This YouTube got me to thinking about the Bush/Obama "free speech zones," and how far we have come in just one generation:
http://www.youtube.com/watch?v=JP3kJwjG0RE
And then there was this:
http://www.youtube.com/watch?v=djlWmg8wDj0
I was a freshman at the University of Michigan in the 1975-76 school year when Gerald Ford decided to announce at his alma mater his candidacy for the Republican nomination for President.
The event was held at the basketball arena not too far from Central Campus. I, and thousands of other U of M students and local residents, flooded the streets as if we were going to a sporting event. I remember reaching the door to the arena and being surprized that every single person was given a once-over and a bag check before being allowed inside. They even took my umbrella and examined it closely (it was a rainy day). I'd never been exposed to official paranoia before. I remember thinking how silly it was.
The arena was packed. I don't remember exactly, but I think it held about 15,000, and since this was not that long after the Nixon pardon, it was not a friendly crowd. When the president finally appeared at the podium for his speech, the place went nuts. There was little chance of actually hearing Ford over the screaming, yelling, chants, insults, and general mayhem. At one point, someone lit a string of firecrackers (remember, Ford had been the target of two prior assassination attempts) and Secret Service agents came out of the woodwork, tackled Ford, then dashed out into the audience to look for the perpetrator. A half minute later, Ford stepped back to the podium and continued speaking through the renewed chants and cat-calls.
I'm sure Ford could not have picked a worse place to launch his candidacy. The opposition to him was fierce. He must have left Ann Arbor with a very bad feeling about his political future.
Contrast that event 35 years ago with the Bush/Obama era of "free speech zones." Shunted off to fenced-in locations blocks away from the President, the protesters shout but no one hears. They wave signs, but no one sees. How in heaven's name is our government to know when the people are angry? This cannot end well.
I'm afraid our children will come to think of this as normal.
Thursday, August 12, 2010
Wednesday, August 11, 2010
The Escape Clause
Most Americans are sympathetic to the libertarian ideas of small government, low taxes, equality before the law, innocent until proven guilty, and self-reliance. Many a Tea Party speech has begun with a quote from Jefferson, Madison, and Thoreau. The Declaration of Independence and Bill of Rights are enshrined as near perfect documents. Why, then, are people repelled by the term 'libertarian?' Why do some of the advocates of small government attack 'libertarianism' with terms like 'juvenile,' or 'moronic,' or worse? Even regular posters at the dailypaul.com are dismissive of libertarianism, though Ron Paul himself describes himself as a libertarian. How could it be libertarianism could come to be so reviled among people who would otherwise be considered fellow travelers?
I think it's because there is no Escape Clause.
There are different approaches to the origins of libertarian philosophy, but the most common one is the 'non-agression' principle. Stated simply, you may do as you wish with with your life and your property as long as you do not initiate aggression against anyone else's life or property. Nearly everyone says, 'this is all fine, but...'
But what about the poor...we need to steal from some people to give wealth to others.
But what about drug users...we need to take control of their lives because we don't like what they are doing.
But what about health care...we need to force people to value it as much as we do.
But what about (your favorite cause)...we need to enslave others because the results will be good.
Everyone has their Escape Clause. They are happy to agree to the non-aggression principle...as long as they are exempt from it. Everyone seems to have a little larceny in them. Of course, and entire society built around larceny quickly becomes a free-for-all for pickpockets. That, I think is the society we currently live in. Many of my friends would say, "So...?" They accept the idea that everyone is out to steal from everyone else...that's just the way it is.
Yet these same people are the Tea Partiers who decry the confiscation by taxes of their hard earned money. I believe they are concious of their hypocrisy...they just can't help themselves. They feel they need the legal option to steal or enslave, at least a little, if they feel like it. They WANT their Escape Clause.
So they have it. And they have the society that results from it, and they are not happy. What these Tea Partiers can't fathom is that once it is accepted that robbing, maiming, and killing others for what they consider necessary reasons, they have essentially muttered the open sesame that makes all other reasons acceptable. The tepid conservatives, who mouth the words about individual liberty, hand to their big-government, big spending, high tax, regulate-them-'till-they bleed, opposition all the justifications for every confiscation, imposition, and oppression known to man. The big government people don't need an escape clause. They just need the small government people to agree there must be one. Or one hundred. Or seventy thousand (the number of pages of Federal Regulations, minus the sixteen thousand pages of the Tax Code).
This is the essence of the Escape Clause. It is the escape from morality, the blessing of the cruel, and the justification of the unjust. It is the purposeful breaking of our moral compass so we can be freed from the dictates of universal principles that cross over all cultures and epochs: It is wrong to rob, injure, enslave, or kill another human being. Indeed, an entire class of educated, attractive, and engaging people argues that not only are these actions acceptable, they are necessary and noble. Psychology labels these people 'sociopaths;' they label themselves 'public servants.'
Libertarianism does not have Escape Clauses. It says you should not rob, nor is it acceptable to get your Congressman to rob for you. You should not injure, nor should you get the police to do it for you. You should not enslave, and no government should force other's to live for your sake.
So because libertarianism advocates individual liberty, but does not twist itself in a knot creating moral loopholes, it is considered moronic.
Got it.
I think it's because there is no Escape Clause.
There are different approaches to the origins of libertarian philosophy, but the most common one is the 'non-agression' principle. Stated simply, you may do as you wish with with your life and your property as long as you do not initiate aggression against anyone else's life or property. Nearly everyone says, 'this is all fine, but...'
But what about the poor...we need to steal from some people to give wealth to others.
But what about drug users...we need to take control of their lives because we don't like what they are doing.
But what about health care...we need to force people to value it as much as we do.
But what about (your favorite cause)...we need to enslave others because the results will be good.
Everyone has their Escape Clause. They are happy to agree to the non-aggression principle...as long as they are exempt from it. Everyone seems to have a little larceny in them. Of course, and entire society built around larceny quickly becomes a free-for-all for pickpockets. That, I think is the society we currently live in. Many of my friends would say, "So...?" They accept the idea that everyone is out to steal from everyone else...that's just the way it is.
Yet these same people are the Tea Partiers who decry the confiscation by taxes of their hard earned money. I believe they are concious of their hypocrisy...they just can't help themselves. They feel they need the legal option to steal or enslave, at least a little, if they feel like it. They WANT their Escape Clause.
So they have it. And they have the society that results from it, and they are not happy. What these Tea Partiers can't fathom is that once it is accepted that robbing, maiming, and killing others for what they consider necessary reasons, they have essentially muttered the open sesame that makes all other reasons acceptable. The tepid conservatives, who mouth the words about individual liberty, hand to their big-government, big spending, high tax, regulate-them-'till-they bleed, opposition all the justifications for every confiscation, imposition, and oppression known to man. The big government people don't need an escape clause. They just need the small government people to agree there must be one. Or one hundred. Or seventy thousand (the number of pages of Federal Regulations, minus the sixteen thousand pages of the Tax Code).
