I travel with my pistol and I have a proper gun case and the required TSA locks. Federal law mandates that you declare your firearm at check-in, then a TSA agent checks it out and then it is checked in your luggage. In my lateness and rush I forgot to declare my pistol. Turns out it doesn't matter because they didn't catch it in their screening. It was obviously a firearm and it was at the top of my bag, but it still wasn't caught. It could have very well a been bomb in a terrorists luggage. I hope TSA searching Grandma makes you feel safer, because to me it looks like they don't know what they are doing. When are we going to stop turning over our personal sovereignty over to the federal government in exchange for security, when it's obvious we'll get neither?
Merry Christmas!
Friday, December 24, 2010
Friday, June 25, 2010
The Case for Small Government in the BP Oil Spill
In the first 30-45 days of the BP oil spill there was an outcry from small government conservative governors and legislators who were pleading with the federal government to speed up the response and increase available resources to fight the oil spill. Many people in the media were asking if there was a contradiction in their philosophy. How can one be so opposed to big government, but when things go wrong they scream and yell for government assistance? This is a great question, but it was answered very poorly by those who were asked.
After the recent trend of botched relief/recovery operations by the federal government e.g. Hurricane Katrina and BP Oil Spill it would seem that the government is trending downward in what would be considered its critical functions or core competencies. What is the cause of this decline and what can we do to correct it?
The concept of the "core competency" is something that business has understood for a long time. Essentially, the concept embraces the principle that the further away you get from what you are good at then the less effective you will be at doing anything. This has been proven true by the government and businesses and as of late the gulf coast has suffered the most. The original intent for our government can be summed up best by Thomas Jefferson:
With government now running health care, parts of the automotive industry, and large swaths of the financial industry, while also eyeing takeovers for newspapers, radio and other media it is clear they have strayed from the government's rightful scope intended by our founding fathers. This new direction puts more strain on already scarce resources and puts people at risk. When lives and livelihoods are at stake in situations like the BP Oil Spill we simply cannot afford a fractured government that lacks focus and competence in its critical functions. When the federal government proves itself to be impotent and restricts state and local government from doing what needs to be done, then it is the responsibility of the states to shrug off the federal government and do what is necessary to protect its citizens. In turn, it is the citizens responsibility to protect those elected officials that choose to take the risk and do the right thing. Force your elected leaders to take a stand and hold their feet to the fire. Whether its your local, state or national leaders don't allow them to continue to make big promises with no results. Don't continue to allow a government that makes mediocrity something to strive for.
In conclusion, the simple truth is that if the government were smaller, it would be more effective during the times we really need it. So the outcry from small government advocates should continue. After all if they had their way with government then most of this pain could be avoided. Our question should no longer be what power and responsibility can we give the government, but what power and responsibility should we give the government?
After the recent trend of botched relief/recovery operations by the federal government e.g. Hurricane Katrina and BP Oil Spill it would seem that the government is trending downward in what would be considered its critical functions or core competencies. What is the cause of this decline and what can we do to correct it?
The concept of the "core competency" is something that business has understood for a long time. Essentially, the concept embraces the principle that the further away you get from what you are good at then the less effective you will be at doing anything. This has been proven true by the government and businesses and as of late the gulf coast has suffered the most. The original intent for our government can be summed up best by Thomas Jefferson:
"A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
With government now running health care, parts of the automotive industry, and large swaths of the financial industry, while also eyeing takeovers for newspapers, radio and other media it is clear they have strayed from the government's rightful scope intended by our founding fathers. This new direction puts more strain on already scarce resources and puts people at risk. When lives and livelihoods are at stake in situations like the BP Oil Spill we simply cannot afford a fractured government that lacks focus and competence in its critical functions. When the federal government proves itself to be impotent and restricts state and local government from doing what needs to be done, then it is the responsibility of the states to shrug off the federal government and do what is necessary to protect its citizens. In turn, it is the citizens responsibility to protect those elected officials that choose to take the risk and do the right thing. Force your elected leaders to take a stand and hold their feet to the fire. Whether its your local, state or national leaders don't allow them to continue to make big promises with no results. Don't continue to allow a government that makes mediocrity something to strive for.
In conclusion, the simple truth is that if the government were smaller, it would be more effective during the times we really need it. So the outcry from small government advocates should continue. After all if they had their way with government then most of this pain could be avoided. Our question should no longer be what power and responsibility can we give the government, but what power and responsibility should we give the government?
