The Rise of the Wannabe Political Street Warrior

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Antifa and the Alt-Right re-enact the political street combat of Weimar Germany.

“I can’t wait for the liberal genocide to begin,” exclaimed a demonstrator at a March 4 rally in Phoenix on behalf of President Trump, as an expression half-way between a sneer and a smirk creased his corpulent face. Asked by left-leaning independent journalist Dan Cohen to elaborate on what he said, the middle-aged man insisted that targeting political enemies for mass slaughter would be “a way to make America great again … it’s the liberals that are destroying this country.”

If the bloodletting this fellow cheerily anticipates were to ensue, he would be, at best, a spectator. He has taken too many trips around the Sun, and made too few trips to the gym, to be of any practical use in the hands-on business of eliminating the Enemy Within. Like most other people at that event, and others like it nation-wide, he was LARPing – Live-Action Role-Playing – in what could be seen as a contemporary re-enactment and updating of Weimar-era political street combat.

Mr. Liberal Genocide, who wore an Oath Keepers t-shirt, did display a little more sartorial restraint than the members of a group calling itself the “Arizona Border Recon” militia, who hovered at the periphery of the event in full desert military kit, striking poses of grim resolution.

“Nobody has respect for our servicemen,” complained one young female demonstrator, her voice thick with outrage. “They might not be government-affiliated, but they’re still servicemen, and they’re still working their butts off to make sure this country is safe. They might not tell you who they are, and that’s because they’re protecting their people.

I Will Fight You IRL

Unlike the valiant, if anonymous, members of the Arizona Border Recon, who seemed content with a bit of combat cosplay, California resident Kyle Chapman, aka “Based Stick Man,” actually threw down – sort of — with Black Block radicals at the pro-Trump rally in Berkeley on the same day. As each side’s shock troops tentatively engaged on the field of battle, Chapman – attired in hockey pads, a gas mask, what appeared to be a batting helmet, and carrying a plywood shield – pranced into the fray, swatting at Black Block cadres with a long stick that shattered quickly without doing any lasting damage. Not surprisingly, Chapman was instantly cyber-canonized as the “Alt-Knight.”

Several fights erupted at the March 4 events in Berkeley and elsewhere, a few dozen people were injured, and a comparable number of people were arrested. While politically inspired violence of any magnitude is at least troubling, these skirmishes had less in common with the war-to-the-knife confrontations between Freikorps and Spartacists in Weimar Germany than with the cosplay “Battle of Evermore” from the movie “Knights of Badassdom.”

There was an element of precautionary wisdom in that whimsical indie film: The socially marginalized LARPers in that story inadvertently unleashed a tangible, murderous evil. As Mr. Liberal Genocide’s blithe – and apparently sincere – endorsement of mass murder illustrates, through political cosplay people can become habituated into thinking in eliminationist terms: The “other side” is not merely gravely mistaken, but irreducibly evil, and since reason is unavailing the only option that remains is slaughter.

The Left/Right Sucker Punch

In “The Revolt of the Masses,” which was published in 1930 – a time when Mussolini was still in favor with the bien-pensants — the Spanish political philosopher Jose Ortega y Gassett observed that through Fascism “there appears for the first time in Europe a type of man who does not want to give reasons or to be right, but simply shows himself resolved to impose his opinions.”

That is to say, there nothing’s either right or wrong, but “winning” makes it so. This conceit isn’t limited to one end of the statist political spectrum: It encompasses both the Antifa and the Alt-Right. It was exhibited by the leftist nitwit who sucker-punched proto-Nazi Richard Spencer on the day of Trump’s enthronement, and by North Carolina resident John McGraw, who sucker-punched Rakeem Jones at a Trump campaign rally a year ago.

“Next time we see him, we might have to kill him,” McGraw told a reporter following the rally while he was still in the afterglow from the rapturous ritual of collective hatred. “We don’t know who he is – he might be with a terrorist organization,” McGraw elaborated, guided by the assumption that only depravity of that variety would inspire someone to oppose the Dear Leader. There are more than a few adherents of Trump’s personality cult who have explicitly called for the prosecution, imprisonment, or execution of those who criticize their idol.

When the Power Polarity Flips

Attendees at this year’s Conservative Political Action Convention energetically applauded the suggestion that the US government should revive an ancient Roman law allowing for the execution of citizens who “calumniate” – that is, defame – supposedly virtuous politicians.

“Let’s go back to ancient Rome,” urged CPAC speaker Robert Davi, a former actor who fashioned a career as a Trump-worshiping right-wing radio host once the offers to play TV and movie villains dried up. “If such laws existed today, we would see more men like Donald Trump and Mike Pence running for Congress or the Senate or the presidency and more fake reporters perhaps going to prison for the very lies they make up to commit cruel character assassination against the very best of our American heroes.”

In a similar vein, Fox News commentator Matthew Vadum has repeatedly called for critics of Trump, such as former CIA officer-turned-independent presidential candidate Evan McMullin, to be executed for “treason.”

The behavior of such Trump loyalists, it must be said, is not significantly different from that of first-term Obama supporters who accused the Tea Party movement of fomenting “sedition.”

“The entire right wing” is guilty of “sedition in slow motion,” by offering “incitement to revolt” against Obama, complained Sara Robinson of the Soros-funded Campaign for America’s Future in a 2009 essay. In similar terms, professor and MSNBC pundit Melissa Harris (who, with a hyphenated surname, later became notorious for an ad describing children as the collective property of “society”) said that by comparing Obama to despots like Hitler and Mao, the Tea Party was guilty of treasonous sedition.

“The Tea Party is a challenge to the legitimacy of the U.S. state,” declared Harris, without offering a convincing argument for the state’s legitimacy. “When Tea Party participants charge the current administration with various forms of totalitarianism, they are arguing that the government has no right to levy taxes or make policy.”

During the debate over Obamacare, Harris continued, “Many GOP elected officials offered nearly secessionist rhetoric from the floor of Congress…. They joined as co-conspirators with the Tea Party protesters by arguing that this government has no monopoly on legitimacy.”

This is exactly the same aria of civic outrage being performed by Trump-centric politicians and pundits today – albeit in a different collectivist key.

Eight years ago, it was the populist Right that chanted the “Not My President!” refrain, while the Left denounced them for their lack of “patriotism” and their defiance of the “rule of law.” Now what Lenin would call the Who/Whom polarity has shifted. Tea Party veterans who once saw rule by executive decree as the distillate of tyranny now thrill to every stroke of their president’s pen, and many of the same people who had upbraided Obama’s critics as less than patriotic are reconsidering the wisdom of nullification and interposition.

The Basest Appetite

Collectivist mass movements, warned Ortega y Gassett, aren’t organized around principles or ideals, but rather propelled by what he called “appetites in words,” particularly the basest appetite, which is a desire for power over others. Unlike the wholesale violence that our country saw in the late 1960s and early 1970s, contemporary street-level political conflict is heavy on posturing and pretense and light on actual bloodshed – but it does whet degenerate appetites that will grow to dangerous proportions as times get leaner and meaner.

Analyzing faux news with Alex Jones

Liberty Economics Posted on by

Let me preface this by warning everybody that the government in Washington exists to protect Alex Jones from his critics. I’ve learned that myself, as it is apparently a transgression to call for people to pray for Alex, that his eyes would be opened, as I did. Just a few days ago, Alex on his show spoke about “strafing” his opposition – literally. Listen to his show. I perceive that as somewhat of a threat. Welcome to the Alex Jones World Order. Several days ago – anterior to the faux news debate – Alex literally called for shutting down CNN. It’s Wolf Blitzer, not Alex Jones, helping us identify the torturers: http://www.cnn.com/2016/11/09/politics/tom-cotton-waterboarding-torture/ There’s no room for heterogeneous thought in the Alex Jones World Order. It’s an order that will have the government harass you for merely wanting to escape its reign of terror.