This is the essence of the Escape Clause. It is the escape from morality, the blessing of the cruel, and the justification of the unjust. It is the purposeful breaking of our moral compass so we can be freed from the dictates of universal principles that cross over all cultures and epochs: It is wrong to rob, injure, enslave, or kill another human being. Indeed, an entire class of educated, attractive, and engaging people argues that not only are these actions acceptable, they are necessary and noble. Psychology labels these people 'sociopaths;' they label themselves 'public servants.'
Libertarianism does not have Escape Clauses. It says you should not rob, nor is it acceptable to get your Congressman to rob for you. You should not injure, nor should you get the police to do it for you. You should not enslave, and no government should force other's to live for your sake.
So because libertarianism advocates individual liberty, but does not twist itself in a knot creating moral loopholes, it is considered moronic.
Got it.
Friday, June 25, 2010
Ok, smarty, what would YOU do?
The country is in a tough economic spot. All indications are that there is no recovery from this two year old recession. More people are losing their jobs. More businesses are going bankrupt. A general gloom has decended over the marketplace.
The federal government has tried the standard remedies: lower interest rates, deficit spending, make-work programs, and bailouts. Nothing has worked. The critics of the current, and former, government have been crying that the powers-that-be are impoverishing us all. The supporters of the government are responding that the critics have no better ideas and that they are just playing politics with a national tragedy.
Fair enough. I have been a critic by claiming, from early on, the government's programs won't work and will probably make the problems worse. So far I have been right. But do I have any positive contribution to make beyond sniping at our Dear Leader? As a card-carrying amateur pundit and economic seer, let me try my hand.
My Take On The Situation:
First, I believe the cause of this recession is the same as all the other recessions and depressions of the past. Credit booms lead to credit busts, as day leads to night. The Austrian economists von Mises and Hayek constructed an understanding of the boom and bust cycle almost a hundred years ago that explains in clear cause-and-effect terms how new credit money causes malinvestment and cannot be sustained, therefore there is credit contraction, deflation, and correction (recession, bankruptcies, etc.). So, if you want to stop a recession, don't have a credit boom. Once the credit expansion has happened, the rest is inevitable.
Where are we in this cycle today? We have just endured 40 years of credit expansion exacerbated by the disconnection of our money supply from the only anchor it had: gold. With the collapse of the Bretton Woods agreement in 1971, and our reniging on agreements to redeem our dollars with gold, the door was left wide open for monetary expansion without limit. All things being equal, a currency that is inflated far beyond the economy's increases in goods and services will lose value. Prices would go up. People would demand more pay. The spiral of "cost-push inflation" and continuing loose money policies would result in ever accelerating price increases until the money lost all value in a hyper-inflation. That did not happen in the U.S. because the dollar became the "reserve currency of the world," thereby soaking up the newly minted dollars to be used in other international exchanges. We were able to create the money instead of products, and send it overseas to trade for goods. The effect was to make it economically silly to produce products here when we could buy all we wanted with paper and electronic dollars created from nothing.
That new money, however, came into our hands via debt. The loans we, and our government, took out fueled the boom in the stock market, the dot-coms, housing, and now bonds. But at the core, they were still loans that needed to be serviced. When the debt load became excessive, we, as individuals, stopped funding our purchases with new debt and the recession began. When banks stopped lending, credit cards cancelled customers, and consumers started paying down their debts, the money supply reversed.
Deflation became the name of the game, and according to the Federal Reserve, the enemy. Ben Bernanke earned the name "Helicopter Ben" when he pledged to prevent deflation (sometimes referred to as 'liquidity crisis') by dropping money from the air if need be. So far, despite doubling the M1 money supply in a recent 12 month period, the total M3 money supply has been shrinking by over 9% on an annualized basis. Thus the growing unemployment, downward pressure on prices, and bankruptcies. You can see why he would consider deflation to be the enemy.
What Can Be Done?
The danger in trying to reinflate the money supply is that the result could easily be a newer and bigger bubble, total loss of confidence in the dollar, and hyperinflation, or, just as bad, the economy may refuse to reinflate with new lending and instead painfully deflate over a long period of time instead of all at once. Decades of precious life could be squandered.
The first thing that must be acknowledged is that the correction is inevitable. Stop trying to fight it, because all you will do is expend resources you will need later. As Churchill was supposed to have said: when you're going through hell, keep going. We need to get through this, and as quickly as possible.
So, no bailouts, no stimulus, no subsidies, no zero interest rates. These are the things that caused our injury, so we need to stop doing them. The immediate result will be a sudden deflation.
The Federal budget will have to be slashed, and not by a little, but by a lot. Forget our overseas empire...it will have to go. The military will have to refocus on defending the U.S., not nationbuilding Afghanistan and Iraq. I'm guessing an 80% reduction would be about right.
Subsidies for all our Federally funded pet projects will have to end, from arts projects, to cash for clunkers, to the space program. Done. Over. If we don't, there will be no way to stop Federal borrowing that's putting us on the path to becoming a banana republic.
Social programs are in a different league. Programs that help those who reasonably cannot help themselves should be kept intact. I'm talking about Food Stamps, Unemployment Insurance, Social Security, Medicare, and Medicaid. Because each of these programs is essentially broke today, they may require even more funding in the future as the economy tanks and the demographics of the baby-boom retirement looms. I believe that each of these programs is doomed to fail, so I advocate, long term, planning their reduction and elimination. But that's for another day. Today, if they were eliminated, helpless people would starve to death.
Next, take some positive steps. Allow people to escape from the crashing dollar system by giving them the option to make deals or settle their debts in any currency or commodity they please. This could be done by repealing the legal tender laws that require settlement of debts in dollars. The dollar would quickly seek its' own value amongst all the options out there. For the average person, however, they would have an escape from the inflate/deflate rollercoaster, and this one move alone could give the economy the ability to quickly correct and rebound.
During a deflation, it is critical that expenses be reduced to match the reduced money supply. The biggest single expense in most people's lives is the burden of government: taxes. The burden must not be allowed to grow, and ideally will shrink, as a percent of income. Less money for the government means more money for the people to service their debts, accumulate savings, invest in their future, and enjoy their lives. But make no mistake: if tax cuts mean more government borrowing, nothing is gained! Government spending at all levels must be cut AND taxes must be cut in order to lighten the burdens on the economy and allow it to rebuild.
I would make it illegal for the Federal Reserve to create money out of thin air. That is where the inflationary boom and deflationary bust cycle has its' beginning. Fractional reserve banking is the mechanism by which a small amount of currency becomes are large amount of credit, and it is also the point of failure in our monetary system. Banks create debt in the society by lending the same money out multiple times at once, thereby falsely increasing the apparent money in the economy. When the people are overburdened with debt, they cease new borrowing and begin to pay back their loans, which causes the apparent money supply to contract (deflation). The banks are now at risk of runs on their deposits, as there is not enough money in reserve to satisfy all of the claimants, so they build their reserves by not lending, and the economy goes into a tailspin. It all started with the Federal Reserve and the practice of fractional reserve banking. Both must be stopped, or the boom and bust cycle can never be brought under control.