Sunday, June 13, 2010
A Second Look at Public Health Care
While I am a consumer of PBS television and enjoy their relatively calm take on the days events I often find myself repulsed by the slant of their "journalism" or the views their commentators take on certain issues. I was especially appalled on a National Press Club debate on the subject of health care rationing. While this nudge toward more control is not surprising to many who are/were paying attention it is surprising at the speed at which its arrived.
The latest public testament from the progressive left is the doctrine of health care rationing. People who spoke up during the public debate that spoke of the coming health care rationing and "death panels" were derided as sensationalists or inflammatory and were quickly dismissed. It seems however that these voices in the wilderness were speaking the truth.
The vicious cycle of government intervention into the free market with one variation or another goes something like this; The government sees something that they would like to make more available to the public, the next step is some sort of guarantee through takeover, public financing or mandate. These artificial constraints on the marketplace flood the market with new consumers and higher demand which deplete resources and create shortages. The government responds to these shortages by rationing. So the market always wins, but what we must look at is in what context does it claim victory? Does it claim victory with the drab and grey backdrop of social democracy with ever increasing controls and intrusion into our daily lives? Or does it claim victory in the dynamic and bold marketplace of a liberal Republic with our liberties still intact?
A common sentiment in the pro-rationing movement is that they believe that if we are able to focus resources through the government we will be able achieve a specific desired result. For instance, the pro-rationing debaters posited that if we could re-focus the resources that companies expend on researching what this panel viewed as unnecessary technologies then so much more could be accomplished. On the surface this may appear to make sense, but it violates a principal that Friedrich Hayek (1974 Economics Nobel Laureate) outlined in "The Constitution of Liberty" that says that the more focused or centralized resources are, the less likely that certain discoveries that we currently know nothing about can be made. Essentially supporting the Socratic Maxim that, "The only real wisdom is knowing you know nothing". I think this is a valuable ethic, but alas it is very difficult for it to penetrate the cloud of smug and ignorant self assurance that hangs like a plague in the halls of government.
Another common sentiment is that if only Grandma would die quicker we could devote so much more in the way of money and health care infrastructure that many other lives could be saved. With a straight face and no recognition of the evil they eruct they posited that essentially grandma has no real right to make these decisions for herself because after all we are paying for this now. With all of the research done on comparative effectiveness the "community" has decided that this hip replacement or that pacemaker really gives no benefit to society because she is no longer a producer. Meanwhile Grandma twists in the wind and we justify our evil deeds by telling ourselves that this is what she really wants, that sick people don't think rationally and that they can't be trusted to make decisions regarding their own health.
These are not American ideals. These ideas come from a long and dark world history where the state or the "community" made decisions for people, where the state was sovereign and the individual subject. These are not our values. The sovereignty of the individual is at stake and if it's lost it is very difficult to restore.
The latest public testament from the progressive left is the doctrine of health care rationing. People who spoke up during the public debate that spoke of the coming health care rationing and "death panels" were derided as sensationalists or inflammatory and were quickly dismissed. It seems however that these voices in the wilderness were speaking the truth.
The vicious cycle of government intervention into the free market with one variation or another goes something like this; The government sees something that they would like to make more available to the public, the next step is some sort of guarantee through takeover, public financing or mandate. These artificial constraints on the marketplace flood the market with new consumers and higher demand which deplete resources and create shortages. The government responds to these shortages by rationing. So the market always wins, but what we must look at is in what context does it claim victory? Does it claim victory with the drab and grey backdrop of social democracy with ever increasing controls and intrusion into our daily lives? Or does it claim victory in the dynamic and bold marketplace of a liberal Republic with our liberties still intact?
A common sentiment in the pro-rationing movement is that they believe that if we are able to focus resources through the government we will be able achieve a specific desired result. For instance, the pro-rationing debaters posited that if we could re-focus the resources that companies expend on researching what this panel viewed as unnecessary technologies then so much more could be accomplished. On the surface this may appear to make sense, but it violates a principal that Friedrich Hayek (1974 Economics Nobel Laureate) outlined in "The Constitution of Liberty" that says that the more focused or centralized resources are, the less likely that certain discoveries that we currently know nothing about can be made. Essentially supporting the Socratic Maxim that, "The only real wisdom is knowing you know nothing". I think this is a valuable ethic, but alas it is very difficult for it to penetrate the cloud of smug and ignorant self assurance that hangs like a plague in the halls of government.
