appear that jobs are good indicator of economic health. But does every job signify wealth creation? As long as someone is being paid for something, doesn’t their spending add to productivity?

When looking at what productivity really entails, it’s obvious that, contrary to Krugman’s logic, not all jobs are created equal. In fact, it will become clear that the state’s necessarily violent nature results in the consumption of built up capital rather than the adding to or replacing of it.

First, by taking the idea that paying people an extraordinary amount for relatively useless tasks to its extreme logical conclusion, one can argue reduction ad absurdum that all that’s needed to jumpstart the economy is to employ people to dig ditches and fill them up. Yet only a complete economic ignoramus would argue that such a policy actually creates any type of wealth. The money squandered from the private sector to pay for make-work jobs like ditch digging is essentially wasted.

The process in producing something of value can be both simple and infinitely complex. People can produce for their own consumables or to sell their wares to other producers. Human demand is literally infinite. The problem is that the world is dominated by ever-present scarcity. To quote economist Thomas Sowell, “there is never enough of anything to satisfy all those who want it.”

In today’s modern economy of large retail stores and grocers, many have fallen victim to the error in thinking known as putting the cart in front of the horse. In economic terms, they put consumption in front of production. But logic tells us what hasn’t at first been produced can’t be consumed. People weren’t able to purchase iPods without Apple producing them. What is usually called Say’s Law of the markets is that the act of supplying allowing for demand. Or as Professor Steven Horwitz puts it
 

Say was making the claim that production is the source of demand. One’s ability to demand goods and services from others derives from the income produced by one’s own acts of production. Wealth is created by production not by consumption.

When it comes to buying and selling that contributes to the satisfying of wants, exchange must be mutually beneficial. That is, both parties don’t see their transaction as an equal exchange but as gaining something they value more than what they are offering as remuneration. The volunteerism that the free market represents is what makes the act of economization necessary. Limited resources compel prudence.

The state doesn’t operate under these limits. Though it is still beholden to the fact that resources are scarce; it doesn’t rely on voluntary payment for income. The state is funded solely by acts of aggression. Whether it is through legalized robbery (taxation), the promise of future theft (borrowing), or fraudulent counterfeiting (inflation), those in the confined within the bureaucracies of the state need not worry to the extent that the private individual must in regards to obtaining resource to utilize. Politicians and tax collectors are only limited in their ability to plunder by how productive the citizenry under their control are.

The money spenders in government not only have the threat of force at their disposal to acquire funds, but also have no incentive to spend the income they happily pilfer in a cost effective way. As economist Mark Thornton writes, “government spending does not have its value tested with consumers in the market.” The only way to determine if something is of value is for it to be voluntary purchased. Whenever consumers make a purchase they are telling producers that they are willing to give up other purchasing opportunities for the price charged. When consumers abstain from making purchases, they are telling producers that the price offered is too high and they value the gains of their productivity being spent elsewhere. Producers get the message to either drop their price by adopting new methods of production to become more cost efficient or enter into a new industry. In short, only consumers ultimately decide what is of value through their purchases. Since government is not beholden to such rigorous standards, it’s practically impossible to judge whether or not its expenditures actually produce anything of worth.

There are countless examples demonstrative of this truth. From the failed solar power company Solyndra to the State Department paying $6,600 a pop for Amazon Kindle e-readers, politicization has proven to be the biggest driver of government spending. Because government produces nothing that can be determined valuable by peaceful means, this reinforces Mises’ claim that “the total complex of the financial policies of the Federal Government, the States, and the municipalities tends toward capital consumption.” It’s why the services provided by the state are almost always inferior to what could be provided by a competitive market. Since theft and coercion result in one party benefiting at the expense of another, the operations of the state are conclusively a net loss for society.

If the reader needs any more evidence of this conclusion, perhaps a visit to their local Department of Motor Vehicles is in order.

Does America Face an Election Between Moderates?

