by Howard S. Katz
6-29-09
On May 27, 2009, Barack Obama made his first nomination to the Supreme Court. I can remember the days when Democrats were, at least nominally, opposed to racism. Martin Luther King said, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” These words were barely out of his mouth when the political left openly adopted what they called affirmative action, meaning affirmative action to judge people by the color of their skin. The difference here was that this new racism was motivated by hatred against a person for being white instead of hatred for being black.
This hatred of people for being white now pours in an unstaunched torrent from the Poly Sci departments of most colleges and universities, and it was most explicitly stated in a speech which had been made by the new nominee:
“I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion [as a judge] than a white male who hasn’t lived that life.”
Sonia Sotomayor, 2001 speech at University of California, Berkeley, CA
Of course, everyone has the richness of their experiences, and it is difficult to argue that one person’s experiences are better than any other’s. The job of a judge is to decide which, of two parties, is acting in accord with the law and which is acting against it. To be a judge, one needs a knowledge of the law and the wisdom to apply that general knowledge to the particular case. Being Latina and having Latina and female experiences have no part in it, and it is hard to avoid the conclusion that Judge Sotomayor was admitting, in advance, that she would rule in favor of Hispanics against other races. In other words, legal decisions would be made by the color of the skins of the various parties.
Every time one looks at Latin America, one finds a horror show. The people there seem to be continually at war with each other. The countries are barely hanging on to democracy. The poverty is appalling. And over the past several centuries of human history, when so many new, good things have been created, the contribution of the Latinos has been close to zero. This is not to pick on the Latinos. The same can be said for pretty much all of Africa, most of Asia and the eastern part of Europe.
There are several reasons for this, and one of them is a complete absence in the minds of those people of the concept of justice. When Moses led the Children of Israel out of Egypt and they were wandering for 40 years in the wilderness, he was their leader. But we do not think of him as a king or president, and this is because what he spent his time doing was judging the people. That is, when two people had a dispute, they would come to Moses for resolution, and he would decide who war right in accordance with the law. The impression he made was such that after his death the leaders of the 12 Israelite tribes were called judges (although they acted as more conventional political leaders).
This idea, that there ought to be a person to resolve disputes in accordance with a body of rules which had been adopted by that society as the law, gradually spread, and it became a naturally accepted function of government that it should contain a judiciary, meaning a group of people who spend their time judging the people, as Moses had done.
What happens to people who do not have a judiciary? They fall to quarreling with each other. Soon the people of that society are fighting with each other. There is no time, energy or resources for constructive activity, and the society cannot unite against an aggressor from the outside. There are two problems in human relations. First, everybody pursues his self interest, and this may sometimes bring him into conflict with those around him. (This is particularly true of those who adopt a philosophy opposed to self interest. Such people merely disguise their interest and pretend that it does not exist.) Second, even in the case of two people who have good will and are earnestly trying to resolve the problem ethically, there will be failures of knowledge. The different people will perceive the situation differently, and each will believe that he is in the right.
History teaches us one overwhelming, incontrovertible fact. Most of human history has been a sad, sad tale. One man’s hand has been turned against the other. Thousands of years have gone by with no progress and no improvement in the human condition. The killer has been glorified, and the creator has been persecuted. The example which keeps coming to my mind was the invention of Greek Fire
Greek Fire was an invention of the Byzantine Empire in the 7th century A.D. It was similar to modern napalm, but its exact composition is unknown. It was used several times by the Byzantines to win dramatic naval victories, including the saving of their capital Constantinople from attack by the Muslims. It was the decisive weapon of the age. Then, after using it for a period of about 50 years, the Byzantines lost the secret of how to make it. We don’t know why it was lost. Probably the inventor died, and no one else knew how.
To a modern person, who cannot imagine a thing which is known becoming unknown, this actually happened. Meanwhile the people of Western Europe at this time were not even able to make comparable discoveries. They just stagnated and killed each other.
Then, in the 17th century, in a little island off the coast of Europe, which had never achieved anything of note in all previous history, the human potential stood up and began to achieve great things: democracy, science, economic growth, mastery of the seas and a great empire upon which the sun never set. It is true that all of the people who achieved this great civilization were of the white (Caucasian) race. But they were only a small fraction of the white race, and the majority of whites remained bogged down in the ignorance and misery of the rest of the world.
In truth, all men are fundamentally equal, in the sense that at birth any man has the ability to achieve even what the greatest humans achieve. The human mind, for example, may differ from individual to individual in terms of genetically determined factors. But these do not seriously contribute to the ability to discover new knowledge. The crucial factor in the discovery of new knowledge is how you use your mind. The second important thing for human achievement is to follow the correct code of ethics. (By this I do not mean what some other human being tells you God has laid down as ethics. Indeed, in our culture the book which is widely considered definitive on what God wants us to do contains directly contradictory advice.) The third important thing for human achievement is to associate with your fellows in a proper form of social organization.
These last two points involve the concept of justice. Most people have been miseducated in Plato’s belief that justice cannot be defined. Justice is the concept that one should act in accord with the law of causality. That is, one should accept the consequences of one’s actions, and one should give others the consequences of their actions. (Give the good man the good consequences of his good actions, and give the evil man the evil consequences of his evil actions, as per Isaiah, Ch. 3, vs. 10-11, King James version.) The individual who achieves the most in his life will be the one who incorporates the concept of justice into his personal life. The society which achieves the most in human affairs will be the one which incorporates the concept of justice into its political life.
For the first point, the most helpful guide I have found is Introduction to Objectivist Epistemology by Ayn Rand. Miss Rand has solved the problems of how one starts from unproven axioms and arrives at true conclusions. She has correctly identified the fundamental human intellectual problem as properly using abstractions. She defines an abstraction as a mental entity which stands for any of a group of similar objects but is not the same as them. That is, anything which can be proven about the abstraction (concept) is also true of all the concretes which make it up. The proper way to move back and forth between the concrete world in which we live and the abstractions in our minds is the key to the human search for knowledge.
1. In sum, we live in a universe which operates according to the law of causality.
2. Therefore, we must act in accord with the law of causality, i.e., the concept of justice.
3. And finally, we must apply the concept of justice to our social life.
When these three elements are achieved, humanity blossoms forth in a blaze of achievement and success in every field. Most human beings are happy, well-to-do and optimistic. Life is a wonderful thing.
So far in history the benefits of this way of living have been restricted to the Anglo-Saxon peoples and those who imitated them. Most of them have been white, but the success of the Japanese (who imitated the U.S.) proves that no race is inferior to any other. We all have the same human potential – if we live in accord with the principle of justice.
But, as I mentioned, the vast majority of the people on the planet Earth do not live in accord with justice. Indeed, they rise up in righteous indignation and denounce justice (the real concept, not necessarily the word) as evil. Even in our own society, the clear statement by Moses that one should deal with evil by the policy of an eye for an eye and a tooth for a tooth (i.e., that one should give the evil man the evil consequences of his evil actions) is denounced as wrong. In Mexico, they sing beautiful songs of Jesus and love, and then their drug wars spill over our border. This is most of the world. People are killing each other, as they have done for 5 million years of human existence.
Sonia Sotomayor wants to change the American judicial system so that judges rule for or against certain parties based on their race. A Hispanic judge rules in favor of the Hispanic party. A white judge rules in favor of the white party. A black judge rules in favor of the black party. That is what happened in the O.J. Simpson case. A (largely) black jury acquitted an obviously guilty man because he was of the same race. A little bit of this and the nation breaks down into bitterly quarrelling ethnic or racial groups, and the quarrelling then progresses to killing. America, after all, is composed of diverse ethnic, religious and racial elements. It is the only place on earth where so many diverse peoples can get along. If we throw out the American system of justice to become like the other nations, then we will become like the other nations. And the result will not be pretty.
The political left has been engaged in an outpouring of vicious, hate-filled rhetoric against the white race. Their favorite tactic is to shout a speaker down, yelling: “Dead, while, males.” They are not really against the white race, only that segment of it which follows, to some degree, the principle of justice and the Anglo-Saxon principle of rights. (For example, they have only sympathy for Arab terrorists, such as Al Qaeda and Hamas, who are, of course, white.)
So it is appropriate to point out that (this portion of) the white race has brought mankind some of its proudest accomplishments. And if one accepts the premise of the New York Times, Barack Obama, Sonia Sotomayor and the Democratic majority which will approve her nomination that one judges everything and everyone by race, then it would follow that whites are the superior people in the world.
After all, human slavery existed throughout the world, for all human history. The strong enslaved the weak. After the Reformation a sense developed among western Europeans that slavery was wrong. 17th and 18th century Negro slavery was caused by the fact that it was established practice for the Negro tribes of Africa (who hated each other) to enslave each other. Since it was an established institution, some westerners fell into practicing it. That is, they purchased existing slaves. They did not impose slavery on free men. Even this gnawed on their consciences, and a widespread movement to abolish slavery swept the world in the 19th century.
To condemn, for example, America’s Founding Fathers because some of them practiced slavery is bizarre. They inherited the institution. Social institutions change slowly. Here were men who did more than any other group to increase human freedom. And here they are criticized for not moving rapidly enough – by people who themselves are trying to destroy freedom
Or consider Western prosperity. The Anglo-Saxon countries and their imitators created more wealth in the span of 2 centuries then ever before in human history. The rest of mankind simply remained where they were or experienced small improvements by trading with the west.. This is interpreted by the left as our having stolen our automobiles, our electric devices, our transcontinental railroad system, etc. from those ignorant and vicious people who never had such things.
A favorite target of the left is western imperialism. What is called imperialism is the peoples of the world seeking out western political leadership because the western countries gave so much better government than their own rulers. The British Empire started in the wake of 1689, when the British Parliament enacted the first Bill of Rights. (It ended in 1948, shortly after Britain had adopted the welfare state.)
In short, the white race, and in particular the western European and North American portion of it, is being condemned because for the first time in human history it made possible a human society in which people could be happy, relatively wealthy, secure in their persons and property and confident that they would be treated in accord with justice. For this they have been vilified with hysterical hatred and invective.
The political left is a reactionary force which is masquerading as progressive. It advocates policies which have long failed and which have brought war, misery, ignorance and hate. Whether this is done by ignorance or venality is a debatable question. But the consequences of these policies are not. Much of human history has been a progress to better conditions, but there is one fatal example to the contrary. When the Romans of 410 A.D. gave up their heritage, which had elements of freedom, democracy and justice-under-law, they plunged western Europe into a Dark Age which unleashed every human evil and misery. This is the evil which threatens today with the Administration of Barack Obama.
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
Monday, June 29, 2009
Monday, June 22, 2009
STRATEGY FOR VICTORY V
by Howard S. Katz
6-22-09
The weak point of the New Deal is that it is based on a lie. It promises to give the average American something for nothing. The main advantage of social security (to the people who operate it) is to send the average American a check every month. Meanwhile, the money that was taken from him was deducted from his wages. He never felt it in his hand, and it is not real to him. Meanwhile a further portion is taken from his employer. The average worker does not know enough economics to realize that the employers since 1935 have simply deducted that employer contribution to social security from the employee’s wages. The laws of economics require them to pay a certain level of wages (at a minimum the value of the employee’s labor). That they pay whether it is in the form of direct wages or government-required donations to a fund. The total amount the employer pays out (in toto) remains constant (in real terms) for each worker. In this way, the Government convinces the unthinking person that it is giving him something for nothing. In fact, it is taking money from his rear pocket and giving him a part of it
back in his front pocket.
The central reason for the success of the New Deal is that for 76 years its opponents have never raised the public issue to point out that this is a lie.
This goes back to an important point. When one is trying to persuade people, one must pay attention to the ideas in their minds. Ayn Rand used to simply present truth. She was a brilliant person, and most of what she said was true. However, she did not convince people because she did not directly address the key wrong ideas in her audience’s heads. For example, the Objectivist ethics is all based on one vital premise, that there is no heaven. This is a correct premise, but it is rejected by the vast majority of human beings on planet Earth. And in her entire writings, Miss Rand devotes approximately 2 lines to the subject (and does not give credit to the intellectual who did the most to weaken the idea of heaven in Western Culture, John Calvin).
Neither did the libertarians or the conservatives do any better. The libertarians logically deduce their entire philosophy from the non-initiation principle. This principle is better stated as John Locke’s principle of rights. (You should respect the rights of all men and insist that they respect yours.) Americans today do not know what rights are. Look at the attitude toward libertarians in our current society. The attitude is that THEY ARE IRRELEVANT, a group of intellectuals walking around with their heads in the sky.
Why is this? Because the vast majority of Americans have accepted the principle of government by love, which is the central principle behind the welfare state. This principle states that government is a big father who loves his subjects and wants to give them something for nothing, which in turn it does by robbing from the rich to give to the poor. This is the wrong idea in the minds of most Americans and most people in the world, and this is the idea which is destroying freedom. Any movement to restore freedom must focus on this idea.
(The conservatives, following Bill Buckley, have not rejected the philosophy of love. They have merely taken the other side of the coin. They argue that the moral, meaning love, is impractical, and hate (toughness) is preferable because it is practical. These two sides fought each other through the Middle Ages. There was always a party of love and a party of hate. The two parties fought each other for well over a thousand years, and neither side made any progress in convincing the other. This is why “liberal” and conservative are in a 50-50 balance in America today. They have always been in 50-50 balance, and the concept that this is going to change in our lifetimes is foolishness.)
The average American must be told: “The Government is not your father. It does not love you. It does not give you something for nothing. Something for nothing is impossible in this world, and if you want to succeed in life, one of the things you have to do is get this idea completely out of your head. (This, by the way, is why I am hostile to gambling. If people are dumb enough to gamble, with other consenting adults, they should have that right. But those people who choose to gamble show precisely that -something for nothing- attitude which leads them to support the welfare state and violate the rights of others. There is a perfect analogy here. Just as the gambling casino always wins, just as the gambling patron is a sucker and a loser, in politics the power structure always wins, and the blue collar Democratic voter is a sucker and a loser.)
Understanding that they were erecting a gigantic fraud the early New Dealers were very careful in its construction. The purpose of the New Deal was to rob from the common people of America and give to the rich. This was accomplished via the paper money system. Commercial bankers were given the privilege to create money out of nothing (with the aid and backing of the Federal Reserve). The benefits of this were shared with their corporate loan customers and with stock market speculators (via a rise in stock prices). Of course, the wealth which flowed to the banks and Wall Street had to come from somewhere. A large part of it came from the class of retired people, who were hit in two ways. As the Fed created money, the real value of their savings was reduced. Most of these people were too ignorant to know that it was the government which was robbing them and went along with the media in blaming the scapegoat of the day. A second way in which the retired class was hurt was in the lowering of real interest rates. Real interest rates on riskless investments have averaged 0% since the New Deal started in 1933. But the bulk of the gains to Wall Street and the banks came from the employed working man. As the Fed and the private banks created money, it caused the currency to depreciate. The price of goods rose, but the wages of labor lagged behind. (One can see this phenomenon happen over and over in economic history.) Thus the real wages of labor declined. This, caused a massive transfer of wealth from the working people of America to a small group of rich.