Another common sentiment is that if only Grandma would die quicker we could devote so much more in the way of money and health care infrastructure that many other lives could be saved. With a straight face and no recognition of the evil they eruct they posited that essentially grandma has no real right to make these decisions for herself because after all we are paying for this now. With all of the research done on comparative effectiveness the "community" has decided that this hip replacement or that pacemaker really gives no benefit to society because she is no longer a producer. Meanwhile Grandma twists in the wind and we justify our evil deeds by telling ourselves that this is what she really wants, that sick people don't think rationally and that they can't be trusted to make decisions regarding their own health.
These are not American ideals. These ideas come from a long and dark world history where the state or the "community" made decisions for people, where the state was sovereign and the individual subject. These are not our values. The sovereignty of the individual is at stake and if it's lost it is very difficult to restore.
Friday, March 26, 2010
Viva La Revolucion!!!!
Its not often that I say this, but I think I agree with him. President Obama has done what I didn't think was possible and has signaled that he would like to lift some if not all of the restrictions on travel and trade with Cuba. This is welcome news for those who love liberty. It should never be up to the government to decide who the sovereign citizens of the United States can or should trade with or visit. Although I understand there are limits to this line of thinking it should be a general principle that our nation should try to adhere. Read the article below and start making your travel plans, unless you're are one of the many who'll object to this decisiion. So what are your thoughts? Can't wait to hear what you have to say!
Cuba Readies for U.S. Tourists With Luxury Hotels (Update1) - Bloomberg.com
Cuba Readies for U.S. Tourists With Luxury Hotels (Update1) - Bloomberg.com
Wednesday, March 24, 2010
Groupthink and Pragmatism
Groupthink or the "mob mentality" is a very interesting phenomenon that we see all over the world, but I am particularly interested in the American brand of groupthink. While in other parts of the world groupthink is largely of nationalistic, ethnic or religious origin, American groupthink is different. Granted, we have elements of nationalistic, ethnic or religious groupthink in our country, but the American form of groupthink is highly political and frankly a little puzzling. Traditionally Americans have liked to think of themselves as individualistic and self-reliant, even the most ardent American progressive usually has an individualistic bent, but thats not exactly what I am talking about.
In a nation as vast and diverse as the United States of America I have a hard time understanding that nearly 100% of the votes cast in the last presidential election were cast for one of the two major parties. Do these parties really represent our country? To the outside observer I think the two party platforms would seem to contradict themselves and appear to be bit contrived. So why do we tend to fall into line? Are we intellectually lazy? Do we like the comfort of being part of a larger group and were simply born into a two party system?
On one side of the aisle we have a party that embraces individual or "social" freedoms they don't extend that same tolerance to people of faith who are open about their opposition or disagreement with elements of their platform. When it comes to economic freedom they believe its the government's right and obligation to bend the will of the individual to achieve any stated goal that they deem necessary or beneficial to the collective. They often fuse their interests with large corporations and organizations in a fascistic attempt to achieve their goals.
On the other side of the aisle you have a party that embraces economic freedom and sees private property as an individual's sacred right. However, they don't see personal behavior on the same plane. They believe that morality and "family values" are of the utmost importance for societal health, which necessitates the use of government power to impose their moral will on the population. While they would never acknoledge it or agree, they are essentially seeking to create a Christian Caliphate inside the United States.
So where are their principles? I wish I could say that I cannot understand how people can compartmentalize their views and operate as though principles apply to one viewpoint and not another. 3 or 4 years ago I would have been counted amongst that latter party. So often I talk to people who apply sound reason in every other aspect of their life, whether its their businesses, their relationships, or a sporting activity, but as soon as politics or religion enters the equation they absolutely lose their minds. I think what happens when we stop the groupthink, we discover our principles. It is my assertion that if you stop the groupthink and discover your principles then you will never be happy with our current two party system. In my view the political spectrum is divided into three segments:
Classical Liberals-
A political philosophy that places high value on individual freedom based on a belief in natural rights that exist independent of government. In its pure form, for example in contemporary libertarian thought, it holds that the best government is minimal in scope, providing security, but promoting laissez-faire policies towards morality, religion, the economy, and the rest of social life.
http://www.laits.utexas.edu/gov310/DC/glossary.html
Pragmatists-
A movement consisting of varying but associated theories, originally developed by Charles S. Peirce and William James and distinguished by the doctrine that the meaning of an idea or a proposition lies in its observable practical consequences.
http://www.answers.com/topic/pragmatism
Statists-
The theory or practice of concentrating economic and political power in the state, resulting in a weak position for the individual or community with respect to the government.
www.thefreedictionary.com/statism
When you break it down both of our parties are pragmatists, due to their irresistable urge for government action if anything undesirable happens. The problem with this is time and time again throughout history this has led to statism and tyranny in one form or another. So where do you stand? What are your principles?
