Liberty Economics

Laissez-Faire News & Commentary

Washington’s hubris

As one who served honorably on active duty in the Marine Corps infantry, I never anticipated back then that one day my conscience would compel me to call the government in Washington the largest and most criminal enterprise on earth.

The government in Washington has been managing a dollar standard system that’s based on a depreciating currency and negative real rates. As I’ve explained in previous commentaries, this means the economic pie is shrinking by way of policy. The War Party (aka armageddon lobby) has us quarreling over how to divide up pieces of a shrinking economic pie. And the government in Washington expects the rest of the world to roll over and play dead as it seeks to conquer and conscript other nations into this system?

Our top pursuit should be that of peace, and there be no war. Unfortunately, Trump’s victory was not a defeat for the War Party. The War Party’s propaganda machine is running at full throttle, concocting Russian guilt for events with absolutely no evidence. War may be inevitable at this point. If it is, and if people truly understood what was happening, they would understand that the survival of the West depends upon the rest of the world defeating the Murder Industrial Complex in Washington.

In defense of Ben Carson

Senator Catherine Cortez Masto is now saying that one of the biggest issues facing Nevadans is a lack of affordable housing. Senator Cortez Masto says that HUD Secretary Dr. Ben Carson isn’t doing enough to help create more affordable housing. See: https://www.rgj.com/story/news/politics/2018/03/27/masto-says-trump-appointee-carson-has-no-plan-help-nevadas-affordable-housing-crisis/464506002/ But is Senator Cortez Masto’s indictment legitimate?

Rather than plagiarize myself, I will post the text from a commentary I wrote in 2011:

“The art of economics consists in looking not merely at the immediate, but at the longer effects of any act or policy; it consists in tracing consequences of that not merely for one group, but for all groups.” -Henry Hazlitt

A SPECIFIC PLAN – THE ONLY PLAN – TO ENGENDER AN ECONOMIC RECOVERY WITHOUT HYPERINFLATING

Former Federal Reserve Chairman Paul Volcker, whom I have much respect for, pointed out that a 2% inflation rate means confiscating half of one generation’s wealth. In the end, he settled with price stability for the Fed’s mission. Far better than inflation targeting.

Federal Reserve Vice Chairman Donald Kohn promised that the Fed would turn off inflation if it happens (is the guy myopic, since it’s here already?). Ben Bernanke was talking about “green shoots” many months ago. Politicians were talking about a “glimmering of hope.” The Fed tells us it will stay loose until there’s an economic recovery, as though artificially low interest rates are therapeutic in nature. The parlance used engenders confusion, and it’s my purpose here to deconstruct a few fallacies.

Let’s start with this axiom: prevailing economic orthodoxy is wrong. If prevailing economic orthodoxy is so great, then how did the orthodox practitioners get us into this mess? Even I saw this one coming. See: http://libertyeconomics.com/be-afraid-of-the-dollar-not-gold/

What is it that we are all pursuing and seeking? The betterment of our lives (i.e. economic growth). When government officials and politicians speak of economic growth, they should be able to define the phrase. If they can’t define it, then they have no business talking about economic growth. So what is economic growth?

Wealth is that which satisfies demands. Inasmuch as businesses satisfy consumer demands, they are being productive. Within the construct of the unhampered market, productivity can be measured by income, since income is earned by satisfying consumer demands. The government, on the other hand, does not sustain itself by satisfying consumer demands (i.e. earning its income). The government uses the threat of violence, or actual violence, to obtain its revenue (i.e. compulsory taxation). Thus the government can’t get away with saying that the more it taxes and spends the more productive it’s becoming.

The technocrats had to invent a different excuse for government: its spending is productive! So government spending – as well as private sector spending – has been placed into the GDP. The kleptocracy tries to camouflage itself with Keynesian formulas (e.g. the “multiplier effect”).

Nevermind the fact that if the “multiplier effect” held truth, so long as nobody saved anything – meaning zero-liquidity preference, in which case we would have hyperinflation – the “multiplier” would be infinity!

If you look at the textbook definitions of economic growth, objectively, it’s defined as a rising GDP. A rising GDP means we are having “economic growth,” because the GDP supposedly measures “economic growth,” and “economic growth” is defined as a rising GDP. Do you see any tautology here whatsoever? Even I noticed the tautology all on my own without anybody to point it out to me in any book. This is “Mark original” analysis.

Before economic growth can possibly be measured, it must be defined. Defining economic growth as a rise in the very indicator that supposedly measures economic growth is self-evidently flawed. Look at it another way. Measuring wealth in terms of a depreciating currency is akin to changing around the definitions of inches and feet in order to say that a person is changing in size. If the technocrats and politicians in Washington can’t figure this one out, then everything is hopeless.

The simplest definition of economic growth is a lessening of the unsatisfaction of wants or demands. We are diverse, and our wants, or demands, are subjective. Politicians and econometricians are not psychics. There is no way to quantitatively measure economic growth. Even Alan Greenspan wrote a piece – even while maintaining the fiction that the Fed is blameless – in which he claimed the Fed is blameless because it’s impossible to model malinvestment. See: http://us.ft.com/ftgateway/superpage.ft?news_id=fto031620081437534087 If it’s impossible to model malinvestment, then it’s impossible to model economic growth.

Prevailing economic orthodoxy tells us that there are two kinds of GDP growth: nominal and real. This is where thinking on the subject becomes dubious at best. Real GDP growth is defined as nominal GDP growth discounted for inflation, which is determined by the unreliable GDP deflator (I won’t belabor the reasons why in this piece, but I have done so before and will do so again).

Let’s start with what should be a self-evident absolute: economic growth need not be discounted for inflation. Either we are having economic growth, or we aren’t. If the GDP must be discounted for an inflation component, then this means that some GDP growth is good, but other GDP growth is bad. But if the GDP is measuring the same thing(s) constantly, this makes little sense. Either the GDP measures economic growth and any rise in the GDP is good, or the GDP measures inflation and any rise in the GDP is bad. If the GDP can rise, but only in nominal terms, then this must mean that it can fall, but only in nominal terms.

When Fed officials and other D.C. technocrats speak of “economic growth,” they’re talking about rising prices in absolute terms, which is not inflation but the result of inflation (i.e. monetary expansion). If a person conflates rising prices with economic growth, they’re boxed into an awfully awkward position. The only way to have a fast economic recovery would be to have prices rise fast (i.e. hyperinflation).

Real economic growth engenders falling prices. Falling prices increases the ROR (rate of return) in real terms. I remember when I was growing up during the 1980s, and if I wanted to make a photocopy, I had to walk down to the drug store to use the big, bulky copy machine. If I had to send a fax, I went to Kinko’s, or another commercial location. At that time, nobody would have thought that the average household might have its very own fax/copy machine. Today, you can get an all-in-one for under $100. Who would have thought a century ago we would go from horses and buggies to automobiles?

Undoubtedly, this is a positive development. Albeit demand for the copy machine at Kinko’s and horses and buggies has dropped. But those things have been replaced by at-home copy machines and automobiles. This drop-off in demand for Kinko’s and horses and buggies would be detected by the GDP as economic decline. The political response would be to bailout Kinko’s and the horses and buggies industry, as though market share is supposed to remain static. One man’s loss of market share is another man’s gain of market share.

Conversely, if the western part of the United States went to war against the eastern part of the United States, the GDP could rise exponentially. But would that be a positive development for the economy? Hardly.

For the Fed to keep the price level the same in nominal terms requires inflation (i.e. an expansion of the money supply). Thus, even if prices were to remain stagnant, we can still be suffering from the effects of lost deflation. The question is: what would prices otherwise be absent central bank manipulation? We don’t know, but it’s safe to say prices would be a lot lower.

It’s the effort to prop up prices through stimulus that’s preventing the economic recovery. People are losing their homes because homes are unaffordable, not because they are too cheap. Thus deflation is the cure, not the problem. What sense does it make to provide somebody with a cheaper mortgage – by interest rate manipulation through loose monetary policy at the FOMC – on a more expensive house that costs more to maintain?  But that is what present policy is aimed at pursuing. What sense does it make to stimulate more home building when housing isn’t clearing the market as is?

No matter which way the government inserts itself into the housing market, this diminishes the need for sellers to set prices pursuant to supply vs. demand (i.e. market-clearing prices). Whether the government buys up bad mortgages, bails out the homeowner or the bank, this interferes with the price mechanism.  If we continue down the current policy path, one will have to be politically connected to get an “education,” get a job, get healthcare, and…get a house!