In short, F.D.R. was not a traitor to his class. The very first thing he did was to set up a system by which his class of Wall Streeters could rob from the working people of the country. Then this giant system of fraud was covered over with a slight-of-hand. “Look, over here. We are robbing from the rich to give to the poor.” The New Deal enacted a highly progressive income tax precisely to deceive people into thinking the reverse of what was actually happening. Actually, this income tax was riddled with loopholes and existed on paper and for those well-to-do members of the middle class who had not figured out the system. The average member of the upper class since 1933 has just kept his money in stocks and let the Government (i.e., the Federal Reserve) make money for him. He donates to both major parties (but not the Libertarian), and he pays his bribes to the bureaucrats and politicians to ensure preferential treatment.
Meanwhile the media are shouting, “The Democratic Party is the party of the working man. The Republican Party is the party of the rich.” And the average American falls for this line. Indeed, one cannot find any significant opposition group which has publicly opposed this argument for the last 76 years.
Well, it is time for someone to say, “no.” An attack on the fraud of the New Deal will bring down the welfare state and destroy the present alignment of American politics.
Further, here in 2009 we are in an extremely favorable position because the power structure has made a major blunder. The average American feels the pain of the system when prices are advancing rapidly. And that is going to happen in spades over the next 4-5 years.
When Henry Paulson proposed a Wall Street bailout to George Bush, Jr. in Sept. 2009, he was following the tradition of F.D.R. But he had none of F.D.R.’s subtlety. He simply said, let’s rob from the common people (taxpayers) and give to Wall Street and the banks. When the dust had cleared, the Wall Street firm which got most of the money was Henry Paulson’s old company, Goldman Sachs.
E-mail to Congress on the bailout bill was running 100 to 1 against. Here in New Hampshire 3 of our congressmen/senators were up for reelection. The two who opposed the bailout were reelected. The one who supported it was defeated. If you want to see what is going to happen in the next election, study the election of 1832, in which Andrew Jackson defeated Henry Clay by a wide margin. It is the same issue: the common man versus the banks.
The strategy of the power structure is to control both parties.. Notice that both Obama and McCain supported the bailout. This is because both were accepting money from Wall Street, and this money entitled them to recommend economic advisors. When the crisis broke, the candidate, who knew nothing about economics, went to his economic advisor. What a joke. The typical U.S. major party candidate can be convinced of anything by pretty much any advisor. So both candidates were told that without the bailout the U.S. economy would collapse. Why not? Both McCain and Obama were/are so stupid that you could tell them anything. It was rather like trying to convince a 5 year old child. The reality is that now, because of the bailout, the U.S. economy is about to collapse.
I have recently discovered that the Federal Reserve has been lying about the U.S. money supply. The figure is being reported as $1.6 trillion, a 16% advance from a year ago. But it is actually $2.34 trillion, a 70% advance from a year ago. Do you have a concept what will happen in this country if/when prices rise by 70% in one year?
You can see clearly that the doctrine of “don’t waste your vote,” actually means “vote against your own interests.” It means vote for a major party candidate who is bribed by (receives donations from) Wall St. and the banks. What is the chance for the people in 2012? The only chance the people have is to elect Ron Paul. Any Democrat or any other Republican will simply steal their money and give it to Wall Street. Why does Ron Paul have a possible chance at the Republican nomination for 2012? Because 8% of the people voted for him in 2008. Whose vote was wasted, the 8% who voted for Paul or the larger number who voted for McCain?
I can’t give a firm prediction of the rate at which prices will be rising over the next 4-5 years. In theory, the Fed could reverse itself and withdraw from circulation the money it has just created. But then Daddy Warbucks might appear in a UFO and give everyone a billion dollars in gold. The Fed has never made significant reductions in the money supply since it received the money creation power in 1933. A conservative estimate is that prices will be rising by 20%-30% per year over much of this period. The last time anything like this happened was in the late 1970s. Prices rose by 13.3% in 1979. The party in power was defeated in 1980, and there was a mini-political revolution (which was defeated when Reagan broke his own promise to stick to the monetary rule).
But in 1979, people were still taken in by the idea that the welfare state robs from the rich and gives to the poor. (Most of the propaganda for this false idea, by the way, comes from the conservatives. They are the bulwark of the welfare state.) But today the welfare state has thrown away its disguise. It openly said, rob from the American people to bail out the banks and Wall Street. That changes the name of the game and makes a pro-liberty victory possible.
One serious albatross about the neck of the libertarian movement has been libertarian-anarchism. This was the political philosophy of Murray Rothbard. I knew Murray in New York in the 1970s. He was a wonderful, roly-poly person and a great economist. But once he stepped outside his field, he made serious errors.
Jefferson once argued that that government was best that governs least. Henry David Thoreau carried this a step further and argued (incorrectly) that that government was best which governs not at all, thus carrying Jefferson’s limited government philosophy to anarchism.
Thoreau, however, was mistaken, and so was Jefferson. One cannot quantify government. The worst tyrannies came from the personal rule of one man who, like the Queen of Hearts, would get up in a bad mood one day and shout, “Off with their heads.” The uncertainty, never knowing when the strong man would try to murder you, was as bad as the actual murders. To put a stop to this, the Anglo-Saxon people created the rule of law. This required the erection of a formal structure which is very reasonably considered more government. It was more government, and it was good.
The precise statement of the proper amount of government that should exist was made by Jefferson in the Declaration of Independence, in which he states that government is the institution in society for the protection of people’s rights. Government which protects rights is good. Government which violates rights is a perversion and is evil. End of story.
The anarchists would be able to see this if they studied history. History bears the same relation to political philosophy as experimental evidence to science (which used to be called natural philosophy). Any (valid) intellectual process should go from concrete to abstract and back to concrete again, etc. You look at the facts; this gives you the idea for an abstract theory; then you test your theory against further facts. In science, these facts are provided by experiment. In politics, the facts are provided by history and current events.
If we look at the facts, we find many examples of anarchist societies. The people in them continually fight with each other. They live in abject poverty. Their technology is a joke. They routinely practice torture. Usually they enslave their neighbors and/or eat them.
Rothbard made the mistake of exhibiting medieval Ireland as an example of an anarchist society. Well, libertarian societies are supposed to be bursting with energy and wealth (such as 19th century Britain and America). They are supposed to be a fount of scientific and technological development. They are supposed to be militarily strong but not aggressive. Medieval Ireland did not make it. They were poor as church mice, and they were the doormat of Europe. To this day, the major cities in Ireland were all founded by the Vikings, not by the Celtic Irish.
The libertarian-anarchists are completely mesmerized by the 1930s and assume that what happened at that time is an inevitable tendency in political systems. But a wider study of history would prove that this was not the case. There is no tendency for government to get “bigger” (in the bad sense). From the Peasant’s Revolt of 1381 to about 1900, people got freer and freer. We only started to slip backward in the 20th century, and I believe that there are definite signs that this backward period is near an end. On the other side, the late Roman Empire was a totalitarian monstrosity. It fell because the people welcomed the barbarian invaders. (What followed then was a period of near anarchy dominated not so much by the impulse to power as by simple ignorance of what to do.)
Rothbard’s original idea was for an appeal to the left by championing victimless crimes. This has been a complete failure (because what really motivates the left is the philosophy of love and the German welfare state). And the most successful libertarian has been Ron Paul, who must be ranked on the conservative side of the movement. Our best chance, at this time, lies with him. If you listen to the talk shows, any mention of libertarian anarchism drives people wild.
One of the most successful lies by the social democrats has been when they got the conservatives to call them (the social democrats) liberals. A liberal is someone who favors liberty. The term was coined in Spain in the early 19th century, and to this day the Spanish word for liberal is the same as the word for libertarian. This is still true in most of the world today. The party which has the most respect for rights and favors a Lockean concept of government is described as liberal.
The American social democrats do not call themselves by what they are because they are trying to hide the fact that they are (ideological) Germans. People might ask them, “The last time your political philosophy was tried it led to Nazism. How do you know it won’t happen again?”
Every left wing Democrat comes equipped with a laundry list of programs designed to violate the liberty of the people. Such people are not liberals. They are reactionaries (German social democrats), and to call them liberals is to acquiesce in their lie. This is not the way to beat them.
In 2012, the U.S. currency will be depreciating as never before in American history (since the depreciation of the continental in 1776-80). The American people will be enraged. It is our job to connect the effects they are feeling with the true causes. In that way lies a resurgence of liberty in America.
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
6-22-09
The weak point of the New Deal is that it is based on a lie. It promises to give the average American something for nothing. The main advantage of social security (to the people who operate it) is to send the average American a check every month. Meanwhile, the money that was taken from him was deducted from his wages. He never felt it in his hand, and it is not real to him. Meanwhile a further portion is taken from his employer. The average worker does not know enough economics to realize that the employers since 1935 have simply deducted that employer contribution to social security from the employee’s wages. The laws of economics require them to pay a certain level of wages (at a minimum the value of the employee’s labor). That they pay whether it is in the form of direct wages or government-required donations to a fund. The total amount the employer pays out (in toto) remains constant (in real terms) for each worker. In this way, the Government convinces the unthinking person that it is giving him something for nothing. In fact, it is taking money from his rear pocket and giving him a part of it
back in his front pocket.
The central reason for the success of the New Deal is that for 76 years its opponents have never raised the public issue to point out that this is a lie.
This goes back to an important point. When one is trying to persuade people, one must pay attention to the ideas in their minds. Ayn Rand used to simply present truth. She was a brilliant person, and most of what she said was true. However, she did not convince people because she did not directly address the key wrong ideas in her audience’s heads. For example, the Objectivist ethics is all based on one vital premise, that there is no heaven. This is a correct premise, but it is rejected by the vast majority of human beings on planet Earth. And in her entire writings, Miss Rand devotes approximately 2 lines to the subject (and does not give credit to the intellectual who did the most to weaken the idea of heaven in Western Culture, John Calvin).
Neither did the libertarians or the conservatives do any better. The libertarians logically deduce their entire philosophy from the non-initiation principle. This principle is better stated as John Locke’s principle of rights. (You should respect the rights of all men and insist that they respect yours.) Americans today do not know what rights are. Look at the attitude toward libertarians in our current society. The attitude is that THEY ARE IRRELEVANT, a group of intellectuals walking around with their heads in the sky.
Why is this? Because the vast majority of Americans have accepted the principle of government by love, which is the central principle behind the welfare state. This principle states that government is a big father who loves his subjects and wants to give them something for nothing, which in turn it does by robbing from the rich to give to the poor. This is the wrong idea in the minds of most Americans and most people in the world, and this is the idea which is destroying freedom. Any movement to restore freedom must focus on this idea.
(The conservatives, following Bill Buckley, have not rejected the philosophy of love. They have merely taken the other side of the coin. They argue that the moral, meaning love, is impractical, and hate (toughness) is preferable because it is practical. These two sides fought each other through the Middle Ages. There was always a party of love and a party of hate. The two parties fought each other for well over a thousand years, and neither side made any progress in convincing the other. This is why “liberal” and conservative are in a 50-50 balance in America today. They have always been in 50-50 balance, and the concept that this is going to change in our lifetimes is foolishness.)
The average American must be told: “The Government is not your father. It does not love you. It does not give you something for nothing. Something for nothing is impossible in this world, and if you want to succeed in life, one of the things you have to do is get this idea completely out of your head. (This, by the way, is why I am hostile to gambling. If people are dumb enough to gamble, with other consenting adults, they should have that right. But those people who choose to gamble show precisely that -something for nothing- attitude which leads them to support the welfare state and violate the rights of others. There is a perfect analogy here. Just as the gambling casino always wins, just as the gambling patron is a sucker and a loser, in politics the power structure always wins, and the blue collar Democratic voter is a sucker and a loser.)
Understanding that they were erecting a gigantic fraud the early New Dealers were very careful in its construction. The purpose of the New Deal was to rob from the common people of America and give to the rich. This was accomplished via the paper money system. Commercial bankers were given the privilege to create money out of nothing (with the aid and backing of the Federal Reserve). The benefits of this were shared with their corporate loan customers and with stock market speculators (via a rise in stock prices). Of course, the wealth which flowed to the banks and Wall Street had to come from somewhere. A large part of it came from the class of retired people, who were hit in two ways. As the Fed created money, the real value of their savings was reduced. Most of these people were too ignorant to know that it was the government which was robbing them and went along with the media in blaming the scapegoat of the day. A second way in which the retired class was hurt was in the lowering of real interest rates. Real interest rates on riskless investments have averaged 0% since the New Deal started in 1933. But the bulk of the gains to Wall Street and the banks came from the employed working man. As the Fed and the private banks created money, it caused the currency to depreciate. The price of goods rose, but the wages of labor lagged behind. (One can see this phenomenon happen over and over in economic history.) Thus the real wages of labor declined. This, caused a massive transfer of wealth from the working people of America to a small group of rich.
In short, F.D.R. was not a traitor to his class. The very first thing he did was to set up a system by which his class of Wall Streeters could rob from the working people of the country. Then this giant system of fraud was covered over with a slight-of-hand. “Look, over here. We are robbing from the rich to give to the poor.” The New Deal enacted a highly progressive income tax precisely to deceive people into thinking the reverse of what was actually happening. Actually, this income tax was riddled with loopholes and existed on paper and for those well-to-do members of the middle class who had not figured out the system. The average member of the upper class since 1933 has just kept his money in stocks and let the Government (i.e., the Federal Reserve) make money for him. He donates to both major parties (but not the Libertarian), and he pays his bribes to the bureaucrats and politicians to ensure preferential treatment.
Meanwhile the media are shouting, “The Democratic Party is the party of the working man. The Republican Party is the party of the rich.” And the average American falls for this line. Indeed, one cannot find any significant opposition group which has publicly opposed this argument for the last 76 years.
Well, it is time for someone to say, “no.” An attack on the fraud of the New Deal will bring down the welfare state and destroy the present alignment of American politics.
Further, here in 2009 we are in an extremely favorable position because the power structure has made a major blunder. The average American feels the pain of the system when prices are advancing rapidly. And that is going to happen in spades over the next 4-5 years.
When Henry Paulson proposed a Wall Street bailout to George Bush, Jr. in Sept. 2009, he was following the tradition of F.D.R. But he had none of F.D.R.’s subtlety. He simply said, let’s rob from the common people (taxpayers) and give to Wall Street and the banks. When the dust had cleared, the Wall Street firm which got most of the money was Henry Paulson’s old company, Goldman Sachs.