Alex Jones recently invited everybody to analyze faux news. In this commentary, I take up his challenge. Here’s Alex trying to recruit thousands of fellow thought police:

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Alex spends time directing people’s anger towards Amy Schumer. Is Amy Schumer leaving the country? Isn’t she? Is Amy caught in a lie? It’s worse than tabloid politics because Amy Schumer isn’t even a politician. As Shakespeare said, be it thy course to busy giddy minds. This is distracting people with quarrels over transitory issues of little or no significance. Alex then talks about his favorite bogeyman – the abstraction called “globalism”. Waging a war on “globalism” will be as endless as is the war on “terrorism”. It’s all platitudes. While it’s true there are institutions of global governance that should be dismantled, President Obama’s warning against a “crude sort of nationalism” isn’t without merit. Opposing nationalism in no way implies support for “globalism”, nor does it validate anything Alex says. There’s nothing wrong with market globalism. As Frederic Bastiat said, if goods don’t cross borders, armies will.

Pursuant to Infowars, Ron Paul has even published a “hit list”. Yes. A “hit list” of people in the mainstream news. See: http://www.infowars.com/ron-paul-reveals-hit-list-of-alleged-fake-news-journalists/ Alex spoke very approvingly of the “hit list” in yesterday’s show. Does anybody know what a “hit list” means? To be clear, I’m not here to publish “hit lists”. I’m here to deconstruct faux news. Gentle reader, I couldn’t imagine what would happen to me if I published “hit lists”. Or what would be said about me if I endorsed the “hit list”? If I failed to do anything other than condemn it, as I do? Even condemning it will get me in trouble with somebody.

From a few days ago, here’s Alex Jones covering Steve Bannon’s recent interview:

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This one clip alone of Alex should be sufficient to convince his most die-hard followers to do an about face. It’s a museum-quality piece. There’s an emergency, alright. Alex has gone completely off the deep end. Alex’s coverage is very peculiar. He excises some of the most consequential information. It becomes self-evident that Alex amalgamates germs of truth with lies, contorts and omits truth, in order to smuggle lies past his audience. The Alex Jones sashay: ignore the consequential while dwelling on the inconsequential. Notice who Alex recommends people read. It’s not Henry Hazlitt or Ludwig von Mises.

Here’s one huge gem that Alex conveniently excises from at least two days worth of interview coverage:

“Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement,” Bannon says. “It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.” See: http://www.breitbart.com/big-government/2016/11/18/steve-bannon-vows-economic-nationalist-movement-white-house-exciting-1930s-greater-reagan-revolution/

Alex Jones and Donald Trump inform us that China – not the government in Washington – is the biggest “abuser” of the United States. Pursuant to Jones and Trump, the most devastating weapon China has in its arsenal is currency manipulation. In other words, pursuant to the protectionists, renminbi devaluation is tantamount to an attack on the United States. But are the protectionists right? Is the Sinophobia justified? Do they not understand that interest rates are artificial? Are Jones’s ideas anything but a menace to the national security of the United States?

Prevailing practitioners of economics tell us that inflation stimulates exports. They get the flow of capital inverted. Otherwise, pray tell, why wouldn’t Zimbabwe be the world’s leading exporter? Inflation inflicts injury upon the manufacturing base, engendering capital outflow and the destruction of jobs.

Not only has Zimbabwe not been the world’s leading exporter, below is a chart that shows what happens to the balance of trade in juxtaposition with inflation.

Contrary to prevailing economic orthodoxy, inflation is not export-friendly. Inflation nurtures dependence upon cheaper foreign markets to supply us with production (i.e. begets capital outflow). Capital outflow can be reversed by compelling the Fed to tighten. If the Fed tightens, interest rates rise, prices collapse to reflect wages, the market clears (only then does the economic recovery begin), and dollars that have accumulated in foreign reserves will coming flowing back into the domestic loan market, thus lowering the natural rate of interest. Anything that nurtures sticky prices and/or wages will prevent the market from clearing.

“The dollar rose against most major currencies on Thursday as a latest report showed U.S. trade deficit plunged in February,” pursuant to one news source.[1]

“The contraction in the deficit came with a big recession-driven fall in imports and an unexpected rebound in exports, the Commerce Department said overnight in the US,” pursuant to another news source.[2]

In July of 2008, the dollar went through a rally – albeit a pseudo-rally – marked by falling nominal prices. Although falling nominal prices is not deflation (i.e. the contraction of the money supply, which would be a healthy thing), that’s the definition of deflation pursuant to prevailing orthodoxy. When the dollar rally began, the trade deficit declined, due to both decreasing imports and increasing exports. In other words: the fall in the trade deficit had been accompanied by a dollar rally. What prevailing economic orthodoxy teaches regarding inflation’s impact on capital flows betrays this possibility.

In November of 2007, Ben Bernanke put on an exhibition of his confusion when he said that inflation is inconsequential for everything but imports.[3] He literally said that dollar devaluation raises prices of everything not denominated in dollars! As if the Fed creating inflation has nothing to do with bond prices. Apparently, Bernanke was blinded by prevailing orthodoxy, which tells us that inflation mitigates a negative balance of trade – another Keynesian apologia for inflation that needs to be buried.

On a peripheral note, Bernanke’s argument runs slightly afoul of prevailing orthodoxy. Prevailing orthodoxy tells us that inflation does raise prices for Americans, and that this magically lowers real prices for foreigners. If Bernanke can’t figure out that increasing the supply of dollars raises dollar-denominated prices, then the average person is hopeless for understanding the international trade cycle and how capital flows.

The decline in imports and rise in exports in juxtaposition with the short-lived dollar rally were not a fluke, nor is this inexplicable. The trade “deficit” is but a symptom of monetary policy. A trade “deficit” isn’t bad per se. A trade “deficit” between two countries is no worse than a trade “deficit” between two towns. The consequential part is if the trade “deficit” is due to something other than comparative advantage (e.g. inflation).

“Suppose four-fifths of all the money in GREAT BRITAIN to be annihilated in one night, and the nation reduced to the same condition, with regard to specie, as in the reigns of the HARRYS and EDWARDS, what would be the consequence? Must not the price of all labour and commodities sink in proportion, and every thing be sold as cheap as they were in those ages? What nation could then dispute with us in any foreign market, or pretend to navigate or to sell manufactures at the same price, which to us would afford sufficient profit? In how little time, therefore, must this bring back the money which we had lost, and raise us to the level of all the neighbouring nations? Where, after we have arrived, we immediately lose the advantage of the cheapness of labour and commodities; and the farther flowing in of money is stopped by our fulness and repletion.

“Again, suppose, that all the money of GREAT BRITAIN were multiplied fivefold in a night, must not the contrary effect follow? Must not all labour and commodities rise to such an exorbitant height, that no neighbouring nations could afford to buy from us; while their commodities, on the other hand, became comparatively so cheap, that, in spite of all the laws which could be formed, they would be run in upon us, and our money flow out; till we fall to a level with foreigners, and lose that great superiority of riches, which had laid us under such disadvantages?” -David Hume, Essays, Moral, Political, and Literary, 1752

What mainstream economists teach runs contrary to what David Hume taught us in 1752. Hume describes arbitrage. Prevailing economic orthodoxy inverts the international trade cycle. We are told that inflation mitigates the trade “deficit”. By inflating the money supply, dollars will become less attractive to foreigners. Thus, runs the argument, foreigners will follow by curtailing exports to the U.S. Somehow, domestic productivity will magically be increased, stimulating exports.