I don't think we can outlaw fractional reserve banking overnight, though that might be the moral thing to do, because the deflationary shock to the economy would shake our society down to its' bones. I also would not change the reserve requirements to make the banks more resistant to runs, because that would provide the people with a false sense that the banks are "safe" when infact they are still insolvent. 100% reserves would be 100% safe, but the deflation that would be required to get there might do serious social and political harm to our society. Instead, I would eliminate the Federal Deposit Insurance Corporation, and make it clear that nothing is completely safe. Suddenly companies and the people will want to know that their bank is treating their money with care, and banks will become more careful with their loan porfolio. If the Federal Reserve is prevented from printing money to 'loan' to banks to save them from their mistakes, then there would be a real chance that banks could go out of business if they are reckless with their depositors' money. The market would discipline banks in a way no regulator ever could.
Finally, to allow full employment at lower money supply levels, wage rates must be allowed to fluctuate. While it may seem cruel to eliminate the minimum wage, it is far far more cruel to condemn an entire class of people (the people who have the least education, are aged or inexperienced, disabled, or otherwise less productive) to institutional unemployment. They must be allowed to work for an agreed upon wage, even if they wage is very low. Full employment would ensue, and because the costs of overhead would plummet, prices would drop also. This is not so radical an idea as most people would assume. One of the tenants of Keynesian economics is that inflation of the money supply is needed to achieve full employment because people are resistant to accepting lower wages. An increase in the money supply means devalued purchasing power, which means REAL wages are lowered without the worker's knowledge. As all economists know, Keynesians included, real wages must go down if large masses of unemployed are to find jobs again. I believe inflating the money supply to acheive full employment introduces us to the boom and bust cycle detailed above. Let's be up front with the unemployed and tell them they will need to work for less instead of stealing their purchasing power and creating the boom and bust cycle to achieve the same end.
Those are my thoughts today. I'll get back to you when they are on the verge of being adopted.
The federal government has tried the standard remedies: lower interest rates, deficit spending, make-work programs, and bailouts. Nothing has worked. The critics of the current, and former, government have been crying that the powers-that-be are impoverishing us all. The supporters of the government are responding that the critics have no better ideas and that they are just playing politics with a national tragedy.
Fair enough. I have been a critic by claiming, from early on, the government's programs won't work and will probably make the problems worse. So far I have been right. But do I have any positive contribution to make beyond sniping at our Dear Leader? As a card-carrying amateur pundit and economic seer, let me try my hand.
My Take On The Situation:
First, I believe the cause of this recession is the same as all the other recessions and depressions of the past. Credit booms lead to credit busts, as day leads to night. The Austrian economists von Mises and Hayek constructed an understanding of the boom and bust cycle almost a hundred years ago that explains in clear cause-and-effect terms how new credit money causes malinvestment and cannot be sustained, therefore there is credit contraction, deflation, and correction (recession, bankruptcies, etc.). So, if you want to stop a recession, don't have a credit boom. Once the credit expansion has happened, the rest is inevitable.
Where are we in this cycle today? We have just endured 40 years of credit expansion exacerbated by the disconnection of our money supply from the only anchor it had: gold. With the collapse of the Bretton Woods agreement in 1971, and our reniging on agreements to redeem our dollars with gold, the door was left wide open for monetary expansion without limit. All things being equal, a currency that is inflated far beyond the economy's increases in goods and services will lose value. Prices would go up. People would demand more pay. The spiral of "cost-push inflation" and continuing loose money policies would result in ever accelerating price increases until the money lost all value in a hyper-inflation. That did not happen in the U.S. because the dollar became the "reserve currency of the world," thereby soaking up the newly minted dollars to be used in other international exchanges. We were able to create the money instead of products, and send it overseas to trade for goods. The effect was to make it economically silly to produce products here when we could buy all we wanted with paper and electronic dollars created from nothing.
That new money, however, came into our hands via debt. The loans we, and our government, took out fueled the boom in the stock market, the dot-coms, housing, and now bonds. But at the core, they were still loans that needed to be serviced. When the debt load became excessive, we, as individuals, stopped funding our purchases with new debt and the recession began. When banks stopped lending, credit cards cancelled customers, and consumers started paying down their debts, the money supply reversed.
Deflation became the name of the game, and according to the Federal Reserve, the enemy. Ben Bernanke earned the name "Helicopter Ben" when he pledged to prevent deflation (sometimes referred to as 'liquidity crisis') by dropping money from the air if need be. So far, despite doubling the M1 money supply in a recent 12 month period, the total M3 money supply has been shrinking by over 9% on an annualized basis. Thus the growing unemployment, downward pressure on prices, and bankruptcies. You can see why he would consider deflation to be the enemy.
What Can Be Done?
The danger in trying to reinflate the money supply is that the result could easily be a newer and bigger bubble, total loss of confidence in the dollar, and hyperinflation, or, just as bad, the economy may refuse to reinflate with new lending and instead painfully deflate over a long period of time instead of all at once. Decades of precious life could be squandered.
The first thing that must be acknowledged is that the correction is inevitable. Stop trying to fight it, because all you will do is expend resources you will need later. As Churchill was supposed to have said: when you're going through hell, keep going. We need to get through this, and as quickly as possible.
So, no bailouts, no stimulus, no subsidies, no zero interest rates. These are the things that caused our injury, so we need to stop doing them. The immediate result will be a sudden deflation.
The Federal budget will have to be slashed, and not by a little, but by a lot. Forget our overseas empire...it will have to go. The military will have to refocus on defending the U.S., not nationbuilding Afghanistan and Iraq. I'm guessing an 80% reduction would be about right.
Subsidies for all our Federally funded pet projects will have to end, from arts projects, to cash for clunkers, to the space program. Done. Over. If we don't, there will be no way to stop Federal borrowing that's putting us on the path to becoming a banana republic.
Social programs are in a different league. Programs that help those who reasonably cannot help themselves should be kept intact. I'm talking about Food Stamps, Unemployment Insurance, Social Security, Medicare, and Medicaid. Because each of these programs is essentially broke today, they may require even more funding in the future as the economy tanks and the demographics of the baby-boom retirement looms. I believe that each of these programs is doomed to fail, so I advocate, long term, planning their reduction and elimination. But that's for another day. Today, if they were eliminated, helpless people would starve to death.
Next, take some positive steps. Allow people to escape from the crashing dollar system by giving them the option to make deals or settle their debts in any currency or commodity they please. This could be done by repealing the legal tender laws that require settlement of debts in dollars. The dollar would quickly seek its' own value amongst all the options out there. For the average person, however, they would have an escape from the inflate/deflate rollercoaster, and this one move alone could give the economy the ability to quickly correct and rebound.