LvMIC:

This weekend the runoff election will be held in Egypt to decide who will be the next president. The country’s first democratic election in decades comes one year after former President Hosni Mubarak was ousted during a massive civilian protest. Despite decades of financial support from supposedly democracy-friendly U.S. and Western governments, it’s was widely acknowledged that Mubarak’s constant reelection was the product of ballot rigging. He aggressively held power for years by censoring and controlling the media along with suppressing political dissent. Mubarak was shielded from most opposition by the fact that he used his office as a tool of political corruption and was the quintessential Western puppet of a dictator.

At the beginning, most journalists in the West were celebrating the Egyptian revolution as a victory for democratic governance. They saw the possibility of untainted elections as the best way for Egyptians to adopt their values. With the first presidential runoff ballot since Mubarak just around the corner, the good feelings have begun to wear off. Many prominent media publications are dismayed that this weekend’s contest is looking like a battle between two radical candidates. The Globe and Mail reports:

If this is what democracy is like, maybe we’re better off without it, many Egyptians voting in their first-ever truly free presidential election must be thinking.

With a choice between a leader of the Muslim Brotherhood on the one hand and a former air-force commander and prime minister for Hosni Mubarak on the other, not only do these virgin voters have to choose between two political extremes, but the majority of Egyptians don’t want either of them to win.

New York Times columnist Thomas Friedman equates the runoff election with “having to choose between two diseases.”

From the mainstream, corporate media perspective, this isn’t how elections are supposed to play out. In America, the Democrat vs. Republican paradigm forces both parties to appease centrists and independent voters. The nominees must campaign not as extremists, but pragmatic moderates who embody the level headedness of the people. The victor in November is thus given an electoral mandate from the voters to carry out their collective will.

This is also the election process taught in public schools and universities.

But while the American public has been duped into believing such a process gives rise to pragmatic and temperate leaders, quite the opposite is true.

With former Massachusetts Governor Mitt Romney now the presumptive Republican nominee, campaign season is now fully underway. Romney is being portrayed as the free market loving, social conservative choice to Barack Obama’s cool, calm, and collected liberalism. Instead of falling victim to the stereotype of being a fragile leftist, Obama’s ramping up of the War on Terror has been applauded by the right as a step toward the center. Weekly Standard editor and all around warmonger Bill Kristol declared the President a “born again neo-con.” And in spite of initially supporting a public option within his key legislative achievement of health care reform, Obama opted for the less extreme alternative of the individual mandate that the conservative Heritage Foundation once endorsed.
As for Romney, he was portrayed by his opponents as Obama-lite due to his pioneering the President’s health care scheme during his tenure as governor of Massachusetts. Romney has gone on record stating “I’m not going to cut $1 trillion in the first year” as it would “cause our economy to shrink [and] would put a lot of people out of work.” Of course his logic only works if you believe the money stolen and spent by the government actually creates wealth despite the expenditures never having to compete in the open market. Statements like these are what leads to Romney being called a “closet Keynesian” by Paul Krugman and the “Massachusetts moderate” by Newt Gingrich.

Though the November election will be hyped as two opposites squaring off against each other, both candidates are considered rather moderate compared to who could have been the nominees.

The question is, are Barack Obama and Mitt Romney really that moderate?

Let’s account for the similarity in policy of both.

–Both are large supporters of the military industrial complex. Romney has vowed to increase defense spending and wants the Navy, which is larger than the navies of the next 13 nations combined, to ramp up production of warships. Numerous times the former governor has vowed to prevent Iran from acquiring a nuclear weapon even if it means offensive military action. For Obama, as the New York Times recently revealed, the President spends every Tuesday morning playing God by picking out drone targets on what could be mistaken for baseball cards. His unlawfully ordered death strikes are based on flimsy evidence and incredibly vague criteria for determining who the enemy is. And then there are the hundreds of civilian casualties that have been a result of the unaccountable killing spree. The drone war won’t end in a second Obama administration and military aggression will likely escalate under a Romney presidency. This policy does absolutely nothing to keep the U.S. safe and everything to put the public in harm’s way.