The genesis of this error is begotten by the underlying macroeconomic assumptions. Rather than using microeconomic principles to understand macroeconomic phenomenon, mainstream economics fragments microeconomics and macroeconomics into separate compartments. Macroeconomics then becomes myopic, by lopping individuals out of its paradigm. Myopic macroeconomics doesn’t consider individuals; it only considers aggregates.

Translated, the macroeconomic analysis is this: the country has dollars. If the country, or nation – or whatever aggregate you wish to use – decides to print more dollars, the country, or nation, isn’t going to refuse to use its own dollars. However, the country, or nation, of, say, France, being a different country, won’t like very much the devalued American dollar.

I guess we aren’t supposed to ask why both inflation and the trade “deficit” have risen in juxtaposition with one another. Sound economics gives us that answer. If inflation did mitigate a trade “deficit”, then one is boxed into the position of currency-devaluation wars. Inflation vs. counter-inflation vs. hyperinflation.

The economy is made up of individuals making choices in exchanges. When the government devalues the currency, this doesn’t only make dollars less attractive to individuals abroad, but also to individuals right here at home. This is reflected with higher prices. It isn’t about aggregates printing more money for use by aggregates.

Inflation (i.e. the creation of money ex nihilo) disconnects sustenance from the satisfaction of consumer demands, diminishing the need to set market clearing prices. Consequently, inflationary stimulus interferes with the price mechanism preventing prices from falling to reflect wages. The market fails to clear, thus derailing an economic recovery. With mass unemployment, the last thing that will rise will be wages. The domestic cost of production goes up. Thus, to reduce costs, capital flight takes place. Inflation actually increases the dependence upon cheaper foreign markets to supply us with production.

As David Hume saliently articulated in 1752, inflation makes not only the currency less attractive abroad, but also the higher-priced goods. It also makes the higher-priced goods less attractive right here at home. Using inflation to remedy a trade “deficit” is akin to breaking a leg to make yourself more competitive.

The short-lived – due to central bank intervention – dollar rally in 2008 was not the consequence of the declining trade deficit; it was the cause of the declining trade deficit. Everything denominated in dollars becomes cheaper. It shouldn’t take a genius to figure out that one doesn’t become more competitive by raising prices.

It’s impossible to devalue the dollar to manipulate exchange rates without impacting any other prices. It might be true that devaluing the dollar will enable renminbi holders to purchase a greater quantity of dollars, but it will require a greater quantity of dollars to purchase goods and services. Therefore, real prices haven’t been lowered for renminbi holders whatsoever.

If inflation actually mitigated a trade deficit, Zimbabwe would be one of the world’s leading exporters. Inflation doesn’t lower real prices for anybody. But even if inflation did mitigate a trade deficit by lowering real prices for foreigners, while making things more expensive for Americans, why would that be a good thing? Why should American economic policy be calculated to make things cheaper for foreigners and more expensive for Americans? Economic growth – which is not measured by the GDP – engenders falling prices, which is a good thing.

Inflationary stimulus has served one purpose: preventing prices from falling to reflect wages. The market then fails to clear. The real issue isn’t even the direction of nominal prices, but what prices would otherwise be absent central bank manipulation. Even if prices fall in nominal terms while wages fall much faster, then we’re still suffering from the consequences of inflation. We can be suffering from lost price deflation. Falling nominal prices engender rising real wages.

Inflationary policy by the FOMC suppresses nominal interest rates by increasing the supply of loanable funds, but without a genuine expansion of savings to fund investment. Investment can only come out of savings since producers must be able to consume in order to sustain the process of production. Deploying printing-press money (i.e. unearned income) transfers money away from producers and the process of production to consumers. Inflationary stimulus disconnects consumption from production, turning Say’s law upside down. Thus inflation not only drives capital overseas, but begets capital consumption. Inflation is injurious to the process of production.

Interest rates are more than the cost of money. The essence of a credit transaction is the exchange of present wealth for future wealth. Interest rates are the discount rate of future goods against present goods. That present goods are more valuable than are future goods is why machinery doesn’t get bid up to what it will net. It doesn’t make economic sense to spend $2,000 on a vending machine that will net $2,000 over its lifespan throughout several years. The market’s discounting of machinery and equipment based upon future returns is called originary interest.

Increasing the money supply tricks the loan market into consummating unjustifiable loans to non-credit worthy projects. That’s why malinvestment occurs and projects are halted midstream with the revelation of malinvestment. By allowing debtors to pay back creditors with devalued dollars, real interest rates are suppressed. There’s no right way for the loan market to extend credit at negative real rates, which is a negative ROR in real terms. That’s a calculus for the loan market to go bust as it did in 2008. See: http://www.federalreserve.gov/releases/h3/hist/h3hist1.htm [now the information must be downloaded]. Check out the early months of 2008. That’s not psychological and that’s not a matter of consumer confidence.

The long end of the curve is most sensitive to market forces while the short end of the curve is most sensitive to FOMC policy. If the Fed stays loose to prop up the bond market, this will undermine the very bond market the Fed is trying to prop up. Investors/lenders will account for the inflation risk by tacking an inflation agio onto the curve. Eventually, the Fed will lose control over the short end, too. Under the scenario where the Fed stays loose, there will be no floor underneath the dollar nor any roof on interest rates.

Already, central banks seem to be the only buyers for mispriced bonds. As the Fed stays loose to prop up the bond market, this undermines the bond market in real terms, since other asset classes rise much faster.

Under the scenario where the Fed props up the bond market indefinitely, both the bond market and the dollar collapse. Dollars will hit parity with bonds. The Fed will be left with $18.5 trillion plus – in nominal terms – worth of bonds on its balance sheet, and we will be left with both junk bonds and junk dollars. The dollar itself will go bankrupt. What should be the true par value (i.e. redemption value) of bonds? We don’t know, because the Fed has been propping up the bond market.

Under the scenario where the Fed tightens, the bond market will decline in nominal terms, but the dollar will be saved and what’s left of real bond values will be salvaged. Dollars won’t hit parity with bonds. Just like investors/lenders tack an inflation agio onto nominal rates, there could very well be a deflation agio. Nominal interest rates could be set very low with the real rate of return coming from an increase in the purchasing power of the dollar. The only way to save the dollar is to stop propping up the bond market.

Until the Fed is compelled to tighten, we won’t have an economic recovery. The loan market has to set interest rates pursuant to the true supply of savings. If interest rates were to hit, say, ten percent on the two-year with a $18.5 trillion national debt, do the math. The longer interest rates are artificially suppressed, the higher they will have to go in order to correct the imbalances in the economy.

By tightening sooner rather than later, this will not only allow the market to discover the natural rate of interest by letting interest rates rise, this will encourage capital inflow. Capital naturally gravitates towards cheaper, higher-yielding, more efficient economies. It’s called arbitrage. The Fed is waging an eternal struggle against arbitrage. The Fed, through its war on low prices, has made the United States more expensive and lower-yielding.

If a person, firm, or institution is dependent upon inflationary credit expansion for sustenance, that person, firm, or institution is – by definition – insolvent. Somebody or some institution (e.g. government) is spending beyond their/its means. As a nation, we have spent beyond our means. Expenditures exceed earnings and we depend on foreign markets to supply us with production. We don’t suffer from a dollar shortage, but from a dollar leakage.

Inflation is no substitute for income-generating investment. Inflation creates pseudo prices and pseudo rates of return. Presently, there’s no right way to invest in the U.S. economy. It’s error to conflate trading with investing. Buying and selling real estate is not investing. Buying and selling equities is not investing. I’ll draw the distinction between trading and investing. A trader buys and sells a particular asset based on nominal price movements. An investor buys and holds a particular asset based on returns from the underlying asset itself. In the case of real estate, that would be rents. In the case of equities, that would be dividends.

