“…A lot of Dumb Things.”

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By Mike Cronin

The latest kerfuffle in the culture wars has put Dirty Harry in the camp of Donald Trump.  In the latest issue of Esquire magazine and in other recent comments, actor Clint Eastwood laments political correctness and the attention given to some of Mr. Trump’s brasher statements.  (He did not officially endorse Trump.)

One need not support Mr. Trump, (or any other candidate) to find political correctness troubling.  The First Amendment to the Constitution charges the government to protect our right to speak freely. This is an intolerable condition to control freaks who just know that their ways and opinions are right and everybody’s lives would be better if we just obeyed them. Political correctness seeks to accomplish by peer pressure and social sanctions what cannot be legally done by government: the limiting of personal expression.

Last week’s post was bout the spotty availability of formal training in logic and critical thinking in America’s educational institutions.   The purposeful omission of such fundamentals from curricula smacks of an elite trying to restrict entry to their ranks.  Now add political correctness to the mix.

According to Merriam-Webster online, political correctness is “conforming to a belief that language and practices which could offend political sensibilities (as in matters of sex or race) should be eliminated.”

Bottom line: giving offense should be eliminated.  We can’t have dissent. Do not speak freely. Protect everyone else’s feeling, but don’t have any non-conforming thoughts of your own.

Don’t look at the value of the dollar.  Don’t examine public education.  Don’t question the dysfunction of maintaining an immigration enforcement enterprise while rewarding illegal immigration. Don’t peer into the doings of your city, county, state, or federal government. Don’t read the Declaration of Independence, the Constitution, or the Bill of Rights. Don’t ask probing questions.

Do not give offense. Don’t see the hypocrisy and irony of being offensive in the name of eliminating offensiveness, being racist in the name of eliminating racism, and churning out myriad petty laws in the name of reducing crime.

Do not think for yourself. Don’t find the insanity in trying to stimulate the economy by taxing real wealth out of it then pumping funny money back in. Don’t be self-reliant; rely on your elected rulers to use the power of government to steal from your more productive friends and neighbors and give some of the loot back to you.

Go with the crowd. Run the machines. Consume. Watch the latest reality show/sitcom/talent contest/news crisis on cable/satellite/internet.  Go find some Poke-mon.

Do We Need a Dictator to Restore our Freedom?

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By Mike Cronin

Over the last 240 years, our federal government has become a bloated monstrosity that bears little resemblance to the founder’s vision. It is so massive and tangled that there is little hope that we can restore it to a more reasonable size or constrain it from grabbing an ever-increasing share of our liberty and freedom. Even if we could elect a Congress and Presidency full of freedom- and liberty-minded politicians for a generation or more, it might not be enough to de-fang the beast and put it on a forced diet.  How can we fix it?

I have an affinity for the adage that whoever wants to be the president is not qualified to have the job. I certainly don’t want it, but if I was ever elected, people might call me the world’s first libertarian* dictator**.  If you think that’s a contradiction, you are only partially correct.  No doubt, in all of human history, the record of dictators tends towards loss of freedom.  But what if we had a dictator who used his or her power to shrink government and increase freedom?

Here’s how I would become subject to such a characterization:

After being elected and taking the oath of office, I would declare a state of emergency and impose martial law.  It would be the weirdest martial law ever, because there would be no curfews or tanks in the streets. No rationing, checkpoints, or firing squads.  Instead, I would go before the American people and explain that the emergency is that we are destroying the Republic with excessive government.  Too many bureaucrats have too much power to regulate our lives.

My first dictate would be to abolish the IRS and institute the Fair Tax plan.  We would no longer punish productivity; we would pay for government the same way we pay for everything else: according to how much we use. In the same stroke, I would put in place a plan to audit the Federal Reserve and end the use of fiat currency, and re-introduce currency exchangeable for precious metals or other suitable commodity. In these two acts alone, we would greatly curtail the power of the government by removing its prerogative to confiscate our money before we see it, and its ability to confiscate our wealth by devaluing the currency we have been allowed to keep.

I would also announce to the world that the vast bulk of our armed forces based abroad would be returning to US territory in calibrated withdrawals from foreign lands.  Our defense strategy would focus on protecting US territory and US interests in international sea- and airspace. In this way, military spending could be reduced without reducing military strength.  Indeed, such a pull-back would allow the armed forces a much-needed breather to reconstitute after decades of continuous warfare and deployments.  No doubt, some countries would not be happy with us, while others, including some adversaries, would be ecstatic.  It would certainly disrupt the balance of power in many regions…but it would not alter the fundamental truth in the global balance of power: The US has the most powerful military and the economic might to back it up.

