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An Epic Folly for the Ages

Today we begin with a list. A partial list. And in no particular order…

Angela Merkel. Donald Tusk. Mario Draghi. Donald Trump. Jerome Powell. Shinzo Abe. Haruhiko Kuroda. Theresa May. Boris Johnson. Mark Carney. Xi Jinping. Emmanuel Macron. Vladimir Putin. Justin Trudeau. Juan Trump. And many, many more…

Politicians and bureaucrats of the modern age of statism and central planning… fighting a rearguard action doomed to fail. [PT]

These central planners – though they may not know it – are facing a no-win situation. They have extrapolated the past and are attempting to preserve the status quo into the future. Yet their efforts to perpetuate the upward growth curve of their countries and unions are useless against the relentless turn of history.

The political, financial, economic, and social foundations that have been in place over the last 75 years – and perhaps, over the last 220 years – are breaking down. And no policy directive, no interest rate adjustment, no trade tariff, no five year plan, no extraordinary measures, no green new deal, and no technocratic prevarication is going to stop it. Big Government doesn’t stand a chance.

The entire apparatus, from social welfare programs to a ridiculously complex capital structure, is based on perpetual growth. But growth, as we are all presently discovering, is ephemeral. The rapid creation of fake money by central planners may be able to forestall the downside that follows a mega-growth cycle. But it cannot avert it.

Still, the central planners are doing anything and everything to resist the downside. They are taking emergency actions. They are employing extreme currency debasement. They are slapping price controls across the economic landscape. They are starting wars. They are harnessing populism. They are doing all of these – and more.

…click on the above link to read the rest of the article…

Why We Have a Surveillance State

April 30, 2018

Why We Have a Surveillance State

It is the inevitable consequence of our prevailing governing philosophy.

“Gentlemen do not read each other’s mail.” Henry Stimson, Secretary of State, 1929

I was upbraided recently by a dear friend for my frequent praise of outcast investor Peter Thiel over Thiel’s involvement with big data company Palantir. He forwarded me a Bloomberg article titled “Peter Thiel’s data-mining company is using War on Terror tools to track American citizens” adding: “Really scary. Not good for democracy; a better version of the Stasi’s filing system and way cheaper and more efficient.”

Increasingly, we live under the kind of comprehensive surveillance predicted by science fiction writers. But Palantir is just an arms merchant, not the architect of our brave new world. Like gun manufacturers, its products can be used for good or evil. I have always believed that moral responsibility lies with the wielder of weapons, not the manufacturers. (This is often expressed as “Guns don’t kill people, people kill people.”)

Peter Thiel’s choice to become an arms merchant rather than invest his considerable talents and fortune elsewhere is a fair question given his libertarian leanings. I have no insight into the answer. I would guess that he founded Palantir as an act of patriotism after 9/11, and it metastasized following the money, cash being the mother’s milk of the state, something the celebrated Alexander Hamilton deeply understood.

Surveillance Is Not the Problem, but It Is a Symptom

The real threat to the republic, however, lies not in the weapons available but in the unlimited and unaccountable bureaucracy in Washington that deploys them, both at home and abroad. Having broken free of constitutional constraints, America’s political class now directs an all-powerful state that naturally adopts every tool technology has to offer.

…click on the above link to read the rest of the article…

The Dunning-Kruger Effect Explains the Growth of Government

February 1, 2018

The Dunning-Kruger Effect Explains the Growth of Government

Why do democracies lead to ever-growing states?

We’ve all found ourselves at least a few times in our lives listening to friends or relatives complain about voter apathy. If only voters properly researched policies and politicians, everything would be better, we hear. Unfortunately, the incentives just aren’t there.

Anthony Downs called this phenomenon “rational ignorance,” and it is especially significant with government-related decision-making, or “Public Choice.” Economic analysis shows us that the value of the time individuals spend informing themselves must exceed its opportunity cost. Take this into consideration when contemplating the ludicrous probability of a single participant swaying an entire election. There is very little individual upside to justify any significant effort to inform oneself on voting for the “right” solution.