Suppose there’s a shop owner whose inventory is piling up because nobody can afford to pay for his prices. What does the shop owner have to do? Lower prices. But suppose the government inserts itself into the picture and subsidizes the shop owner. No longer is the shop owner’s sustenance dependent upon having to satisfy consumer demands, thus diminishing the need to set market-clearing prices. Within the construct of the unhampered free market there can’t be price gouging any more than there can be wage gouging, since vendors can’t short inventory at prices above what consumers are both willing and able to pay.

Let’s try another scenario. Suppose the government distributed “credits” or “vouchers” to this shop owner’s customers. This would be perceived as an “enlightened” form of welfare for the shop owner’s customers. However, this is yet a different way to subsidize the shop owner, by letting the shop owner sell at artificially high prices. A move like this prices the poorer, non-recipients of “credits” or “vouchers” out of the marketplace. No surprise that education and healthcare – two of the most government subsidized cartels – have also had the highest levels of price inflation. This begets the erroneous perception that the problem is a dollar shortage for the one who didn’t receive “stimulus.”

The mistaken conclusion is that we need these subsidies and stimulus rather than understanding that it’s the subsidies and stimulus pricing the little guy out of the marketplace. The poor person has been priced out of the marketplace. The problem isn’t a dollar shortage, but a dollar leakage thanks to promiscuous spending.

I’ve always said that, by rights, the impoverished belong to the free market movement. With the government as large as it is today, would it not be a fair assumption that many people who are poor are so precisely due to big government, whereas many people who are wealthy are so precisely due to big government? You see, big business uses big government to manipulate the marketplace on its behalf.

The flawed assumption made by some progressives is that big government is somehow less dangerous than big business. This begets the erroneous conclusion that the problem is an absence of regulation. It’s paramount to understand that we can’t regulate away insolvency. We can’t regulate away past mistakes. But we sure can regulate everybody except the big cartels out of existence.

Furthermore, it’s loose monetary policy that engenders speculation, as lenders/investors are compelled to hedge against a depreciating currency. Holding (i.e. investing in) dollars guarantees losses. Politicians have no right debasing the currency to then regulate away that behavior. The simple solution is to stop the printing press. Politicians have no right to punish us for their past transgressions through cumbersome regulations. The most efficient way to mitigate excessive risk taking is by letting the market set interest rates pursuant to the true supply of savings. Subsidizing risk taking while privatizing the profits is not a real free market. Size-capping should not be conflated with risk-capping.

Ludwig von Mises and Eugen von Bohm-Bawerk saliently articulated how labor can’t increase its share at the expense of capital. Nobody can argue against capital without arguing for a reduction in their own standard of living. Thus the problem for the progressive should not be with capital per se, but that capital is so inaccessible to the common person.

Why is capital so inaccessible to the common person? Every tax, every regulation, every government program drives up the cost of capital. Politicians love this, because they get power. Big business loves this, because it creates barriers to competition. Big government creates monopolies, as a monopoly is a state of imperfect competition, and imperfect competition is begotten by government interference in the marketplace.

The situation with housing is no different than that of the shop owner I described above. In a market unhampered by government, sellers are sustained by selling inventory. When the government inserts itself into the picture, sellers are no longer dependent upon having to satisfy consumer demands by selling inventory. Sustenance is disconnected from the satisfaction of consumer demands. In the case of housing, the government and the Fed are subsidizing the loan market to hold back inventory. See: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/08/MNL516UG90.DTL&type=realestate

Simultaneously people are living in tents. The mission of politicians in Washington is literally to keep people homeless. Do not let those kleptocrats masquerade as philanthropists. It’s not their money they’re spending; it’s your money they’re spending – and on themselves. So long as the government keeps trying to prop up prices, as it has done with healthcare and education, real estate won’t clear the market and we won’t have a recovery.

Economic recovery rests upon a smooth-functioning price mechanism, where the market can discover real prices. How is Ben Bernanke or anybody else supposed to know what prices of everything are supposed to be? Would politicians mind telling me what housing prices are supposed to be? How is it good to stimulate home building when there are homes on the market not clearing?

The pursuit of price stability means the Fed will constantly be chasing its own tail. The Fed doesn’t want to allow deflation, so it deliberately tries to create inflation. But then the Fed also promises to intervene if inflation surpasses some level that central planners supposedly have the wisdom to know is wrong. This makes no sense. It’s impossible for the Fed to fight both deflation and inflation. If inflation is good, then bring it on Zimbabwe-style. If inflation is bad, and must be turned off after it starts, then why start the inflation to begin with? In other words: central planners have promised to do an intervention on their own intervention.

If prices fall, this isn’t a bad thing. If we had propped up the economy of, say, 1900, we would still be riding around in horses and buggies. While Paul Volcker is right that expanding the money supply by 2% every year wipes out at least half of one generation’s wealth, the Fed should not be pursuing price stability. We should, instead, be concerned with monetary stability.

Inflation is not economic growth. Just as inflation begets a negative RRR (i.e. real rate of return), deflation begets a positive RRR. Falling prices means rising real incomes. No nation has ever succeeded in substituting a printing press for income-generating investment.

Our only ticket out of this mess is to stop the printing press, which will bring false economic activity to an end, allowing for what remains of the productive and profitable elements of the economy to lead us into an economic recovery. The government is leading us over a cliff. There can’t be a systemic collapse without a systemic cause. Until systemic changes are made to Washington (not the private sector), there will be no economic recovery.

DEBUNKING MYTHS & OFFERING THE SOLUTION

Myth: The problem is “toxic” assets (e.g. mortgage-backed securities) which have created systemic risk

When a hospital can’t collect payment, the hospital sells this debt to a collection agency. This doesn’t create booms and busts. The risk is asystemic unless the government bails out every debtor and/or creditor.

Myth: Present problems were caused by bad lending (i.e. sub-prime loans)

Promiscuous lending is a symptom – not a cause – of economic conditions. Take bad lending to its own logical conclusion: creditors give away money as an act of charity, getting nothing in return. Does charity cause booms and busts? No. Promiscuous lending is a symptom of loose monetary policy at the Fed, which tricks the loan market into consummating unjustifiable loans.

It’s primarily through FOMC operations that interest rates are determined (until the Fed loses control, which will eventually happen). By expanding the money supply, this increases the supply of loanable funds without an expansion of genuine savings. In doing so, the loan market appears to be more solvent than it truly is, tricking the loan market into consummating unjustifiable loans. This artificially suppresses nominal interest rates below their natural level (i.e. where they should be pursuant to the true supply of savings). By expanding the money supply, this allows debtors/borrowers to pay lenders/creditors with devalued dollars, thus lowering the real rate of interest.

A credit transaction involves trading present goods for future goods. If there are no present goods (i.e. savings, which aren’t created on a printing press), then credit has to be curtailed. The problem isn’t a credit crunch, but a savings crunch. Investment can only come out of savings because producers must consume in order to sustain the process of production. In order for the baker to make more bread, the baker himself must eat. Thus somebody must forego present consumption in order to fund credit expansion.

The rate of interest is the discount rate of future goods as against present goods. An example would be what an investor pays for a printing press. Suppose the printing press will generate five-hundred thousand dollars in net income throughout a ten-year life. The entrepreneur will certaintly not bid up the price of the capital equipment to five-hundred thousand dollars. The entrepreneur is willing to invest, say, fifty-thousand dollars for the printing press and the vendor is willing to part ways with the printing press in exchange for an immediate fifty-thousand dollars. The entrepreneur and capital equipment vendor mutually settle upon fifty-thousand dollars – a sum far less than the five-hundred thousand dollars – in exchange for the printing press.

How much present income (i.e. present goods) is an entrepreneur willing to invest in order to garner five-hundred thousand dollars in future net income (i.e. future goods) over a ten year period? Reflected in the transaction is the rate of interest as determined by time preferences. Interest rates represent an agio on present goods since present goods are more valuable than are future goods. A person would rather eat an apple today than eat an apple ten years from now. Interest rates must be set pursuant to the true supply of savings and are determined by time preferences. If everybody wants to consume without saving, then interest rates must rise to reflect time preferences.

There is no right way to extend credit at negative real rates, which is a negative rate of return in real terms. It’s a calculus for the loan market to go bust. Any person, firm, or institution (e.g. government) that’s dependent upon inflationary credit expansion is, by definition, insolvent (i.e. a non-income generator). Failure has to be an option for bad business decisions. That’s the check on excessive risk taking.