E-mail to Congress on the bailout bill was running 100 to 1 against. Here in New Hampshire 3 of our congressmen/senators were up for reelection. The two who opposed the bailout were reelected. The one who supported it was defeated. If you want to see what is going to happen in the next election, study the election of 1832, in which Andrew Jackson defeated Henry Clay by a wide margin. It is the same issue: the common man versus the banks.
The strategy of the power structure is to control both parties.. Notice that both Obama and McCain supported the bailout. This is because both were accepting money from Wall Street, and this money entitled them to recommend economic advisors. When the crisis broke, the candidate, who knew nothing about economics, went to his economic advisor. What a joke. The typical U.S. major party candidate can be convinced of anything by pretty much any advisor. So both candidates were told that without the bailout the U.S. economy would collapse. Why not? Both McCain and Obama were/are so stupid that you could tell them anything. It was rather like trying to convince a 5 year old child. The reality is that now, because of the bailout, the U.S. economy is about to collapse.
I have recently discovered that the Federal Reserve has been lying about the U.S. money supply. The figure is being reported as $1.6 trillion, a 16% advance from a year ago. But it is actually $2.34 trillion, a 70% advance from a year ago. Do you have a concept what will happen in this country if/when prices rise by 70% in one year?
You can see clearly that the doctrine of “don’t waste your vote,” actually means “vote against your own interests.” It means vote for a major party candidate who is bribed by (receives donations from) Wall St. and the banks. What is the chance for the people in 2012? The only chance the people have is to elect Ron Paul. Any Democrat or any other Republican will simply steal their money and give it to Wall Street. Why does Ron Paul have a possible chance at the Republican nomination for 2012? Because 8% of the people voted for him in 2008. Whose vote was wasted, the 8% who voted for Paul or the larger number who voted for McCain?
I can’t give a firm prediction of the rate at which prices will be rising over the next 4-5 years. In theory, the Fed could reverse itself and withdraw from circulation the money it has just created. But then Daddy Warbucks might appear in a UFO and give everyone a billion dollars in gold. The Fed has never made significant reductions in the money supply since it received the money creation power in 1933. A conservative estimate is that prices will be rising by 20%-30% per year over much of this period. The last time anything like this happened was in the late 1970s. Prices rose by 13.3% in 1979. The party in power was defeated in 1980, and there was a mini-political revolution (which was defeated when Reagan broke his own promise to stick to the monetary rule).
But in 1979, people were still taken in by the idea that the welfare state robs from the rich and gives to the poor. (Most of the propaganda for this false idea, by the way, comes from the conservatives. They are the bulwark of the welfare state.) But today the welfare state has thrown away its disguise. It openly said, rob from the American people to bail out the banks and Wall Street. That changes the name of the game and makes a pro-liberty victory possible.
One serious albatross about the neck of the libertarian movement has been libertarian-anarchism. This was the political philosophy of Murray Rothbard. I knew Murray in New York in the 1970s. He was a wonderful, roly-poly person and a great economist. But once he stepped outside his field, he made serious errors.
Jefferson once argued that that government was best that governs least. Henry David Thoreau carried this a step further and argued (incorrectly) that that government was best which governs not at all, thus carrying Jefferson’s limited government philosophy to anarchism.
Thoreau, however, was mistaken, and so was Jefferson. One cannot quantify government. The worst tyrannies came from the personal rule of one man who, like the Queen of Hearts, would get up in a bad mood one day and shout, “Off with their heads.” The uncertainty, never knowing when the strong man would try to murder you, was as bad as the actual murders. To put a stop to this, the Anglo-Saxon people created the rule of law. This required the erection of a formal structure which is very reasonably considered more government. It was more government, and it was good.
The precise statement of the proper amount of government that should exist was made by Jefferson in the Declaration of Independence, in which he states that government is the institution in society for the protection of people’s rights. Government which protects rights is good. Government which violates rights is a perversion and is evil. End of story.
The anarchists would be able to see this if they studied history. History bears the same relation to political philosophy as experimental evidence to science (which used to be called natural philosophy). Any (valid) intellectual process should go from concrete to abstract and back to concrete again, etc. You look at the facts; this gives you the idea for an abstract theory; then you test your theory against further facts. In science, these facts are provided by experiment. In politics, the facts are provided by history and current events.
If we look at the facts, we find many examples of anarchist societies. The people in them continually fight with each other. They live in abject poverty. Their technology is a joke. They routinely practice torture. Usually they enslave their neighbors and/or eat them.
Rothbard made the mistake of exhibiting medieval Ireland as an example of an anarchist society. Well, libertarian societies are supposed to be bursting with energy and wealth (such as 19th century Britain and America). They are supposed to be a fount of scientific and technological development. They are supposed to be militarily strong but not aggressive. Medieval Ireland did not make it. They were poor as church mice, and they were the doormat of Europe. To this day, the major cities in Ireland were all founded by the Vikings, not by the Celtic Irish.
The libertarian-anarchists are completely mesmerized by the 1930s and assume that what happened at that time is an inevitable tendency in political systems. But a wider study of history would prove that this was not the case. There is no tendency for government to get “bigger” (in the bad sense). From the Peasant’s Revolt of 1381 to about 1900, people got freer and freer. We only started to slip backward in the 20th century, and I believe that there are definite signs that this backward period is near an end. On the other side, the late Roman Empire was a totalitarian monstrosity. It fell because the people welcomed the barbarian invaders. (What followed then was a period of near anarchy dominated not so much by the impulse to power as by simple ignorance of what to do.)
Rothbard’s original idea was for an appeal to the left by championing victimless crimes. This has been a complete failure (because what really motivates the left is the philosophy of love and the German welfare state). And the most successful libertarian has been Ron Paul, who must be ranked on the conservative side of the movement. Our best chance, at this time, lies with him. If you listen to the talk shows, any mention of libertarian anarchism drives people wild.
One of the most successful lies by the social democrats has been when they got the conservatives to call them (the social democrats) liberals. A liberal is someone who favors liberty. The term was coined in Spain in the early 19th century, and to this day the Spanish word for liberal is the same as the word for libertarian. This is still true in most of the world today. The party which has the most respect for rights and favors a Lockean concept of government is described as liberal.
The American social democrats do not call themselves by what they are because they are trying to hide the fact that they are (ideological) Germans. People might ask them, “The last time your political philosophy was tried it led to Nazism. How do you know it won’t happen again?”
Every left wing Democrat comes equipped with a laundry list of programs designed to violate the liberty of the people. Such people are not liberals. They are reactionaries (German social democrats), and to call them liberals is to acquiesce in their lie. This is not the way to beat them.
In 2012, the U.S. currency will be depreciating as never before in American history (since the depreciation of the continental in 1776-80). The American people will be enraged. It is our job to connect the effects they are feeling with the true causes. In that way lies a resurgence of liberty in America.
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
Tuesday, June 16, 2009
STRATEGY FOR VICTORY IV
by Howard S. Katz
6-15-09
Well, here we are up to our armpits in practical politics, and we have come up against an issue of morality. We were discussing the issue should one vote for the candidate/issue one believes is right, or should one vote for the candidate/issue one believes is wrong. I am here talking only about the subjective issue. One’s candidate/issue may be either right or wrong in fact, but that is not important at this point. The question is, should one do what is right as one sees it? Overwhelmingly, the answer given by our society to this question is, “No. You ought to do what is wrong (as you see it).”
If you and I were transported back into the days of the Founding Fathers , this question would not be asked. Those men did what they believed to be right. Jefferson once said, “Indeed, I tremble for my country when I reflect that God is just” [Thomas Jefferson, Notes on the State of Virginia 1781-85), Ch. 18]. They were fallible human beings, and they made mistakes. But they did great things, things no other age accomplished. And a prerequisite for this was that they were all Calvinists. And what Calvin had taught was to disregard the New Testament and concentrate on the Old Testament.
One can see this issue much more clearly if one studies the history of 17th century England. In the turmoil of the Reformation initiated by King Henry VIII, a small group of people started to read and spread the teachings of John Calvin. Toward the end of the reign of Queen Elizabeth, these people began to organize. The idea on their minds was democracy. However, Elizabeth was too dearly loved by the people, and no anti-monarchy movement could take root. When Elizabeth died in 1603, the Calvinists (who took the name Puritans) began to agitate for democracy. Although at their greatest power they numbered only about 20% of the population (my estimate), they were able to spread their political ideas. In 1621, a Puritan-influenced Parliament passed a bill in favor of freedom of speech. This was only freedom of speech for members of Parliament while Parliament was in session, but it so angered King James I that he ripped the page out of Parliament’s annals. Gradually the Presbyterian majority came to support Puritan political ideas. When James died, the Parliamentary majority (Puritan plus Presbyterian) went toe-to-toe with his son, King Charles I.
In 1629, Charles dismissed the quarrelsome Parliament. In order to force him to call Parliament back into session, the Puritans advanced the doctrine of “no taxation without representation.” This meant that the King did not have the power to lay taxes without the consent of Parliament. In support of this idea, the Puritans and Presbyterians refused to pay taxes throughout the 1630s. There was a nationwide tax revolt which forced the King to his knees. In 1638, he gave in and summoned another Parliament, dismissed it and summoned it again. The principle was established, no taxation without representation.
The King and the new Parliament (with the Puritans at their height, although still a minority) again went toe-to-toe. In 1642, a war began between the King (representing monarchy) and Parliament (representing democracy).
A Puritan Member of Parliament, Oliver Cromwell, was dissatisfied with the way the pro-democracy forces were fighting. So he formed a special cavalry unit (similar to Teddy Roosevelt’s Rough Riders of the Spanish-American War). He had no military experience, and neither did his men, but being radical Calvinists they had enthusiasm. They trained by day and read the Bible by the light of their campfires at night.
The first thing that happened to Cromwell’s unit was that their pro-democracy “friends” betrayed them into a monarchist trap. They fought their way out and established themselves as the number one military unit of the war. They were never beaten. Cromwell was called “Old Ironsides” because his flanks could not be turned (and he is the source of that expression as it appears later in American history). His unit was decisive in winning the key victories (Marston Moor and Naseby) which led to the democratic victory. In 1646, the King was captured, and in 1649 the Puritan Parliament chopped off his head.
The democracy movement did meet with setbacks. They had had no experience with democracy. For example, at one point the Presbyterian majority voted to take away freedom of religion from their Puritan allies. Because of mistakes like this the country turned against the democrats, and the monarchy was restored in 1660. But a second revolution occurred in 1688, and this time Parliament acquired the supreme power in the government. England had become a democracy. A year later it got a bill of rights.
We are so proud of our American heritage of freedom and democracy, but in truth we must acknowledge that we were merely copying the 17th century English. They led the way. We merely carried things a notch farther. We must also acknowledge that it was precisely the other Calvinist countries of the world (Holland, Scotland, Switzerland) which adopted democracy. (Within the U.S. the northern states were dominated by Calvinism to a much greater extent than the southern, and this was the source of the friction which led to the American Civil War.)
We continually find this association between religion and politics. The Romans lost their freedom (and their Empire) in 410 A.D., just 16 years after they adopted Christianity. Shortly prior to the French Revolution an age of enlightenment swept France, and Jansenism (another name for Calvinism) replaced Catholicism as the dominant belief of the people.
What is the essential idea which caused the above facts? Calvinism preaches the Old Testament, and the Old Testament preaches the concept of justice. It says that God (meaning reality) is just. The good will be rewarded, and the evil will be punished. The New Testament, on the other hand, pretty explicitly rejects the concept of justice and argues that God treats good and evil the same (Matthew, Ch. 5, vs. 45). The argument here is that love is opposed to justice, and although this is not true, when Christians preach love (mercy) what they always mean by it is that they want you to act against justice.
How do human beings act when they accept a personal philosophy of justice? Since good is rewarded and evil punished, they are afraid to do evil. The standard of morality rises dramatically (as indeed it did in puritan England). How do human beings act when they reject the idea that the world is just (as expounded through the ideas of love for and forgiveness of evil)? Well, since sins are forgiven, go out and sin and then act contrite and repent. The priest says that your sin is erased from the blackboard of reality. After all, “all men are sinners,” and “God is love,” meaning that he looks kindly on sinners and forgives them. The argument here is that your sins will not have any consequences, i.e., that the law of cause and effect does not operate. The result of these ideas is that the standard of morality falls dramatically.
The historians of our age have hidden from you that the Pilgrim Fathers explicitly refused to celebrate Christmas. And Christmas was hardly celebrated in America until the late 19th century (when Charles Dickens brought it back). Almost immediately thereafter America began t lose her freedom.
On the other side of the argument, the evil we are fighting is the welfare state. These are the people who hate liberty and are trying to eliminate it, and the fundamental impulse for this comes from Germany. It is based on the philosophy of love, and it was described by the politician who first introduced it into the German legislature (Otto von Bismarck, 1880) as his Christian (meaning New Testament) program. The people of Germany then went around for 40 years proclaiming that they were superior to everyone else because they were the country of love. We Americans were “rugged individualists.” (intended as an insult, meaning that we had no compassion because we did not have a welfare state).
Then (during the 1920s) the people of Germany converted from the philosophy of love to the philosophy of hate (Adolf Hitler), tried to make themselves the master race and killed 50 million human beings. This is the evil we are fighting. We cannot accept the ideology of the enemy and hope to defeat him. This is why I began this series with the statement by George Washington:
“If we offer what we ourselves do not approve [i.e., the arguments of our enemies], how will we defend our work?”
I put this question to the lovers of liberty in America today.
The lovers of liberty in mid-20th century America were good people, but they did not understand the nature of their enemy. They were like the 6 blind men who came across an elephant. Each could only perceive a part of the elephant and got a completely wrong idea. The mid-20th century conservatives preached (and still preach) the principle of non-initiation of force. This principle is not wrong (although it would be more precise to state it as Locke’s principle of rights).
The point is that the non-initiation principle is simply not relevant to a welfare statist. The libertarian movement has failed because the reaction of all welfare statists has been “does not compute.” If you want to convince another person, who is in error, you must look into his mind and discover what his wrong thinking is. It is not enough to simply present a correct argument. One must present an argument which precisely addresses the errors that he is making. . What welfare statists are thinking of is love. Look at the expression on a welfare statist politician’s face when he proposes a new spending program:
“Look at me. I am a person of love. I want to help people. This proves that I am a good person.”
And along with this thought comes a glazed expression (which appears on the faces of medieval saints, is known as the beatific smile and was satirized by Mad Magazine with the character of Alfred E. Newman ), and you know that a fog has descended over this person’s mind, and he is immune from any rational argument. Indeed, if you present him with even the simplest rational argument showing him that his proposal is not going to help people but rather hurt them badly, he will viciously turn on you:
“You have been listening to hate radio.”
