Quantitative Easing or Quantitative Fleecing?

By Mike Cronin

Q: You’ve heard the talking heads talk about quantitative easing, so what the heck is it?

A: Put in the most basic terms, quantitative easing, or QE, is weasel-ese for the Federal Reserve (aka “the Fed”) attempting to stimulate consumption by making up money out of nothing and injecting it into the economy.

Q: What’s wrong with that?

A: Multiple things:

  1. The Constitution gives the government the power to print and coin money. That is one of the functions of the Dept of the Treasury.  The Constitutionality of the government making monetary policy (i.e. manipulating interest rates or “stimulating” the economy) has been debated since the time of Jefferson and Hamilton.  The powers enumerated to the government in the Constitution manifestly do not include allowing it to charter a central bank (which is what the Federal Reserve is), but Congress created one anyway with the passage of the Tenth Amendment in 1913.
  2. The “money” that the Federal Reserve puts into the economy is created out of thin air. The process is convoluted, but the net effect is that the Fed accomplishes QE by changing the balance in the accounts it is “depositing” the money into, i.e. creating electronic “money” out of thin air. The theory is that by giving banks more money (quantitative) to lend at low rates (easing), more businesses will borrow that money and put it to work, which will in turn generate more commerce.  In other words, the economy will have been “stimulated.”  The problem is, after the financial crises in 2007-2009, banks are only lending money to those with top-tier credit ratings.  A great deal of the money that is meant to stimulate commerce has instead stimulated stock trading.  That’s why we can have record stock prices even as the rest of the economy (especially on the employment side) is unspectacular.
  3. Since the value of a thing, including money, is directly related to its relative scarcity, adding hundreds of billions, or even trillions of dollars into electronic circulation reduces, or debases, the value of our already existing money. If the money isn’t worth as much as it used to be, but the value of the things we buy hasn’t changed, the price will have to go up. That’s price inflation.  If your income rises with prices, inflation may not be alarming, but how often do you get a raise just because your money loses value?

Q: If I’m not going to make more money at work, making money in the stock market isn’t so bad, is it?

A: In and of itself, making money on stocks is not bad.  The problem is that there shouldn’t be any QE and there shouldn’t be a central bank!

In reality, instead of stimulating the economy, QE amounts to a second, insidious way to tax you.  The first way is income and capital gains taxes. They are painful, but at least they are overt and articulated in law.  The second is in currency debasement (the deliberate erosion of the buying power of the dollar to increase the amount of dollars moving in the system) by the unelected, unaccountable, and opaque Federal Reserve.  It is not nearly as overt, but it takes value from you just the same.

UFOs: Fact AND Fantasy


By Mike Cronin

Do I “believe” in UFOs?  I absolutely believe people have seen objects or phenomena in the sky that they couldn’t identify, so yes, I believe that unidentified flying objects exist in the most literal sense. I enjoy science fiction and space opera fantasy, and I believe earth can’t be the only planet in the universe with sentient life.  Do I believe any of the UFOs people have seen here on earth are alien spacecraft?  No. As Carl Sagan once remarked: “extraordinary claims require extraordinary evidence.”

My belief that other sentient creatures must exist is not evidence of anything. For spacecraft to come here from another solar system would mean either the alien operators found a way around the speed of light, or they spent centuries, or even millenia, to travel here. Either would fit the very definition of extraordinary.

So far, the body of evidence indicating UFOs are extraterrestrial spacecraft is not only not extraordinary, it is completely underwhelming. Fuzzy pictures, suspect “eye witness” accounts, and dramatized “documentaries” do comprise strong evidence – of our own credulity.

Weasel Words: Constitutional Rights

civil rights_header

By Mike Cronin

Have you noticed that the weasels telling us we have “rights” to a job, or an education, or healthcare – all things that can only be given to some at the expense of others, are quite often the same people that are trying to eliminate our inalienable rights? (You know – the rights the Founders tried to protect with the Declaration of Independence, the Constitution, and the Bill of Rights?  The ones that don’t depend on taking time, money, or goods away from anyone?)

Consider: If you have a right to a job, then an employer is compelled by law to give some of his property, namely the position, to you. If you have a right to an education, the government has to first take money from your friends and neighbors to pay for it.  If you have a right to healthcare, then you have a license to demand time and effort from doctors, nurses, technicians, and pharmacists, and a warrant to seize medicines or medical equipment away from those who made them. If you have a right to not be offended, then you have the power to muzzle the free expression of others.

On the other hand, the rights the founders designed our government to protect do not require us to take away anything from our neighbors; they simply require that we leave each other alone.  They don’t preclude us helping others voluntarily; the don’t preclude private entities from influencing our charitable behavior; but they do not permit the government to use its coercive power to dictate whether or how our neighbors’ “generosity” is to be extracted and distributed.

When the weasels take from the most productive in order to give it to the least productive in the name of benevolence, the result is not universal prosperity, it is universal resentment.  The productive resent having the fruit of their labor confiscated (via income tax withholding, for example), and the recipients resent the productive for being able to “make it.”  Nobody prospers except the politicians, cronies, and bureaucrats doing the taking.

The weasels will use every rhetorical trick to convince us that we have Constitutional rights to this, that, or the other thing.  There is no such thing as a Constitutional right, because the Constitution doesn’t grant us our rights.  The Constitution isn’t the law we are supposed to obey; it’s the law the government is supposed to obey.  It doesn’t give us our rights; its purpose is to protect our rights from the government!