In a nation as vast and diverse as the United States of America I have a hard time understanding that nearly 100% of the votes cast in the last presidential election were cast for one of the two major parties. Do these parties really represent our country? To the outside observer I think the two party platforms would seem to contradict themselves and appear to be bit contrived. So why do we tend to fall into line? Are we intellectually lazy? Do we like the comfort of being part of a larger group and were simply born into a two party system?
On one side of the aisle we have a party that embraces individual or "social" freedoms they don't extend that same tolerance to people of faith who are open about their opposition or disagreement with elements of their platform. When it comes to economic freedom they believe its the government's right and obligation to bend the will of the individual to achieve any stated goal that they deem necessary or beneficial to the collective. They often fuse their interests with large corporations and organizations in a fascistic attempt to achieve their goals.
On the other side of the aisle you have a party that embraces economic freedom and sees private property as an individual's sacred right. However, they don't see personal behavior on the same plane. They believe that morality and "family values" are of the utmost importance for societal health, which necessitates the use of government power to impose their moral will on the population. While they would never acknoledge it or agree, they are essentially seeking to create a Christian Caliphate inside the United States.
So where are their principles? I wish I could say that I cannot understand how people can compartmentalize their views and operate as though principles apply to one viewpoint and not another. 3 or 4 years ago I would have been counted amongst that latter party. So often I talk to people who apply sound reason in every other aspect of their life, whether its their businesses, their relationships, or a sporting activity, but as soon as politics or religion enters the equation they absolutely lose their minds. I think what happens when we stop the groupthink, we discover our principles. It is my assertion that if you stop the groupthink and discover your principles then you will never be happy with our current two party system. In my view the political spectrum is divided into three segments:
Classical Liberals-
A political philosophy that places high value on individual freedom based on a belief in natural rights that exist independent of government. In its pure form, for example in contemporary libertarian thought, it holds that the best government is minimal in scope, providing security, but promoting laissez-faire policies towards morality, religion, the economy, and the rest of social life.
http://www.laits.utexas.edu/gov310/DC/glossary.html
Pragmatists-
A movement consisting of varying but associated theories, originally developed by Charles S. Peirce and William James and distinguished by the doctrine that the meaning of an idea or a proposition lies in its observable practical consequences.
http://www.answers.com/topic/pragmatism
Statists-
The theory or practice of concentrating economic and political power in the state, resulting in a weak position for the individual or community with respect to the government.
www.thefreedictionary.com/statism
When you break it down both of our parties are pragmatists, due to their irresistable urge for government action if anything undesirable happens. The problem with this is time and time again throughout history this has led to statism and tyranny in one form or another. So where do you stand? What are your principles?
Tuesday, March 23, 2010
Article: 20 Ways Obamacare Will Take Away Your Freedoms
Here is an article that itemizes and cites the specific sections where this bill takes away our freedom. Have a gander below:
http://blogs.investors.com/capitalhill/index.php/home/35-politicsinvesting/1563-20-ways-obamacare-will-take-away-our-freedoms
Joshua McKee
http://blogs.investors.com/capitalhill/index.php/home/35-politicsinvesting/1563-20-ways-obamacare-will-take-away-our-freedoms
Joshua McKee
Sunday, March 21, 2010
On Healthcare and Natural Rights
Its been awhile since my first post, but I felt the need to at least write down my thoughts even if nobody cares to read them. Healthcare has been successfully passed now in the House and the Senate and the president will sign the bill very soon.
My view is that this whole debate has been skewed toward the idea that government must do anything to "fix" something that has been working quite well for a long time. In fact it is my view that the things that hold back our current health care system are in areas where government has failed to live up to its obligations. For instance, buying health insurance accross state lines is impossible right now, but if that restriction were lifted, it is my opinion that this would increase competition and the "invisible hand" of Adam Smith would be allowed to do its work and drive down premiums. The commerce clause in the U.S. constitution states that Congress shall have the power, "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes". Now the term "regulate" means to "make regular" commerce with nations, states and tribes. It doesn't however, mean that they can or should straddle citizens and businesses with restrictive and burdensome legislation. This is exactly what this new health care bill accomplishes.