During a deflation, it is critical that expenses be reduced to match the reduced money supply. The biggest single expense in most people's lives is the burden of government: taxes. The burden must not be allowed to grow, and ideally will shrink, as a percent of income. Less money for the government means more money for the people to service their debts, accumulate savings, invest in their future, and enjoy their lives. But make no mistake: if tax cuts mean more government borrowing, nothing is gained! Government spending at all levels must be cut AND taxes must be cut in order to lighten the burdens on the economy and allow it to rebuild.
I would make it illegal for the Federal Reserve to create money out of thin air. That is where the inflationary boom and deflationary bust cycle has its' beginning. Fractional reserve banking is the mechanism by which a small amount of currency becomes are large amount of credit, and it is also the point of failure in our monetary system. Banks create debt in the society by lending the same money out multiple times at once, thereby falsely increasing the apparent money in the economy. When the people are overburdened with debt, they cease new borrowing and begin to pay back their loans, which causes the apparent money supply to contract (deflation). The banks are now at risk of runs on their deposits, as there is not enough money in reserve to satisfy all of the claimants, so they build their reserves by not lending, and the economy goes into a tailspin. It all started with the Federal Reserve and the practice of fractional reserve banking. Both must be stopped, or the boom and bust cycle can never be brought under control.
I don't think we can outlaw fractional reserve banking overnight, though that might be the moral thing to do, because the deflationary shock to the economy would shake our society down to its' bones. I also would not change the reserve requirements to make the banks more resistant to runs, because that would provide the people with a false sense that the banks are "safe" when infact they are still insolvent. 100% reserves would be 100% safe, but the deflation that would be required to get there might do serious social and political harm to our society. Instead, I would eliminate the Federal Deposit Insurance Corporation, and make it clear that nothing is completely safe. Suddenly companies and the people will want to know that their bank is treating their money with care, and banks will become more careful with their loan porfolio. If the Federal Reserve is prevented from printing money to 'loan' to banks to save them from their mistakes, then there would be a real chance that banks could go out of business if they are reckless with their depositors' money. The market would discipline banks in a way no regulator ever could.
Finally, to allow full employment at lower money supply levels, wage rates must be allowed to fluctuate. While it may seem cruel to eliminate the minimum wage, it is far far more cruel to condemn an entire class of people (the people who have the least education, are aged or inexperienced, disabled, or otherwise less productive) to institutional unemployment. They must be allowed to work for an agreed upon wage, even if they wage is very low. Full employment would ensue, and because the costs of overhead would plummet, prices would drop also. This is not so radical an idea as most people would assume. One of the tenants of Keynesian economics is that inflation of the money supply is needed to achieve full employment because people are resistant to accepting lower wages. An increase in the money supply means devalued purchasing power, which means REAL wages are lowered without the worker's knowledge. As all economists know, Keynesians included, real wages must go down if large masses of unemployed are to find jobs again. I believe inflating the money supply to acheive full employment introduces us to the boom and bust cycle detailed above. Let's be up front with the unemployed and tell them they will need to work for less instead of stealing their purchasing power and creating the boom and bust cycle to achieve the same end.
Those are my thoughts today. I'll get back to you when they are on the verge of being adopted.
Sunday, June 6, 2010
It's Not All or Nothing
There was a long piece in the Daily Kos this week that 'exposed' libertarians and their goofy-subversive-dangerous ideas. Outside of the general snarky patina of the article, it was actually a pretty good survey of libertarian positions on most issues. There were some key, and common, characterizations that were, I felt, wide of the mark. I have chosen to highlight one that I feel is fundamental to the overall misunderstanding of the libertarian philosophy.
I am often accused of being an idealist. Unable to deal with the 'real world,' they say, I adhere to an ideology that has no practical application. There is no constituency to abolish the FDA, SSA, CIA, IRS, or DEA. Also, a libertarian society would provide no safety net and people could starve, or be homeless, or die without all these government programs. Imposing the libertarian system on a modern society would require everyone to accept it, and that ain't going to happen. Idealism never works, they say, which is why all 'isms' fail. Libertarianism is no different from Communism. Pie in the sky, impractical, doomed to failure.
Perhaps the critique of Communism is correct. It does seem to require a violent revolution to wipe away the old bourgeois regime and replace it with a worker's paradise in one fell swoop. If the program is not adopted in its' entirety, it fails. Let one bourgeois remain in power and he will ruin the Communist stew. Root them out! Kill them all! Purge society of the wreckers so Communism can flourish and create a worker's paradise. So when critics of Communism say it doesn't work, and Communists reply that it hasn't been tried, the Communists have a point. (Forget for a moment that successful small scale communist experiments have been carried out in the U.S. since the early 1800's, in towns such as New Harmony and New Economy.) Both the critics of Communism and the supporters of Communism agree: what has been tried in various nations around the world has lacked the requisite purity, and they have all failed miserably. Maybe it would work if pure, but we know it won't work if it is impure.
While Libertarianism tries to be a comprehensive political philosophy, like the Marxist and Communist theories, it does not run afoul of the same purity problem as other 'isms.' Impure libertarian societies have existed on a national scale, and they have been highly successful. I'm thinking of the U.S. prior to World War I. The Roman Republic before Caesar crossed the Rubicon. Hong Kong. Even the ancient Hebrews lived in a kind of libertarian world with no kings or rulers (the Jews were warned not to get a king because he would tax their wealth and send their children off to war...oh how prophetic!) In each case, the relative freedom enjoyed by individuals in those societies resulted in stable and wealthy communities. As their freedoms were curtailed, each of those societies experienced a decline in wealth, stability, and vitality (Hong Kong has not yet seen a decline, as it remains one of the freest places on earth despite belonging to a 'communist' country). Libertarian theory endorses the idea that more freedom means more wealth, stability, and security, while less freedom means more poverty, discontent, and conflict.
Taken to its' logical extreme, Libertarianism calls for an entirely voluntary society. A century and a half ago, that might have been imaginable. Today, from the perspective of people who are taxed, licensed, mandated, regulated, and subsidized by a 360 degree government that alternates between kind paternalism and nasty scold, this is a ridiculous thought. Surely the Libertarian ideal is so disconnected with the world as it exists that it is not worthy of serious consideration. Problems today must be fixed with practical solutions, not pie-in-the-sky theories.
Actually, this is where Libertarianism excels. Since Libertarianism does not require perfect execution to generate positive results, it can be taken in small pieces. Example: When the airlines were "deregulated" in the late 1970's and early 1980's, there was loud complaining that air travel would become more expensive and unsafe. Libertarian theory said it would become more affordable, flexible, and safer (if that was important to consumers). Indeed, that is exactly what happened. Air travel boomed. Over the next ten years fares dropped by some 50% and the number of carriers and routes doubled, making air travel affordable and practical for millions of Americans who otherwise would not have considered flying. The entire economy did not have to be deregulated, just a portion of a portion. More freedom was better, however limited.
The same thing happened with the trucking business at about the same time. The result was lower freight rates for industry and lower merchandise prices for consumers.