The problem isn’t a lack of regulatory oversight. One can’t regulate away past mistakes. Insolvency can’t be regulated away. The only solution is to force up interest rates, prices fall, dollars that have accumulated in foreign reserves will flow back into the domestic loan market, which will then beget a lower natural rate of interest. Any other solution will lead to the destruction of the currency, in which case everybody’s savings get wiped out. Loose monetary policy to prop up a spending orgy engenders capital outflow (i.e. begets outsourcing).

Inflation is a tax. There’s no objective difference between the government taking the money you have in your pocket and duplicating the money you have in your pocket, thus devaluing the purchasing power of what you have in your pocket. Even if prices don’t rise in nominal terms, the real issue is what prices would otherwise be absent central bank manipulation.

Furthermore, if one is going to hold the position that rising prices is synonymous with economic growth, then they’re boxed into advocating skyrocketing prices in order to have fast economic growth. The way to have fast economic growth under such a scenario would be to have prices rise fast. I believe there’s a term for that. It’s called hyperinflation. Who supports hyperinflation?

The only path to an economic recovery runs through monetary tightening by the Fed. Waiting until we have an economic recovery before tightening is a calculus to destroy the currency and the economy. When the currency collapses is impossible to predict, but the currency will eventually collapse if current policies aren’t abandoned. We can prevent this if we change policy. Absent dealing with monetary policy, no politician offers us an economic solution. Forcing up interest rates means Washington relinquishing power. If Donald Trump can get away with talking about China’s management of the renminbi, there’s no reason why discussing the Fed’s management of the dollar should be taboo.

By buying dollars, China has helped postpone the day of reckoning. Having the Fed stay loose and asking China to buy dollars in perpetuity is like asking China to commit national harakiri. Renminbi devaluation would actually be injurious to Chinese exporters. If China really wanted to give herself an advantage, she would cease inflating and decouple from the dollar. Our real economic adversary is not in Beijing, but in Washington. Blaming China for our own failing policies is misguided at best. The solution is to abandon our own failing policies.

Objectively, the protectionist complaint about jobs “going” to China and China “cheating” on trade can be reduced down to there’s a problem with China buying dollars. How, pray tell, are jobs “going” to China other than the fact that dollars are going to China? How and why, pray tell, do dollars go to China? The tea party looks to be Bushism plus protectionism, which actually makes Bushism look very appealing.

Jones and Trump say nothing about dollar devaluation. From what I can tell, they want the Fed to stay loose, but they don’t want China to buy dollars. Having the Fed stay loose in juxtaposition with protectionism is very dangerous. They are ignoring the underlying problem while advocating more intervention to try to mitigate the symptoms.

Let’s pretend Jones and Trump are both honest persons and are genuinely confused, rather than dishonest. Confusion begets error, and error begets error. As I’ve articulated, Jones and Trump invert the flow of capital. It seems like that might be the genesis of their error.

Prevailing economic orthodoxy tells us that dollar devaluation is good for exports. But it’s impossible to devalue the dollar to manipulate exchange rates without impacting any other prices. It might be true that devaluing the dollar will enable renminbi holders to purchase a greater quantity of dollars, but it will require a greater quantity of dollars to purchase goods and services in the United States. Therefore, real prices haven’t been lowered for renminbi holders whatsoever.

Now let’s switch around dollar and renminbi holders. It might be true that devaluaing the renminbi will enable dollar holders to purchase a greater quantity of renminbis, but it will require a greater quantity of renminbis to purchase goods and services in China. Therefore, real prices haven’t been lowered for dollar holders whatsoever.

Suppose the PBC stays tight while the Fed stays loose. That would create even more lopsided arbitrage opportunities, in which case capital will flee to China at an accelerated pace. The old axiom about buying low and selling high is true, except in the world of central banking and the bond market. Do we really expect China to buy dollars while the Fed stays loose in perpetuity? Far from China being an adversary, China has helped postpone the day of reckoning by buying dollars.

Suppose the PBC loosens. Far from giving Chinese exporters an advantage, it would actually give Chinese exporters a disadvantage. If the Fed stays loose, China’s best course of action for its own national interests would be to tighten and decouple from the dollar – not unpeg, but decouple. Should Washington have the exclusive right to “print” the world’s “gold”? Why would China permit this in perpetuity? The one advantage that Washington has is that no government on earth wishes to abide by the discipline of a gold standard.

Renegotiating trade deals – as bad as some of them are – won’t repatriate capital. China’s loose monetary policy is not what “takes” our jobs. It’s Washington’s loose monetary policy. Capital naturally gravitates to cheaper, higher-yielding economies. It’s called arbitrage. If China tightened, becoming cheaper, that would precipitate capital outflow to China.

The idea that we can repatriate capital by adjusting nominal tax rates in juxtaposition with the Fed staying loose is a delusion. Does scapegoating China for our economic problems make it more or less likely we can attract Chinese capital? If the desire is to repatriate capital, then Jones should be demanding the Fed tighten and force up interest rates. When the Fed ceases inflating, we are back on a gold standard, because the only new money would be created through mining (i.e. a market transaction). There’s no need to make the dollar convertible, nor would making the dollar convertible be desirable, since that would be a price control like any other.

Imposing further regulations, restrictions, and capital controls as a makeshift effort to remedy capital outflow is a dangerous prescription that will result in economic dislocations. We need a plan to repatriate capital, not trap in capital. No plan to repatriate capital has been offered. Let no amount of patriotic sloganeering disguise protectionism as anything other than corporatism. It’s not about protecting jobs, but restricting access to cheaper markets for the non-politically-connected. If we reject the laissez-faire arguments against capital controls today, the resulting chaos will be met with demands for tighter controls tomorrow. I’m compelled to conclude that Jones’s ideas are a menace to the national security of the United States.

Back to faux news. Bad ideas pose no threat except when welded with state power, which can be diminished vis-à-vis monetary tightening. The solution to faux news is not censorship. The solution is more speech. Truth exposes Alex. Is Infowars faux news? I’m not here to play defense for the mainstream media, but I can’t possibly think of Infowars as a credible news source. Not only was Prince murdered by illuminati music executives, he was also killed by chemtrails. See: http://www.infowars.com/special-report-was-prince-murdered-by-illuminati-record-execs/ and http://www.infowars.com/did-the-chemtrail-flu-kill-prince/ We don’t need censorship. We need monetary tightening. The wonderful thing is here’s empirical evidence enough to convince the most recalcitrant central planners of the urgent need for monetary tightening. Loose monetary policy has adversely impacted Infowars, as there appears to be an Infowars bubble. At the very least, perhaps we can nationalize Infowars and make it non-profit, to then dismantle the operation. Remember, Alex indicts the Fed not for creating inflation, but for being a “private, for profit” enterprise.

[1] – http://news.xinhuanet.com/english/2009-04/10/content_11160595.htm

[2] – http://www.theaustralian.com.au/business/us-trade-deficit-dive-may-ease-slide/story-e6frg8zx-1225697017588

[3] – http://www.youtube.com/watch?v=nj9KHJRRUbQ – The consequential portion of the video is around the 5-minute mark. Inflation is not rising prices. To say so implies that rising prices are caused by rising prices. That contorts Irving Fisher’s own Quantity Theory of Money. Rising prices are the consequence of inflation, which is an expansion of the supply of money not redeemable in a fixed amount of specie. Prices could drop in nominal terms, yet prices could be too high in real terms. Falling nominal prices engenders rising real wages. We can still be suffering from inflation due to contortions in the price mechanism since prices remain higher than what they otherwise would be absent central bank policy.