For the first time in American history to be a citizen of the United States of America in good standing you will be required to purchase something. This is an iggregious violation of human natural rights and any liberty loving American should work to change this law by voting for candidates and joining organizations whose loyalties lie with the U.S. Constitution and who work for the proliferation of liberty.
"Freedom, in a political context, means freedom from government coercion. It does not mean freedom from the landlord, or freedom from the employer, or freedom from the laws of nature which do not provide men with automatic prosperity. It means freedom from the coercive power of the state--and nothing else."
-Ayn Rand-
Health care is not a right. A right cannot be material or financial in nature. A right is something that exists in the natural world in the absence of the state or any form of government. Health care obviously does not fall under this category and its absurd on its face to assert that it should. Anything that requires another individual to provide for the person receiving the benefit cannot be a right. That is the looting of one class of society to benefit another class and its wrong. We are heading down a path and there is a cliff at the end, we need to turn back now!
Another post is coming soon on the Federal Reserve, but for now I leave you with this quote:
“If ye love wealth better than liberty, the tranquillity of servitude than the animating contest of freedom, — go from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that ye were our countrymen!”
-Samuel Adams-
As always I love to hear you thoughts and look forward to discussing this further.
Regards,
Joshua McKee
My view is that this whole debate has been skewed toward the idea that government must do anything to "fix" something that has been working quite well for a long time. In fact it is my view that the things that hold back our current health care system are in areas where government has failed to live up to its obligations. For instance, buying health insurance accross state lines is impossible right now, but if that restriction were lifted, it is my opinion that this would increase competition and the "invisible hand" of Adam Smith would be allowed to do its work and drive down premiums. The commerce clause in the U.S. constitution states that Congress shall have the power, "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes". Now the term "regulate" means to "make regular" commerce with nations, states and tribes. It doesn't however, mean that they can or should straddle citizens and businesses with restrictive and burdensome legislation. This is exactly what this new health care bill accomplishes.
For the first time in American history to be a citizen of the United States of America in good standing you will be required to purchase something. This is an iggregious violation of human natural rights and any liberty loving American should work to change this law by voting for candidates and joining organizations whose loyalties lie with the U.S. Constitution and who work for the proliferation of liberty.
"Freedom, in a political context, means freedom from government coercion. It does not mean freedom from the landlord, or freedom from the employer, or freedom from the laws of nature which do not provide men with automatic prosperity. It means freedom from the coercive power of the state--and nothing else."
-Ayn Rand-
Health care is not a right. A right cannot be material or financial in nature. A right is something that exists in the natural world in the absence of the state or any form of government. Health care obviously does not fall under this category and its absurd on its face to assert that it should. Anything that requires another individual to provide for the person receiving the benefit cannot be a right. That is the looting of one class of society to benefit another class and its wrong. We are heading down a path and there is a cliff at the end, we need to turn back now!
Another post is coming soon on the Federal Reserve, but for now I leave you with this quote:
“If ye love wealth better than liberty, the tranquillity of servitude than the animating contest of freedom, — go from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that ye were our countrymen!”
-Samuel Adams-
As always I love to hear you thoughts and look forward to discussing this further.
Regards,
Joshua McKee
Friday, March 19, 2010
Taxation Without Representation, Part 2
The economy sucks; big corporations are taking advantage of the little guy; the free market has failed us; if only the government had stepped in and regulated industry more heavily then we could have avoided this; lets pass laws that restrict big banks and big businesses from taking big risks. Sound familiar? This has been a narrative in the United States and Europe for the last two years (much ,much longer in some circles) due to our current economic quagmire. While this is a well meaning and seemingly well reasoned line of thought, it is hopelessly and dangerously off target. We have little hope of ever trudging out of this recession let alone our history of the boom and bust cycle if we don't get seriously thoughtful and address the foundational cause of all of our economic heartache.
The next obvious question is, if these things aren't the cause of our current predicament then what is? The answer is multi-faceted, but really the root of it is access to extremely cheap and easy credit. The mid-2000's relatively speaking were good economic times for America and it seemed like the growth wouldn't end. The average Joe was taking part in a huge economic boom that was being led by record home building and home value appreciation. I remember thinking that it was absolutely amazing how much my home had appreciated and how wonderful it was for my family to be able to build wealth so quickly. It was a time of "irrational exuberance" as former Federal Reserve chairman Alan Greenspan put it. Participating in it myself, I was led down the path happily like a cow to the slaughter. While I haven't been hit as hard as some by this financial crisis I am carrying the yoke of a home that is worth less than what I bought it for.