I am often accused of being an idealist. Unable to deal with the 'real world,' they say, I adhere to an ideology that has no practical application. There is no constituency to abolish the FDA, SSA, CIA, IRS, or DEA. Also, a libertarian society would provide no safety net and people could starve, or be homeless, or die without all these government programs. Imposing the libertarian system on a modern society would require everyone to accept it, and that ain't going to happen. Idealism never works, they say, which is why all 'isms' fail. Libertarianism is no different from Communism. Pie in the sky, impractical, doomed to failure.
Perhaps the critique of Communism is correct. It does seem to require a violent revolution to wipe away the old bourgeois regime and replace it with a worker's paradise in one fell swoop. If the program is not adopted in its' entirety, it fails. Let one bourgeois remain in power and he will ruin the Communist stew. Root them out! Kill them all! Purge society of the wreckers so Communism can flourish and create a worker's paradise. So when critics of Communism say it doesn't work, and Communists reply that it hasn't been tried, the Communists have a point. (Forget for a moment that successful small scale communist experiments have been carried out in the U.S. since the early 1800's, in towns such as New Harmony and New Economy.) Both the critics of Communism and the supporters of Communism agree: what has been tried in various nations around the world has lacked the requisite purity, and they have all failed miserably. Maybe it would work if pure, but we know it won't work if it is impure.
While Libertarianism tries to be a comprehensive political philosophy, like the Marxist and Communist theories, it does not run afoul of the same purity problem as other 'isms.' Impure libertarian societies have existed on a national scale, and they have been highly successful. I'm thinking of the U.S. prior to World War I. The Roman Republic before Caesar crossed the Rubicon. Hong Kong. Even the ancient Hebrews lived in a kind of libertarian world with no kings or rulers (the Jews were warned not to get a king because he would tax their wealth and send their children off to war...oh how prophetic!) In each case, the relative freedom enjoyed by individuals in those societies resulted in stable and wealthy communities. As their freedoms were curtailed, each of those societies experienced a decline in wealth, stability, and vitality (Hong Kong has not yet seen a decline, as it remains one of the freest places on earth despite belonging to a 'communist' country). Libertarian theory endorses the idea that more freedom means more wealth, stability, and security, while less freedom means more poverty, discontent, and conflict.
Taken to its' logical extreme, Libertarianism calls for an entirely voluntary society. A century and a half ago, that might have been imaginable. Today, from the perspective of people who are taxed, licensed, mandated, regulated, and subsidized by a 360 degree government that alternates between kind paternalism and nasty scold, this is a ridiculous thought. Surely the Libertarian ideal is so disconnected with the world as it exists that it is not worthy of serious consideration. Problems today must be fixed with practical solutions, not pie-in-the-sky theories.
Actually, this is where Libertarianism excels. Since Libertarianism does not require perfect execution to generate positive results, it can be taken in small pieces. Example: When the airlines were "deregulated" in the late 1970's and early 1980's, there was loud complaining that air travel would become more expensive and unsafe. Libertarian theory said it would become more affordable, flexible, and safer (if that was important to consumers). Indeed, that is exactly what happened. Air travel boomed. Over the next ten years fares dropped by some 50% and the number of carriers and routes doubled, making air travel affordable and practical for millions of Americans who otherwise would not have considered flying. The entire economy did not have to be deregulated, just a portion of a portion. More freedom was better, however limited.
The same thing happened with the trucking business at about the same time. The result was lower freight rates for industry and lower merchandise prices for consumers.
Alcohol prohibition in the 1920's resulted in a wave of violent crime as gangs battled over the black market while doing little to decrease drinking. Making alcohol legal again was another step in the direction of freedom, and the unintended consequences of prohibition disappeared overnight. A similar approach is needed with marijuana, and for the same reasons: it is practical and it is the right thing to do in a free society. Theory says that society would benefit from legalizing all drugs, but it will benefit from just the first small step with marijuana.
Libertarianism is not all or nothing. In general, freedom is good, more freedom is better. It is not necessary to have a pure Libertarian system to experience the benefits of freedom. Libertarian theory can be taken to the extreme...if you want...but it can also be taken is small pieces if that is all your society can handle. No need for a violent revolution. Just the steady drip, drip, drip of ideals and practical compromise. Then, one day, we may all be free. Perfectly free.
And it will seem perfectly reasonable.
Saturday, May 22, 2010
Musings on History as it Is and as it Was
Rand Paul was in trouble this week. He touched on the sacrosanct 1964 Civil Rights Act and mentioned it was less than perfect. For three news cycles he was vilified as a wide-eyed idealist out of touch with reality, or as a closet racist. No amount of denial mattered. The hole he had dug kept getting deeper...until he did the only thing left and shut up. Now he is a silent racist, I guess.
What Rand came to appreciate is that history comes in two parts: Is and Was. The "Is" part clobbered him his week. "Was" could have defended him, but it was no where to be found. My experience is that "Was" always shows up a little late, but in a tux. "Is" is always johnny-on-the-spot with hair-on-fire.
Sorry, dear reader, if I've lost you. Let me try again.
A question was posed to me by a fellow on the dailypaul.com: How could I defend the sanctity of property rights, as a libertarian, if a black person came to town and no one would give him a meal or a hotel room? Wouldn't the 1964 Civil Rights Act be necessary to save the black man from starvation or the elements? (In other words, Mr. Libertarian Fancy Pants, I challenge you to apply your principles consistently and commit social and poltical hari kari for the amusement of all). I nearly took the bait and responded by putting my head in that noose, but then I read the question again...and I sought more information.
The office a couple of doors from mine is occupied by a most interesting person. He is a tall thin man of about seventy years who speaks with the slow drawl of a life-long Mississippian. He is neither a Republican nor a Democrat, though that doesn't prevent him from taking sides in a political fight, sometimes for one and sometimes for the other. As a Jew, he was taught by his father to treat all persons equally because, his father said, "when they're done with the blacks, they'll come for the Jews."
Who better to ask about conditions in the pre-1964 South? So I layed out the question as it had been posed to me and watched him as he leaned back and wound-up his story-telling machine.
"Well....my first job out of college was selling shoes in Jackson, Mississippi. I will tell you that growing up in Vicksburg, I never saw an act of blatant racism. I'm sure there was some, but I never saw it. Blacks and whites worked together, lived together. Hell, two black women raised me, and if I did something I wasn't supposed to, they whupped me, too. But I won't mislead you...there were separate drinking fountains and restrooms, and I'm sure blacks couldn't sit in the front of many restaurants. There was probably no trouble because blacks 'knew their place,'" I caught a little wince in his face as he finished his sentence.
"In Jackson, just out of college, the owner of the shoe store I worked in was a terrible racist. He was so bad that he didn't allow his black customers to sit down. They had to buy the shoes standing up and take them home to try them on. When I saw that, I asked myself if I could even work for an asshole like that. But there was a manager in that store who would keep watch for the owner, and when the coast was clear, he'd have the black customers step into the stockroom where they could try on the shoes without being seen. Word got out in the black community and the black customers would come in when that manager was on duty."