Alan Keyes hits, Pat Buchanan misses

Liberty Economics Posted on by

Let me preface this by noting that once upon a time, I chauffeured Pat Buchanan. I have no natural animosity towards Pat. It’s my objectivity that compels me to call Pat out for his economic nationalism. While Pat has been promoting economic quackery, Alan Keyes has been blazing a trail for liberty.

Here’s a snippet from a recent commentary written by Alan Keyes:

“Like Mr. Trump’s instinctive opposition to North Carolina’s so-called “bathroom bill”; his desire to alter the GOP’s principled platform position on respect for the unalienable right to life; his disregard for the plain meaning of the Fifth Amendment’s reference to persons, without regard to citizenship; and his eager disregard for the implications of the Fifth Amendment’s prohibition against compulsory self-incrimination and the Eighth Amendment’s intolerance for cruel and unusual punishment (which, taken together, more than eliminate torture from the list of actions the government can constitutionally perpetrate against persons not even accused of a crime), Trump’s willingness to consider William Pryor for a seat on the U.S. Supreme Court contradicts the principled, conservative course he now promises to take with respect to judicial appointments.” -Alan Keyes, see: http://www.renewamerica.com/columns/keyes/160523 (bold text added for emphasis)

It was very refreshing to read Alan Keyes echoing exactly what I have been saying about torture (e.g. waterboarding, which Republicans claim isn’t) ever since I first learned of its use in 2004. This isn’t about Trump bashing or a personality contest. This is about the Constitution and standing in protest to its demolition. If the government can torture a confession out of a person, damning the Fifth Amendment, then the entire Bill of Rights be damned. Alan Keyes also makes a great point about not only does Trump advocate torturing people, but people not even accused of a crime. Until somebody is legally and officially charged with a crime to be granted habeas corpus, then that person hasn’t yet been officially accused. Thank you, Alan Keyes, for supporting and defending the Constitution. Alan hits a homerun. One thing I really appreciate about Alan Keyes is he really understands how abortion and the devaluation of human life begets things like torture.

Meanwhile, Pat Buchanan has been writing commentaries like this one: https://www.lewrockwell.com/2016/05/patrick-j-buchanan/great-white-hope/ Several months ago, I wrote a mock endorsement of Trump. See: http://libertyeconomics.com/why-i-support-donald-trump/ Little did I realize just how my satire would foreshadow a commentary by Pat Buchanan – only Pat is serious. For those who may laugh at me or believe I’m somehow inaccurate in what I write, it looks like I may get the last laugh.

Nobody distilled Pat Buchanan’s nonsense more skillfully than did my friend William Norman Grigg. Below is WNG’s response to Pat’s commentary:

“As I learned from reading the fascinating (and, of course, self-serving) autobiography of heavyweight champion Jack Johnson, the expression “Great White Hope” was paired with the description of Johnson as “The Black Peril” — not because of his morally dissolute lifestyle, which he shared with many white athletes, but because of his incontestable dominance of a sport that was seen as the defining test of manhood.

“If a black man — especially one who was literate and flamboyantly individualistic — could best a white man in a mediated boxing match, the myth of innate white superiority would be impossible to sustain. Johnson’s merciless beating of Jim Jeffries in 1910 set off race riots in cities across the country in which dozens or scores of people were killed, most of them blacks who were beaten, shot, or had their throats slit as punishment for being uppity in the face of resentful whites.

“In Uvalda, Georgia, a vengeful white mob laid siege to a black suburb, lynching three people and driving many more to flee for their lives into a nearby forest. In Mounds, Illinois, interestingly, a black police officer was killed trying to defend persons and property against four local black residents who wanted to celebrate in much the same fashion as the white mobbers in Georgia.

“When Jess Willard, the titular “Great White Hope” of Buchanan’s scabrous essay, beat Johnson in Havana five years later, white tribalists treated this as the validation of the social order, rather than the victory of one remarkable athlete over another. Willard was seen as symbolically beating back the dusky-skinned hordes whose mere presence in society was a threat to white dominance, which — it was feared — couldn’t survive in a society in which whites and non-whites were allowed to compete freely against each other.

“That is the core complaint being made in Buchanan’s unabashed endorsement of what *he* sees as the white nationalist essence of the Trump campaign.

“Yes, state-imposed schemes like affirmative action have done considerable damage to the economy and to civil society, and must be destroyed root and branch. But that consideration is ancillary to Buchanan’s central complaint — namely, the presence of “Scores of millions of third-world immigrants, here **legally** and illegally, who depress U.S. wages,” and the fact, as he sees it, that “The world has been turned upside-down for white children” because the education system and popular culture no longer validate the idea of white dominance.

“Buchanan is an economic ignoramus, but even he must understand the role played by the Federal Reserve in destroying the middle class. People of any origin or description who perform honest work at agreed-upon wages are not the culprit here, and since the collapse of the Fed’s last speculative bubble nearly ten years ago immigration from Mexico has declined precipitously. But then again, Buchanan objects to *legal* non-white immigration, because he seems to think the United States should be a state-enforced safe space for white nationalists.” -William N. Grigg

You got that? Pat is cheering on Trump for wanting to create a state-enforced safe space for white nationalists – literally. And people believe libertarians are extremists? Pat Buchanan swings and misses with his brand of race based mercantilism. Objectively, protectionism is state intervention to manipulate capital flows (i.e. capital controls). It’s marketed as a means to remedy capital outflow, yet capital outflow is a symptom of a disease called statism. Capital flows don’t determine economic conditions. Economic conditions determine capital flows. What Trump seeks to impose on the United States would be referred to as sanctions if imposed by any other government on the United States. Trump’s economic policies will actually precipitate an exodus of capital. While Alan Keyes has been echoing me on defending the Constitution, Pat Buchanan has been echoing my satire that demolished his calculus.

Good people don’t vote for Jeff Sessions

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Senator Jeff Sessions recently said that good people don’t smoke pot. Keep in mind this is the same Jeff Sessions who has campaigned with Dick Cheney and very recently with Donald Trump, both of whom are adamantly pro torture. In this commentary, I make the case that good people don’t vote for Jeff Sessions. To make clear, I’m not defending pot use, as it impairs cognitive function, engendering Sessions-style thinking. It’s Dick Cheney – not me – who is nexused with major drug smugglers.

Let’s start with this axiom: an accusation isn’t tantamount to guilt. To say that only terrorists will be denied habeas corpus and tortured would require evidence of guilt anterior to the use of torture. The alleged purpose of torture is to extract evidence. Pre-existing evidence defeats the alleged purpose of torture. More importantly, torture is unreliable to collect valid information.

That the United States government can do whatever it wishes to foreigners runs contrary to both the letter and the spirit of the Constitution. Just because citizens of, say, Canada are not protected by the United States Constitution does not permit the United States government to confiscate the firearms of Canadian citizens. The Constitution follows the government wherever it goes. The Fifth Amendment right against self-incrimination and right of habeas corpus applies to foreigner and American citizen alike.

When I was in the Marine Corps, I was not only taught that torture is illegal and that Marines don’t torture, but also that a prisoner of war is sacred. POWs are not to be tried for conduct on the battlefield. Upon conclusion of a war, POWs are to be released.

In the present paradigm, the United States is at war against terrorism. It’s akin to having a war against sin. Sin will always be with us. So, too, will terrorism. There’s no finite enemy and a “war on terror” can never be won and is never ending. Terrorism should be treated as a law enforcement matter, affording suspects due process without demolishing the rule of law. Anything other invites encroachment by the government upon the rights of American citizens.

The “war on terror” is global, which includes the United States. Keep in mind the definition of terrorism seems to be more dynamic than static. I happen to support the Second Amendment. There does seem to be somewhat of an anti-Second Amendment trend and I could see how one day if you believe in the Second Amendment, you could be accused of being a terrorist. Pursuant to Jeff Sessions’s calculus, if you’re accused of being a terrorist then you should be waterboarded until you confess to being a terrorist. The Second Amendment is not safe without the Fifth Amendment and vice versa. Those two Amendments mutually support one another.