Cheap and easy isn't a phrase you hear commonly in the current economic debate, in fact you're more likely to hear it on an episode of Jersey Shore or Real American Housewives than you are on CSPAN or PBS, but this is exactly what we should be talking about. This story about the "Cheap and Easy" can really be traced back all the way to the American Revolution, but for the purposes of this post we will only go back to the earlier 20th century. Few Americans understand the roots or function of the Federal Reserve and its impact on their lives so I will give a brief history of our present federal reserve system.
The story starts on Jekyll Island, a small island off the coast of Georgia. It was purchased as a hunting club/retreat for some of the worlds richest men in 1886 and its members at the time represented 1/6th of the world's wealth. Privacy and discretion being the utmost concern for people of such high stature it was also very exclusive. The fact that this is also the birthplace of our Federal Reserve seems odd for constitutional republic and an open society like the United States of America. Alas, the basic outline of the Federal Reserve Act of 1913 was formed in a super-secret meeting on this exclusive island by some of the worlds richest most powerful men. Senator Nelson Aldrich, John D. Rockefeller and Paul Warburg were all in attendance among others at this meeting where last names weren't allowed to be used as not to alert the press. None of employees on the train out to the island or at the meeting itself were told who the men were. These men brought shotguns along with them to disguise their rendezvous as a hunting trip in order to conceal the real reason for their visit. So why the secrecy? It seems that if this was truly beneficial to the people of the United States that it could be presented in a well reasoned manner and the public could be swayed to get behind it, but the problem was the people didn't want a central bank and had a history of rejecting them. The last central bank the United States had was allowed to expire under Andrew Jackson in 1836. The name, "Federal Reserve" was concocted by the Jekyll Island troupe in order to give it the appearance of a government entity while obscuring the fact that it was a central bank. You're probably thinking to yourself, "Wow, the process so far makes the Nixon Administration look transparent!" And you're exactly right, but what was their motivation? Why would these men, already among the most rich and powerful in the world force an idea on the American people that they were clearly against? Were they do-gooders with the public's interest in mind? Certainly not, and if you are someone who can tie your own shoe you already know that stories like this very rarely end with a public win. Actually its a group of men and a story that is so cartoonishly evil that it wouldn't even make believable fiction!
So what were their goals and what did they stand to gain by forming a central bank? Their goals were to squeeze out emerging private capital that was being created by an expanding industrial base, reduce competition from smaller regional or local banks which were on the rise in the south and the west by keeping the financial power center in New York, and transfer financial losses and risk to the taxpayer. This was all easily accomplished with the Federal Reserve Act because by controlling the flow and cost of money they were able to make money so cheap that no one else could compete and their monopoly was secured. So what happens when a bank becomes too big to fail? This answer has been played out over the last couple of years and that answer is we all pay for it, not only in the erosion of our dollar, but also when taxpayer dollars are used to pick up the losses of these banks. More regulation will not change our boom and bust cycle! Only a drastic yet gradual revision of our monetary policy back toward a true gold standard can change our current cycle.
Why a gold standard? The answer is that gold is a finite and tangible resource that can't go to zero and can't be manipulated as easily. It is something that has proven to be more stable than our current paper system and actually encourages saving due to its history of appreciation rather than our current system which heavily favors borrowing. Often times people can't understand why they can never seem to get ahead financially and the reason is the relative value of their dollar is constantly declining due to massive deficit spending in Washington and the cheap and easy flow of credit to the consumer. Also, the boom bust cycle is created by the expansion and contraction of credit which are essentially federal reserve responses to political pressures to stimulate what feels like economic growth or to market forces like increasing inflation. The market does work if its allowed to work, but what we presently have is a monetary system that is controlled by a private cartel of banks and not the free market. They can't possibly have our interests in mind!
This is a short and crude synopsis of our present predicament so it is essential that you educate yourself on the subject. In my view this is the single most important issue facing us today; in a sense it is the root of all evil in our nation and contributes to so many of our social ills. I recommend two books on the subject: "The Creature from Jekyll Island" by G. Edward Griffin and "End the Fed" by Ron Paul. I would love to vet these ideas further with some discussion. Let me know what you think!