He continued. "My own father owned a clothing store and he sold expensive clothes. Many of our customers bought on the layaway plan. Every week they'd come in a make a payment, and I'd remember the black women coming in and pulling cash out of their brassieres or their hose to put down on those clothes. If they couldn't make a payment, they'd stop in and say, 'sorry, Mr. B, but my husband got laid off from the mill this week and I can't pay you, but I promise I'll be back as soon as he gets a job.' My dad would hold the goods, unless the situation got abusive, and wait for them to pay. They usually did. I remember him showing me the card file where all of the layaway accounts were kept, and him telling me 'look here, our worst accounts are white, with not one colored customer in that stack.' I never forgot it."
I relayed to him how my father did not meet a black person until he was drafted into the army in World War II. Whatever his experience was there, he had nothing but derogatory comments to make about blacks, yet one night at about 10:00 there was a knock on our door. Two black men were asking for a lift into town, as their car had broken down a couple of miles up the road. My dad put on his coat and drove them fifteen miles into the nearest town. We all stayed up until he returned. After all, these were BLACK people and outside of my dad's army stories the only thing we knew about blacks was that Bill Cosby was funny, but the rest of blacks were burning down Detroit, Cleveland, and LA (this was the 1960's). When my dad returned, he said 'those were two of the nicest n*****rs I ever met.'
I told my friend that my own convictions were formed by reading "Black Like Me" in high school, and forever after that my father and I were at loggerheads concerning race. Nevertheless, my friend told me that even within families, there was no consistent approach to race. Heck, I replied, even within a single person there's no consistent approach.
And, I said, as a Northerner I was taught that there was blatant racism everywhere in the South. Whites against blacks. No middle ground. This whole discussion about Rand, the Civil Rights Act, and the South is based on stereotypes. The reality was much more nuanced, and much more humane, even if it had elements of terrible bigotry.
I went back to my desk and drafted my response to my dailypaul.com questioner.
"It is said that extreme cases make bad law, meaning that the law cannot be written to right every possible wrong. To do so would create solutions that are worse than the sin. Is your scenario possible? Yes. Is your scenario probable? No. It didn't happen that way in the past and there is no reason to believe it would in the future."
"Is" gets right to the point and says before 1964 whites were racists and blacks were oppressed victims. "Was" isn't so kind as to wrap it all up in a single sentence and instead likes to start by pulling out an old cigar, leaning back in a chair, and musing..."Well....in 1955 in Vicksburg, Mississippi, a town of sixteen thousand or so, I remember...."
What Rand came to appreciate is that history comes in two parts: Is and Was. The "Is" part clobbered him his week. "Was" could have defended him, but it was no where to be found. My experience is that "Was" always shows up a little late, but in a tux. "Is" is always johnny-on-the-spot with hair-on-fire.
Sorry, dear reader, if I've lost you. Let me try again.
A question was posed to me by a fellow on the dailypaul.com: How could I defend the sanctity of property rights, as a libertarian, if a black person came to town and no one would give him a meal or a hotel room? Wouldn't the 1964 Civil Rights Act be necessary to save the black man from starvation or the elements? (In other words, Mr. Libertarian Fancy Pants, I challenge you to apply your principles consistently and commit social and poltical hari kari for the amusement of all). I nearly took the bait and responded by putting my head in that noose, but then I read the question again...and I sought more information.
The office a couple of doors from mine is occupied by a most interesting person. He is a tall thin man of about seventy years who speaks with the slow drawl of a life-long Mississippian. He is neither a Republican nor a Democrat, though that doesn't prevent him from taking sides in a political fight, sometimes for one and sometimes for the other. As a Jew, he was taught by his father to treat all persons equally because, his father said, "when they're done with the blacks, they'll come for the Jews."
Who better to ask about conditions in the pre-1964 South? So I layed out the question as it had been posed to me and watched him as he leaned back and wound-up his story-telling machine.
"Well....my first job out of college was selling shoes in Jackson, Mississippi. I will tell you that growing up in Vicksburg, I never saw an act of blatant racism. I'm sure there was some, but I never saw it. Blacks and whites worked together, lived together. Hell, two black women raised me, and if I did something I wasn't supposed to, they whupped me, too. But I won't mislead you...there were separate drinking fountains and restrooms, and I'm sure blacks couldn't sit in the front of many restaurants. There was probably no trouble because blacks 'knew their place,'" I caught a little wince in his face as he finished his sentence.
"In Jackson, just out of college, the owner of the shoe store I worked in was a terrible racist. He was so bad that he didn't allow his black customers to sit down. They had to buy the shoes standing up and take them home to try them on. When I saw that, I asked myself if I could even work for an asshole like that. But there was a manager in that store who would keep watch for the owner, and when the coast was clear, he'd have the black customers step into the stockroom where they could try on the shoes without being seen. Word got out in the black community and the black customers would come in when that manager was on duty."
He continued. "My own father owned a clothing store and he sold expensive clothes. Many of our customers bought on the layaway plan. Every week they'd come in a make a payment, and I'd remember the black women coming in and pulling cash out of their brassieres or their hose to put down on those clothes. If they couldn't make a payment, they'd stop in and say, 'sorry, Mr. B, but my husband got laid off from the mill this week and I can't pay you, but I promise I'll be back as soon as he gets a job.' My dad would hold the goods, unless the situation got abusive, and wait for them to pay. They usually did. I remember him showing me the card file where all of the layaway accounts were kept, and him telling me 'look here, our worst accounts are white, with not one colored customer in that stack.' I never forgot it."
I relayed to him how my father did not meet a black person until he was drafted into the army in World War II. Whatever his experience was there, he had nothing but derogatory comments to make about blacks, yet one night at about 10:00 there was a knock on our door. Two black men were asking for a lift into town, as their car had broken down a couple of miles up the road. My dad put on his coat and drove them fifteen miles into the nearest town. We all stayed up until he returned. After all, these were BLACK people and outside of my dad's army stories the only thing we knew about blacks was that Bill Cosby was funny, but the rest of blacks were burning down Detroit, Cleveland, and LA (this was the 1960's). When my dad returned, he said 'those were two of the nicest n*****rs I ever met.'
I told my friend that my own convictions were formed by reading "Black Like Me" in high school, and forever after that my father and I were at loggerheads concerning race. Nevertheless, my friend told me that even within families, there was no consistent approach to race. Heck, I replied, even within a single person there's no consistent approach.
And, I said, as a Northerner I was taught that there was blatant racism everywhere in the South. Whites against blacks. No middle ground. This whole discussion about Rand, the Civil Rights Act, and the South is based on stereotypes. The reality was much more nuanced, and much more humane, even if it had elements of terrible bigotry.
I went back to my desk and drafted my response to my dailypaul.com questioner.
"It is said that extreme cases make bad law, meaning that the law cannot be written to right every possible wrong. To do so would create solutions that are worse than the sin. Is your scenario possible? Yes. Is your scenario probable? No. It didn't happen that way in the past and there is no reason to believe it would in the future."