In his mind, there are two parties, the party of love (the social democrats) and the party of hate (the fascists). That is the beginning and the end of things. Now how are American conservatives going to accomplish anything for liberty when they convert to Catholicism (i.e., Laura Ingraham) and reinterpret Christianity away from its American Calvinist roots? America was literally founded in the battle against the Catholic Church. The Pilgrims left Holland in 1620, not because they had a spirit for adventure, but because they were afraid of being murdered by the Catholics. There was a war going on between Calvinist Holland and Catholic Spain. The Pilgrims had come to Holland during a truce in that war, and the truce was scheduled to end in 1621. If the Spanish had won, then the Pilgrims (who were radical Calvinists) would have been declared heretics and burned alive. One part of the group decided to remain in Leyden and risk a Spanish victory; the other part decided to risk the ocean voyage and the savage Indians. In the 17th century, the Catholics in Quebec used to pay the Indians to kidnap English colonists in New Hampshire and take them up to slavery in Quebec.
If American lovers of liberty want to employ Washington’s strategy of not offering the arguments of our enemies, then we have to reject the philosophy of love, upon which the welfare state is based. Love is just a simple emotion. It comes to us without our consent. Hate is the same. And the only choice we have in regard to either is to act on it or not. Feeling an emotion is not a moral issue; it is what you do with that feeling which reflects your moral character. A good man asks himself, is this a good emotion? If not, he will not act on it. End of story.
We humans are part of a class of living creatures who feel emotions. If you believe in God, then emotions, as such, have to be good because God created them. If you believe in evolution, then emotions are still good because they are pro-life and give animals which possess them a leg up in the struggle for survival. We humans bond with other animals which have emotions (such as dogs and cats) because, in this regard, they are like us. The only difference is that we have the capacity to recognize right and wrong and can use this moral sense to check an emotion. This does not mean check feeling it. That was the mistake the Germans made. You have to feel the emotion. But if it tells you to do something illegal or immoral, then you do not have to act on it.
For this reason, I strongly support the traditional American practice of not celebrating Christmas.(See, Of Plymouth Plantation, by William Bradford, (New York, Capricorn, 1962), p. 82-83.) Christmas tells you to feel “good will toward all men.” Since you cannot turn on an emotion like good will, if you don’t happen to feel it, then Christmas encourages you to lie to yourself. (Besides, it is not right to feel good will toward Hitler or Osama bin Laden, and if Jesus of Nazareth tells you that you should do this [Matthew, Ch. 5, vs. 44], he is a false prophet.)
Many people have espoused a philosophy of love over the past 2000 years. In each and every case, it has been a disaster. You know, the Pope gives a speech about love and peace, and then all the followers of the Pope set about killing each other. The amazing thing is that, although sometimes they kill foreigners, mostly they kill each other. When there is a split between two countries (such as 16th century England and Spain, or a split within a country, such as the 17th century puritans and cavaliers in England, then it is the side least enthusiastic about the philosophy of love which is the most decent and humane. The side most enthusiastic about the philosophy of love is the most brutal and savage.
The point of this series is to target the (wrong) ideas which are really in the minds of our enemies. And it offers a logically consistent program from that point. The failure of both the mid-20th century conservatives and the late 20th century libertarians to make progress toward liberty over the past ¾ of a century is due to these mistakes.
Once the correct strategy is employed, our progress will be rapid, and the pro-liberty movement will be filled with energy. (To be continued.)
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
6-15-09
Well, here we are up to our armpits in practical politics, and we have come up against an issue of morality. We were discussing the issue should one vote for the candidate/issue one believes is right, or should one vote for the candidate/issue one believes is wrong. I am here talking only about the subjective issue. One’s candidate/issue may be either right or wrong in fact, but that is not important at this point. The question is, should one do what is right as one sees it? Overwhelmingly, the answer given by our society to this question is, “No. You ought to do what is wrong (as you see it).”
If you and I were transported back into the days of the Founding Fathers , this question would not be asked. Those men did what they believed to be right. Jefferson once said, “Indeed, I tremble for my country when I reflect that God is just” [Thomas Jefferson, Notes on the State of Virginia 1781-85), Ch. 18]. They were fallible human beings, and they made mistakes. But they did great things, things no other age accomplished. And a prerequisite for this was that they were all Calvinists. And what Calvin had taught was to disregard the New Testament and concentrate on the Old Testament.
One can see this issue much more clearly if one studies the history of 17th century England. In the turmoil of the Reformation initiated by King Henry VIII, a small group of people started to read and spread the teachings of John Calvin. Toward the end of the reign of Queen Elizabeth, these people began to organize. The idea on their minds was democracy. However, Elizabeth was too dearly loved by the people, and no anti-monarchy movement could take root. When Elizabeth died in 1603, the Calvinists (who took the name Puritans) began to agitate for democracy. Although at their greatest power they numbered only about 20% of the population (my estimate), they were able to spread their political ideas. In 1621, a Puritan-influenced Parliament passed a bill in favor of freedom of speech. This was only freedom of speech for members of Parliament while Parliament was in session, but it so angered King James I that he ripped the page out of Parliament’s annals. Gradually the Presbyterian majority came to support Puritan political ideas. When James died, the Parliamentary majority (Puritan plus Presbyterian) went toe-to-toe with his son, King Charles I.
In 1629, Charles dismissed the quarrelsome Parliament. In order to force him to call Parliament back into session, the Puritans advanced the doctrine of “no taxation without representation.” This meant that the King did not have the power to lay taxes without the consent of Parliament. In support of this idea, the Puritans and Presbyterians refused to pay taxes throughout the 1630s. There was a nationwide tax revolt which forced the King to his knees. In 1638, he gave in and summoned another Parliament, dismissed it and summoned it again. The principle was established, no taxation without representation.
The King and the new Parliament (with the Puritans at their height, although still a minority) again went toe-to-toe. In 1642, a war began between the King (representing monarchy) and Parliament (representing democracy).
A Puritan Member of Parliament, Oliver Cromwell, was dissatisfied with the way the pro-democracy forces were fighting. So he formed a special cavalry unit (similar to Teddy Roosevelt’s Rough Riders of the Spanish-American War). He had no military experience, and neither did his men, but being radical Calvinists they had enthusiasm. They trained by day and read the Bible by the light of their campfires at night.
The first thing that happened to Cromwell’s unit was that their pro-democracy “friends” betrayed them into a monarchist trap. They fought their way out and established themselves as the number one military unit of the war. They were never beaten. Cromwell was called “Old Ironsides” because his flanks could not be turned (and he is the source of that expression as it appears later in American history). His unit was decisive in winning the key victories (Marston Moor and Naseby) which led to the democratic victory. In 1646, the King was captured, and in 1649 the Puritan Parliament chopped off his head.
The democracy movement did meet with setbacks. They had had no experience with democracy. For example, at one point the Presbyterian majority voted to take away freedom of religion from their Puritan allies. Because of mistakes like this the country turned against the democrats, and the monarchy was restored in 1660. But a second revolution occurred in 1688, and this time Parliament acquired the supreme power in the government. England had become a democracy. A year later it got a bill of rights.
We are so proud of our American heritage of freedom and democracy, but in truth we must acknowledge that we were merely copying the 17th century English. They led the way. We merely carried things a notch farther. We must also acknowledge that it was precisely the other Calvinist countries of the world (Holland, Scotland, Switzerland) which adopted democracy. (Within the U.S. the northern states were dominated by Calvinism to a much greater extent than the southern, and this was the source of the friction which led to the American Civil War.)
We continually find this association between religion and politics. The Romans lost their freedom (and their Empire) in 410 A.D., just 16 years after they adopted Christianity. Shortly prior to the French Revolution an age of enlightenment swept France, and Jansenism (another name for Calvinism) replaced Catholicism as the dominant belief of the people.
What is the essential idea which caused the above facts? Calvinism preaches the Old Testament, and the Old Testament preaches the concept of justice. It says that God (meaning reality) is just. The good will be rewarded, and the evil will be punished. The New Testament, on the other hand, pretty explicitly rejects the concept of justice and argues that God treats good and evil the same (Matthew, Ch. 5, vs. 45). The argument here is that love is opposed to justice, and although this is not true, when Christians preach love (mercy) what they always mean by it is that they want you to act against justice.
How do human beings act when they accept a personal philosophy of justice? Since good is rewarded and evil punished, they are afraid to do evil. The standard of morality rises dramatically (as indeed it did in puritan England). How do human beings act when they reject the idea that the world is just (as expounded through the ideas of love for and forgiveness of evil)? Well, since sins are forgiven, go out and sin and then act contrite and repent. The priest says that your sin is erased from the blackboard of reality. After all, “all men are sinners,” and “God is love,” meaning that he looks kindly on sinners and forgives them. The argument here is that your sins will not have any consequences, i.e., that the law of cause and effect does not operate. The result of these ideas is that the standard of morality falls dramatically.
The historians of our age have hidden from you that the Pilgrim Fathers explicitly refused to celebrate Christmas. And Christmas was hardly celebrated in America until the late 19th century (when Charles Dickens brought it back). Almost immediately thereafter America began t lose her freedom.
On the other side of the argument, the evil we are fighting is the welfare state. These are the people who hate liberty and are trying to eliminate it, and the fundamental impulse for this comes from Germany. It is based on the philosophy of love, and it was described by the politician who first introduced it into the German legislature (Otto von Bismarck, 1880) as his Christian (meaning New Testament) program. The people of Germany then went around for 40 years proclaiming that they were superior to everyone else because they were the country of love. We Americans were “rugged individualists.” (intended as an insult, meaning that we had no compassion because we did not have a welfare state).
Then (during the 1920s) the people of Germany converted from the philosophy of love to the philosophy of hate (Adolf Hitler), tried to make themselves the master race and killed 50 million human beings. This is the evil we are fighting. We cannot accept the ideology of the enemy and hope to defeat him. This is why I began this series with the statement by George Washington:
“If we offer what we ourselves do not approve [i.e., the arguments of our enemies], how will we defend our work?”
I put this question to the lovers of liberty in America today.
The lovers of liberty in mid-20th century America were good people, but they did not understand the nature of their enemy. They were like the 6 blind men who came across an elephant. Each could only perceive a part of the elephant and got a completely wrong idea. The mid-20th century conservatives preached (and still preach) the principle of non-initiation of force. This principle is not wrong (although it would be more precise to state it as Locke’s principle of rights).
The point is that the non-initiation principle is simply not relevant to a welfare statist. The libertarian movement has failed because the reaction of all welfare statists has been “does not compute.” If you want to convince another person, who is in error, you must look into his mind and discover what his wrong thinking is. It is not enough to simply present a correct argument. One must present an argument which precisely addresses the errors that he is making. . What welfare statists are thinking of is love. Look at the expression on a welfare statist politician’s face when he proposes a new spending program:
“Look at me. I am a person of love. I want to help people. This proves that I am a good person.”
And along with this thought comes a glazed expression (which appears on the faces of medieval saints, is known as the beatific smile and was satirized by Mad Magazine with the character of Alfred E. Newman ), and you know that a fog has descended over this person’s mind, and he is immune from any rational argument. Indeed, if you present him with even the simplest rational argument showing him that his proposal is not going to help people but rather hurt them badly, he will viciously turn on you:
“You have been listening to hate radio.”
In his mind, there are two parties, the party of love (the social democrats) and the party of hate (the fascists). That is the beginning and the end of things. Now how are American conservatives going to accomplish anything for liberty when they convert to Catholicism (i.e., Laura Ingraham) and reinterpret Christianity away from its American Calvinist roots? America was literally founded in the battle against the Catholic Church. The Pilgrims left Holland in 1620, not because they had a spirit for adventure, but because they were afraid of being murdered by the Catholics. There was a war going on between Calvinist Holland and Catholic Spain. The Pilgrims had come to Holland during a truce in that war, and the truce was scheduled to end in 1621. If the Spanish had won, then the Pilgrims (who were radical Calvinists) would have been declared heretics and burned alive. One part of the group decided to remain in Leyden and risk a Spanish victory; the other part decided to risk the ocean voyage and the savage Indians. In the 17th century, the Catholics in Quebec used to pay the Indians to kidnap English colonists in New Hampshire and take them up to slavery in Quebec.
If American lovers of liberty want to employ Washington’s strategy of not offering the arguments of our enemies, then we have to reject the philosophy of love, upon which the welfare state is based. Love is just a simple emotion. It comes to us without our consent. Hate is the same. And the only choice we have in regard to either is to act on it or not. Feeling an emotion is not a moral issue; it is what you do with that feeling which reflects your moral character. A good man asks himself, is this a good emotion? If not, he will not act on it. End of story.
We humans are part of a class of living creatures who feel emotions. If you believe in God, then emotions, as such, have to be good because God created them. If you believe in evolution, then emotions are still good because they are pro-life and give animals which possess them a leg up in the struggle for survival. We humans bond with other animals which have emotions (such as dogs and cats) because, in this regard, they are like us. The only difference is that we have the capacity to recognize right and wrong and can use this moral sense to check an emotion. This does not mean check feeling it. That was the mistake the Germans made. You have to feel the emotion. But if it tells you to do something illegal or immoral, then you do not have to act on it.
For this reason, I strongly support the traditional American practice of not celebrating Christmas.(See, Of Plymouth Plantation, by William Bradford, (New York, Capricorn, 1962), p. 82-83.) Christmas tells you to feel “good will toward all men.” Since you cannot turn on an emotion like good will, if you don’t happen to feel it, then Christmas encourages you to lie to yourself. (Besides, it is not right to feel good will toward Hitler or Osama bin Laden, and if Jesus of Nazareth tells you that you should do this [Matthew, Ch. 5, vs. 44], he is a false prophet.)
Many people have espoused a philosophy of love over the past 2000 years. In each and every case, it has been a disaster. You know, the Pope gives a speech about love and peace, and then all the followers of the Pope set about killing each other. The amazing thing is that, although sometimes they kill foreigners, mostly they kill each other. When there is a split between two countries (such as 16th century England and Spain, or a split within a country, such as the 17th century puritans and cavaliers in England, then it is the side least enthusiastic about the philosophy of love which is the most decent and humane. The side most enthusiastic about the philosophy of love is the most brutal and savage.
The point of this series is to target the (wrong) ideas which are really in the minds of our enemies. And it offers a logically consistent program from that point. The failure of both the mid-20th century conservatives and the late 20th century libertarians to make progress toward liberty over the past ¾ of a century is due to these mistakes.
Once the correct strategy is employed, our progress will be rapid, and the pro-liberty movement will be filled with energy. (To be continued.)