Capital naturally gravitates to lower priced, higher-yielding economies. It’s called arbitrage. Artificially low interest rates engenders capital outflow. Capital goes racing overseas. The problem isn’t a dollar shortage, but a dollar leakage. The dollars are out there; they’re just piled up in foreign reserves. The way to repatriate these dollars is for the Fed to tighten, interest rates rise, prices collapse to reflect wages, which will then beget capital inflow thus lowering the natural rate of interest. If I give you $10 in exchange for a book and you turn around and give me that $10 in exchange for a DVD, the real means of purchase for the book was the DVD and the real means of purchase for the DVD was the book. Increasing the quantity of dollars creates no benefit for the economy.

Myth: The FDIC is good for depositors

The FDIC offers deposit insurance for bank customers, which is really a backdoor way to bailout insolvent banks. Could you imagine being able to run a ponzi scheme (e.g. fractional-reserve banking), knowing that when your insolvency is exposed the government will pay off your customers (i.e. a de facto bailout of you)? This creates yet another layer of moral hazard on top of the central bank injecting “liquidity” into the loan market. Thus FDIC’s true purpose is designed to keep the unsustainable intact.

Needing to insure bank deposits should raise questions in and of itself. Unlike natural disasters, economic risk can’t be pooled. It’s one thing to guarantee one’s solvency should they get wiped out due to, say, a flood. It’s quite another thing to guarantee solvency, per se. It’s impossible to insure against economic miscalculation and loss. If I were to go into business and you offered to insure me against business failure, you become the true entrepreneur in the deal by underwriting/assuming risk.

The FDIC (insolvent) is backed by the Treasury (insolvent) which is backed by the Federal Reserve (insolvent). The Federal Reserve is backed by a printing press which is backed by the savings of Americans. Not only is the concept of insuring economic risk altogether chimerical, but there’s a reason why only a government-backed entity would offer insurance to banks. Inflationary credit expansion makes banks inherently insolvent. Demand deposits are payable on demand, while banks are lent long. Thus the time structure of assets and liabilities does not match.

At the end of the day, the FDIC/Treasury/Federal Reserve (all three of which are insolvent) can guarantee depositors pull money out of their bank, but there’s no guarantee of the currency’s value. By guaranteeing solvency, this inherently places the currency’s value at risk. Deposits are guaranteed in nominal terms, but not in real terms.

When one scrutinizes the role of the FDIC more closely, they can see that its entire purpose is keeping the good ole’ boy network intact, leaving Americans with nothing. If the free market were allowed to function, the government’s role would be limited to enforcing contracts. If homeowners default, the bank would foreclose. But if the bank defaults, the bank’s creditors – i.e. its depositors – would become receiver for the failed bank’s assets. Depositors should be senior to all other creditors. Thus, in the event of a bank run, depositors have the first legal claim to a bank’s housing inventory.

What does the insolvent FDIC do? If a bank fails, the FDIC sends in federal regulators to protect the bank’s assets from its depositors by becoming receiver for a failed bank’s assets. In many instances, the FDIC has arranged shotgun mergers with investment banks on Wall Street, turning investment banks into bank holding companies.

So we can see this sleight-of-hand trick – under the guise of protecting depositors – is designed to transfer real assets (i.e. housing inventories) from failed banks to Wall Street, while promising depositors nothing more than globs of Ben Bernanke’s “liquidity.”

There’s no way the FDIC/Fed can guarantee the solvency of the banking system or depositors, which will destroy the currency (measure purchasing power in terms of gold) thus destroying the very depositors (anybody holding dollars) those institutions are supposedly designed to protect.

The solution, then, is to put a failed bank’s assets into the receivership of its depositors. Any other efforts to prop up the housing and/or bond market will prevent the market from clearing and block those who have already lost homes from ever regaining possession. We are now doing to the housing market the same thing that has already been done to healthcare and education.

If you want to figure out how to get your homes back, then make an inquiry into where they’ve gone. The Fed is sitting on at least $1 trillion worth of Mortgage Backed Securities. We can go a long ways towards saving the dollar and getting people back into homes by having the Fed liquidate the MBS on its balance sheet.

In my estimation, any other plan will engender homeless people and peopleless homes.

I would submit to you that we would all be better off the less government intervenes in the marketplace, no matter how well intentioned is the intervention. The less politicians do, the better off we will all be. Politicians spend a great deal of time promising to fix problems that they created in the first place. The “fixes” create yet more problems. Senator Cortez Masto is no exception. Everything Senator Cortez Masto has supported has made housing unaffordable.

Since I wrote the above commentary, the Fed has increased the amount of MBS on its balance sheet, which now stands at over $1.5 trillion worth of MBS. If Senator Cortez Masto is sincere in wanting to create more affordable housing, then she should demand the Fed liquidate the MBS on its balance sheet. Compelling the federal government to liquidate its real estate would be very helpful as well. Senator Cortez Masto is the wrong barrister with the wrong indictment of the wrong suspect.

Analyzing faux news with Alex Jones

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:

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:

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.

Hillary Clinton, the spy

The FBI “saved” us from the Russians who are supposedly coming for our ETFs. Evgeny Buryakov is a Russian banker who was arrested for being a spy. Allegedly, he was going to destabilize the United States through ETF trading. Believe it or not, this isn’t a slapstick comedy. See: http://www.etftrends.com/2015/01/russian-spies-like-etfs/

From what we know, there’s no way to tell whether or not the intention was to gather information for offensive purposes. It could have been for defensive purposes, to find out in what ways Russian ETFs could be targeted. See: http://web.archive.org/web/20161204051433/http://www.businessinsider.com/rsx-plunges-july-17-2014-7 It makes little sense to me that a Russian intelligence asset would be tasked with a mission nobody knew how to execute. It’s especially chimerical considering the fact that if Russia wanted to deal the ultimate black swan in retaliation for the economic sanctions imposed by the United States, she could do so easily by offsetting her long position in dollars (which Trump would like since he doesn’t like foreigners buying dollars). The problem in that case would not be Russia, but our flawed monetary system built on a fiat currency that functions insofar foreigners buy dollars in perpetuity (which Trump wants to curtail in the name of price fixing since arbitrage is a means by which market forces hold statist economies accountable).

It’s a matter of national security for us to determine what trade(s) can destabilize the market, yet nobody in Washington has done anything to help us in that effort. This makes politicians in Washington tacit supporters of espionage against the American people at the very least, pursuant to the government’s own calculus. Is it too many longs or shorts of calls or puts? If there are such trades, then those trades need to be proscribed so they wouldn’t be offered in the first place.

From my knowledge of the markets and trading, having held the Series 3 license, I know of no trade, or sequence of trades, that could be performed to manipulate or destabilize the market. That politicians are able to get away with scapegoating individual traders and speculators for causing market disturbances and recessions is something I find to be chimerical. For further information, see: http://libertyeconomics.com/senator-dean-hellers-swing-and-a-miss/

Think about the absurdity of the argument that tells us the government is just trying to fix the economy with its policies, while speculators cause crashes. Those greedy speculators deliberately trying to cause the economy, which they are participants of, to crash. Trading doesn’t determine economic conditions. Economic conditions determine trading.

The only organization with the power to manipulate the market is government. Politicians and bureaucrats are the only ones with the power and capability to manipulate the market and they do so as a matter of policy. If I am mistaken in my analysis, politicians don’t really have the power to manipulate the market while traders do, then don’t you, gentle reader, believe politicians would be resigning to seek greater power by trading ETFs?

Suppose I were tasked with destabilizing the market, here’s how I would do it:

[1] I would appoint a Federal Reserve Chairman who is really good at talking a lot while saying absolutely nothing of substance, able to convince the people that the Fed isn’t really creating inflation as it is creating inflation. That would be done by distracting people with talk of things like “slack.” Only in a very narrow sense is it true that unemployment can contain inflation. (Unemployment actually speeds up inflation.) If inflators in Congress and government lose their jobs that could certainly help contain inflation. The entire purpose of creating inflation is to keep the inflators employed while others lose jobs.

[2] I would create a huge national security state, financed through inflationary monetary policy which is injurious to the economy as a whole, in order to control the Congress so that the Congress keeps spending us into deeper and deeper bankruptcy which is the same goal that Osama bin Congress had. See: http://www.cnn.com/2004/WORLD/meast/11/01/binladen.tape/ There’s been a deafening silence on the mission overlap. I would refer to my efforts to bankrupt the country as stimulus. I would do my best to silence commentators who draw the nexus between economic liberty and civil liberty, and who propose that it’s impossible to bankrupt a people while preserving their liberty.