Thus, ignorance is a perfectly reasonable alternative and should be a completely expected outcome of democracy. After all, the individual losses of inadequate voting are just too low to matter much, if at all. Proper examination simply doesn’t make nearly as much economic sense for political agents as it does for market ones.

But if people are choosing ignorantly, wouldn’t the properly-educated minority weigh the scale towards good, effective policies? And if, as I believe, good policy means a less-intrusive government, why does the opposite always seem to happen?

The Head Start of Statism

An important distinction must here be made: the issue at hand is not an admitted lack of knowledge. Otherwise, the very fact that voting is not random at all would completely debunk the theory. In this case, however, ignorance is knowing things wrong.

…click on the above link to read the rest of the article…

Cash Bans and the Next Crisis

September 17, 2016

Cash Bans and the Next Crisis

Criminalizing Cash

Money sometimes goes “full politics”. Take poor Kenneth Rogoff at Harvard. He wants a dollar with a voter registration card, a U.S. flag on its windshield, and a handgun in its belt – the kind of money that supports the Establishment and votes for Hillary.

Kenneth Rogoff, professor of economics at Harvard University, participates in a session on the third day of the World Economic Forum (WEF) Annual Meeting 2011 in Davos, Switzerland, on Friday, Jan. 28, 2011. The World Economic Forum in Davos will be attended by a record number of chief executive officers, with a total of 2,500 delegates attending the five-day meeting. Etatiste tool Kenneth Rogoff, whose authoritarian jeremiads against cash currency we have first discussed and criticized in 2014 in “Meet Kenneth Rogoff, Unreconstructed Statist”. As Hans-Hermann Hoppe once noted: “[I]ntellectuals are now typically public employees, even if they work for nominally private institutions or foundations. Almost completely protected from the vagaries of consumer demand (“tenured”), their number has dramatically increased and their compensation is on average far above their genuine market value. At the same time the quality of their intellectual output has constantly fallen. What you will discover is mostly irrelevance and incomprehensibility. Worse, insofar as today’s intellectual output is at all relevant and comprehensible, it is viciously statist.”

Photo credit: Andrew Harrer / Bloomberg

Writing last month in the Wall Street Journal under the headline “The Sinister Side of Cash”, he noted that:

“Paper currency, especially large notes such as the U.S. $100 bill, facilitate crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism.”

Of course, large notes do make it easier for criminals to operate. Like cellphones. And sunglasses. And automobiles with air-conditioning. But that’s what money is supposed to do: make it easier for an economy to function. You use it as you please.

Yes, dear reader, we are back to our regular beat. Money. But what’s this? Finally, we’re beginning to see some action. You’ll recall that the markets have been eerily quiet – with less movement in stocks than we’ve seen in the last 100 years. What gives?

…click on the above link to read the rest of the article…

The Keynesian House Of Denial

April 18, 2016

The Keynesian House Of Denial

We use the term “Keynesian” loosely to stand for economic interventionists of all schools. The followers of JM Keynes and Milton Friedman alike fit that category. So do some of the more rabid supply siders who claim the power to stimulate ultra-high economic growth with the tools of tax policy alone.

The common denominator is economic statism. That is, the assumption that the state, including its central banking branch, is indispensable to economic progress and prosperity.

As the various denominations of the Keynesian economic church have it, capitalism is always veering toward the ditch of under-performance and recession when left to its own devices and natural tendencies; and, if neglected by the wise policy-makers of the central state too long, it lapses toward outright depression and collapse.

Our purpose here is not to correct the particular philosophical and analytic errors associated with each of these Keynesian or statist variants. On any given day we make it pretty clear the central banking based mutation of modern Keynesianism is predicated on two cardinal errors. Namely, the myth of demand deficiency and the false presumption that central bank pegging of interest rates, yield curves and other financial prices will enhance macro-economic performance while not harming the efficiency, stability and efficacy of money and capital markets.