The next obvious question is, if these things aren't the cause of our current predicament then what is? The answer is multi-faceted, but really the root of it is access to extremely cheap and easy credit. The mid-2000's relatively speaking were good economic times for America and it seemed like the growth wouldn't end. The average Joe was taking part in a huge economic boom that was being led by record home building and home value appreciation. I remember thinking that it was absolutely amazing how much my home had appreciated and how wonderful it was for my family to be able to build wealth so quickly. It was a time of "irrational exuberance" as former Federal Reserve chairman Alan Greenspan put it. Participating in it myself, I was led down the path happily like a cow to the slaughter. While I haven't been hit as hard as some by this financial crisis I am carrying the yoke of a home that is worth less than what I bought it for.
Cheap and easy isn't a phrase you hear commonly in the current economic debate, in fact you're more likely to hear it on an episode of Jersey Shore or Real American Housewives than you are on CSPAN or PBS, but this is exactly what we should be talking about. This story about the "Cheap and Easy" can really be traced back all the way to the American Revolution, but for the purposes of this post we will only go back to the earlier 20th century. Few Americans understand the roots or function of the Federal Reserve and its impact on their lives so I will give a brief history of our present federal reserve system.
The story starts on Jekyll Island, a small island off the coast of Georgia. It was purchased as a hunting club/retreat for some of the worlds richest men in 1886 and its members at the time represented 1/6th of the world's wealth. Privacy and discretion being the utmost concern for people of such high stature it was also very exclusive. The fact that this is also the birthplace of our Federal Reserve seems odd for constitutional republic and an open society like the United States of America. Alas, the basic outline of the Federal Reserve Act of 1913 was formed in a super-secret meeting on this exclusive island by some of the worlds richest most powerful men. Senator Nelson Aldrich, John D. Rockefeller and Paul Warburg were all in attendance among others at this meeting where last names weren't allowed to be used as not to alert the press. None of employees on the train out to the island or at the meeting itself were told who the men were. These men brought shotguns along with them to disguise their rendezvous as a hunting trip in order to conceal the real reason for their visit. So why the secrecy? It seems that if this was truly beneficial to the people of the United States that it could be presented in a well reasoned manner and the public could be swayed to get behind it, but the problem was the people didn't want a central bank and had a history of rejecting them. The last central bank the United States had was allowed to expire under Andrew Jackson in 1836. The name, "Federal Reserve" was concocted by the Jekyll Island troupe in order to give it the appearance of a government entity while obscuring the fact that it was a central bank. You're probably thinking to yourself, "Wow, the process so far makes the Nixon Administration look transparent!" And you're exactly right, but what was their motivation? Why would these men, already among the most rich and powerful in the world force an idea on the American people that they were clearly against? Were they do-gooders with the public's interest in mind? Certainly not, and if you are someone who can tie your own shoe you already know that stories like this very rarely end with a public win. Actually its a group of men and a story that is so cartoonishly evil that it wouldn't even make believable fiction!
So what were their goals and what did they stand to gain by forming a central bank? Their goals were to squeeze out emerging private capital that was being created by an expanding industrial base, reduce competition from smaller regional or local banks which were on the rise in the south and the west by keeping the financial power center in New York, and transfer financial losses and risk to the taxpayer. This was all easily accomplished with the Federal Reserve Act because by controlling the flow and cost of money they were able to make money so cheap that no one else could compete and their monopoly was secured. So what happens when a bank becomes too big to fail? This answer has been played out over the last couple of years and that answer is we all pay for it, not only in the erosion of our dollar, but also when taxpayer dollars are used to pick up the losses of these banks. More regulation will not change our boom and bust cycle! Only a drastic yet gradual revision of our monetary policy back toward a true gold standard can change our current cycle.
Why a gold standard? The answer is that gold is a finite and tangible resource that can't go to zero and can't be manipulated as easily. It is something that has proven to be more stable than our current paper system and actually encourages saving due to its history of appreciation rather than our current system which heavily favors borrowing. Often times people can't understand why they can never seem to get ahead financially and the reason is the relative value of their dollar is constantly declining due to massive deficit spending in Washington and the cheap and easy flow of credit to the consumer. Also, the boom bust cycle is created by the expansion and contraction of credit which are essentially federal reserve responses to political pressures to stimulate what feels like economic growth or to market forces like increasing inflation. The market does work if its allowed to work, but what we presently have is a monetary system that is controlled by a private cartel of banks and not the free market. They can't possibly have our interests in mind!
This is a short and crude synopsis of our present predicament so it is essential that you educate yourself on the subject. In my view this is the single most important issue facing us today; in a sense it is the root of all evil in our nation and contributes to so many of our social ills. I recommend two books on the subject: "The Creature from Jekyll Island" by G. Edward Griffin and "End the Fed" by Ron Paul. I would love to vet these ideas further with some discussion. Let me know what you think!