Some people might remain skeptics. But think about this. If the government is to completely demolish habeas corpus and implement a domestic torture program, what would the government want to do first? Disarm the people. There are politicians who really do want to disarm us. That’s not a conspiracy theory. Once guns are banned, is it inconceivable that gun owners could be declared terrorists? There are politicians who really do support torturing accused terrorists and denying them habeas corpus. That’s not a conspiracy theory.

It’s unfortunate that so many alleged conservatives are unable to recognize that denying accused terrorists habeas corpus is incompatible with small government conservatism. Many conservatives are too cognitively deficient to figure out the injustice of creating a new class of prisoner that doesn’t quite match the definition of a POW or a terrorist suspect. They are POWs without any rights in a never ending, global war.

But not only that, many conservatives believe an accusation is tantamount to guilt. Conservatives embrace the idea that anybody the United States government decides to capture and accuse of being a terrorist is one, therefore it’s morally acceptable to torture the accused into confessing to crimes while denying the accused the right of habeas corpus. Even if this treatment is reserved exclusively for foreigners, it’s still reprehensible. Torture is wrong when foreigners do it to American citizens and it’s wrong when American citizens do it to foreigners.

The use of torture makes battlefield opponents much less likely to surrender, thereby jeopardizing the safety of troops in harm’s way. Practicing torture undermines the legitimacy of the government itself. How can any reasonable person justify a government that practices torture incarcerating people over much more minor and technical infractions of statutory law? Let’s not forget that innocent people died under Dick Cheney’s torture program, i.e., they were murdered. Pursuant to Jeff Sessions’s calculus, pot smokers are worse than torturers and murderers. In other words, it’s okay to jail pot smokers while torturers and murderers remain free.

Torture is notoriously unreliable for collecting legitimate intelligence. Torture is an effective tool to extract false confessions. Denying accused terrorists due process, using tactics that result in false confessions, is something that terrorists would do. Terrorists kill and torture people extrajudicially. Terrorists don’t like due process. I believe that politicians who seek to jettison due process are themselves terrorists. Therefore, I am accusing many politicians, including Jeff Sessions, of being terrorists. Pursuant to Jeff Sessions’s own calculus, an accusation is tantamount to guilt. It’s why good people don’t vote for Jeff Sessions.

Donald Trump will implement capital controls

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Recently Donald Trump unveiled a plan to proscribe remittances sent to Mexico. See: http://abcnews.go.com/Politics/wireStory/report-trump-hell-fund-wall-cutting-remittances-38158595 Amazingly, remittances sent to Mexico were characterized by Trump as “de facto welfare”. Pursuant to the Trump calculus, money earned through productive work in the private sector is synonymous with welfare.

The purpose of Trump’s plan is to pressure the Mexican government into taxing its citizens in order to fund a border wall. In other words, Donald Trump wants to implement capital controls in order to get the Mexican government to pay for his cronies to build a border wall, which somehow isn’t considered to be welfare.

If Trump plans to impose capital controls in order to build a border wall, why believe a border wall wouldn’t be used to impose capital controls? With legislation like Foreign Account Tax Compliance Act that passed in 2010, why believe it would be used for anything other than trapping people and capital into the United States? Yet we are supposed to believe that Trump’s capital controls would be used only against immigrants and until the Mexican government ponies up the capital to build a border wall, at which time Trump will cease being a menace.

Supposedly, Trump’s plan will be limited to immigrants (somehow making it a good thing). Arbitrage has a funny way of holding lawless regimes in check. Desperate governments do desperate things, and if we can justify curtailing capital outflow to Mexico in one instance, then why not in every instance? By treating honestly earned money on the free market as “welfare” that the government can seize, this will discourage immigrants from performing honest and productive work. No matter where dollars earned flow, productive work is a benefit to the economy.

I didn’t have to read about Trump’s plan to know that Trump would impose capital controls. As I wrote back in 2010, immigration restrictionism taken to its logical conclusion is capital controls. See: http://libertyeconomics.com/my-problem-with-brian-sandoval-mike-montandon-and-governor-jim-gibbons/ The populist indictment of immigration is that immigrants “drive down wages.” Not true. This argument dovetails with arguments in favor of minimum wage law as an effort to fix wages. The welfare-warfare state drives down wages. The problem is not the immigration, but the welfare-warfare state. Furthermore, let’s take this argument to its logical conclusion: capital controls.

The government could inflict injury upon every employer of Mexican immigrants (legal or illegal). However, this would do absolutely nothing to create or save a job. If employing inexpensive labor at home is curtailed, this begets one of two possibilities: the job is destroyed altogether, or the employer flees the country altogether.

What next? Criminalize capital flight? Pursuant to the statutory case against hiring illegal immigrants, the de jure case for capital controls is already in place. If it’s illegal to hire an illegal immigrant at home, then why is it legal to do business with “undocumented” workers abroad? (In that case, one becomes the de facto employer of foreigners living abroad.) For the sake of logical consistency, outsourcing should be criminalized. All international trade and commerce should be criminalized. If the government should proscribe remittances, then why not proscribe Americans from traveling to Mexico and paying Mexican nationals for goods and services?

Let me remind you that if the government can trap capital in, it can trap people in. Try leaving the country without your capital. If immigrants aren’t permitted to send money to Mexico, then how can they be expected to leave the United States? This means that Trump has, almost paradoxically, devised a scheme to trap immigrants into the country. Coming to the United States will be akin to checking into a roach motel. Furthermore, remittances to Mexico would curtail emigration from Mexico. This means curtailing remittances to Mexico would encourage emigration from Mexico.

We are being told that protectionism and capital controls are used to protect us, to protect our jobs. In reality, capital controls are a makeshift effort to remedy capital outflow engendered by loose monetary policy. Capital naturally gravitates toward cheaper, higher-yield, more efficient economies. The only way to repatriate capital is for the central bank to stop inflating, force up interest rates, and return to sound money. If we pursued the right economic policies, people would voluntarily keep their money in the United States. If the government in Washington seeks to curtail capital flight, then stop fixing prices and stop using the central bank to suppress interest rates.

Not only will capital controls not work, capital controls will beget greater problems. If we reject the free market argument against capital controls today, then the resulting chaos will be met with demands for tighter controls tomorrow. Trump’s plan is to turn the United States into an open air prison. Trump’s plan will actually precipitate an exodus of capital.

How would I approach the matter of immigration? Let property rights prevail. If two people wish to engage in peaceful, voluntary and mutually beneficial exchange, whose right is it to interfere? That somebody is an “illegal alien” is a faux concept constructed by statutory law. Unlike politicians and bureaucrats, most Mexican immigrants hold real jobs. It’s time to legalize immigration. I say we deport politicians and bureaucrats instead.

Why I support Donald Trump

Liberty Economics Posted on by

Let’s face it. Immigrants are destroying America. Some of them come here and commit crimes. But just as bad, a lot of them come here to work and steal our jobs. The Asians especially like to come here and work. Why is it every Chinese buffet I go eat at is ran by Chinese people? Not only are our jobs going to China, but the Chinese are coming here to steal our jobs! The only candidate with a serious plan to protect our economic wellbeing from these job stealing immigrants is Donald Trump.

There’s a narrow group of people who call themselves libertarians who say that immigration restrictionism won’t create or save jobs. I beg to differ. Donald Trump wants to create a deportation force. Just think of all the jobs he would create to round up and deport immigrants!