That’s completely wrong. The very worst thing the state can do is meddle with and falsify financial market prices. Sooner or later cheap debt, repressed volatility, stock market “puts” and artificially inflated asset prices drain the genius of markets out of capitalism. What remains in the financial system is raw speculation for the purpose of rent gathering and leverage for the purpose of supercharged gambling.

On the other hand, what gets lost is true capital formation, honest price discovery and allocative efficiency. These are the building blocks of true macroeconomic expansion and rising wealth.

…click on the above link to read the rest of the article…

Statism in a Nutshell: From Thievery to Tyranny in Five Easy Steps

April 14, 2016

Statism in a Nutshell: From Thievery to Tyranny in Five Easy Steps

“Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” ~Unknown proverb

War is murder, no matter how you try to justify it. Taxation is theft, no matter how you try to codify it.Statism is tyranny, no matter how you try to rationalize it. No amount of justification, codification, and rationalization will get you off the hook for murder, thievery, and tyranny. The only solution? Stop justifying, codifying, and rationalizing murder thievery and tyranny. It can only be resolved from the ground up; never from the top down. Meaning: it begins with you. It begins by recognizing how individual thievery can become collective tyranny.

Here’s a parable explaining the diabolical ease in which base thievery can become a tyrannical state. As Anthony de Mello said, “You have to understand, my dears, that the shortest distance between truth and a human being is a story.”

1. Steal a fish from one guy and give it to another.

“Where there is only a choice between cowardice and violence, I would advise violence.”~Mohandas Gandhi

There you are, scoping out the ocean side, looking for that unaware fisherman. Sure you’re lazy and greedy, but you’re smart. You’ll be damned if you’re gonna let a sucker keep his fish. After all, that fishhead soup isn’t going to cook itself. You’re hungry and you have to survive too. It just so happens that you’re hungry for power and control, and survival for you is making other people’s survival dependent on you. Who cares if it’s off the backs of others? You’re smarter than they are. Or so you keep telling yourself.

…click on the above link to read the rest of the article…

Why did Lagarde Stay at the IMF? To Increase its Global Power.

February 23, 2016

Why did Lagarde Stay at the IMF? To Increase its Global Power.

Christine Lagarde Managing Director of the International Monetary Fund spoke at the IMF Arab Fiscal Forum: Fiscal Policy and Growth in Abu Dhabi on February 22, 2016. Her message was clear – forget downsizing government or reforming anything, just raise taxes. She opened the conference saying:

“This event is taking place at a pivotal moment not only for this region but for many other countries that have seen fiscal issues rise to the top of their policy agendas.

Or, to be more precise, it is taxation that has risen to the agenda in many countries. If you wonder why this issue has become so important, let me assure you that this is nothing new in the history of mankind!”

Lagarde is calling for international taxation. She has threatened every tax haven with being sanctioned and removed from the Swift System unless they give up everyone. She has done far more damage to the world economy than any previous director. We have anemic economic growth and rising tax enforcement depriving us of our free society and the free movement of people as well as capital. If you owe taxes, government simply revokes your passport precisely as passports began to prove you owed the state nothing and could travel. She concluded her address and called for global tax enforcement and raising taxes; not reforming government in the least. She said:

“Political economy…proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people…and secondly, to supply the state or commonwealth with a revenue sufficient for the public services.”

My main message today is this: creating successful 21^st-century economies requires robust government revenues and an international tax system that works for everybody. These ingredients are essential for growth, fairness, and development.

…click on the above link to read the rest of the article…

Mid-Sized Meditations #11: Thoughts on Localism and Resilience

February 17, 2016

Mid-Sized Meditations #11: Thoughts on Localism and Resilience

[Cross-posted to Front Porch Republic]

Yesterday, I had the opportunity to speak to the “Resilience Group,” an informal gathering of environmentalists, activists, and interested others that meet regularly at the home of Wes Jackson, in Salina, KS. My short remarks–which were mostly inspired by the material in this post–gave rise to a robust and enlightening discussion, or so I thought. Here are a few take-aways, for whatever they’re worth.