Tuesday, February 2, 2010
Taxation Without Representation, Part 1
When the Pilgrims landed at Plymouth Rock in 1620 civilization reached the New World and a new legacy of independence and prosperity was born. The road ahead would be long and difficult for certain, but the fortitude and faith of the new arrivals would prove to be sufficient to meet the new challenges. Fleeing from religious persecution these Pilgrims would take huge risks for and with their families to provide a future that wouldn't have been available to them in the Old World. From the Pilgrims in 1620 to the Chinese and Irish in the 1800's people all over the world took an inventory of their circumstances and sailed toward the promise that the new world offered. I believe that because we are the descendants of these risk takers Americans tend to work longer hours, are more productive and generally are more prosperous than the rest of the world. Many of us to this day still refer to the "Puritan work ethic" and all that it encompasses. This is the legacy that our ancestors left us, but what legacy are we leaving for our children and grandchildren?
Taxation without representation is a concept that came into our collective consciousness and vernacular when talk in the colonies was fomenting revolution and this can be credited as one of the primary catalysts for the American Revolution. The Boston Tea Party was an extension of this thinking and a response to the Stamp Act which required American colonists to pay a tax on most printed materials. Americans traditionally have had an aversion to taxes and throughout our history and have resisted large public debt. While we have incurred debt in the past, long-term large debts and deficits have largely been a late 20th century and early 21st century phenomenon. So here we are at a precipice and as sentient thinking humans we have the ability to choose whether or not we continue down this path. I think the questions we must ask ourselves and each other are:
Is it moral to leave huge debts to generations not yet born?
Is it or can it be justified?
Do we have the right?
Is this taxation without representation?
Should it be legal?
While the concept of "Taxation Without Representation" is generally accepted as a good rule of thumb for government to abide by and it is widely believed to be a constitutional protection, it actually has no grounding in the constitution. This may be so because our constitutional framers were not in complete harmony on this issue.
Thomas Jefferson had this to say about passing debt onto posterity:
"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:357
(Jefferson quote pulled from http://etext.virginia.edu/jefferson/quotations/jeff1340.htm)
Alexander Hamilton had this to say:
“A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement to our nation. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry.”
(Hamilton quote pulled from www.thinkexist.com)
So where do you stand? Do you believe that debt should not be passed onto future generations without exception? Do you believe that its a poor practice, but should be allowed in certain circumstances? Maybe you believe that the country benefits from debt? Whatever your opinion please share respectfully and cite you specific reasoning. Feel free to pull from any source that you deem appropriate. Let the dialectic begin!
Part 2 will focus on central banking and how it perpetrates an invisible tax on the poor and middle class.
Taxation without representation is a concept that came into our collective consciousness and vernacular when talk in the colonies was fomenting revolution and this can be credited as one of the primary catalysts for the American Revolution. The Boston Tea Party was an extension of this thinking and a response to the Stamp Act which required American colonists to pay a tax on most printed materials. Americans traditionally have had an aversion to taxes and throughout our history and have resisted large public debt. While we have incurred debt in the past, long-term large debts and deficits have largely been a late 20th century and early 21st century phenomenon. So here we are at a precipice and as sentient thinking humans we have the ability to choose whether or not we continue down this path. I think the questions we must ask ourselves and each other are:
Is it moral to leave huge debts to generations not yet born?
Is it or can it be justified?
Do we have the right?
Is this taxation without representation?
Should it be legal?
While the concept of "Taxation Without Representation" is generally accepted as a good rule of thumb for government to abide by and it is widely believed to be a constitutional protection, it actually has no grounding in the constitution. This may be so because our constitutional framers were not in complete harmony on this issue.
Thomas Jefferson had this to say about passing debt onto posterity:
"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:357
(Jefferson quote pulled from http://etext.virginia.edu/jefferson/quotations/jeff1340.htm)
Alexander Hamilton had this to say:
“A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement to our nation. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry.”
(Hamilton quote pulled from www.thinkexist.com)
So where do you stand? Do you believe that debt should not be passed onto future generations without exception? Do you believe that its a poor practice, but should be allowed in certain circumstances? Maybe you believe that the country benefits from debt? Whatever your opinion please share respectfully and cite you specific reasoning. Feel free to pull from any source that you deem appropriate. Let the dialectic begin!
Part 2 will focus on central banking and how it perpetrates an invisible tax on the poor and middle class.
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