[3] I would want the Fed to do quantitative easing, which is a nice sounding euphemism for legalized counterfeiting, or debasing the currency. The practice is horrible for the economic wellbeing of the average American. I would demand the Fed bailout my cronies. I would cheer as the loan market goes bankrupt by extending credit at negative real rates. To this date, nobody has ever explained to me how it is the loan market can extend credit at negative real rates without becoming insolvent. I would laugh at Americans who believe they are becoming more prosperous because of higher nominal incomes in juxtaposition with higher prices.

[4] As the Fed is creating inflation, I would misdirect people into looking at the gerrymandered Consumer Price Index in order to measure inflation. As I deceived people into believing there is no inflation, that would cause firms to overestimate profits, consequently paying more in taxes to the government which would be very good to destabilize the economy.

[5] I would tax everything I could possibly tax through capital gains taxes, corporate income taxes, personal income taxes, an alternative minimum tax, and more. I would want a graduated income tax. I would fool the people into believing I am helping them through offers of tax rebates, tax credits, and vouchers (euphemism for subsidies) in juxtaposition with budget increases, pretending that’s lowering the tax burden.

[6] As firms are overestimating profits and going under because of my policies, I would blame economic downturns on business owners who do things like overestimate profits and direct my agents to arrest business owners for economic failure in an economy rigged through my own policies.

[7] I would lie the country into open ended wars without a finite enemy (e.g. warring against terror), telling the American people that I am saving them from some foreign enemy, while enriching myself and my cronies in the name of patriotism. Nothing wrecks a nation’s morality more so than remaining on a perpetual war footing.

[8] I would tell the people things like the Russians are coming, the Russians are coming! I would accuse Russians of trying to destabilize the economy through things like trading equities. I would try to instill as much fear of everything but government in the American people as I possibly could (this doesn’t apply to critics and opponents). I would tell the people that I must take away their freedoms to protect them from an enemy that hates their freedom.

[9] I would cheapen freedom by reducing it down to some form of hedonism by defining freedom as the right to have gay sex and get abortions so that the people believed they had freedom as I demolished due process and property rights. Undermining a people’s morality and demolishing the concept of moral absolutes also renders a people incapable of challenging government wrongdoing.

[10] I would help create even more economic problems for my own countrymen by imposing sanctions and trade restrictions on different countries like Russia. I would try to take my country into a huge war against a really big superpower which would really help me solidify control over the population.

[11] I would want Congress to pass as many laws as possible, criminalizing as many non criminal activities as they can get away with before the people finally say no more. That would allow me to jail whoever I wanted to jail. I would want Congress to regulate almost every activity there is so that I can target anybody I want. I would tell the people the more important something is, the more the government should be involved, rather than letting them figure out it should be the other way around.

[12] I would label my opponents and critics, anybody who knows what’s going on, as enemies of the state, terrorists, and/or mentally ill. Truth becomes a delusion in an empire of lies. Everything becomes a criminal activity and disagreement with that becomes tantamount to thought crime. I would also define truth telling and whistleblowing as treason and espionage. I would instill as much fear of the government in the aforementioned people as I possibly could.

[13] I would make people defenseless by enacting gun control. And as people became victims of individual criminals more and more as I destabilized the country, proving that government is incapable of protecting them, I would do my best to convince them that they need the government to protect them even as I was the one imposing victim disarmament schemes. At the same time I demonized guns for the general public, I would direct the government to arm itself to the teeth.

[14] I would inculcate people with allegiance to the government through propaganda in a government run education system. I would do my best to influence the media into promoting the idea that the government knows best and that people breathe courtesy of me.

To destabilize a country, I would seek to control and confiscate the people’s wealth through inflation, taxation and regulation. I would ape the government in Washington. Yes. Washington is full of people who make careers out of destabilizing the United States. If Russians really wanted to harm us, they would fund the campaigns of politicians. I say free the Russian “spy” and jail politicians in Washington. Come out with your hands up, politicians!

Reichsführer-SS Rudy Giuliani vs. Hillary Clinton

I’ve said before that people can criticize others and advocate changes which appear benign, but in reality the purpose is to thrust us deeper into a constitutional crisis. Rudy Giuliani fits that narrative exactly. After watching Rudy Giuliani’s most recent remarks in Reno, the title I feel that is most appropriate for him is Reichsführer-SS. I will explain.

Before Holocaust victims were sent to their deaths, their possessions would be confiscated. After death, gold would be extracted from teeth. Anything of value was to be sent to the Reich. In October of 1943, Heinrich Himmler gave a speech in Poznan before SS officers in which he declared war on “corruption” in the SS. Corruption was defined as an SS officer taking a bribe to let a prisoner escape, or keeping some of the stolen loot for himself rather than sending it to the Reich. SS officers who were caught would be prosecuted and punished severely.

When you think about the seriousness of the crime of the Holocaust, you can see the absurdity of the Hitler regime prosecuting SS officers for keeping stolen loot. The real reason for a criminal regime cracking down on small scale corruption was not because the regime cared about the victims, but to enhance the power of the regime. To the extent SS officers complied with orders to send stolen loot to the Reich, that benefited the criminal regime. To the extent SS officers deviated from policy, they became competitors with the regime by functioning as independent de facto tax collectors.

Applying Caesar’s observation on war, Lysander Spooner neatly distilled the genesis of the state. Any group of scoundrels, as Spooner saliently articulated, having money enough to start with, can form themselves as a state. Because with money they could hire agents. With agents they could steal more money. And so the first use the state always makes of its money is to hire agents to subdue and kill all those who refuse to give it more money.

The government doesn’t sustain itself by satisfying consumer demands, i.e. it doesn’t earn its income. The government sustains itself with compulsory taxation, i.e. it uses violence or the threat of violence to obtain its revenue. That’s why problems inhere with everything the government inserts itself into. It has nothing to do with personalities. It’s the nature of the state. (There’s no better way to crystallize this than to think about how free markets don’t create concentration camps. Nobody would patronize such a place. Governments create concentration camps.) You have to pay the government in order to remain free. If that isn’t the definition of a protection racket, gentle reader, then I don’t know what is.

People often times conflate the violence that ensues between warring tribes and warlords with anarchy. That is not anarchy. That’s the genesis of the state. It’s competing warlords fighting to obtain a territorial monopoly on the use of violence. Eventually, one of them prevails and becomes the government. At that time, their crimes are made legal. And because the violence is directed one way, vertically downwards, that’s called “order”.

Government is, to put it simply, the most powerful group of thugs with guns. The first documented political act that I can think of is when Cain murdered his brother Abel. I’m not saying the government doesn’t do anything good and there aren’t a lot of well meaning people in government. But the good government does in apprehending sporadic criminals is because if the government allowed people to behave the way it does with impunity then pretty soon a different government would replace it. The good government does is incidental to its primary function of maintaining a territorial monopoly on the use of violence. If the government permitted its own minions to collect bribes its power would be diffused. If the government permitted anybody to steal with impunity, then before long there would be a new government. As we can see with the SS officers, their offense was not in harming people or even stealing, but in trying to compete with the Reich. Reichsführer-SS Himmler didn’t care about the Holocaust victims, just like Reichsführer-SS Giuliani doesn’t care about innocent detainees being tortured to death.

In Reno, Reichsführer-SS Giuliani boasted that he could successfully prosecute Hillary Clinton not for any of her matter of policy crimes, but for selling protection to UBS bank in Switzerland. This is the same Reichsführer-SS Giuliani who blamed Hillary Clinton for creating ISIS not because she actually helped create ISIS (like she did), but because of the alleged troop withdrawal from Iraq (there are troops in Iraq right now). Pursuant to Reichsführer-SS Giuliani’s calculus, criminal policies are not the crimes, but the efforts to circumvent criminal policies are the crimes.

Rather than plagiarize myself, I will post an excerpt from a previous commentary I wrote regarding Jesse Ventura’s anti-libertarian heresy on campaign finance. To make clear, I was still hoping he would run despite my disagreements. I can think of no better way to illustrate how the government’s war on corruption is corrupt. The trend is not for the government to administer justice but to drive up its cost (i.e. drive up the cost of a “bribe” or protection). My rule is to look for the means to further that trend in every political plan. And that’s why the government prosecutes people like the former police chief Willie Lovett, who deserves a Presidential Medal of Freedom.