–Both show no opposition to the Federal Reserve System and the banking cronyism it has institutionalized. Both supported the Wall Street bailouts and the unprecedented bout of money printing that took place during the financial crisis. While Goldman Sachs was Obama’s biggest private donor in the last election, the investment firm is currently Romney’s largest donor. This election is shaping up to be more of the same as Wall Street is bankrolling both candidates. Seeing as how the whole banking system operates under the veil of solvency due to fractional reserve lending, it is in the elite money lender’s interest to use their easy access to the printing press to keep the house of cards from collapsing.

–Neither candidate has made a peep out of ending the needlessly expensive and socially degenerating drug war. In fact, the Obama administration has increased spending on drug enforcement and has cracked down on medical marijuana distributors more than any other president before him. Romney hasn’t taken a position on the drug war but considering his socially conservative talking points, it’s extremely unlikely he will allow others the freedom of putting what they want in their own bodies. In short, both candidates are supporters of the prohibition on dry plants and the seedy and dangerous black market it has created.

–And then there is the drug of which all of Washington is addicted to: spending and borrowing. Neither Obama nor Romney have presented budgets that have actually brought expenditures in line with revenues. The national debt would balloon under both their proposals. Being that, as Lew Rockwell identified, pork barrel spending is the “entirety” of the federal government’s budget, denying the welfare dependents of their food stamps, the elderly of their Social Security checks, farmers of their subsidies, green energy companies of their taxpayer loans, Wall Street of its implied bailouts, dictators of their foreign aid, and military contractors of their lucrative deals has become electoral suicide.

Those opposed to the above polices are typically referred to as radicals. This is especially so for the independent minded who see politics as a game played by well dressed mobsters and the state as an institution of pure thievery. In modern American discourse, peace is now the policy of ignorance. The right to do what you want with your self and property must come second to the will of the ruling class. Being in favor of free markets and not the crooked capitalism which politicians love means wishing to see workers starving in the streets. True liberty is only of value to the dimwitted and unpatriotic.

Texas Congressman Ron Paul was a steadfast supporter of sound money, nonintervention, the unfettered market, and significantly axing government spending before a now guaranteed financial collapse. His reward was being treated like a senile uncle and his presidential campaign being subjected to an incredible amount of voter fraud. He was deemed too much of a threat to the establishment.

In the end, Paul and others who are disgusted at the utter cronyism that is the state aren’t the extremists. What’s extreme is a blind adoration of government power. Paul isn’t a radical; he is practically the only politician in Washington who isn’t a closet socialist or fascist on an egotistical power trip.

With such radicalism deeply entrenched in the U.S. government, the best hope the country has is for this fall’s election turnout to be the lowest on record. Like Egypt, the choice is between two radicals seeking to use the state’s apparatus of violence to help their political buddies and mold society to their liking. Voting for the lesser of two evils is still evil and immoral. The freedom to not vote is still available to Americans. They would be best to exercise it before it’s too late.

Does Paul Krugman Really Care About the Poor?

LvMIC:

In the 19^th century, the term ‘liberal” had vastly different connotations than what it does today. Political thinkers who endorsed the economic ideas of free trade and laissez faire, such as Frederic Bastiat and Jean-Baptiste Say, were at the forefront of what was known as the classical liberal movement. With the progressive movement came the hijacking of the term liberal that lead to it being used to describe those who regard government intrusion in the economy as a must. Liberal is no longer reserved for those who valued liberty. Its bastardized definition now describes those who wish for unquestioned devotion to the state.

Any observer would be hard pressed to find a more ideological leader of modern liberalism than Paul Krugman. Krugman is, of course, the Nobel Prize winning economist who teaches at Princeton University and writes a twice weekly column for the New York Times. He has written several books, including the “Conscience of a Liberal,” and hundreds of columns which have a tendency of devolving into politically partisan attacks. Some may even say Krugman writes more like a political hack than an economist. His basic strategy involves using his leftist ideology to criticize opponents of government intervention and portraying them as hating the needy. Like the New York Times itself, Krugman is rabid defender of the welfare state.