Next, I would turn to the various departments of the executive branch.  I would call in each incumbent cabinet-level secretary/director to defend the constitutionality of the operations, or even the very existence, of their department – on the basis of how it protects the rights to life, liberty, and pursuit of happiness of the citizens.  Some would have an easy job of it, especially the Departments of Defense and Justice, and perhaps the Director of National Intelligence (though he or she would have a tough time convincing me domestic intelligence operations do more constitutional good than harm!).  Some would have a very tough time indeed, such as the Departments of Commerce, Transportation, Education, Energy, and the Interior.

Departments with unsatisfactory answers would be on the chopping block for re-organization, mission reductions, or even complete dismantlement.  The chief of every department left standing would be under orders to examine all of their operations and to de-regulate anywhere such operations do not protect the life, liberty, or property of citizens.

There are innumerable issues that would have to be addressed during such a departmental shake up:  Welfare. Social Security. Immigration. Guns. Abortion. Drugs. Trade. All manner of regulations. The list would be quite long, but always the test for each would be simple: How does a program, regulatory structure, function, etc. protect the rights of the citizens? Is the coercive power of the federal government the right way to address the issue?  If the answer to the first question is that it does not, or to the second, no, then that program would be on the chopping block for re-design, privatization, or elimination.

Of course, such a scheme (getting elected on a “libertarian dictator” platform) is pretty much a pipe dream, but the idea that it will take some unorthodox leadership to re-align the Republic to the founders’ vision and restrict the government to its Constitutional limits is very timely.

*Note that my use of the word “libertarian” (little l) should not be construed as an endorsement for the (Big L) Libertarian Party.

**There is a book by the name of “The Libertarian Dictator” (published in 2015).  I’ve never read it, but if any of the ideas I espouse in this post were first put forth in said book, I yield credit to the author.

 

 

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.

Four Branches of Dysfunction in US Government, Part V

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By Mike Cronin

To recap the first three major strains of dysfunction in our government: Keeping the institution of slavery while proclaiming all men are created equal introduced the strain of accommodating hypocrisy in our national psyche right from the birth of the nation. Trying to maintain that contradiction led to the Civil War, which ended the chattel slavery of blacks…but the income tax, given its first trial run during the Civil War and made permanent in 1913, made all of us tax slaves to the government and thieves to our fellows.

The fourth major branch of dysfunction is currency debasement. Currency debasement is the act of reducing the value of money by increasing its supply. This can only be done with fiat currency, and usually by central, or national, banks, such as the US Federal Reserve.

So what is fiat currency, and why is currency debasement a dysfunction?

Fiat currency is money that has nothing backing it. US dollars used to be backed by gold. For a long time in this country, you could exchange a given amount of dollars for a given amount of gold, and the prices of goods and service remained relatively the same. A man from 1800 would not have been shocked by the prices in 1900. This is what the original meaning of the term “gold standard.” Our money was as good as gold.  Then, in 1913, the Federal Reserve was established, and it began manipulating the economy. In 1973, President Nixon dissolved the gold standard altogether, our money became mere paper, and the only thing backing it became faith.

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Once a currency becomes fiat, it is relatively easy for the central bank to manipulate the value of the money. Central banks ostensibly manipulate the currency to control inflation by “stimulating” the economy or changing interest rates, but the reality is that injecting additional money into the economy is the source of inflation. There are two aspects to inflation. When the newsies report inflation, they are usually talking about price inflation. When the Fed injects money into the economy (i.e. by stimulus, AKA quantitative easing), it is inflating the money supply. That is monetary inflation. Monetary inflation dilutes the value of the money already in existence, so merchants have to raise prices in order to receive the same value for their products. Monetary inflation is meant to control price inflation by “stimulating” consumption, but it actually causes price inflation because it makes our money worth less than it was before!

This leads to all kinds of trouble. First, just like income taxation, it concentrates power that should belong to the people into a few select hands, namely the operators of the central bank. (In the case of the US, it’s the board of the Federal Reserve). Second, when a powerful group like the Fed lowers the value of your money, it is, just like income taxation, using the force of government to take value from you. Third, if the central bank goes too far with its machinations, it will create hyperinflation. This is when the money loses value so fast that prices may rise weekly, daily, or even hourly.  The money literally becomes more valuable as fuel for the fireplace or as wallpaper than as currency. If it is still accepted, it will take a literal wheelbarrow full of cash to buy a loaf of bread.  Can this happen in the US? Consider:

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