Overall, Donald Trump is on the right track by campaigning against arbitrage in the labor market. He just doesn’t go far enough. I mean think about it. By restricting immigration to the United States, the aggregate supply of labor hasn’t really shrunk. Lower cost labor is still available, but in other countries. The only way to truly shrink the labor pool – which everybody knows is the way to lift wages (not increasing productivity) – would be to bomb everybody in every other country. Donald Trump needs to get serious about bombing China back to the stone age, or else his campaign against arbitrage will be wholly ineffective.

Curtailing the ability of companies to purchase lower cost labor here in the United States would merely encourage companies to move their business abroad. Therefore, to effectively combat arbitrage in the labor market, Donald Trump has the right idea with a border wall. We need to implement capital controls so that businesses can only hire white males here in the United States and nobody else. If that means building border walls to trap people and capital into the United States, so be it! It’s time for a Berlin Wall of North America. Keep in mind that if we trap capital in, we trap people in. Try leaving the country without your capital!

If you are in business and somebody is selling the same product or service you are, but at a cheaper price, in the old days this would be settled with baseball bats. Now price fixing is so much better. We can just use government – militaries and police forces – to harass and imprison and maybe even kill our competitors! People even cheer on the price fixing schemes! At the very least, we can use government run healthcare to diagnose free market advocates who support a smooth functioning price mechanism as mentally ill. My favorite Chinese buffet is low priced compared to other restaurants, which just isn’t fair. All the more reason we need Donald Trump.

I really like Donald Trump’s waterboarding plan. That could create a lot of jobs at the Central Intelligence Agency. I myself would be very interested in one of those positions as an Enhanced Interrogation Specialist. When I was in the Marine Corps, I was brainwashed into believing torture is contrary to the law of war. But I am overcoming that brainwashing. We all know an accusation is tantamount to guilt and, just like Donald Trump, politicians get everything right and there could never be any mistakes. How can anybody claim waterboarding is bad without trying it on somebody once or twice? Only terrorists would disagree with Donald Trump’s waterboarding plan. It’s about time they be waterboarded.

I really appreciate the way Donald Trump wants to execute Edward Snowden. Only traitors would try to expose government wrongdoing. What would we do without the NSA protecting us? I mean we could end up with political figures openly plotting to implement torture programs becoming POTUS or something! I say we waterboard Edward Snowden before executing him. And what an awesome idea that is to wall off a torturing police state!

One thing that really pisses me off about China is the way the PBC has been devaluing the renminbi in order to cheat on trade. Everybody knows low prices are bad for the economy and devaluing the currency is the way to boost exports. It’s not like if China tightened that would create even more lopsided arbitrage opportunities and precipitate capital outflow at an accelerated pace due to loose monetary policy by the Fed. People just stop shopping completely if prices are too low. Donald Trump is so right on economics. Now he needs to call on the Fed to devalue the dollar by increasing the money supply a good four or five fold. Pour on the inflation so that we can take those jobs back from China! What’s really killing our economy is trade with China. China is killing us. Damn China for buying our dollars. We need to erect trade barriers so that American consumers can’t buy anything from other countries like China in juxtaposition with the Fed staying loose. Keeping the Fed parked in neutral in juxtaposition with implementing a protectionist package is such a great idea!

Of course, I write in jest to demonstrate the absurdity of Donald Trump’s platform. For some great rebuttals of Trump’s fallacies, I will be posting some links right here in the near future.

The Borders Are Closing In

Liberty Economics Posted on by

Slavery consists of being “subject to the incessant, uncertain, arbitrary will of another man.”

~ John Locke, Second Treatise of Civil Government

When an officer tells you to come inside and sit down, you come inside and sit down…. When an officer tells you to do something, you do it …. There is no “why” here.

~ U.S. Border Guard to a befuddled Canadian citizen arbitrarily detained while trying to visit a shopping mall in Niagara Falls, New York.

Returning to his home in Toronto following a brief visit to the States last December, author Peter Watts had the misfortune of being “randomly selected” for a search by members of the Regime’s Border Guards Directorate stationed at the Blue Water Bridge in Port Huron, Michigan.

The science fiction novelist’s bad luck was exacerbated by a momentary miscommunication: He saw a “flicker of motion” outside his car that he assumed was a wave, rather than a demand to pull over. His passenger understood what was happening, and urged Watts to pull over — which he did.

“When I go like this, I’m not waving hello,” sneered the border guard, assuming the snarky tone of unmerited superiority that armed functionaries use when addressing Mundanes.

“I guess we’re not in Canada, because sometimes that means ‘hello,’” Watts replied, thereby committing a potentially fatal offense called “contempt of cop.”

He compounded that supposed sin by getting out of the car and asking what the guards were doing as they pawed through the luggage in his trunk and the bags in his back seat.

As a citizen of the freest country (by default) in North America, Watts made the critical error of assuming that he had the right to ask why his privacy was being invaded, and that his question would be answered. His question was answered with repeated demands that he get back in his car.

After Watts hesitated, one of the guards seized his arm. This provoked a predictable “flinch response” from Watts, who pulled his arm away.

For reasons that make perfect sense to those attuned with Kafka’s sense of reality, American law enforcement officers often construe the act of pulling away from their unwanted physical contact as a form of “assault” — and thus as a pretext for the summary administration of “street justice.”

First two, and then eventually three, of the stalwart guardians of our sacred northern frontier took turns pummeling the slender, mild-mannered 52-year-old man. Watts was punched, kicked, pepper-sprayed, handcuffed, then thrown wet and partially disrobed into an unheated cell. He was then interrogated, held overnight, and charged with “assaulting a federal officer” after being denied access to legal counsel (and pestered repeatedly to repudiate his Miranda rights).

After Watts’ computer, flash drives, and loose-leaf notebook were confiscated, he was unceremoniously dumped — in shirtsleeves, without so much as a windbreaker — on the Canadian side of the border.

Ironically, in his novel Maelstrom, Watts — a Hugo nominee who specializes in dystopian fiction — appears to have anticipated his experience. Describing the abuse suffered by a character at the hands of customs officials, Watts observes: “Technically, of course, it was not an assault. Both aggressors wore uniforms and badges conferring the legal right to beat whomever they chose.”

A jury of dutiful collectivist drones found Watts guilty of the supposed crime of “non-compliance with a border guard”; his “crime,” reduced to its essence, was to ask, “why?”

Although Watts could have been forced to spend years as part the world’s largest prison population, the presiding judge was content to pilfer $1,628 from the victim of the assault at the border — after treating him to a patronizing lecture about the need to be “nice” to the feral armed adolescents who constitute the State’s punitive caste.

Watts’ experience leaves a decidedly totalitarian aftertaste. Crossing the border of a totalitarian state u2014 in either direction u2014 is an experience fraught with visceral anxiety. Finding himself in the unwanted company of humorless, heavily armed goons of questionable competence and dubious intelligence, the traveler is vividly aware that he can be arrested, imprisoned, beaten, or even shot at whim.

The best thing to do in such circumstances, travelers are told, is to assume a posture of utter servility, meekly and quietly enduring whatever indignity inflicted on them until they are safely through the checkpoint. In coming years, it most likely won’t be necessary to visit the border in order to have a sample of what Watts endured; experiences similar to his will become increasingly commonplace for citizens and other residing legally within the United States.

Is it easier to build a police state from the inside out, or from the outside in? We may never know, since the architects of the Homeland Security State are doing both simultaneously.

Whenever a society descends into totalitarianism, the ruling clique will eventually close the borders — not just to prevent contamination by politically troublesome foreign influences, but also to prevent the egress of refugees and (most importantly) the flight of capital to more congenial economic environments.

In our case, the invasive and arbitrary powers exercised in the name of border security are becoming embedded in routine law enforcement within the interior. Although the geography of the contiguous 48 states remains unchanged, there is a very real sense in which the borders are closing in on us.