Jesse Ventura recently posted a commentary about campaign expenditures. Somehow, campaign expenditures get morphed into both the cause of political crises and the crises itself. From that thought pattern, it then follows that curtailing and/or proscribing campaign expenditures is the way to remedy crises.

While Ventura lamented the First Amendment rights of protesters being curtailed, he simultaneously endorsed curtailing the First Amendment rights of campaign contributors and candidates. Hopefully I am able to draw the nexus between the First Amendment and campaign contributions for Jesse Ventura to see.

Newspapers can deputize their editorial boards to write up editorials in favor, or against, candidates. This amounts to nothing less than a campaign contribution. That doesn’t need to be reported as such. Worse yet, newspapers generally endorse candidates who wish to keep all of the other candidates in handcuffs with the very campaign regulations that newspapers are not bound by. Also, newspapers need not register as PACs, and they need not disclose subscriber lists.

Candidates are bound by disclosure laws, contribution limit laws, and so forth. Meanwhile, a newspaper can deputize its editors to endorse or oppose a candidate. That is, objectively, a campaign contribution. Should the political speech of newspapers be regulated? Should Jesse Ventura’s show be shut down? That would violate First Amendment rights. And so, too, do campaign finance regulations. Campaign finance regulations violate the First Amendment rights of candidates and PACs. So, let’s now see the nexus between the First Amendment rights of commentators and candidates.

About the only addition I could make to my previous commentary that I post below is that legalizing bribery on a blanket basis might actually diminish police brutality. Why? Police officers would feel much more beholden to the citizens whose generosity they rely upon. Before dismissing that argument, please read these two commentaries and consider two different cases involving police officers with different outcomes. In one case, a police officer didn’t arrest people for a victimless “offense” and received 7.5 years in prison. In another case, a police officer actually murdered a man for a victimless “offense” with impunity. See: http://libertyeconomics.com/supporting-the-police-who-enforce-sheldon-adelsons-racket/ and http://libertyeconomics.com/a-prediction-on-police-body-cameras/ Under the current system bribery is legal, but only for politicians. Politicians can bribe us with our own money, but we can’t bribe them with our own money.

Ask yourself why anybody would spend, as Ventura would say, “hundreds of millions of dollars” on elections. It’s being spent in the pursuit of power. The problem is the power. Donors are spending a record amount of money on protection from political candidates. And why is that? They are buying protection from a government that’s the biggest it has ever been. Big government creates demand for protection. The way to solve this is not to rein in campaign expenditures, but to rein in government power. It would be undesirable to rein in campaign expenditures while keeping government intact.

By advocating tighter campaign finance regulations – which Harry Reid advocates as well – Jesse Ventura plays right into the hands of the power brokers. What I found to be very amusing was seeing Reid go back to Washington arguing for tighter campaign finance regulations after the entire Whittemore thing came out. As if that was his way of “atoning” for his transgressions. But just think of the government as nothing but a gigantic conspiracy in restraint of trade. Not to claim accolades, but I wrote a great commentary in which I demolished Ventura’s position about as well as anybody could.  It would be fun to debate Jesse Ventura on this issue.

From my commentary where I demolish Ventura’s position:

I will never forget the time when I was in Tijuana with a few other Marines in the 1990s. Tijuana wasn’t a place I went to often. It’s not the nicest place in the world and, sadly, that’s largely due to what Americans have helped do to the place. If you want to see what a total gun ban looks like, go to Tijuana.

I was with two other Marines. We had just left a bar and were outside. A Mexican national ran up to one of the Marines I was with and handed him a cup of beer. My Marine friend began to drink down the beer and as he was in the middle of doing so a Tijuana police officer came over and threatened my Marine friend with arrest for drinking a beer in public. That had to be the least of the problems going on in Tijuana at the time. We soon figured out why my friend was targeted.

The same Mexican national who handed my Marine friend the cup of beer appeared to “negotiate” with the police officer to not take my Marine friend to jail. The terms were my friend would hand over $20 to the police officer in order to evade arrest. My friend handed over the money which we noticed afterwards was split with the same Mexican national who handed my friend the cup of beer. In the end, we made it back just fine.

Of course that Tijuana police officer was abusing his authority and engaging in petty corruption. But you know what? The issue wasn’t the money he received to not arrest my friend for doing something so many others were doing. The issue wasn’t that he let my friend “walk”. Whenever I shared this story in the past, I would remind people that it’s not really a bad thing you can buy some justice in Mexico for twenty bucks. Cracking down on police officers who sell justice for twenty bucks will merely raise the cost of a bribe (i.e. justice).

Here in the United States you wouldn’t be able to buy justice like that. You would be arrested, hauled off to jail for a few days, miss work and maybe lose your job, and then get fined a few hundred dollars. After all of the other middle men in the criminal justice system get involved, the price of justice goes way up. I’m not one to say all police officers are anxious to use force, but it does seem nowadays like there’s a chance somebody might get tased over an offense like that. And people would go along with the narrative that’s real justice because the police officer strictly enforced all statutes and ordinances created by politicians.

This brings me to the case of Harvey Whittemore which I felt compelled to write about after seeing the front-running Democratic candidate for U.S. Senate in a different state promise to ban members of Congress from ever becoming lobbyists. The more I think about that, the more I get the proverbial butterflies. A proposal like that should send chills down everybody’s spine.

Think about this one. Harvey Whittemore has been prosecuted for skirting campaign finance laws. Is the United States any better off because of that? This should prompt questions. We ought to ask ourselves what, exactly, campaign finance laws beget? In my estimation, campaign finance laws are all about giving the government more power while also curtailing the ability of the people to influence that same government. It’s called power consolidation. Meanwhile, the crimes of the government continue to metastasize.

There’s a paradox in campaign finance laws. While it would be perfectly legal for a wealthy person to self-finance, donating, say, $500,000 to their own campaign, it becomes a crime to donate the same amount of money to another person’s campaign since it’s necessary to use strawman donors due to contribution limits. That wealthy person could run with those funds but they couldn’t use those same funds to help somebody else run. As if the government so cares about donors like Whittemore it had to create these laws to help level the playing field in their own favor.

Let’s take campaign finance laws to their logical conclusion: criminalize all campaign contributions. If all campaign contributions were criminalized, is that going to fix anything? No. The corporate media would have more power to determine the outcome of elections as people find themselves unable to support the candidates they want while the media continues to enjoy its First Amendment right to support and oppose candidates. If somebody wants to run for office they will need to be very wealthy so that they can self-finance. Campaign finance laws are most injurious to the poorer candidates who need to fundraise.

Campaign finance laws are also injurious to candidates who strive to follow the statutes, which places those candidates at a disadvantage compared to candidates who violate campaign finance statutes. In other words, it’s statutory law that created the very system to be gamed. Eliminating donors also centralizes the sources of campaign funding into fewer and fewer hands, compelling politicians to tap more establishment and elite sources of funding. That would beget politicians becoming more and more like carbon copies of one another.

Perhaps that’s why politicians in Nevada who are guilty of far greater crimes than Harvey Whittemore don’t oppose campaign finance laws and have said nothing in Whittemore’s defense. Politicians who even took Whittemore’s money. They’re indifferent to the corruption. What they like is the weaponization of laws, using them selectively to ensnare their political opponents and to remind people they have no business trying to buy some influence. Or maybe prosecutions of people like Whittemore are meant to send a signal to other donors that their contributions better not taper off or else they’re next.

The problem with Washington is not lobbyists per se. We should all be trying to lobby Washington. Restrictions on lobbying and lobbyists drive up the cost of lobbying, putting the less connected lobbyists out of business while also driving up premiums for the services offered by the more connected lobbyists. If we’re so worried about members of Congress being lobbied or becoming lobbyists, then why trust them as members of Congress? Why not just ban what members of Congress are doing to us through legislation and policy? Ban the federal government? Maybe people ought to recognize campaign finance laws were constructed by Congress to keep power entrenched. Which brings me to the real issue: government power.

It’s kind of like government run medicine. It’s inherently inefficient. The solution isn’t for Congress to exercise more oversight over the VA or to get better VA caseworkers. The solution is to get the government out of healthcare, and then veterans can’t be blackmailed with their healthcare. And then there’s no having to decide which candidate, which member of Congress, I must support in order to get the eczema treated.