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
Monday, June 8, 2009
STRATEGY FOR VICTORY – III
by Howard S. Katz
6-8-09
I have studied the 1930s in a great deal of detail. But one event (or non-event) remains a mystery to me? Why didn’t the conservatives of the day seize upon F.D.R.’s abolition of the gold standard and make it the main issue of the 1936 election? By the way, the definition of an American conservative in the mid-20th century is anyone who opposed the policies of F.D.R. The more general definition of a conservative is someone who opposes change. These two concepts have been fighting with each other as an American conservative of the mid-20th century is actually a liberal.
First, I would like to review the political battles over the gold standard (construed broadly to include all hard vs. soft money issues) in American history because they lead directly to the conclusion that the conservatives were handed a perfect issue and could have won the election of 1936 in a landslide victory.
The first known battle over hard money in American history occurred in the 1780s when several of the state governments issued paper money. You have probably heard of Shay’s Rebellion in Massachusetts. Actually, Dan Shays was not the true leader of the movement. As a mob was assembled by agitators, the true leaders preferred to remain anonymous, and someone pushed Shays forward to be the leader. The Shaysites wanted a program of large scale government spending accompanied by no taxes but a great deal of paper money and tried to seize power by violence. (This was the basic idea of the Kennedy tax cut of 1963 currently held in high esteem by modern conservatives.)
The Shaysites were defeated by Washington’s army. However, the same faction managed to win election in Rhode Island and controlled the state government for several years.
The people we know as the Founding Fathers were against paper money and for a gold/silver standard. But many people of the 1780s favored paper money, and in 1787 it was hard to determine which side would win. Voters in many states (besides Rhode Island) were endorsing limited issues of paper money, and how the matter would go in a general election was not known.
The Founding Fathers chose to resolve the issue by writing a new constitution (the existing one being the Articles of Confederation) which would ban all fiat money permanently. The issue of paper money by the states was banned in the new Constitution by Article I, Section 10. And the issue of paper money by the Federal Government was banned by omission. That is, the basic structure of the Constitution, latter clarified by Amendment 10 of the Bill of Rights, restricted the Federal Government to 17 powers enumerated in Article I, Section 8. The power to issue paper money was omitted from this list. At the Constitutional Convention, an attempt to smuggle in the paper money power (disguised as bills of credit) was defeated 9 states to 2, and the paper money faction left the convention advising their supporters to reject the new constitution.
So when the Founding Fathers attempted to gain ratification for the Constitution in 1788, they faced a difficult battle. But remember Washington’s technique of arguing issues by means of reason. “Let us raise a standard to which the wise and honest can repair.” They did, and they began to win victory after victory. In some cases, the voters elected an anti-constitution slate to a special convention to consider the issue. The delegates assembled, initially in opposition. But during the debate the pro-Constitution side was more persuasive, and the convention wound up ratifying. In short order, 12 of the 13 states had ratified and the new Government , sans Rhode Island, went into operation. Rhode Island was no longer part of the United States.
Then a hard money faction formed in the southern part of the state (centered in Newport). It threatened to secede from Rhode Island, form its own state and apply for admission. Faced with this threat the paper money faction in the northern part of the state admitted defeat, and Rhode Island ratified the Constitution in convention by a vote of 34-32. The Founding Fathers had won a unanimous victory.
But the candles had barely died after the victory party when hard money faced a new threat. Alexander Hamilton proposed a central bank for the new country. A central bank, as conceived in those days, was not a full abrogation of the gold standard. Rather, it allowed the banks of the country to expand their paper notes to a limited degree. A good analogy would be an elastic gold standard. The banks, guided by the central bank, could issue paper money up to a point and then would be forced to contract their money and credit. Indeed, conventional economists often refer to this as “an elastic currency.”
In Hamilton’s defense, having a central bank was the conventional wisdom of the day. Anyone who studied higher economics in the 1780s would be taught that a central bank was the regular way to go. The American colonists had been under the Bank of England up to 1776. Under the Articles of Confederation, the Continental Congress had established the Bank of North America (whose name indicated the intention to conquer Canada). So when the Constitution was adopted in 1788, proposing an American central bank was just the natural thing to do. Only Thomas Jefferson understood the evils of a central bank. He broke with his friends in the Federalist Party and went into opposition on the issue of abolishing the central bank.
Jefferson organized an opposition movement and ran for President in 1796. He missed by 3 electoral votes. He tried again in 1800 and won an overwhelming victory. But he was unable to repeal the bank because Congress was against him. However, the bank’s charter expired in 1811. At that time, Jefferson’s associate, James Madison, was President, and his veto killed the first Bank of the United States.
But the battle was not over. Soon the nation was involved in the War of 1812. It borrowed money from (some of the) local banks to finance the war. These banks issued too much money and were forced to suspend gold/silver payment. Their bank notes sank to 75¢ on the dollar. This created a chaotic situation, and Madison allowed himself to be talked into supporting a second central bank. This Second Bank of the United States had a 20 year charter (1816-36).
Jefferson, now in retirement in Monticello, was very angry. A young politician, Martin van Buren, visited him, and Jefferson poured out his heart to the man. Van Buren walked away inspired and energized. He formed a second anti-bank movement, recruited war hero Andrew Jackson and formed the Democratic Party. Jackson won a plurality of votes in 1824 (both electoral and popular) but lost when the election was thrown into the House of Representatives. In 1828, Jackson won a decisive victory. Again the President was anti-bank, but Congress was pro-bank. (The head of the second bank was bribing congressman.)
Since the bank’s charter expired in 1836, the election of 1832 was crucial. If reelected, Jackson would be able to kill the bank with his veto, as Madison had done. The supporters of the bank raised the issue by bringing forward an early recharter in 1832. Jackson drew a line in the sand. He said that the people could have, “A bank and no Jackson, or no bank and Jackson.” He was reelected in an overwhelming victory. This time the central bank was crushed, and the issue of a bank became death in American politics for the remainder of the 19th century.
Now these battles were hard fought. Nothing was easy. But look what we owe to the gold standard: The Constitution was written and adopted. Jefferson was elected President. The Democratic Party was founded. Andrew Jackson was elected President. And the country was set on a course of hard money which turned it into the economic powerhouse of the world. Each time the people had been asked to decide the issue, they had voted for hard money, often by overwhelming majorities.
Lincoln turned to paper money during the Civil War. There was a stated intent to resume the gold standard after the war, but in 1874 the railroads (who had broken their gold contracts and wanted to repay their debts in paper money) began to agitate for a continuation of paper money. A bill to postpone resumption (of gold) passed both houses of Congress in 1874 and went to President Grant for his signature. Grant intended to sign, but when he sat down and read the bill, he changed his mind and vetoed it instead. Then when Congress recessed for the election of 1874, they found out that their constituents were soundly for gold. They sheepishly returned to D.C. in early 1875 and voted a resumption of the gold standard effective 1879. Again the people had spoken.
But the paper money party had been tempted by the easy profits of the war period, and continual agitation appeared in favor of paper money. You have heard of the populist movement. This is simply another historian’s lie. The populist movement was not for the people, and the people were not for it. It was a cover for the greenbackers, a group who wanted to return to paper money. It is funny that the common people of the late 19th century could see that clearly even though modern day historians cannot.
Gradually the Republicans became the hard money party, and the Democrats became the soft money party. In 1884, there was a Republican scandal, and the Democrats saw their chance for victory (similar to 1976). In order not to blow their chance for a win, the Democrats made certain to nominate a pro-gold member of their party, Grover Cleveland. Cleveland served two (disconnected) terms. But in 1896, the Democrats forgot about practical politics and nominated a soft money man, William Jennings Bryan.
Bryan was a distinguished American political figure, and his softness on the money issue was very minor. He favored expanding the money supply by the remonetization of silver (which was allowed to be money by the Constitution) but had been demonetized in 1873. Bryan was considered a great orator and gave a famous speech at the Democratic nomination convention in which he said:
you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.
Bryan ran for election 3 times and was defeated decisively each time. The Populist Party was reduced to 0.2% of the vote in 1908.
This period, 1788-1912, gave America the hardest money system in the world. In America, the streets were paved with gold. People from all over the world left their country, their friends, their society and their language and emigrated to America. Freedom was a great concept, but the highest real wages and the highest standard of living in the world clearly motivated a lot of those immigrants. The second place country, Britain, also had a free economy and a gold standard, but it was a gold standard weakened by a central bank.
More to our point, every one of these cases was decided by the people. The battle of the 1830s was particularly bitter. Polling was not in vogue at the time, and the pro-bank party genuinely thought they had a chance to win. It was only when the nation voted in Nov. 1832 that there was a clear resolution. In every one of these battles, the paper money faction was highly vocal and campaigned aggressively. It was only after the votes were counted that people saw how weak they were. If it had not been for the gold standard, then the Constitution might not exist. The Democratic Party definitely would not exist.
Looking back we can see that the Republican Party became the dominant party of the post-Civil War period by capturing the hard money issue. The Democratic Party sunk to minority status by giving up its founding issue.
These are 5 important political battles in American history, the Constitution, the first bank, the second bank, 1874, and 1896. If you want to count Grover Cleveland, this makes it 6. The gold standard won all of them. How then did we leave the gold standard?
The answer is by fraud and deceit. My intention here is not to get on my high horse but to point out the simply truth that the enemies of the gold standard knew they were coming from a position of weakness and did not dare to openly announce their intent. This was the case with F.D.R. in 1932 and Richard Nixon in 1968. Both in fact led voters to believe that they would defend the existing gold standard.
Of course, it is not exactly a surprise that evil men lie to us. What lacks rational explanation is why did the opposition party or faction not take advantage of these events by picking up a winning issue? The Republicans of the 1930s seemed not to know that the country had left the gold standard. The Republicans of the 1970s saw the libertarians walk out but rallied behind Ronald Reagan who adopted the slogan “Thou shalt not speak ill of any Republican” (referring to Nixon and his economic measures of Aug. 15, 1971.) Again Reagan lied to the American people in 1980, running as a sound money (Friedmanite rule) candidate and than doubling the nation’s money supply. When a sound money movement did arise from the people (Ross Perot) in 1992 and ran as a third party, it won an astonishing 19% of the vote and forced President Clinton to completely change his policies and balance the budget.
The technique of the bankers is to donate money to both political parties and thus get to name “advisers” to both major party candidates. These advisers always say pretty much the same thing. Steal from the people and give to the bankers. This is why McCain and Obama agreed upon the Wall St. bailout bill of 2008. McCain lost the election because he put himself out in front for the bailout while Obama hung back. McCain had come from behind and had just moved ahead in the polls when the issue broke. As soon as he put himself forward for the bailout, he started to sink.
Those people who feel they must vote for a major party candidate so as not to “waste” their vote manage to waste their vote every time. Their candidate wins, and their issue is defeated. Both major party candidates are ignorant of the issue and will make their decisions as directed by their (banker nominated) advisers.
We had a long discussion in this blog about the thesis of Saul of Tarsus (St. Paul) that “all men are sinners.” One is expected to do evil. They urge you to do evil. And they magically remove the bad consequences of doing evil. The men of the 18th century paid no attention to Saul of Tarsus. They did good. That is why they achieved great things. (To be continued.)
# # #
6-8-09
I have studied the 1930s in a great deal of detail. But one event (or non-event) remains a mystery to me? Why didn’t the conservatives of the day seize upon F.D.R.’s abolition of the gold standard and make it the main issue of the 1936 election? By the way, the definition of an American conservative in the mid-20th century is anyone who opposed the policies of F.D.R. The more general definition of a conservative is someone who opposes change. These two concepts have been fighting with each other as an American conservative of the mid-20th century is actually a liberal.
First, I would like to review the political battles over the gold standard (construed broadly to include all hard vs. soft money issues) in American history because they lead directly to the conclusion that the conservatives were handed a perfect issue and could have won the election of 1936 in a landslide victory.
The first known battle over hard money in American history occurred in the 1780s when several of the state governments issued paper money. You have probably heard of Shay’s Rebellion in Massachusetts. Actually, Dan Shays was not the true leader of the movement. As a mob was assembled by agitators, the true leaders preferred to remain anonymous, and someone pushed Shays forward to be the leader. The Shaysites wanted a program of large scale government spending accompanied by no taxes but a great deal of paper money and tried to seize power by violence. (This was the basic idea of the Kennedy tax cut of 1963 currently held in high esteem by modern conservatives.)
The Shaysites were defeated by Washington’s army. However, the same faction managed to win election in Rhode Island and controlled the state government for several years.
The people we know as the Founding Fathers were against paper money and for a gold/silver standard. But many people of the 1780s favored paper money, and in 1787 it was hard to determine which side would win. Voters in many states (besides Rhode Island) were endorsing limited issues of paper money, and how the matter would go in a general election was not known.
The Founding Fathers chose to resolve the issue by writing a new constitution (the existing one being the Articles of Confederation) which would ban all fiat money permanently. The issue of paper money by the states was banned in the new Constitution by Article I, Section 10. And the issue of paper money by the Federal Government was banned by omission. That is, the basic structure of the Constitution, latter clarified by Amendment 10 of the Bill of Rights, restricted the Federal Government to 17 powers enumerated in Article I, Section 8. The power to issue paper money was omitted from this list. At the Constitutional Convention, an attempt to smuggle in the paper money power (disguised as bills of credit) was defeated 9 states to 2, and the paper money faction left the convention advising their supporters to reject the new constitution.
So when the Founding Fathers attempted to gain ratification for the Constitution in 1788, they faced a difficult battle. But remember Washington’s technique of arguing issues by means of reason. “Let us raise a standard to which the wise and honest can repair.” They did, and they began to win victory after victory. In some cases, the voters elected an anti-constitution slate to a special convention to consider the issue. The delegates assembled, initially in opposition. But during the debate the pro-Constitution side was more persuasive, and the convention wound up ratifying. In short order, 12 of the 13 states had ratified and the new Government , sans Rhode Island, went into operation. Rhode Island was no longer part of the United States.
Then a hard money faction formed in the southern part of the state (centered in Newport). It threatened to secede from Rhode Island, form its own state and apply for admission. Faced with this threat the paper money faction in the northern part of the state admitted defeat, and Rhode Island ratified the Constitution in convention by a vote of 34-32. The Founding Fathers had won a unanimous victory.
But the candles had barely died after the victory party when hard money faced a new threat. Alexander Hamilton proposed a central bank for the new country. A central bank, as conceived in those days, was not a full abrogation of the gold standard. Rather, it allowed the banks of the country to expand their paper notes to a limited degree. A good analogy would be an elastic gold standard. The banks, guided by the central bank, could issue paper money up to a point and then would be forced to contract their money and credit. Indeed, conventional economists often refer to this as “an elastic currency.”