But does Paul Krugman, in being the mouthpiece of Keynesian economics, really care about the poor?

As an unabashed proponent of liberalism, it would at first appear so. In Krugman’s own words, “liberal in the United States means more or less what social democratic does in Europe.” According to David Gordon, the term social democrat was originally used in reference to socialists. Eduard Bernstein, social democracy’s initial theorizer, saw representative democracy as being the true path to communism unlike the revolutionary violence Marx prophesized. Today, social democrats typically value the democratic process over production completely in the hands of private owners. They believe that the citizenry is owed a number of social rights including public healthcare, education, child care, and aid for the retired. To pay for these benefits, progressive taxation is pushed for as a means of combating income equality.www
Readers familiar with Krugman’s editorials would certainly agree that he holds many of these ideals. He is quick to depict himself as a champion of the poor and destitute while demonizing robber baron capitalists for their greed and stinginess. A favorite argument of his is painting the so-called Gilded Age as a time of atrocious hardship for the common man (despite all historical evidence) while claiming the Keynesian revolution brought the average Joe the wonderful middle class lifestyle he enjoys today.

Recently, another dominant theme has crept up in Krugman’s writing; notably since the onset of the financial crisis and subsequent economic contraction. With unemployment staying high for an unprecedented amount of time, the Nobel laureate has taken to calling on central banks to begin aggressively combating what he sees as “depressionary conditions” with massive amounts of monetary easing. In an April column, he wrote:

       Indeed, a bit more inflation would be a good thing, not a bad thing.

If the Fed refuses to take even the slightest risk on the inflation front, despite a disastrous performance on the employment front, it’s violating its own charter. And, beyond that, would a rise in inflation to 3 percent or even 4 percent be a terrible thing? On the contrary, it would almost surely help the economy.

Krugman argues that an increase in inflation would help reduce debt overhang and encourage spending. Of course such a position assumes Federal Reserve Chairman Ben Bernanke could begin contracting the money supply before inflation expectations got out of control. That aside, what Krugman, and his fellow Keynesian advocators, conveniently forget to mention is the underlying, and subtly deceptive, effect of money printing. While he may play the role of the leading intellectual Robin Hood, Krugman’s prescribed remedy for the unemployed is not as benevolent as it may seem.

What inflation ultimately does is lower the real wages of all workers thereby clearing the market. This end result doesn’t occur overnight however. The injections of newly created money are
constrained by time and space. Money doesn’t, as David Hume showed, appear in everyone’s pocket overnight. It must go through a series of hands in order to reach the broader economy. This has the insidious effect of enriching the first receivers immediately who have the privilege of bidding up the price of other goods through spending. Those at the bottom of the monetary totem pole, typically the lower class and the retired, must cope with rising prices before their own wages rise; if they do at all. For a wonderful illustration of this process, see the graph from investor Martin Sibileau below:

What is referred to as the Cantillon Effect is really the means the federal government and those banks closely affiliated with the Federal Reserve use through coercively imposed legal tender laws to make themselves rich at the expense of the whole population. While voluntary market exchanges are mutually beneficial, the scheme of central banking is exploitive to the core.

And it just so happens to be the gospel which Paul Krugman never tires of preaching. Under the guise of lifting the impoverished onto plateaus of opulence, the Nobel laureate’s mighty solution to the world’s problems enriches precisely those who don’t need any help.

In another recent New York Times column, Krugman once again lets his readers know that he is dismayed over the reluctance both the Federal Reserve and European Central Bank have toward reigniting the printing presses. He notes that as the rate of inflation has slowed, neither central bank is showing any signs of being ready to flood their respective banking systems with liquidity. What’s peculiar about the piece is not only does Krugman endorse Spain’s government bailing out its banking sector, he also admits to inflation being needed for “internal devaluation” and “cutting wages.”