"Is" gets right to the point and says before 1964 whites were racists and blacks were oppressed victims. "Was" isn't so kind as to wrap it all up in a single sentence and instead likes to start by pulling out an old cigar, leaning back in a chair, and musing..."Well....in 1955 in Vicksburg, Mississippi, a town of sixteen thousand or so, I remember...."
Monday, March 29, 2010
The Last Resort
In a community college acting class many years ago, I learned a life lesson that haunts me to this day: the trump card in any dispute, whether personal or political, is always violence.
The teacher paired up the class and gave each of us scenarios that we had to improvise our way through, with the "winner" being the one who achieved the particular goal he was assigned. I was paired with Mike, a large man a few years older than me, who had a very overbearing presence. Our scenario was this: Mike was an auto mechanic who never refunds money when he has an unhappy customer. Me? I was the unhappy customer hell bent on getting my money back on a bad repair job.
I walked into Mike's garage on stage to confront him, but he immediately slipped under a "car," which was a bunch of metal chairs arranged in a rectangle. As I tried to explain that I wanted a refund, he began banging on the "car" with a hammer and making an god-awful racket. No matter what I said, he yelled back that he couldn't hear me. I crawled under the "car" and began yelling at him so he couldn't ignore me, but Mike just banged louder. This scene went on for several minutes, much to the amusement of our classmates.
I was stymied. I couldn't make an argument, indeed I couldn't be heard, so I was being totally ineffectual in achieving the goal of getting the refund. As this was leading to a failure in the task, I switched gears, crawled out from under the "car," and in a moment of inspiration I announced that I found the imaginary cash box, pantomimed opening it, declared there was 50 bucks in there, and made like I had tucked it under my arm as I declared that was good enough, and I marched out of the garage with Mike sputtering in the background. I had won.
I observed my classmates going through their scenarios and noted that it was not eloquence, or wit, or technique that would win the task, but rather some physical action such as a punch, or a shot from a gun, or, in my case, a robbery. The actor who was most effective was often the one who resorted to the most violent solution.
In the context of life, the lesson, I fear, is all too real. There is great anger in the country right now. Despite strong nationwide opposition, our Congressmen, Senators, and President, have spent trillions bailing out the rich bankers, taking over General Motors, expanding wars, and nationalizing the health care industry. The anger in the street is palpable. By god, we say, we will VOTE OUT ALL THE BUGGERS and take our country back...except that we the people don't control the voting booth. The government does. We mass thousands to protest...but the government literally pretends we don't exist. We write to our representatives, but they send us back form letters full of pablum excusing their votes. We can almost imagine the government sitting in their offices sniggering at the utter uselessness of all that storming around. What's worse is we KNOW they are laughing at us.
Breaking points are as varied as the people who have them. And we all have them. Joe Stack found his. Jim Koresh found his. Tim McVeigh found his. As the disconnect between the people and the politicians gets wider, more and more people will find theirs'. One by one, as talking, protesting, and voting doesn't work, people will turn to other means. The government knows this, and it has an enormous stockpile of weapons and agents trained to use them to try to keep a lid on the people's anger. Both sides are likely to turn to violence: the people to random acts of destruction, maiming, and killing, and the government to harsh repression against everyone, guilty and innocent alike, which will push even more to the breaking point. The spiral downward appears inevitable.
Except that I believe that where there is life, there is hope. I hope the people can find the right levers of power to influence that will return the government to its' proper size and role. I pray, though I am not a praying man, the petty tyrants in Washington will sense that the only way to defuse this anger is with talk or with blood, and I hope they choose the former.
If they don't, they will surely get the latter.
I don't revel in this insight. I fear it. I fight against it. I advocate non-violence. But I see the strength of government prompting a response from the people to meet force with more force. The most ruthless will win...and after that how will they conduct themselves? With honor? Unlikely.
Violent revolution, like violent repression, leads to societies of fear and barrenness. If we don't meet the government with violence, they will steamroll us. If we do, we are likely to become the new oppressors.
Dark thoughts for dark times.
The teacher paired up the class and gave each of us scenarios that we had to improvise our way through, with the "winner" being the one who achieved the particular goal he was assigned. I was paired with Mike, a large man a few years older than me, who had a very overbearing presence. Our scenario was this: Mike was an auto mechanic who never refunds money when he has an unhappy customer. Me? I was the unhappy customer hell bent on getting my money back on a bad repair job.
I walked into Mike's garage on stage to confront him, but he immediately slipped under a "car," which was a bunch of metal chairs arranged in a rectangle. As I tried to explain that I wanted a refund, he began banging on the "car" with a hammer and making an god-awful racket. No matter what I said, he yelled back that he couldn't hear me. I crawled under the "car" and began yelling at him so he couldn't ignore me, but Mike just banged louder. This scene went on for several minutes, much to the amusement of our classmates.
I was stymied. I couldn't make an argument, indeed I couldn't be heard, so I was being totally ineffectual in achieving the goal of getting the refund. As this was leading to a failure in the task, I switched gears, crawled out from under the "car," and in a moment of inspiration I announced that I found the imaginary cash box, pantomimed opening it, declared there was 50 bucks in there, and made like I had tucked it under my arm as I declared that was good enough, and I marched out of the garage with Mike sputtering in the background. I had won.
I observed my classmates going through their scenarios and noted that it was not eloquence, or wit, or technique that would win the task, but rather some physical action such as a punch, or a shot from a gun, or, in my case, a robbery. The actor who was most effective was often the one who resorted to the most violent solution.
In the context of life, the lesson, I fear, is all too real. There is great anger in the country right now. Despite strong nationwide opposition, our Congressmen, Senators, and President, have spent trillions bailing out the rich bankers, taking over General Motors, expanding wars, and nationalizing the health care industry. The anger in the street is palpable. By god, we say, we will VOTE OUT ALL THE BUGGERS and take our country back...except that we the people don't control the voting booth. The government does. We mass thousands to protest...but the government literally pretends we don't exist. We write to our representatives, but they send us back form letters full of pablum excusing their votes. We can almost imagine the government sitting in their offices sniggering at the utter uselessness of all that storming around. What's worse is we KNOW they are laughing at us.
Breaking points are as varied as the people who have them. And we all have them. Joe Stack found his. Jim Koresh found his. Tim McVeigh found his. As the disconnect between the people and the politicians gets wider, more and more people will find theirs'. One by one, as talking, protesting, and voting doesn't work, people will turn to other means. The government knows this, and it has an enormous stockpile of weapons and agents trained to use them to try to keep a lid on the people's anger. Both sides are likely to turn to violence: the people to random acts of destruction, maiming, and killing, and the government to harsh repression against everyone, guilty and innocent alike, which will push even more to the breaking point. The spiral downward appears inevitable.
Except that I believe that where there is life, there is hope. I hope the people can find the right levers of power to influence that will return the government to its' proper size and role. I pray, though I am not a praying man, the petty tyrants in Washington will sense that the only way to defuse this anger is with talk or with blood, and I hope they choose the former.