In Hamilton’s defense, having a central bank was the conventional wisdom of the day. Anyone who studied higher economics in the 1780s would be taught that a central bank was the regular way to go. The American colonists had been under the Bank of England up to 1776. Under the Articles of Confederation, the Continental Congress had established the Bank of North America (whose name indicated the intention to conquer Canada). So when the Constitution was adopted in 1788, proposing an American central bank was just the natural thing to do. Only Thomas Jefferson understood the evils of a central bank. He broke with his friends in the Federalist Party and went into opposition on the issue of abolishing the central bank.
Jefferson organized an opposition movement and ran for President in 1796. He missed by 3 electoral votes. He tried again in 1800 and won an overwhelming victory. But he was unable to repeal the bank because Congress was against him. However, the bank’s charter expired in 1811. At that time, Jefferson’s associate, James Madison, was President, and his veto killed the first Bank of the United States.
But the battle was not over. Soon the nation was involved in the War of 1812. It borrowed money from (some of the) local banks to finance the war. These banks issued too much money and were forced to suspend gold/silver payment. Their bank notes sank to 75¢ on the dollar. This created a chaotic situation, and Madison allowed himself to be talked into supporting a second central bank. This Second Bank of the United States had a 20 year charter (1816-36).
Jefferson, now in retirement in Monticello, was very angry. A young politician, Martin van Buren, visited him, and Jefferson poured out his heart to the man. Van Buren walked away inspired and energized. He formed a second anti-bank movement, recruited war hero Andrew Jackson and formed the Democratic Party. Jackson won a plurality of votes in 1824 (both electoral and popular) but lost when the election was thrown into the House of Representatives. In 1828, Jackson won a decisive victory. Again the President was anti-bank, but Congress was pro-bank. (The head of the second bank was bribing congressman.)
Since the bank’s charter expired in 1836, the election of 1832 was crucial. If reelected, Jackson would be able to kill the bank with his veto, as Madison had done. The supporters of the bank raised the issue by bringing forward an early recharter in 1832. Jackson drew a line in the sand. He said that the people could have, “A bank and no Jackson, or no bank and Jackson.” He was reelected in an overwhelming victory. This time the central bank was crushed, and the issue of a bank became death in American politics for the remainder of the 19th century.
Now these battles were hard fought. Nothing was easy. But look what we owe to the gold standard: The Constitution was written and adopted. Jefferson was elected President. The Democratic Party was founded. Andrew Jackson was elected President. And the country was set on a course of hard money which turned it into the economic powerhouse of the world. Each time the people had been asked to decide the issue, they had voted for hard money, often by overwhelming majorities.
Lincoln turned to paper money during the Civil War. There was a stated intent to resume the gold standard after the war, but in 1874 the railroads (who had broken their gold contracts and wanted to repay their debts in paper money) began to agitate for a continuation of paper money. A bill to postpone resumption (of gold) passed both houses of Congress in 1874 and went to President Grant for his signature. Grant intended to sign, but when he sat down and read the bill, he changed his mind and vetoed it instead. Then when Congress recessed for the election of 1874, they found out that their constituents were soundly for gold. They sheepishly returned to D.C. in early 1875 and voted a resumption of the gold standard effective 1879. Again the people had spoken.
But the paper money party had been tempted by the easy profits of the war period, and continual agitation appeared in favor of paper money. You have heard of the populist movement. This is simply another historian’s lie. The populist movement was not for the people, and the people were not for it. It was a cover for the greenbackers, a group who wanted to return to paper money. It is funny that the common people of the late 19th century could see that clearly even though modern day historians cannot.
Gradually the Republicans became the hard money party, and the Democrats became the soft money party. In 1884, there was a Republican scandal, and the Democrats saw their chance for victory (similar to 1976). In order not to blow their chance for a win, the Democrats made certain to nominate a pro-gold member of their party, Grover Cleveland. Cleveland served two (disconnected) terms. But in 1896, the Democrats forgot about practical politics and nominated a soft money man, William Jennings Bryan.
Bryan was a distinguished American political figure, and his softness on the money issue was very minor. He favored expanding the money supply by the remonetization of silver (which was allowed to be money by the Constitution) but had been demonetized in 1873. Bryan was considered a great orator and gave a famous speech at the Democratic nomination convention in which he said:
you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.
Bryan ran for election 3 times and was defeated decisively each time. The Populist Party was reduced to 0.2% of the vote in 1908.
This period, 1788-1912, gave America the hardest money system in the world. In America, the streets were paved with gold. People from all over the world left their country, their friends, their society and their language and emigrated to America. Freedom was a great concept, but the highest real wages and the highest standard of living in the world clearly motivated a lot of those immigrants. The second place country, Britain, also had a free economy and a gold standard, but it was a gold standard weakened by a central bank.
More to our point, every one of these cases was decided by the people. The battle of the 1830s was particularly bitter. Polling was not in vogue at the time, and the pro-bank party genuinely thought they had a chance to win. It was only when the nation voted in Nov. 1832 that there was a clear resolution. In every one of these battles, the paper money faction was highly vocal and campaigned aggressively. It was only after the votes were counted that people saw how weak they were. If it had not been for the gold standard, then the Constitution might not exist. The Democratic Party definitely would not exist.
Looking back we can see that the Republican Party became the dominant party of the post-Civil War period by capturing the hard money issue. The Democratic Party sunk to minority status by giving up its founding issue.
These are 5 important political battles in American history, the Constitution, the first bank, the second bank, 1874, and 1896. If you want to count Grover Cleveland, this makes it 6. The gold standard won all of them. How then did we leave the gold standard?
The answer is by fraud and deceit. My intention here is not to get on my high horse but to point out the simply truth that the enemies of the gold standard knew they were coming from a position of weakness and did not dare to openly announce their intent. This was the case with F.D.R. in 1932 and Richard Nixon in 1968. Both in fact led voters to believe that they would defend the existing gold standard.
Of course, it is not exactly a surprise that evil men lie to us. What lacks rational explanation is why did the opposition party or faction not take advantage of these events by picking up a winning issue? The Republicans of the 1930s seemed not to know that the country had left the gold standard. The Republicans of the 1970s saw the libertarians walk out but rallied behind Ronald Reagan who adopted the slogan “Thou shalt not speak ill of any Republican” (referring to Nixon and his economic measures of Aug. 15, 1971.) Again Reagan lied to the American people in 1980, running as a sound money (Friedmanite rule) candidate and than doubling the nation’s money supply. When a sound money movement did arise from the people (Ross Perot) in 1992 and ran as a third party, it won an astonishing 19% of the vote and forced President Clinton to completely change his policies and balance the budget.
The technique of the bankers is to donate money to both political parties and thus get to name “advisers” to both major party candidates. These advisers always say pretty much the same thing. Steal from the people and give to the bankers. This is why McCain and Obama agreed upon the Wall St. bailout bill of 2008. McCain lost the election because he put himself out in front for the bailout while Obama hung back. McCain had come from behind and had just moved ahead in the polls when the issue broke. As soon as he put himself forward for the bailout, he started to sink.
Those people who feel they must vote for a major party candidate so as not to “waste” their vote manage to waste their vote every time. Their candidate wins, and their issue is defeated. Both major party candidates are ignorant of the issue and will make their decisions as directed by their (banker nominated) advisers.
We had a long discussion in this blog about the thesis of Saul of Tarsus (St. Paul) that “all men are sinners.” One is expected to do evil. They urge you to do evil. And they magically remove the bad consequences of doing evil. The men of the 18th century paid no attention to Saul of Tarsus. They did good. That is why they achieved great things. (To be continued.)
# # #
Monday, June 1, 2009
STRATEGY FOR VICTORY II
by Howard S. Katz
6-1-09
Last week we asked the question, since the classical liberal movement of America’s early days was so successful and popular, then why cannot the modern (true) liberal movement be equally popular? In answer, we saw that the Founding Fathers adopted a strategy of reason, and we saw that (true) liberalism remains popular to this day whenever it is put to a test of the people.
One of the factors responsible for the defeat of classical liberal values in our day is a mistake I call the liberty-benevolence split. Starting in the 1920s the idea entered American thought that benevolence was opposed to liberty. (Benevolence is the emotion which results when one identifies with another living creature.) For example, in his first inaugural address, Jefferson said:
“A wise and frugal government…shall not take from the mouth of labor the bread it has earned.”
Notice that Jefferson thought of his position in favor of low taxes as being for the working man. How different this was from the position of, say, Bob Taft, Sr. (co-author of the Taft-Hartley Act). Taft was also for low taxes, but he was strongly anti-union and was perceived as anti-labor. Somehow in 150 years the low tax (pro-liberty) position had been separated from the pro-labor (pro-benevolence) position.
In the same way, Jefferson and Jackson were for gold/silver money (pro-liberty) and were opposed to the bankers (pro-benevolence). 150 years later the gold standard was routinely attacked as being pro-banker.
But even though the liberty-benevolence split made things very difficult in 20th century America, a close student of politics could see that the American people were still pulled strongly toward both the liberty side and the benevolence side.
For example, in mid-20th century America, the conservatives were closely identified with the balanced budget, a hard money (pro-liberty) position. Meanwhile the “liberals” were closely identified with an anti-war (pro-benevolence) position. It became a cliché for voters to say, “I’m a conservative on economic policy and a liberal on foreign policy.”
America left (what remained of) the gold standard in 1971, but it never voted to do so. Nixon ran on a series of campaign planks which indicated that he would retain the gold standard, balance the budget and keep a free economy. When he proved to have lied about these promises, a segment of activists walked out of the Republican Party and formed the Libertarian Party. When Nixon got into political trouble for something much less severe than many Democratic Presidents had done, these Libertarians and many Republicans sympathetic to them) would not support him, and he was driven from office by almost certain impeachment.
In 1992, an independent citizen, Ross Perot, was outraged by the size of the budget deficit and used his personal wealth to create a third party, which gathered 19% of the vote. This was a wake-up call to Bill Clinton, who wanted re-election in 1996 and needed those votes. Clinton said to his staff, “We’re Eisenhower Republicans, and we’re going to balance the budget.” Clinton reduced the size of the Government, both in terms of real spending and in terms of number of non-military employees.
If we step back and look at the world picture, then in terms of classical liberal values the world hit a low in 1933 with the election of Roosevelt and Hitler. Countries were leaving the gold standard, socialism appeared unstoppable. But sometime around 1980 the world began to shift for the better. A wave of privatization struck Latin America and Europe. The leaders of the Soviet Union lost heart, and the people of Eastern Europe began to agitate for freedom. In 1989, the Soviet Union collapsed, thus ending the Cold War. And in 1992 the Republicans captured control of Congress.
Although America has always been the freest country in the world (since her creation in 1776) she has usually lagged in world trends. For example, the American Revolution was an imitation of the English Civil War of 1642-46 and the Glorious Revolution of 1688. The American Bill of Rights of 1789 was based on the English Bill of Rights of 1689. And the slogan “no taxation without representation” comes from the English tax rebellion of the 1630s. The nickname “Old Ironsides” comes from the English general (Oliver Cromwell, who won the Civil War for the forces of democracy. This world trend bodes well for the forces of liberty. Indeed, if you could be transported back in time and were to tell a conservative of the 1950s that the Soviet Union would abolish itself (without the need for a world war III), they would refuse to believe it, and you would be the object of ridicule.
In addition to these large scale trends, the mistakes of our enemies vis a vis the events of late 2008 open up a tremendous opportunity – if we can take advantage of it.
One of the most powerful political forces is a sense of identity. In the 1930s, 40s and into the ‘50s, the Democratic Party was known as the party of the working man. The result was that the large majority of the working people voted Democrat. They did not know that the Democratic Party had initiated policies to rob the working man and give to Wall Street and the bankers. Later in the century another political movement started which called itself the woman’s movement. Large numbers of American women voted for the candidate of “the woman’s movement” and in this way elected the first rapist to occupy the position of President of the United States. Indeed, we have come a long way from George Washington.
My point here is that there are large numbers of people who will respond to the following political argument:
I am a member of ABC group.
The P Party is the party of ABC group.
Therefore, I will vote for the P Party.
It was thus a terrible error when the conservatives of the 1930s allowed F.D.R. to claim the mantle of the common man. The only explanation for this is that they did not understand F.D.R.’s strategy.
F.D.R. was a Wall Streeter. He spent the 1920s managing a vulture fund. This is a fund which swoops down on dying companies, buys them for a very low price and tries to make a profit by selling them higher. There is a legitimate place for vulture funds in a free marketplace, however, there is no legitimate place for them in F.D.R.’s stated political philosophy, and it is very difficult to avoid the conclusion that F.D.R. spent the ‘20s doing what he believed to be wrong. In short, F.D.R. was the type of person later satirized by the character Gordon Gekko and associated with the phrase “greed is good.” The fact that the very first act of his administration was to give commercial bankers the power to create money out of nothing indicates his real intent. F.D.R. was a member of the upper class. He was on the side of the upper class, and he wanted to make them richer by robbing from the poor and giving to them
F.D.R.’s political program was divided in two parts. In the first part, he robbed from the rich and gave to the poor through a highly progressive income tax (which reached a top rate of 90% of income). This, however, was substantially moderated by a network of loopholes which turned it into the Swiss cheese tax program and sharply undercut its stated intent. In the second part, F.D.R. caused a massive easing of credit and infusion of money by the Federal Reserve, both of which caused a sharp rise in the stock market and a decline in the real wages of the average working man. The stock market rose from a low of DJI 41.22 shortly before F.D.R. was elected to a peak of 194.40 at the end of his first term.
To put this in context, a free market economy does not have a continual rise in stock prices, such as we have become used to. The different companies compete with each other, and this keeps average earnings from rising. Charles Dow was keeping real time stock indexes as far back as 1885. (He created the Dow Jones Industrial Average in 1896.) His stock indexes show that U.S. stock prices were, on balance, flat from 1885 to 1932. The steady rise in stock prices since 1933 was the direct result of F.D.R.’s taking the country off the gold standard and giving the power to create money to the bankers.
The basic issue of the New Deal was in doubt until 1971 when Richard Nixon declared “I am a Keynesian” and adopted F.D.R.’s program of running budget deficits and printing money. The result of this can be given by 3 numbers: 1) The Dow Jones Industrials went from a low of 600 in 1974 to a high of 14,000 in 2007. 2) The real wages of the average American worker went from $344 per week in 1972 to $276 per week in 2005 (in terms of 1982 dollars). 3) The number of years the average American worker had to work to earn a home went from 3.6 years in 1970 to 7.8 years in 2007.In short, there has been a major transfer of wealth from the poor to the rich over the past generation, completely against the stated intent of the New Deal and as a direct consequences of the policies they introduced.