1) The growth-centric paradigm which dominates so much economic activity around the world isn’t really the result of politically powerful actors; it’s the consequence of a worldview. Thus fulminating against the defenders of–in some ways undeniably beneficial, but also socially and culturally harmful, not to mention ecologically unsustainable–globalism, whether their motivations are libertarian like the Koch brothers (whose influence is omnipresent in Kansas) or statist like the Davos bunch(whose influence around here doesn’t really exist beyond the paranoid fears of a few black-helicopter-watching Tea Party types in our legislature), is to mistake symptoms for the disease. That’s not to say particular actions by particular actors shouldn’t be organized against; they should be. But we need to recognize that, as important as, say, an overturning of Citizens United might be to getting the message for local and economic democracy out there, simply accomplishing that, without a paradigm-changing language to explain why it’s important to do so, probably won’t change much.

2) The language that defenders of steady-state economies and local democracy need probably won’t be political in nature, and probably won’t emerge from the major cities or the state-based political entities of the world, despite those locations and polities being the site of so many productive nodes of intellectual input.

…click on the above link to read the rest of the article…

The Statist Mindset

December 18, 2015

The Statist Mindset

The Key Logical Fallacy of Statism

I just read an article in Bloomberg View yesterday by Cass Sunstein, who is a law professor at Harvard. It was a roundup of a number of books published last year on “behavioral economics”. For those who don’t know it, behavioral economics typically focuses on the biases and systematic errors in human behavior.

communist angels Surely everyone has heard an argument along these lines before: socialism would really work if only it were done right! For starters, it would need to be administered by a host of angels, so what you see above should be considered the ideal communist bureaucrats. Image via pixgood.com

In his review of the book Phishing for Phools by George Akerloff and Robert Shiller, Sunstein concludes that one of the major contributions of the authors “is to show that if we care about people’s well-being, the invisible hand (i.e., free markets) is often the problem, not the solution.”

cass-sunstein-cia Cass Sunstein, a committed, and as we believe, truly dangerous statist, who would likely have felt right at home in Stalin’s politburo. We have discussed this crypto-communist weirdo previously in these pages (see The Taming of Deluded Conspiracy Theorists) and so has incidentally Dr. Machan (see Rights and Government). Sunstein is not only an enemy of the free market, he inter alia once opined (in an academic paper, no less) that Americans should henceforth only be fed government-approved information. In order to achieve this, he proposed that government agents should infiltrate the web sites of “conspiracy theorists” (=anyone who thinks the government may be lying about something) to spy on them and discredit them, and if that doesn’t help, government should tax them oroutright ban “conspiracy theorizing” (wise men like Mr. Sunstein would presumably determine what does and doesn’t constitute a “conspiracy theory”). He failed to mention how those breaking the ban should be punished (forcible relocation into a reeducation camp perhaps?) Photo via 911blogger.com

…click on the above link to read the rest of the article…

The Next Level of John Law Type Central Planning Madness

November 7, 2015

The Next Level of John Law Type Central Planning Madness

Cries for Going Totally Crazy are Intensifying

What are the basic requirements for becoming the chief economist of the IMF? Judging from what we have seen so far, the person concerned has to be a died-in-the-wool statist and fully agree with the (neo-) Keynesian faith, i.e., he or she has to support more of the same hoary inflationism that has never worked in recorded history anywhere. In other words, to qualify for that fat 100% tax-free salary (ironically paid for by assorted tax serfs), one has to be in favor of central economic planning and support policies fully in line with today’s economically illiterate orthodoxy. Meet Maurice Obstfeld, who has just taken the mantle.

For all we know the man is merely misguided and otherwise a nice person (in fact, he’s laughing a lot in photographs and seems a personable enough fellow). But his proposals could eventually affect the lives of countless people in the whole world, so he is fair game for robust criticism. We personally believe that he and other members of our “enlightened” technocratic ruling class should resign without delay and start looking for productive work instead of parasitizing and hampering the ever shrinking class of genuine wealth producers, but it seems unlikely that they will be interested in our opinion.