If they don't, they will surely get the latter.
I don't revel in this insight. I fear it. I fight against it. I advocate non-violence. But I see the strength of government prompting a response from the people to meet force with more force. The most ruthless will win...and after that how will they conduct themselves? With honor? Unlikely.
Violent revolution, like violent repression, leads to societies of fear and barrenness. If we don't meet the government with violence, they will steamroll us. If we do, we are likely to become the new oppressors.
Dark thoughts for dark times.
Saturday, January 30, 2010
A Letter To An Awakening Friend
I wrote the letter below to a friend of mine who has just discovered thesurvivalistblog.net. He and I had spoken many times in the past couple of years about the mid-east wars, the economy, politics, etc., and I always knew he was more of a neo-con than a conservative. But he has an open mind, so we were able to talk productively even though we disagreed on the interpretation of current events. Having stumbled on libertarian/conservative information on his own and finding it convincing enough to be disturbed by it means that he is moving more in my direction. I wanted to let him know I agreed.
Chuck,
(Sorry, in advance, for my long response)
I checked out the blog. Interesting. There is a lot of crossover information here with the websites I frequent. My focus has been on the current economic/political situation and the likely unfolding of events in the future. The Survivalist Blog seems to cover much of the same information with the added twist of advising how people can protect themselves. The writer seems sane and measured, not wooly haired and crazy-eyed. There is probably good prudent advice in there that we should all take.
As for the alarming nature of the information: I lose sleep sometimes when I get too far "down the rabbit hole." The causal connections, several times removed, between actions of our "leaders" and the meltdown of our economy and the perversion of our Constitution, sometimes is so clear to me that I cannot understand why other people cannot see it. Then I remember that I've been reading related stuff for the last 35 years, and that I cannot expect the average person to just read one book or article, or even a dozen books and articles, and expect them to come to the same conclusions I have.
I believe we are in for a very difficult time in the future. The large picture is: our economy was fooled by easy money generated by deficit spending, expansionist Federal Reserve policy, and fractional reserve banking.
People thought they were richer than they really were (I was one of them); they borrowed and bought and pushed prices upward for thirty years with the expectation there would be more money tomorrow.
When the new money was not sufficient to fulfull our expectations of ever-increasing prices, prices began to fall.
Falling prices began to reveal unsound investments (think: real estate, but it applies to other areas of the economy also) and the loans that supported them could not be repaid.
The banks and investment houses that were the most leveraged (fractional reserve banks are always insolvent, by their nature) were the first to collapse, leading to a chain reaction of insolvencies and credit contraction, which destroys the circulating money supply (just as increasing credit in a fractional reserve system creates money) and principle paydowns (which sucks money out of the economy).
With a decreasing circulating money supply (despite the trillions the Fed pumped into favored banks to prop them up, which they either can't or won't lend), asset prices will continue to drop...for a while...so far...leading to bone-crunching deflation, unemployment, bankruptcies, etc., a process that, if allowed to happen, would be complete in a year or so as the economy adjusted to the new reality of a lower money supply, then started growing again...
But the trillions of dollars being lavished on the financial houses by the Fed will eventually find its' way back into the circulating money supply.
The new money will begin competing with existing money for existing goods and services, and in a very short time prices will skyrocket...but wages will not (why? because of the large number of unemployed workers who, due to competition with other unemployed workers, cannot demand higher pay).
This will result in bone-crushing inflation for everyone, but especially for people on Social Security, pensions, or other fixed state aid.
If the scenario I have written above is correct, our country is in for an extreme amount of instability, both political and economic. People will be discouraged, and maybe even dangeously hungry. They will get restive, possibly violent. With the instability will come calls for more law and order, which will come at the expense of the Bill of Rights. The question will be: will the American people rediscover the wisdom of the Constitution (which, if followed, would have prevented this scenario to begin with), or will they adopt a different political framework, such as a leader cult or an oligopoly?
There is no way of knowing how it will all resolve itself, but it is unlikely that the America of our youth will be the America of our future.
Chuck,
(Sorry, in advance, for my long response)
I checked out the blog. Interesting. There is a lot of crossover information here with the websites I frequent. My focus has been on the current economic/political situation and the likely unfolding of events in the future. The Survivalist Blog seems to cover much of the same information with the added twist of advising how people can protect themselves. The writer seems sane and measured, not wooly haired and crazy-eyed. There is probably good prudent advice in there that we should all take.
As for the alarming nature of the information: I lose sleep sometimes when I get too far "down the rabbit hole." The causal connections, several times removed, between actions of our "leaders" and the meltdown of our economy and the perversion of our Constitution, sometimes is so clear to me that I cannot understand why other people cannot see it. Then I remember that I've been reading related stuff for the last 35 years, and that I cannot expect the average person to just read one book or article, or even a dozen books and articles, and expect them to come to the same conclusions I have.
I believe we are in for a very difficult time in the future. The large picture is: our economy was fooled by easy money generated by deficit spending, expansionist Federal Reserve policy, and fractional reserve banking.
People thought they were richer than they really were (I was one of them); they borrowed and bought and pushed prices upward for thirty years with the expectation there would be more money tomorrow.
When the new money was not sufficient to fulfull our expectations of ever-increasing prices, prices began to fall.
Falling prices began to reveal unsound investments (think: real estate, but it applies to other areas of the economy also) and the loans that supported them could not be repaid.
The banks and investment houses that were the most leveraged (fractional reserve banks are always insolvent, by their nature) were the first to collapse, leading to a chain reaction of insolvencies and credit contraction, which destroys the circulating money supply (just as increasing credit in a fractional reserve system creates money) and principle paydowns (which sucks money out of the economy).
With a decreasing circulating money supply (despite the trillions the Fed pumped into favored banks to prop them up, which they either can't or won't lend), asset prices will continue to drop...for a while...so far...leading to bone-crunching deflation, unemployment, bankruptcies, etc., a process that, if allowed to happen, would be complete in a year or so as the economy adjusted to the new reality of a lower money supply, then started growing again...
But the trillions of dollars being lavished on the financial houses by the Fed will eventually find its' way back into the circulating money supply.
The new money will begin competing with existing money for existing goods and services, and in a very short time prices will skyrocket...but wages will not (why? because of the large number of unemployed workers who, due to competition with other unemployed workers, cannot demand higher pay).
This will result in bone-crushing inflation for everyone, but especially for people on Social Security, pensions, or other fixed state aid.
If the scenario I have written above is correct, our country is in for an extreme amount of instability, both political and economic. People will be discouraged, and maybe even dangeously hungry. They will get restive, possibly violent. With the instability will come calls for more law and order, which will come at the expense of the Bill of Rights. The question will be: will the American people rediscover the wisdom of the Constitution (which, if followed, would have prevented this scenario to begin with), or will they adopt a different political framework, such as a leader cult or an oligopoly?
There is no way of knowing how it will all resolve itself, but it is unlikely that the America of our youth will be the America of our future.
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