The problem for lovers of liberty over the past 76 years has been, 1) the American people did not recognize that the New Deal was robbing from the poor to give to the rich, and 2) the pro-liberty movement did not realize it either. Indeed, they allowed themselves to be mouse trapped into acting as defenders of the rich. Ayn Rand’s pamphlet, “Big Business, America’s Persecuted Minority” is a blatant example.
But in 2008, Wall Street blundered badly. As always, they were controlling both horses in the race. They donated to both Republican and Democratic Presidential candidates, and this gave them the inside track for the top advisory positions no matter who won the election. In 2008, the Republican Wall Street advisor was Henry Paulson.
From 2000 to 2004, Alan Greenspan engineered the greatest easing of credit in Fed history – the opposite of everything he said he believed in his early days in the Objectivist movement. This created a housing bubble, and Wall Street firms made billions of dollars by making irresponsible loans to people who could not pay them back. The term Wall Street coined for such loans was NINJA, an acronym for: No Income, No Job or Assets. Although these loans could not be paid back, they were given (fraudulent) AAA ratings. In 2006-07, the entire house of cards collapsed, and today Greenspan goes around the country saying: “It’s not my fault.”
As his Wall Street friends were collapsing, Henry Paulson rushed to President Bush, whose knowledge of economics is down to absolute zero. “The whole financial system is collapsing,” he argued. This was not true literally, but in Paulson’s world it was true. He and his friends are (in his mind) the whole financial system. Bush swallowed everything he said. Paulson proposed a bailout of his Wall Street friends by the Federal Reserve. (In the media this is called a taxpayer bailout although no tax increase was associated with it, and the money given to the banks will be paid for by Fed printing of money, not by an increase in any tax rate.)
As it turned out, most of the Wall Street firms given bailout money just happened to owe large sums to Goldman Sachs, Paulson’s old firm. So the entire program amounts to Henry Paulson robbing the people of America and giving the money to his old buddies.
In the 1930s, when the average American thought that he was a beneficiary of the robbery, he endorsed it. (Of course, the conservatives blundered badly by not exposing what was happening, but they have a good excuse: unbelievable stupidity.)
But there is no issue of stupidity now. The Wall Street bailout was enormously unpopular. Mail from the public was running 100-1 against it. But the Wall Street technique of controlling both parties by picking candidates with no moral convictions or brains and controlling their advisors worked in the emergency atmosphere of 2008. This, however, gives us 4 years to organize. (Note that McCain took the lead supporting the bailout while Obama held back. From precisely that moment, McCain began to drop in the polls and went down to defeat.)
In the late 18th and 19th centuries, politicians genuinely ran on issues. They kept their promises, and they directly appealed to the people in elections. The election of 1832 was decided on the issue of the central bank. The election of 1860 was decided on the issue of slavery. The issue of 1896 was decided on the issue of the gold standard. If one studies the history of that period, it becomes clear that there was no force greater than the people. Newspapers who opposed the will of the people folded. Political candidates who opposed the will of the people were defeated. At that time, no political figure would have dared to lie in an election campaign as George Bush, Sr. did in 1988 with “Read my lips, no new taxes.” He would have been defeated in the next election. (Come to think of it, what did happen to Bush, Sr. in 1992?)
Ron Paul ran a great campaign in 2008. On average, he got about 8% of the vote in the Republican primary. We have now reached the point where the principal argument against us is the wasted vote. Although our “wasted” votes of the past are creating a political revolution which is changing the country, most people are too short range and only look as far as the next election.
But 8%, in a 3 or 4 way race, is very close to the breaking point. There are a lot of people favorably disposed toward Ron. I think that the outrage of the Wall Street bailout can raise Ron’s initial vote from 8% to 15% in a 4 way race. And this is enough to put him within striking distance so that the wasted vote argument dies. Note, the one issue on which I disagreed with Ron in ’08 was the “illegal” aliens issue. Who wound up winning the Republican nomination? It was the one (of the initial 10) candidates who was sympathetic to the “illegal” aliens (McCain). I have my nose to the ground, and I know what people are thinking.
What lovers of liberty have to do is to get their head out of the late 20th century. Study the nuts and bolts politics of the 18th and early 19th centuries. Then the good guys won overwhelming victories. We must study their tactics and method of operation. They were winners. We can be winners too. (To be continued next week.)
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
6-1-09
Last week we asked the question, since the classical liberal movement of America’s early days was so successful and popular, then why cannot the modern (true) liberal movement be equally popular? In answer, we saw that the Founding Fathers adopted a strategy of reason, and we saw that (true) liberalism remains popular to this day whenever it is put to a test of the people.
One of the factors responsible for the defeat of classical liberal values in our day is a mistake I call the liberty-benevolence split. Starting in the 1920s the idea entered American thought that benevolence was opposed to liberty. (Benevolence is the emotion which results when one identifies with another living creature.) For example, in his first inaugural address, Jefferson said:
“A wise and frugal government…shall not take from the mouth of labor the bread it has earned.”
Notice that Jefferson thought of his position in favor of low taxes as being for the working man. How different this was from the position of, say, Bob Taft, Sr. (co-author of the Taft-Hartley Act). Taft was also for low taxes, but he was strongly anti-union and was perceived as anti-labor. Somehow in 150 years the low tax (pro-liberty) position had been separated from the pro-labor (pro-benevolence) position.
In the same way, Jefferson and Jackson were for gold/silver money (pro-liberty) and were opposed to the bankers (pro-benevolence). 150 years later the gold standard was routinely attacked as being pro-banker.
But even though the liberty-benevolence split made things very difficult in 20th century America, a close student of politics could see that the American people were still pulled strongly toward both the liberty side and the benevolence side.
For example, in mid-20th century America, the conservatives were closely identified with the balanced budget, a hard money (pro-liberty) position. Meanwhile the “liberals” were closely identified with an anti-war (pro-benevolence) position. It became a cliché for voters to say, “I’m a conservative on economic policy and a liberal on foreign policy.”
America left (what remained of) the gold standard in 1971, but it never voted to do so. Nixon ran on a series of campaign planks which indicated that he would retain the gold standard, balance the budget and keep a free economy. When he proved to have lied about these promises, a segment of activists walked out of the Republican Party and formed the Libertarian Party. When Nixon got into political trouble for something much less severe than many Democratic Presidents had done, these Libertarians and many Republicans sympathetic to them) would not support him, and he was driven from office by almost certain impeachment.
In 1992, an independent citizen, Ross Perot, was outraged by the size of the budget deficit and used his personal wealth to create a third party, which gathered 19% of the vote. This was a wake-up call to Bill Clinton, who wanted re-election in 1996 and needed those votes. Clinton said to his staff, “We’re Eisenhower Republicans, and we’re going to balance the budget.” Clinton reduced the size of the Government, both in terms of real spending and in terms of number of non-military employees.
If we step back and look at the world picture, then in terms of classical liberal values the world hit a low in 1933 with the election of Roosevelt and Hitler. Countries were leaving the gold standard, socialism appeared unstoppable. But sometime around 1980 the world began to shift for the better. A wave of privatization struck Latin America and Europe. The leaders of the Soviet Union lost heart, and the people of Eastern Europe began to agitate for freedom. In 1989, the Soviet Union collapsed, thus ending the Cold War. And in 1992 the Republicans captured control of Congress.
Although America has always been the freest country in the world (since her creation in 1776) she has usually lagged in world trends. For example, the American Revolution was an imitation of the English Civil War of 1642-46 and the Glorious Revolution of 1688. The American Bill of Rights of 1789 was based on the English Bill of Rights of 1689. And the slogan “no taxation without representation” comes from the English tax rebellion of the 1630s. The nickname “Old Ironsides” comes from the English general (Oliver Cromwell, who won the Civil War for the forces of democracy. This world trend bodes well for the forces of liberty. Indeed, if you could be transported back in time and were to tell a conservative of the 1950s that the Soviet Union would abolish itself (without the need for a world war III), they would refuse to believe it, and you would be the object of ridicule.
In addition to these large scale trends, the mistakes of our enemies vis a vis the events of late 2008 open up a tremendous opportunity – if we can take advantage of it.
One of the most powerful political forces is a sense of identity. In the 1930s, 40s and into the ‘50s, the Democratic Party was known as the party of the working man. The result was that the large majority of the working people voted Democrat. They did not know that the Democratic Party had initiated policies to rob the working man and give to Wall Street and the bankers. Later in the century another political movement started which called itself the woman’s movement. Large numbers of American women voted for the candidate of “the woman’s movement” and in this way elected the first rapist to occupy the position of President of the United States. Indeed, we have come a long way from George Washington.
My point here is that there are large numbers of people who will respond to the following political argument:
I am a member of ABC group.
The P Party is the party of ABC group.
Therefore, I will vote for the P Party.
It was thus a terrible error when the conservatives of the 1930s allowed F.D.R. to claim the mantle of the common man. The only explanation for this is that they did not understand F.D.R.’s strategy.
F.D.R. was a Wall Streeter. He spent the 1920s managing a vulture fund. This is a fund which swoops down on dying companies, buys them for a very low price and tries to make a profit by selling them higher. There is a legitimate place for vulture funds in a free marketplace, however, there is no legitimate place for them in F.D.R.’s stated political philosophy, and it is very difficult to avoid the conclusion that F.D.R. spent the ‘20s doing what he believed to be wrong. In short, F.D.R. was the type of person later satirized by the character Gordon Gekko and associated with the phrase “greed is good.” The fact that the very first act of his administration was to give commercial bankers the power to create money out of nothing indicates his real intent. F.D.R. was a member of the upper class. He was on the side of the upper class, and he wanted to make them richer by robbing from the poor and giving to them
F.D.R.’s political program was divided in two parts. In the first part, he robbed from the rich and gave to the poor through a highly progressive income tax (which reached a top rate of 90% of income). This, however, was substantially moderated by a network of loopholes which turned it into the Swiss cheese tax program and sharply undercut its stated intent. In the second part, F.D.R. caused a massive easing of credit and infusion of money by the Federal Reserve, both of which caused a sharp rise in the stock market and a decline in the real wages of the average working man. The stock market rose from a low of DJI 41.22 shortly before F.D.R. was elected to a peak of 194.40 at the end of his first term.
To put this in context, a free market economy does not have a continual rise in stock prices, such as we have become used to. The different companies compete with each other, and this keeps average earnings from rising. Charles Dow was keeping real time stock indexes as far back as 1885. (He created the Dow Jones Industrial Average in 1896.) His stock indexes show that U.S. stock prices were, on balance, flat from 1885 to 1932. The steady rise in stock prices since 1933 was the direct result of F.D.R.’s taking the country off the gold standard and giving the power to create money to the bankers.
The basic issue of the New Deal was in doubt until 1971 when Richard Nixon declared “I am a Keynesian” and adopted F.D.R.’s program of running budget deficits and printing money. The result of this can be given by 3 numbers: 1) The Dow Jones Industrials went from a low of 600 in 1974 to a high of 14,000 in 2007. 2) The real wages of the average American worker went from $344 per week in 1972 to $276 per week in 2005 (in terms of 1982 dollars). 3) The number of years the average American worker had to work to earn a home went from 3.6 years in 1970 to 7.8 years in 2007.In short, there has been a major transfer of wealth from the poor to the rich over the past generation, completely against the stated intent of the New Deal and as a direct consequences of the policies they introduced.
The problem for lovers of liberty over the past 76 years has been, 1) the American people did not recognize that the New Deal was robbing from the poor to give to the rich, and 2) the pro-liberty movement did not realize it either. Indeed, they allowed themselves to be mouse trapped into acting as defenders of the rich. Ayn Rand’s pamphlet, “Big Business, America’s Persecuted Minority” is a blatant example.
But in 2008, Wall Street blundered badly. As always, they were controlling both horses in the race. They donated to both Republican and Democratic Presidential candidates, and this gave them the inside track for the top advisory positions no matter who won the election. In 2008, the Republican Wall Street advisor was Henry Paulson.
From 2000 to 2004, Alan Greenspan engineered the greatest easing of credit in Fed history – the opposite of everything he said he believed in his early days in the Objectivist movement. This created a housing bubble, and Wall Street firms made billions of dollars by making irresponsible loans to people who could not pay them back. The term Wall Street coined for such loans was NINJA, an acronym for: No Income, No Job or Assets. Although these loans could not be paid back, they were given (fraudulent) AAA ratings. In 2006-07, the entire house of cards collapsed, and today Greenspan goes around the country saying: “It’s not my fault.”
As his Wall Street friends were collapsing, Henry Paulson rushed to President Bush, whose knowledge of economics is down to absolute zero. “The whole financial system is collapsing,” he argued. This was not true literally, but in Paulson’s world it was true. He and his friends are (in his mind) the whole financial system. Bush swallowed everything he said. Paulson proposed a bailout of his Wall Street friends by the Federal Reserve. (In the media this is called a taxpayer bailout although no tax increase was associated with it, and the money given to the banks will be paid for by Fed printing of money, not by an increase in any tax rate.)
As it turned out, most of the Wall Street firms given bailout money just happened to owe large sums to Goldman Sachs, Paulson’s old firm. So the entire program amounts to Henry Paulson robbing the people of America and giving the money to his old buddies.
In the 1930s, when the average American thought that he was a beneficiary of the robbery, he endorsed it. (Of course, the conservatives blundered badly by not exposing what was happening, but they have a good excuse: unbelievable stupidity.)
But there is no issue of stupidity now. The Wall Street bailout was enormously unpopular. Mail from the public was running 100-1 against it. But the Wall Street technique of controlling both parties by picking candidates with no moral convictions or brains and controlling their advisors worked in the emergency atmosphere of 2008. This, however, gives us 4 years to organize. (Note that McCain took the lead supporting the bailout while Obama held back. From precisely that moment, McCain began to drop in the polls and went down to defeat.)
In the late 18th and 19th centuries, politicians genuinely ran on issues. They kept their promises, and they directly appealed to the people in elections. The election of 1832 was decided on the issue of the central bank. The election of 1860 was decided on the issue of slavery. The issue of 1896 was decided on the issue of the gold standard. If one studies the history of that period, it becomes clear that there was no force greater than the people. Newspapers who opposed the will of the people folded. Political candidates who opposed the will of the people were defeated. At that time, no political figure would have dared to lie in an election campaign as George Bush, Sr. did in 1988 with “Read my lips, no new taxes.” He would have been defeated in the next election. (Come to think of it, what did happen to Bush, Sr. in 1992?)
Ron Paul ran a great campaign in 2008. On average, he got about 8% of the vote in the Republican primary. We have now reached the point where the principal argument against us is the wasted vote. Although our “wasted” votes of the past are creating a political revolution which is changing the country, most people are too short range and only look as far as the next election.