When it comes to lobbying, I would make the point that if a lobbyist pays a politician $X to do XYZ on their behalf, it’s impossible to say who was bribing whom. Perhaps it’s the power-wielding politicians who play political games, who can threaten companies and people with sanctions, that are bribing people in order to sell their “protection”. Is the campaign contributor buying “protection” or is the politician buying campaign contributions with “protection” from the very schemes that politician creates? Let me distill this even more sharply, and this is “Mark original” writing. Are campaign contributions being used to buy favors or are favors being used to buy campaign contributions?

If you want to curtail lobbying, then curtail government power. It’s not that people try to influence power. It’s the power. The people who prosecuted Harvey Whittemore had the wrong person on the docket. Instead, it should be politicians who are prosecuted for what they are doing to the country as a matter of policy. This is why I’ve never written about alleged kickbacks and payoffs to Reid in exchange for him to do somebody a favor. If Reid can help somebody in exchange for some kind of compensation – no matter how in violation of a statute it might be – it could actually be in the pursuit of true justice. The issue isn’t Reid personally or individually. The real issue is the entire system – a system Reid supports. That’s what makes Harry Reid a criminal.

If you believe that politicians should run everything and that the solution to how everything is being ran straight into the ground is to lock up campaign contributors, you are totally delusional. Things won’t change until we demand governmental agencies and departments get shut down and abolished. For starters, let’s shut down the Department of Homeland Security which trains with paper targets of children. Let’s shut down the VA medical system which is unable to take care of veterans. Let’s end the promiscuous foreign policy of war all over the globe which creates more disabled veterans when we can’t afford to take care of the ones who already exist. By following the Constitution, this would curtail the practice of politicians using favors to buy campaign contributions.

While there are many legitimate reasons to criticize and even prosecute Hillary Clinton, selling protection to UBS bank isn’t one of them. It’s the wrong barrister with the wrong indictment of the right suspect. Reichsführer-SS Rudy Giuliani couldn’t be more mistaken. It’s not the crimes that matter to Reichsführer-SS Giuliani, but that people would sell protection from the crimes. Let’s not forget Reichsführer-SS Giuliani defends Trump on tax avoidance, and I agree with him as it is certainly not in anybody’s interest that billionaires pay taxes to empower government even more so. Tax fairness should not be defined by taxing the rich, but by eliminating taxes on everybody.

This is another example of how Republicans and Democrats engage on the wrong issues in an effort to thrust us deeper into a constitutional crisis. It reminds me of Clinton’s email controversy. Pursuant to the Reichsführer-SS, it’s not the matter of policy crimes committed by Hillary Clinton, but that she isn’t good at securing information which can lead to us mere mundanes finding out about those matter of policy crimes. Hillary Clinton’s carelessness with state secrets might be her main excellence. Call it unintentional transparency. The perfect solution to the Clinton Foundation is to liberalize laws on bribery. If Reichsführer-SS Giuliani can claim accolades for knowing that he could successfully prosecute Hillary Clinton for selling protection to UBS, then I will claim accolades for knowing I could successfully defend Hillary Clinton on those particular charges.

Damning information about Hillary Clinton ‘leaked’

I’m “leaking” damning information about Hillary Clinton right here.

If you have read anything I’ve written in the past, you would know that at times I’ve been soft on Clinton. Albeit, I have made it clear that she is a neocon who belongs in prison. My issue is with the duplicity of Republicans. I believe it’s a mistake to throw energy and resources into defeating a neocon with another neocon who may even be worse than the one being defeated. As bad as Hillary Clinton is, it’s very possible Donald Trump ends up being worse. If a person supports torture, as does Trump, that person is a neocon. Just because one opposes the use of torture, while commendable, doesn’t make the person not a neocon.

To save the world, I have decided to “leak” some very damning information about Hillary Clinton which should cause her to lose the election. No. I don’t support Trump. I support Gary Johnson. Hopefully, this information “leak” will help Gary Johnson defeat Clinton. Unfortunately, many Americans miss crimes carried out as a matter of policy that are “hidden” in plain view. It’s like people become myopic as they search for the esoteric. Some people even cheer on matter of policy crimes as they quarrel over sexual exploits and lewd comments. This means my “leak” most likely won’t have the intended effect.

Hillary Clinton has supported the failed drug war. Not only does she support the drug war, which is a price support mechanism for the medical and pharmaceutical industrial complex, she also supports the government’s war for mandatory drugs from the medical and pharmaceutical industrial complex. I’m not saying using marijuana is good, but by what right can the government jail somebody for voluntarily using marijuana while psychiatrists at the VA promiscuously prescribe a plurality of dangerous drugs simultaneously to veterans? I’ve said before that veterans may live longer by not receiving care at the VA. See: https://www.washingtonpost.com/local/family-of-marine-who-died-at-wisconsin-va-center-files-suit/2016/08/29/ef4a6948-6e54-11e6-993f-73c693a89820_story.html If you actually care about what happened to that Marine and his family, you are the “bad” one who the VA tries to drug. The drug war has never been a war against drugs, but for certain drugs. How drug warriors can speak with a straight face while simultaneously advocating throwing more money at the VA is breathtaking.

It was Bill Clinton’s administration that first implemented the Anthrax Vaccine Immunization Program, which was going to inoculate all military service members in all four branches and in both active and reserve components. Hillary Clinton did nothing to stand up for the troops. Instead, she supported mandatory vaccines for the troops, just like she supports mandatory vaccines for the people. It would be bad enough for local and state government to compel people to take vaccines. But there’s absolutely no excuse for the federal government to compel people to take vaccines. Vaccines shouldn’t even be a federal issue, period.

On a peripheral note, when I opposed the Anthrax Vaccine Immunization Program under Bill Clinton in 1999 and 2000, I was considered a “right wing conservative” for doing so. But a few years later, when the Bush administration resurrected the same program, I was considered a “left wing liberal” for opposing the same exact policy. If that doesn’t crystallize how fraudulent the political paradigm is, then I don’t know what would. That’s what happens when people conflate conservatism with supporting Republicans while failing to exchange in real ideas.

Some have argued that the government can order troops into battle, and so, too, can it order troops to take vaccines. Some have compared mandatory vaccines for the troops to wearing body armor. But let’s not forget that the anthrax vaccine, when forced on the troops, was a completely experimental vaccine. I’m far from the only person who believes the government was violating the law by compelling troops to take the anthrax vaccine. Senator Richard Blumenthal authored similar opinions while he served as Connecticut State Attorney General. See: Connecticut State Attorney General Richard Blumenthal Statement On Anthrax Vaccine.

Furthermore, there’s enough anecdotal evidence to conclude that the anthrax vaccine isn’t safe. Formal evidence is hard to come by, because the very authorities who compile that evidence have deliberately ignored the evidence. There are so many examples of service members who were once healthy, but then ended up with health problems or even died posterior to receiving the anthrax vaccine. One particular case that sticks out in my mind is that of Rachel Lacy, an African-American, whose story I read about at the time. I even spoke to her father briefly to extend my condolences. Unlike politicians in Washington, I actually care about the troops. See: http://www.upi.com/Father-of-dead-soldier-claims-Army-coverup/37551060294351/

Even in combat, the goal is to survive. Everything done during combat is designed to mitigate risk while amplifying strength. If you are on the battlefield, you don’t try to make yourself a bigger and easier target. Even if you disagree with me about the safety and efficacy of the anthrax vaccine, for sake of argument, let’s say the anthrax vaccine isn’t safe. Would it be wise to compel the troops to take something that is detrimental to their own health? How would enhancing risk be tantamount to wearing body armor, which is designed to mitigate risk?

Even if you believe vaccines are safe and effective, there’s no legitimate reason for any level of government to compel people to receive vaccines. If vaccines are safe and effective, people will voluntarily receive vaccines. There is no need for the government to create market demand. Military service members are no exception to this rule.

By using the force of law to compel people to receive vaccines, this undermines safety and efficacy. Why? It disconnects sustenance from the satisfaction of consumer demands. The most efficient quality control mechanism is having to meet a profit-and-loss test on the free market, where firms have to earn income by satisfying consumer demands. With compulsory vaccines, consumers haven’t the power to rein in products of inferior quality.