There once was a time when monetary cranks of the sort in charge nearly everywhere today were laughed out of the room. Today they are perfectly free to drive what is left of the market economy over the cliff. Mr. Obstfeld turns out to be yet another in a long list of luminaries belly-aching about (non-existing) “deflation” – this is to say, the alleged danger that the purchasing power of consumer incomes and savings might increase at some point. Allegedly, this remote eventuality has to be guarded against at all costs.

…click on the above link to read the rest of the article…

Gold and the Grave Dancers

August 1, 2015

Gold and the Grave Dancers

The Asset They Love to Hate …

Back in the 1960s, Alan Greenspan wrote a well-known essay that to this day is an essential read for anyone who wants to understand the present-day monetary and economic system (which is a kind of “fascism lite” type of statism, masquerading as capitalism) and especially the almost visceral hate etatistes harbor toward gold. Greenspan’s essay is entitled “Gold and Economic Freedom”, and as the title already suggests, the two are intimately connected.

Alan Greenspan in the mid 1970s – although he later turned out to be a sell-out, his understanding of economics undoubtedly dwarfed that of his successors at the Fed (and we are not just saying this based on the essay discussed here).

Photo credit: Charles Kelly / AP Photo

What makes Greenspan’s essay especially noteworthy is that it manages to present both theory and history in a concise, easy to understand manner. There isn’t a word in it we would change. At one point, Greenspan provides a brief history lesson. Yes, the (relatively) free banking era in the United States in the 19^th century involved fractional reserve banking and as a result, there were frequent boom and bust cycles. However, since there was no “lender of last resort” with an unlimited money printing capacity, these business cycles were sharp and brief, and the market economy quickly righted itself every time:

“A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled.

…click on the above link to read the rest of the article…

Organized Plunder, a.k.a. The State

July 9, 2015

Organized Plunder, a.k.a. The State

Whose Side Are You On?

On one side: the Fed… the NSA… the CIA… Fannie Mae… Freddie Mac… the trade unions… Wall Street… the dollar… Obamacare… New York’s taxi system… QE… the wars on terror, poverty, illiteracy, and drugs… Dodd-Frank… the TSA… the ATF… millions of retirees and disability scammers… General Motors… Hillary Clinton… and many, many others…

Statism A widely held and quite erroneous belief …

On the other: Airbnb… Uber… cryptocurrencies… “Main Street”… businesses… families… gold… young people… savers… Freemasons… Ron Paul… truck drivers… the Episcopal Church… Elks… entrepreneurs… free markets… and millions of honest people who make their livings and live their lives as best they can without holding a gun to anyone else’s head.

Yes, dear reader, maybe it was too much alcohol or too little food. But in the night, a vision came to us. It revealed the big picture in a way we hadn’t seen it. Zombies, you’ll recall, are people and institutions that live at the expense of others. How?

Some are freelance criminals. But most depend on government to get the flesh they need. People don’t give up their own blood readily. They run. They hide. They try to protect themselves. But government maintains a territorial monopoly on the one thing that does the trick – violence.

So today, we stoop to admire the institution of government. What a beautiful racket! It typically takes 20% to 50% of an economy’s output. It makes the rules. It sets the pace. And woe to anybody or anything that gets in its way…

murray_rothbard_poster-rf988ce7ae6e04a73bd0086fe28baac98_wvo_8byvr_324 Murray Rothbard’s concise definition of the State

…click on the above link to read the rest of the article…

The world of Globalism, the galaxy of slavery

May 19, 2015

The world of Globalism, the galaxy of slavery

“Try looking at the world as a giant three-volume science fiction novel. Organizations of stupefying complexity rule the scene. There is an upside to this. You can gain a much deeper understanding of the archetype of the Rebel against the system.” (The Underground, Jon Rappoport)

“What’s that you said? ‘We gave away our power?’ We? What ‘we’ is that? Did I miss a big meeting in the desert where we all got together and gave it away? Who are you anyway? A PR man for the Syndicate? There is no ‘we.’ Not until there’s an ‘I.’ Didn’t you learn that in Depro 101? Search this man. He’s either a dupe or an agent.” (Colossus Fortune, Jon Rappoport)

I’ve been chipping away and drilling the rock of Globalism for some years now (Archive::Globalist). At times, connections between my various investigations seemed uncertain, but eventually the picture swam into view.