The Border Patrol — the kind folks who treated Mr. Watts to a dose of uniquely Amerikan hospitality — already carries out warrantless, suspicionless checkpoints as far as 100 miles inside the national boundary. The Department of Homeland Security insists that the Fourth Amendment proscription of “unreasonable searches and seizures” doesn’t apply to “border enforcement” searches. This would mean that the two-thirds of the U.S. population living within 100 miles of an international border are residents of a “Constitution-Free Zone.”

Tragically, the expansion of the immigration control “Constitution-Free Zone” is being propelled by some of the most outspoken critics of “big government.”

Last week, many (by no means all) adherents of the Tea Party movement briefly suspended their campaign against invasive government to promote and applaud the enactment of a measure turning Arizona into an authentic police state — that is, one in which police can demand identity papers from practically anyone and arrest those who don’t comply.

Under SB 1070, signed into law by Gov. Jan Brewer on April 24, any “lawful contact” between a law enforcement officer and a citizen can end with the latter being arrested and detained if he cannot satisfy a “reasonable suspicion” that he is in the country without official permission.

An incident that occurred two days before that law was signed by Brewer demonstrates that a valid driver’s license may not be sufficient to allay that suspicion, and that it’s entirely possible for a native-born U.S. citizen who fully cooperates with the police to end up being handcuffed, arrested, detained and humiliated.

On April 22, an Arizona resident who identifies himself as Abdon (he hasn’t chosen to disclose his surname) pulled his truck into a weigh station. As his vehicle was being inspected, Abdon was asked by an official to display proof of legal residency. He promptly handed over a valid Arizona commercial driving license; he also supplied his Social Security number and additional personal details.

For some reason this was considered insufficient, and Abdon ended up being cuffed and hauled away to an ICE detention facility while his wife — who was dragged out of work — was dispatched to their home to retrieve Abdon’s birth certificate and other documents.

The unfortunate truck driver’s birth certificate listed his birthplace as Fresno, California. This means that he — unlike one, or possibly both, major party candidates in the last presidential election — has an unassailable claim to being a “native-born United States citizen.” He had complied with every demand made of him at the weigh station, and did nothing to suggest that he harbored criminal intent of any kind.

The only source of the “reasonable suspicion” that led to Abdon’s arrest was his visible ethnicity. This is the standard under which American citizens (particularly, but not exclusively, of Latino ancestry) can now be harassed, arrested, and detained in the State of Arizona.

The more frequently this kind of thing happens, the likelier it becomes that innocent people will be seriously hurt — as if being accosted, questioned, and detained by armed strangers for reasons beyond one’s control weren’t sufficient injury.

SB 1070 has been the equivalent of a public works project for the “tolerance” industry, which is busy planning boycotts and other expressions of punitive sanctimony against Arizona. This had the predictable, albeit unfortunate, effect of leading at least some honorable people of goodwill to assume the best about the measure without examining its impact on individual liberty.

Every invasion of individual rights happens with the eager support of people acting in the sincere and thoroughly mistaken confidence that what they permit the state to do to others will never be done to them.

The seminal error is to insist on exceptions to the principle that government — assuming, of course, that one should be permitted to exist — must be strictly limited to protecting the life, liberty, and property of every individual.

When that error is coupled with a fertile topic of public concern — such as terrorism, drug addiction, child abuse, or illegal immigration — politics becomes pregnant with large-scale abuses of individual rights.

Supporters of the Arizona immigration law define the controversy as an issue of “sovereignty” — preservation of Arizona’s reserved powers under the Tenth Amendment and the national independence of the United States. Political sovereignty, valuable as it is, must be regarded as a “good of second intent” — something that, while of great worth, is derivative of, or subordinate to, a much greater good. The paramount political good, according to America’s founding premise, is individual liberty protected by law.

In dealing with immigration, as with all other matters of public concern, government’s only legitimate role is to protect individual rights against criminal aggression — such as crimes of violence, fraud, or trespassing on private property.

Current policy, however, is to abet and reward aggression in the form of participatory plunder by illegal immigrants by way of welfare subsidies, which obviously have to be abolished (and not just for immigrants, but for everyone — beginning with the corporate welfare whores on Wall Street and in the military-industrial-homeland security complex).

Enactment of Arizona’s “your papers, please” legislation — which, Judge Andrew Napolitano predicts, won’t survive constitutional scrutiny — comes at a time when the problem of illegal immigration is in remission, both in that border state and nation-wide. It’s entirely likely that with immigration beginning to taper off, the border enforcement apparatus being built today will increasingly be directed inward.

As the government consummates its transformation into an undisguised corporatist kleptocracy, many Americans seeking to preserve some portion of what they have earned and saved will be driven to expatriate themselves.

The Regime already treats Americans living abroad as tax slaves, irrespective of their current place of residence. Economist Doug Casey warns that currency export controls are all but inevitable — indeed, in a small but significant way, they are already a tangible reality.

Many of Obama’s conservative critics simultaneously condemn him for building an invasive collectivist state and for his inadequate zeal in closing down the border. If their perception of Obama’s intentions is sound, those critics had better hope and pray that he doesn’t reverse course and become a border control zealot.

California’s broken justice system

Liberty Economics Posted on by

A few days ago, I was watching a true crime story on Investigation Discovery about two serial killers named Lawrence Bittaker and Roy Norris. The duo was responsible for such horrific crimes that I was overwhelmed with sorrow to the point that I couldn’t sleep for the rest of the night. It is hard to describe the feelings I experienced while watching the re-enactments. I wanted so badly to be able to change the past and save the victims by talking aloud to the television, trying to tell the victims not to get into the van.

Both Bittaker and Norris had long rap sheets. They met in prison, only to be released to go on their killing spree in 1979. It seems to me that there was enough evidence to sentence both Bittaker and Norris to death. Bittaker was sentenced to death almost 30 years ago. Unfortunately, the prosecutors exchanged a much lesser sentence for Norris’ testimonty against Bittaker. Norris is eligible for parole beginning 2010. To my shocked disbelief, Bittaker is still awaiting execution at San Quentin 30 years later!

So here is my proposal to Governor Schwarzenegger and the State of California: stop collecting death row inmates. Execute them. That Bittaker could die of natural causes defies both common sense and justice.

From watching some of these true crime stories, a frequent common denominator is drugs – both recreational and psychiatric. This would make sense, since drugs dull emotions, thus dulling the conscience. There are some things that people should get angry over, e.g., if a loved one is harmed by somebody like a Bittaker or a Norris. There are some things that people should feel sorrow over, e.g., if a loved one dies. There are some things that people should feel guilt and remorse for, e.g., bad behavior. Without emotions, one can’t empathize. Emotions play an important role in governing the conscience. Dulling emotions dulls the conscience, and thus engenders irrational behavior. Both recreational drugs and psychiatric drugs subdue emotions, i.e., subdue the conscience. That some people can’t control their emotions is undeniably true. But psychiatric drugs and people with homicidal tendencies don’t mix. It is a calculus for disaster.

Something else is usually involved in these cases, which is also a part of the broken justice system: so-called psychiatric diagnoses and “treatment” for bad and evil behavior. Doctors morph evil behavior into diseases. I’m sorry, but evil behavior is not a disease. The “remedy” is then to drug the criminal with psychiatric drugs, i.e., dulling the conscience. Norris, a serial rapist prior to his release from prison, would have been better “treated” with castration way back in 1975, rather than treated as a “patient” with a “disease.”

I propose that the criminal justice system be reformed by separating itself from psychiatry. The state of California could save money by firing psychiatrists who prescribe crime-inducing drugs, and then hiring surgeons to castrate people like Norris instead.