Vaccine manufacturers have been granted liability protection from the government. That makes it impossible to hold vaccine manufacturers accountable in any way whatsoever. Under no circumstances should an industry that enjoys liability protection be able to force its products on consumers. If one is going to support compulsory vaccines, they should at least oppose liability protection. Or if one is going to support liability protection for vaccine manufacturers, they should at least oppose compulsory vaccines. On a peripheral note, guess what justices support liability protection for vaccine manufacturers? See: http://www.cbsnews.com/news/supreme-court-vaccine-ruling-parents-cant-sue-drug-makers-for-kids-health-problems/ But we “need” Republicans to control the government so they can push through their Supreme Court picks!

Why reduce the matter of health down to vaccines of questionable safety and efficacy? If one is going to accept the health police, then at least be logically consistent. There should be no debate about whether or not vegetables are good for the health. Why not compel people to eat vegetables? After all, poor diet could make one more susceptible to communicable diseases and consequently a “health risk”. That the government would rather compel people to take vaccines of questionable safety and efficacy than compel people to eat vegetables should make it self-evident that it has nothing to do with advancing health. What would be the reaction if I ran for POTUS and advocated compelling people to eat vegetables? Of course, there’s no money to be made in compelling people to consume something that can come from non-politically-connected sources.

If we’re going to have a health police, why not ban risky sexual practices rather than turning them into protected civil rights? That’s not my position, to make clear. I’m merely illustrating the paradoxical nature of permitting risky sexual practices in the name of upholding civil rights, but then trampling civil rights by denying people choice over what goes inside of their bodies. I’m saying if we’re going to have the health police, then be logically consistent. It’s politically correct to compel people – including gays – to take vaccines that may be unsafe and ineffective, but it’s politically incorrect to compel people to abstain from risky sexual practices.

There is no such thing as the public health. There is the health of individuals. If vaccines really work, then all one must do to be protected is to take the vaccines. Those who choose to remain unvaccinated would pose no risk but to themselves.

Not only is there no legitimate reason to compel people to receive safe and effective vaccines, but there’s an abundance of evidence that vaccines are actually unsafe and ineffective.

Medicine isn’t an empirical science. Medicine is a science based on historicism, not empiricism. Orthodox medicine certainly has its value, especially in the area of acute trauma. Orthodox medicine might be very good at fixing broken bones. But does that mean we have already discovered the most effective way to fix broken bones? Should we discount the possibility that one day somebody might develop an even better method to fix broken bones?

If ten people receive the polio vaccine and none of those ten people contract polio, the medical establishment will tell you that’s because of the efficacy of the polio vaccine. But the real question is what would have otherwise happened to those ten people had they not received the polio vaccine, with all other variables remaining static? There is no way to go back in time and see what would have otherwise happened. That’s why medicine is based upon historicism, not empiricism. One can show correlation, but not causation. Pursuant to the calculus employed by the medical establishment, one could likewise blame every illness a vaccinated person has on vaccines.

I had to receive the first three shots out of the anthrax vaccine series shortly before my End of Active Service date in the Marine Corps. My unit’s policy was to make us start on the shots even though we were about to get and I was so close to getting out that two of the shots I received were administered after my final physical. Posterior to receiving the anthrax vaccine, I ended up with some health problems. I have learned from first hand experience that nobody is keeping track of adverse reactions. If I hadn’t filled out and submitted a VAERS report, it wouldn’t have ever happened. I can assure you that medical authorities aren’t studying adverse reactions to vaccines.

The best response I have received from doctors in the VA medical system is that they aren’t there to discuss the anthrax vaccine but to deal with the health complaint. When a local television station in Minneapolis ran a story on my experience with the anthrax vaccine in 2001, the reporter contacted the VA medical facility and asked if anybody there knew anything about the anthrax vaccine. The response? Nobody knew anything about the anthrax vaccine. Simultaneously, it was all over in my VA medical records that I was somehow delusional and/or psychotic for believing the anthrax vaccine could precipitate health problems! In fact, I have a memo from early 2000 that literally says the VA needs to start a psychosocial profile on me ASAP because I believe squalene was put into the anthrax vaccine. It really was!

For writing a commentary like this very one, people at the VA would love to try to push some dangerous psychiatric drug on a veteran. At the very least, conflate any question of vaccines with some type of anxiety disorder. That’s how the place operates, which is why I haven’t been to the VA in nine years.

Medical practitioners will also use circular reasoning to ignore adverse reactions. Rather than letting the data determine the statistics, they use faux statistics to manipulate the data. Early on, there were times I was told that there is no way any of my health problems could be from the anthrax vaccine because there’s no evidence (i.e. the statistics don’t show a problem with the vaccine) to indicate the vaccine causes health problems. Therefore, there was no reason to even consider a nexus and document the health problems, passing the information onto the proper medical authorities. That was early on, before the product insert had to be redacted showing a much higher adverse reaction rate and before more information came out because the truth could no longer be contained.

I have been vaccine free since I had to receive the anthrax vaccine in 1999. I’m pleased to report that I don’t get the flu vaccine and I don’t get the flu. Conversely, I have heard people tell me that they knew somebody who had gotten a flu vaccine and then became incredibly ill or even died. Like my experience with the anthrax vaccine, I am told that nobody seemed to be keeping track of these adverse reactions.

On a peripheral note, the biodefense stockpile for the United States, which includes the anthrax vaccine, is numbered 666. I’m not making this up. Don’t believe it because I say it. Go look up the information yourself. You can even go to the website for the biodefense stockpile and look up different vaccines and check out the stockpile number. See: http://www.biopharma.com/ From that website, go to the Product database link towards the top of the page. In the search box at the top of that next page, type in US666 (just like that with no spaces). Click on any of the vaccines that come up. Scroll down to the bottom of the page under Regulatory/Status Index. I don’t mean to sound eccentric, but just wanted to throw this tidbit of information out. Even if you aren’t a believer in Christianity, isn’t that enough to make you pause before getting a vaccine?

When Hillary Clinton supports mandatory vaccines, she is defending the indefensible. Anybody who believes the government ought to compel people to receive vaccines is supporting fascism and the violation of people’s human rights. This makes Hillary Clinton unfit for the White House. The only question is does her support for Senator Richard Blumenthal atone for, and offset, some of her past transgressions? I don’t believe so, because I don’t believe she has done an about face on mandatory vaccines. Gary Johnson takes the position that upholds civil liberties and human rights. He’s the only candidate who has said he would shut down any part of the federal government. The government in Washington is after our rights in a plurality of ways. It’s a criminal organization that must be wiped out. We are under attack, and I believe Gary Johnson is the best candidate to mitigate these attacks.

Alan Keyes hits, Pat Buchanan misses

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.

Rex Tillerson is a true patriot

Attorney General Loretta Lynch’s priorities are a bit inverted from a constitutional and legal perspective. Ms. Lynch has directed the FBI to investigate Exxon Mobil for not parroting climate change propaganda. See: https://www.rawstory.com/2016/05/ted-cruz-joins-gop-group-demanding-that-justice-dept-stop-probing-big-oils-climate-denial/ Not only does the cartel want to enforce its price fixing scheme, but it wants to criminalize dissent.

While threatening people and companies with sanctions for dissent, torturers and war criminals who pose a serious threat to the national security of the United States remain free. Why are we seven years into the Obama administration and Dick Cheney remains free? That the Obama administration has failed to prosecute war criminals, committing new war crimes, is precisely why Obama bears some responsibility for Donald Trump. The real amnesty scandal that nobody in Washington is debating is amnesty for war criminals. Lynch is the quintessential example of Murray Rothbard’s law that people tend to specialize in what they are worst at. She’s one of the worst barristers in the country, so she becomes the Attorney General.

I’m reminded of a plea from a Congressman I saw many years ago encouraging people to report price gouging at the gasoline pump. If somebody saw a gasoline price that deviated upwards from some “normal”, they were encouraged to report it to some hotline. Simultaneously, there are regional committees that enforce regulations against undercutting on the price of gasoline. In other words, the real purpose of the central planners was to enforce the same price.

There’s only one reason to set similar prices amongst vendors, and that’s not to curtail price gouging, but to fix prices upwards. The market will naturally punish price gouging, driving gougers out of business. How so? If a vendor is selling gasoline 5 or 10 cents higher than other gas stations, that vendor will lose market share to other vendors. If somebody sees higher prices on the same gasoline, don’t call a hotline. Buy the cheaper gasoline. Furthermore, how do we know what vendors are price gouging and what vendors are undercutting? If half the stations have a price that’s lower than the other half, is one half price gouging or is one half undercutting?