Economist Henry Hazlitt identified why such a policy may seem straightforward but is unsuccessful in the end. As he writes in his classic “The Failure of New Economics”
 

Let us assume a situation, for example, in which all wage rates are at equilibrium levels except wages in the building trades, which are 10 per cent above equilibrium levels. There will then probably be unemployment, not only in the building trades themselves, but also, say, in the steel, cement, brick, and lumber industries, because of the falling off in demand from the building trades. And there will be some unemployment in the television, camera, clothing, and other trades because of the unemployment in the building trades and the consequent fall in retail business.

The whole situation could be cured by a 10 per cent cut in building wages alone (which would show up in the average for all industry, say, as a cut of less than 1 per cent in wage-rates). But such a cut in building wages alone, in Keynesian theory, would be “gradual” and “irregular” and hence “unjust” and “inexpedient.” For Keynesian theory is not interested at all in particular adjustments. It sees them merely as disturbing factors. Therefore Keynes’s remedy would be a 10 per cent debasement of the monetary unit to raise prices and living costs. In other words, he would wish to raise all prices 10 per cent, and cut everybody’s real wage about 10 per cent.

But if he could succeed in doing this, the outcome would not cure the situation. For after all these adjustments had been made, wages in the building trades would still be 10 per cent too high in terms of all other wages and prices. When the temporary effects of the inflation had worked themselves out, the unemployment would return, because the same maladjustment within the wage-price structure would exist.

It should be clear that inflation engineered by central banks, in addition to setting off the business cycle, does not help the average worker. In fact it acts as a burden on his ability to accumulate savings to invest in his own productivity. With the dollars in his wallet losing value almost every day, what’s a man to do besides spend them now while they are still worth something?

This is in addition to the central banking system which exists for the sole reason of cartelizing the industry in favor of those banks closest to the money printer. These banks, such as Goldman Sachs, JP Morgan, and Citigroup in the U.S., have first dips on newly printed dollars which they then use to extend credit and create their own money out of thin air. For legalizing such a corrupt and fraudulent system, the federal government is returned the favor by having its bonds purchased in order to be resold to the central bank.

This is the wealth distribution Krugman is really in favor of. His constant slander of Wall Street’s excesses is paired with endorsing the very banking system which perpetuates extravagant risk taking. When pushes come to shove, he is happy to see banks bailed out just so they will continue to finance their own governments.

What central banking really comes down to is one gigantic Ponzi scheme based on the fraudulent practice of inflation where, as Murray Rothbard always pointed out, benefits some at the expense of others. The whole banking system has become dependent on newly created funds in order to perpetuate its image of solvency. The politicians and bankers are always the first to profit while the rest of the public has the benefit of being next in line. Like any other method the state uses to fund itself, it is based on legalized pick pocketing.

If this is truly Paul Krugman’s ideal system for helping the downtrodden, I would hate to see what type of solution he would come up with if he wanted them to suffer even more.

John Bryson's Real Medical Condition

LvMIC:

Last Saturday, it is being reported that U.S. Department of Commerce Secretary John Bryson was involved in two auto accidents that may have been related to a seizure he suffered during the incidents.  According to CNN, Bryson is currently under investigation for a felony hit and run.  It is unclear at this point if the Commerce Secretary’s health condition played a part in either accident.  Police currently don’t believe drugs or alcohol were involved.  Whatever the case, Bryson’s insider status will likely help him escape any significant legal trouble that could arise from the episode.  That’s just how plutocracies roll.

Perhaps now is a good time to analyze the oxymoronic government bureaucrat in charge of regulating commerce.  According to Article 1, Section 8, Clause 3 of the U.S. Constitution, Congress shall have the authority “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  For those not fooled by the fantasy that government will always abide by the rules set up by its founders, the fact that Congress has used such vague language to regulate anything and everything under the sun comes as no surprise.  If the ruling class of the state really wants to ignore previously defined limits to its powers, there is little that will stop them short of full blown domestic revolution.  Just look at President Obama’s ongoing killing spree in the Middle East.