Medically caused death and destruction. Toxic drugs. Toxic vaccines. Genetically modified food plants and their poisonous pesticides. International trade treaties. Manufactured unemployment. The pseudoscience of psychiatry. Political and media dupes. The art of group propaganda. Indoctrination and lowered IQ through education. Television mind control. Banking. Wall Street. Technocracy. And dozens more subjects.

The carrier of the Globalist world was chosen at the end of World War 2. It already existed, of course. But now it was seen as the prime instrument:

The mega-corporation.

Control of land, resources, labor. No other type of organization would be as efficient at mounting this operation.

Governments tuned themselves to a harmonic convergence with the colossus.

Wars for the corporation. Population control for the corporation. Judiciaries for the corporation.

Language for the corporation. Streamlined stripped-down language for minds wedded to the corporation. Reduced minds.

…click on the above link to read the rest of the article…

In September, The UN Launches A Major Sustainable Development Agenda For The Entire Planet

May 17, 2015

In September, The UN Launches A Major Sustainable Development Agenda For The Entire Planet

The UN plans to launch a brand new plan for managing the entire globe at the Sustainable Development Summit that it will be hosting from September 25th to September 27th. Some of the biggest names on the planet, including Pope Francis, will be speaking at this summit. This new sustainable agenda focuses on climate change of course, but it also specifically addresses topics such as economics, agriculture, education and gender equality. For those wishing to expand the scope of “global governance”, sustainable development is the perfect umbrella because just about all human activity affects the environment in some way. The phrase “for the good of the planet” can be used as an excuse to micromanage virtually every aspect of our lives. So for those that are concerned about the growing power of the United Nations, this summit in September is something to keep an eye on. Never before have I seen such an effort to promote a UN summit on the environment, and this new sustainable development agenda is literally a framework for managing the entire globe.

If you are not familiar with this new sustainable development agenda, the following is what the official United Nations website says about it…

The United Nations is now in the process of defining Sustainable Development Goals as part a new sustainable development agenda that must finish the job and leave no one behind. This agenda, to be launched at the Sustainable Development Summit in September 2015, is currently being discussed at the UN General Assembly, where Member States and civil society are making contributions to the agenda.

…click on the above link to read the rest of the article…

Economist on Gold – A Dissection

May 16, 2015

Economist on Gold – A Dissection

A Proven Contrary Indicator

In early May, the Economist has published an editorial on gold, ominously entitled “Buried”. We wanted to comment on it earlier already, but never seemed to get around to it. It is still worth doing so for a number of reasons.

The Economist is a quintessential establishment publication. It occasionally gives lip service to supporting the free market, but anyone who has ever read it with his eyes open must have noticed that 70% of the content is all about how governments should best centrally plan the economy, while most of the rest is concerned with dispensing advice as to how to expand and preserve Anglo-American imperialism. We are exaggerating a bit for effect here, but in essence we think this describes the magazine well. In other words, its economic stance is essentially indistinguishable from that of the Financial Times or most of the rest of the mainstream financial press.

gold Image credit: Bloomberg

Keynesian shibboleths about “market failure” and the need to prevent it, as well as the alleged need for governments to provide “public goods” and to steer the economy in directions desired by the ruling elite with a variety of taxation and spending schemes as well as monetary interventionism, are dripping from its pages in generous dollops. It never strays beyond the “acceptable” degree of support for free markets, which is essentially book-ended by Milton Friedman (a supporter of central banking, fiat money and positivism in economic science, who comes from an economic school of thought that was regarded as part of the “leftist fringe” in the 1940s as Hans-Hermann Hoppe has pointed out). Needless to say, the default expectation should therefore be that the magazine will be dissing gold – and indeed, it didn’t disappoint.

…click on the above link to read the rest of the article…

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