That price gougers can’t succeed in the free market is why cartels must rely upon government intervention and support. All participants must raise prices in synchronization with one another. The moment one participant begins to set prices pursuant to supply vs. demand, the entire cartel begins to collapse. The problem for the cartel is that even if all participants set prices pursuant to the price fixing scheme, vendors can’t short inventory at prices above what consumers are both willing and able to pay. Higher prices beget fewer consumers, diminishing the volume of sales.

The campaign against fossil fuels has nothing to do with saving the environment. It’s all about price fixing by erecting barriers for oil producers that benefit the big oil producers and big “green” energy companies that can’t compete against fossil fuels. It’s about the restraint of trade to curtail competition. Not only is it about price fixing, it’s about waging war against humanity. Restricting the supply of energy is most injurious to the poor. On one hand, the government offers subsidies to people with low income. On the other hand, the government pursues policies that raise the cost of living.

The key to an economic recovery does not rest in Washington. The key to an economic recovery is to put Washington through a recession. Any efforts by politicians to con you into believing they’re stimulating some kind of economic progress – again, bribing you with your own money – by promoting one form of energy or another should be detected as a ruse.

Some politicians have gone “green” in the name of curtailing “dependence on fossil fuels” and “foreign oil”. It’s a sham. Why not promote a certain type of underwear in the name of curtailing dependence on a particular foreign brand?

The fundamental problem is that most politicians and central planners view the economy as a blob to be manipulated, rather than a complex capital structure involving individuals making choices in exchanges, a process of production, and a price mechanism.

Last year, the United States imported about 4.5 million barrels of oil per day more than it exported. The reason why the United States is so dependent upon foreign oil is due to policies that have already been put in place. The solution, then, is to repeal and correct these policies – not creating new legislation.

Artificially low interest rates, brought on by loose monetary policy at the FOMC, drives capital overseas (by deploying unearned income from a printing press, disconnecting consumption from production, capital is also consumed). Capital naturally gravitates to cheaper, more efficient, higher-yielding economies. Rather than generating revenue and income, the nation spends beyond its means. That’s the short explanation. I hate to spend time belaboring the long answer, because I have already done so in previous commentaries.

Look at it like this: if a person, firm, or nation is dependent upon inflationary credit expansion (as opposed to credit expansion out of savings), then that person, firm, or nation is insolvent and inefficient. We are spending beyond our means, which – yes – engenders dependence upon cheaper markets to supply us with production.

If you want to reduce dependence upon foreign “anything”, then the Fed has to tighten, forcing up interest rates, and Washington has to abandon the spending orgy. Dollars that have been accumulating in foreign reserves will then come flowing back into the domestic loan market, begetting lower interest rates.

I know “clean energy” sounds so nice, so attacking it is very “environmentally-incorrect”. I will put everything I possibly can into layman’s terms. Let’s start with the following axiom: we consume energy in everything we do. If you’re that environmentally-conscious, you shouldn’t be online reading this right now because you’re using electricity which is consuming energy. That’s why I’m confident that everybody reading this agrees with everything I write in this commentary.

Solar energy sounds so nice. After all, it comes from the sun. But let’s not forget that there is a process of production. Take, for example, the solarization of a house. Solar energy requires panels, charge controllers, batteries, inverters, etc. And then let’s not forget capital asset depreciation. Energy is consumed during the process of production.

If “clean energy” has a positive yield, then it will be profitable and private enterprise will pony up the capital. The government need not encourage this. If “clean energy” has a negative yield, then this means that it is unprofitable and dependent on so-called “dirty energy” for its sustenance. It would be akin to consuming 1,000 blueberries for every 500 you are growing – nobody in their right mind would pursue that course absent government subsidies. Somewhere, you have to make up the difference.

I’m not arguing that solar power is necessarily inefficient, but that the market will naturally produce the most efficient and cleanest forms of energy. It’s the pursuit of profits on the free market that engenders efficiency. It’s government intervention in the marketplace that engenders inefficiency and the needless consumption of resources. Government subsidies enable firms to produce inefficient energy. By mandating inefficiency, only those with political connections can compete. Conversely, sound economic policies enable firms to supply efficient forms of alternative energy absent government support.

This leads me to the following axiom: the most profitable and economically-efficient form of energy, within the construct of the unhampered market, is also the cleanest form of energy. Also, pretending that global warming is real, does this mean we should rely upon government coercion to solve the problem? Cancer is real, but that doesn’t mean we should trust the government to run our healthcare. Rather than saying end our dependence on oil, if you support “clean energy” then you should be saying end our dependence on government intervention.

The best ecological hygienist is the unhampered market. Suppose a logging company owns a forest. That logging company can clear-cut the forest, say, tripling immediate income. However, this must be weighed against diminishing future income, or the capital value of the forest as a whole. Suppose, however, this is government property. This calculation no longer needs to be made, and the objective is going to be rapid extraction of resources.

No shocker, then, that government is the biggest abuser of the environment and waster of resources. Look at the atomic weapons tests done in the Nevada desert – and right on top of our own military service members. Or think about the government’s war policy, which both major parties support. Last time I checked, there are no CAFE standards on tanks. How are exploding munitions good for the environment?

The government does not sustain itself by satisfying consumer demands, but through compulsory taxation. Government subsidies to, and control over, industry diminishes the need to set prices pursuant to supply vs. demand. Why? Because sustenance is no longer dependent upon having to satisfy consumer demands. Sustenance is disconnected from the satisfaction of consumer demands.

It’s the price mechanism that ensures resources are allocated and managed efficiently. The price mechanism can only function within the construct of the unhampered market, allowing for producers to set prices pursuant to supply vs. demand (i.e. market-clearing prices). The scarcer the supply, the greater the demand, the higher the price. Consumption runs inversely with prices.

Government subsidies distort prices, interfering with the price mechanism, and cause prices to be set above, or below, market-clearing prices. There is a paradox in government policy in that the government encourages consumption without production (in the name of demand-side stimulus), tells us that we should conserve resources, while simultaneously punishing “price gouging”. Within the construct of the unhampered market, there can’t be price gouging any more than there can be wage gouging, since vendors can only short inventory at prices consumers are both willing and able to pay.

Prices send signals to entrepreneurs, telling them where to deploy capital. Prices tell entrepreneurs what to produce and what not to produce. Prices tell consumers what to buy and what not to buy. The price mechanism can only function within the construct of an unhampered market. There’s no need for the government to encourage or discourage the use of any kind of energy. And let’s not forget that tax credits are subsidies camouflaged as tax cuts. A tax credit merely allows a person to use a portion of their income for a specific purpose (i.e. indirect subsidy). See: http://libertyeconomics.com/reichsfuhrer-ss-rudy-giuliani-vs-hillary-clinton/

I write as a native-Minnesotan. Minnesota is one of the states that mandated the use of ethanol-blend fuels. I only purchase ethanol-blend fuel if there’s no other option. I will not purchase anything over E10. It’s “cheap” for a reason: it’s inefficient.

Only can politicians get away with turning efficient food into inefficient fuel. If politicians keep at it, we will soon be filling our automobiles up with corn and drinking motor oil. Maybe after installing those solar panels, the government can begin shooting those pollution particles – which supposedly ”clean energy” is designed to diminish – into the atmosphere in order to block the sun and “save” us from “global warming”. Sounds like the perfect plan. One only a politician in Washington can dream up. See: http://www.telegraph.co.uk/news/earth/environment/climatechange/5128109/Shoot-pollution-particles-into-atmosphere-to-cool-Earth-says-Obama-adviser.html

As I wrote almost a decade ago, we will soon not only be dependent upon foreign sources of fossil fuels, but also so-called “clean energy”. That’s came to pass. Unfortunately, it was due to misguided policies coming from Washington.

It’s time for somebody to investigate Loretta Lynch for working on behalf of a price fixing cartel. If the government wants to threaten people for speaking truth, that will only prompt me to speak truth even louder. If the FBI wants to investigate truth, good. They’re more than welcome to ask me any questions. Somebody needs to look into the benefits of free markets – and take another look at 9/11 for that matter. I don’t care how tyrannical the government in Washington becomes, I will continue to stand up to an out of control and lawless government. The more tyrannical that government in Washington behaves, the greater is the fiduciary responsibility we all have to speak truth. Rex Tillerson is honoring his fiduciary responsibility as an American.

Good people don’t vote for Jeff Sessions

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

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.

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-yielding, more efficient economies. The only way to repatriate capital is for the central bank to stop inflating, forcing 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.

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