The plain truth is the U.S. Constitution, like every government-establishing text, was never meant to shackle Leviathan.  As Southern University School of Law professor Butler Shaffer writes in regard to the supposed freedoms guaranteed in the Bill of Rights:

This fact is what conservatives fail to understand when they bleat about wanting “to get back to the Constitution.” The government has never strayed from the Constitution; these words have been in that document from the beginning. They have, however, been interpreted according to the ever-changing preferences of those in power.

From Abraham Lincoln’s whoring out to the railroad industry to Franklin Roosevelt’s fascism-in-disguise New Deal, the commerce clause has always been interpreted to justify the federal government’s intrusion into economic life.  Even if we were to accept that the authors of the Constitution really wanted to grant Congress the authority to regulate commerce in such a way as to facilitate it rather than limit it (James Madison is said to have argued that regulate generally means “keep regular”), then such a notion would be counter-intuitive.  The state only ever impedes commerce and transactions among free people.  Tariffs, taxation, subsidies to politically favored firms, and legally imposed barriers to industry are all products of government dictum.
Rather than promote “job creation, economic growth, sustainable development and improved standards of living for all Americans,” as goes its mission statement, the Department of Commerce is fundamentally anti-commerce.  People are perfectly capable of trading with their next door neighbors and with strangers all the way across the globe without being supervised like children.  And through every transaction, both parties think of themselves better off or they wouldn’t have conducted business in the first place.  This concept is universal regardless of the arbitrary boundaries imposed on the world by various nation-states.
What the Department of Commerce really serves as is another bureaucracy to be staffed by those who take great pleasure in barking orders at individuals and instructing them in the proper way in which to live their lives.  In what is perhaps one of the most accurate descriptions written on the state and its enforcers, famed investor Doug Casey’s recent essay “The Ascendence of Sociopaths in U.S. Governance” gets to the bottom of the type of person drawn to positions of coercive dictation.  In addressing the crotch fondlers in the Transportation Security Administration, he writes:

Have you ever wondered where the 50,000 people employed by the TSA to inspect and degrade you came from? Most of them are middle-aged. Did they have jobs before they started doing something that any normal person would consider demeaning? Most did, but they were attracted to – not repelled by – a job where they wear a costume and abuse their fellow citizens all day.

Few of them can imagine that they’re shepherding in a police state as they play their roles in security theater…but the 50,000 newly employed are exactly the same type of people who joined the Gestapo – eager to help in the project of controlling everyone. Nobody was drafted into the Gestapo.

In short, to cite another illuminating phrase from Casey, “Washington draws sociopaths like a pile of dog crap draws flies.”  The key difference is that piles of dog excrement don’t steal from your paycheck, sexually assault you before you board a plane, read your electronic communication without your permission, and then pretend to be looking out for your best interests.

As we have seen, Casey’s reasoning applies directly to those in the Department of Commerce.  If under no restrictions people will naturally economize and bargain with each other to better their lives, then all government can do is act as a hurdle to trade.  And it is precisely those who seek to oversee and squash commerce that will gravitate toward the institution that specializes in the practice.  The purpose of the U.S. Department of Commerce, and its equivalent in other countries, is based on Orwellian reasoning and its offices are used to employ busybodies who will dutifully go to the voting booth and put politicians in power that will appropriate more stolen money to its range of agencies.

What ever medical condition Secretary Bryson may have is negligible in comparison to his statist mindset as the head of a regulatory bureaucracy.  Those who had their vehicle plowed into by his Lexus are not the only ones who have suffered at the hands of Secretary Bryson.  It is the businesses and innovations that will never see the light of day due to the endless amounts of regulatory red tape which permeate from Washington into the economy like a deadly plague.