But 8%, in a 3 or 4 way race, is very close to the breaking point. There are a lot of people favorably disposed toward Ron. I think that the outrage of the Wall Street bailout can raise Ron’s initial vote from 8% to 15% in a 4 way race. And this is enough to put him within striking distance so that the wasted vote argument dies. Note, the one issue on which I disagreed with Ron in ’08 was the “illegal” aliens issue. Who wound up winning the Republican nomination? It was the one (of the initial 10) candidates who was sympathetic to the “illegal” aliens (McCain). I have my nose to the ground, and I know what people are thinking.
What lovers of liberty have to do is to get their head out of the late 20th century. Study the nuts and bolts politics of the 18th and early 19th centuries. Then the good guys won overwhelming victories. We must study their tactics and method of operation. They were winners. We can be winners too. (To be continued next week.)
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
Monday, May 25, 2009
STRATEGY FOR VICTORY I
by Howard S. Katz
5-25-09
The events of October-December 2008 create a unique opportunity for the pro-liberty movement in America to win a stunning victory. By way of introduction, I would like to ask a question. The pro-liberty movement in America here in the early 21st century is not essentially different from the pro-liberty movement in the late 18th or early 19th centuries. But those people won, and we cannot seem to punch our way out of a paper bag.
To illustrate the point, let us consider the most popular politician in American history. This gentleman won election as President without a dissenting vote (in the Electoral Collage). His name, of course, is George Washington. For the purpose of this blog, I will not be discussing the issue of whether liberty is right. That will be a given. The question will be, since liberty proved itself so popular in those earlier days, why can’t the liberty party win here in our own age?
An important clue to George Washington’s political strategy was given at the Constitutional Convention of 1787. A critic suggested to Washington that it would be expedient to compromise his beliefs in order to make the Constitution more popular. It might be immoral, but it would be practical. Washington replied:
“If to please the people, we offer what we ourselves do not approve, how will we defend our work? Let us raise a standard to which the wise and honest can repair. The event is in the hand of God.”
Since this argument is made repeatedly in our own day and age, let us study carefully Washington’s rejection as no one can accuse him of not being a winning politician. The key words are: “how will we defend our work.”
That is, Washington completely missed the critic’s point. Washington did not believe in a moral vs. practical dichotomy and had no concept that being moral would be impractical. When his critic brought up the issue of popularity, his reply was, if you want to talk popularity, “how will we defend our work?” In other words, Washington viewed an election or a political debate as a rational argument. His side presented their arguments; the other side presented their arguments. And the people made the decision. Man was a rational animal, and the side which presented the most rational argument would win.
So if Washington’s side got up and tried to defend policies in which they did not believe, they would fall all over themselves. They would look like fools. To Washington, the critic’s advice was a sure way to lose. Speaking as a practical politician Washington saw that the way to win was to “raise a standard to which the wise and honest can repair,” meaning to do one’s best. His concluding comment that “the event is in the hand of God” merely meant that human events are uncertain. No one can predict them or calculate them (because other human beings have free will), and therefore the only way to approach the human realm is to do your best and hope that others recognize it. That was always Washington’s policy, and it worked out very well for him.
This policy of doing one’s best became the American way. It was epitomized in the slogan “build a better mousetrap.” One thing that is vividly burned into my mind from the 1950s was that everyone always tried to do his best. This changed in the 1960s, a direct result of the propaganda of the New Left, and I began to hear people argue that the American public was stupid and that it was necessary to dumb things down for them.
Using the political action technique of the Founding Fathers three major movements swept over America in the late 18th and early 19th centuries. This period is still known in western intellectual history as the Age of Reason. The three movements were, American independence from Britain, the abolition of the central bank and the abolition of Negro slavery.
American independence from Britain brought with it a new breath of freedom. The most important of these were the abolition of Negro slavery in the northern states and the freedom to pay and receive interest in the northern states. This latter freedom led to the creation of banks and corporate bonds, and this led to the institution of saving. The savings of the people were lent to a class of businessmen who built factories and put the newest machines to work increasing the productivity of the people. This is known as the Industrial Revolution. (This same breath of freedom engulfed Britain herself and also led to the abolition of the anti-interest laws and to an industrial revolution. This enabled Britain to win the Napoleonic wars and become the dominant country in Europe for the remainder of the 19th century.)
The interesting thing about these movements is that they swept the country, destroying all opposition. When Sam Adams conceived the idea of making the American colonies independent of Britain (1763), his supporters could have fit inside a telephone booth (if they had had telephone booths in those days). By 1776, a majority of Americans favored the idea. By 1800, you could not find anyone in America who wanted to return to being a British colony. When Jefferson began his opposition to the central bank (1791), he was a political loner, in opposition to even his political friends. By 1800 he had been elected President. The battle over the bank was long and hard. It was abolished in 1811 but came back to life in 1816. This spawned a second political battle led by Martin van Buren and Andrew Jackson. (Jefferson died in 1826.) Jackson won election for President in 1828, and the issue of the second bank dominated his reelection campaign in 1832. Jackson declared that the people could have:
“a bank and no Jackson, or
no bank and Jackson.”
Jackson won a decisive victory. To put it in modern terms and eliminating the 2 minor parties, he received 59% of the vote as compared to 41% for Henry Clay, his principal opponent. The central bank died in 1836 when its charter expired, and a central bank became anathema in American politics for the remainder of the century.
When William Lloyd Garrison founded The Liberator in 1831, the anti-slavery movement in America was small. By 1865, it had become a majority of the country, and of course today there is no one who favors re-enslaving the black population of the United States.
In contrast with these movements which swept the nation, let us examine the battle over abortion which has gone on in our lifetime. Today there are two sides on the issue, pro-abortion and pro-life. And each has about the strength it had at the time of Rowe v. Wade. Instead of the contest being waged by reason, all we have is two sides shouting at each other, and the result has been absolutely no movement in either direction.
(I should note that my own position on abortion has recently changed. I have always been anti-abortion and rejected the argument that the fetus was not a person. However, I did not place a great deal of importance on the issue. Now with the creation of the Office of Health Information Technology by President Obama it is very clear that there is a larger anti-life movement in this country. The political left is attacking human life at both ends, killing you before you enter and hurrying things up as you leave. Further, several actions of the environmental movement in California are killing human beings on the premise that human life must be sacrificed to plants and animals. There is thus an anti-life movement in this country which is evil and must be opposed, and I erred in not placing enough importance on fighting the abortion issue.)
But here I am interested in the abortion issue because it is a perfect example of how politics is conducted in modern times. Two sides stomp their feet at each other, shout emotive slogans, and there is no attempt to devise a rational argument. The result is that there is absolutely no movement.
This is the German approach to politics. The man who did most to banish reason from the social atmosphere in America was Sigmund Freud. (When I say German, I am talking culturally and am referring to German-speaking Europe of the late 19th and early 20th centuries.) Freud declared that human beings were not moved by reason, and this idea is drummed into the heads of most American college students in almost every Social Studies course taught in the country.
What is the supposed proof that man is not rational? Freud never said. He never conducted a scientific experiment. He did not appear to know how. None of his predictions ever worked out, and the people who are following him have established a long record of failure. (As Ayn Rand pointed out, if Freud had adopted a rational approach and tried to prove to us that man was not rational, then he would have been contradicting himself.)
Since I became aware of this issue, I have made it a point of studying the different projects launched in our society under the premise that man is not a rational being. (Freud never did explain how this non-rational creature invented the internal combustion engine, discovered the principles of Newtonian mechanics, invented the airplane and the TV set, and he certainly failed to predict that men would walk on the moon.)
One of the big arguments for Freudian (and other variants of) psychiatry near the beginning of the 20th century was that large numbers of people were walking around with unconscious mental illnesses which were interfering with their happiness and undercutting their productivity. Once psychiatry had lifted this burden, there would be enormous psychological and real benefits. Yet if we look at our Freudian world today, just the opposite has happened. One very obvious example is the large rise in the divorce rate. This has caused an enormous amount of unhappiness, and one has only to compare the sense of life of the characters in the very early movies with movies (especially left-wing movies) of today. Much of this divorce was caused by Freudian (and neo-Freudian and post-Freudian, etc.) marriage counselors, who themselves were divorced.
Are Americans more productive today now that they have all these psychiatrists lifting their unconsciousness burdens and repressions? You would have a hard time proving it. Henry Ford once sold half the automobiles in the world. Today’s U.S. auto companies run to the Government for a bailout.
To come back to politics, I noted in my analysis of the 2008 election that the late 20th century had a very good record of candidates who did a better job fulfilling their opponent’s promises than their own. This is because both sides have lost the Washington formula for winning elections. If one studies the elections of the late 18th and early 19th centuries, one understands that these were passionate men devoted to their political convictions. Even the bad guys were passionate (in a bad cause). Newspapers were founded (and folded). Political parties were formed. Careers were made, and broken.
The conclusion is obvious from a study of this period that political issues are the most dominant force in our society. Time and again the issue swept everything before it. If your newspaper was on the wrong side of the issue which gripped the people, it went belly up. If your candidate was on the wrong side, he went belly up. There was no institution which could stand against the will of the people.
Today, both parties (both lower case ”p” and upper case “P,”) “know” that being moral is impractical. Thus running an election on what they believe to be right means political suicide. So each party can count on the other to soft pedal its issue. The glib meaningless campaign run by Barrack Obama in 2008 is a good example. Consider the issue which cost George Bush, Sr. reelection in 1992, his promise “NO NEW TAXES” in 1988 and his breaking of this promise. The promise was made because it seemed expedient at the time. It was broken because that seemed expedient a few years later. The whole incident could not have happened 100 or 200 years earlier. If Bush had sincerely believed in no new taxes, he would never have broken his promise and, as sitting President, would never have lost to an unknown in ’92.
Or consider Richard Nixon. He went out of his way to fulfill every campaign promise in the Democratic Platforms of 1968 and 1972. In doing so, he lost the support of the active, intelligent conservatives of the day. When Watergate broke, he desperately needed these people (because his campaign to woo the left had been a dismal failure), but by that time they hated his guts.
To take the opposite case, when Ron Paul was a young Congressman, other Congressmen would come up to him and say, “I wish I could vote like you, but in my district they would kill me.” They were being polite. Ron was not elected in a Libertarian district. In fact, it was a Democratic district, and the Democrats expected to win it back easily after his first full term. Just to make sure they threw big money and big names at him. He increased his margin of victory. In 1980, the Texas state legislature was going to gerrymander him out of a seat. But gold bugs all over the nation rose up in protest. The Texas state legislators were faced with the possibility of big out-of-state money coming in to defeat them. This they did not need. They did a 180º reversal and gerrymandered Ron into a safe seat. All the polite Congressmen would have given their right arms for a safe seat.
One thing which becomes clear from a study of the 18th and 19th centuries is that again and again the American people support the twin planks of the classical liberal program: sound money/limited government in domestic affairs and a foreign policy of non-intervention in foreign affairs. (That is, mind your own business and defend your rights in domestic matters, and mind your own business and defend your rights in foreign matters.) So you have to ask, how come we lost on both issues in the 20th century? The answer is that the issue was never put to a vote of the people. Wilson ran against a central bank in 1912 and on a peace plank in 1916. F.D.R. ran as an economy-in-government man in 1932 and as the peace candidate in 1940. L.B.J. was the peace candidate in 1964 and smeared Barry Goldwater as a dangerous radical who would get us into war in Vietnam. Richard Nixon ran as a balanced budget man and an enemy of price and wage controls in 1968.
This must be the key to a new strategy for the pro-liberty movement. The American people want us. They vote for us again and again. But statism keeps advancing because both parties lie to us on issues, and the media misinterprets and spins the results of elections. What they have done is to erect a house of cards. All that is necessary is for us to huff and puff, and it will come tumbling down. (To be continued.)
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
5-25-09
The events of October-December 2008 create a unique opportunity for the pro-liberty movement in America to win a stunning victory. By way of introduction, I would like to ask a question. The pro-liberty movement in America here in the early 21st century is not essentially different from the pro-liberty movement in the late 18th or early 19th centuries. But those people won, and we cannot seem to punch our way out of a paper bag.
To illustrate the point, let us consider the most popular politician in American history. This gentleman won election as President without a dissenting vote (in the Electoral Collage). His name, of course, is George Washington. For the purpose of this blog, I will not be discussing the issue of whether liberty is right. That will be a given. The question will be, since liberty proved itself so popular in those earlier days, why can’t the liberty party win here in our own age?
An important clue to George Washington’s political strategy was given at the Constitutional Convention of 1787. A critic suggested to Washington that it would be expedient to compromise his beliefs in order to make the Constitution more popular. It might be immoral, but it would be practical. Washington replied:
“If to please the people, we offer what we ourselves do not approve, how will we defend our work? Let us raise a standard to which the wise and honest can repair. The event is in the hand of God.”
Since this argument is made repeatedly in our own day and age, let us study carefully Washington’s rejection as no one can accuse him of not being a winning politician. The key words are: “how will we defend our work.”
That is, Washington completely missed the critic’s point. Washington did not believe in a moral vs. practical dichotomy and had no concept that being moral would be impractical. When his critic brought up the issue of popularity, his reply was, if you want to talk popularity, “how will we defend our work?” In other words, Washington viewed an election or a political debate as a rational argument. His side presented their arguments; the other side presented their arguments. And the people made the decision. Man was a rational animal, and the side which presented the most rational argument would win.
So if Washington’s side got up and tried to defend policies in which they did not believe, they would fall all over themselves. They would look like fools. To Washington, the critic’s advice was a sure way to lose. Speaking as a practical politician Washington saw that the way to win was to “raise a standard to which the wise and honest can repair,” meaning to do one’s best. His concluding comment that “the event is in the hand of God” merely meant that human events are uncertain. No one can predict them or calculate them (because other human beings have free will), and therefore the only way to approach the human realm is to do your best and hope that others recognize it. That was always Washington’s policy, and it worked out very well for him.
This policy of doing one’s best became the American way. It was epitomized in the slogan “build a better mousetrap.” One thing that is vividly burned into my mind from the 1950s was that everyone always tried to do his best. This changed in the 1960s, a direct result of the propaganda of the New Left, and I began to hear people argue that the American public was stupid and that it was necessary to dumb things down for them.
Using the political action technique of the Founding Fathers three major movements swept over America in the late 18th and early 19th centuries. This period is still known in western intellectual history as the Age of Reason. The three movements were, American independence from Britain, the abolition of the central bank and the abolition of Negro slavery.
American independence from Britain brought with it a new breath of freedom. The most important of these were the abolition of Negro slavery in the northern states and the freedom to pay and receive interest in the northern states. This latter freedom led to the creation of banks and corporate bonds, and this led to the institution of saving. The savings of the people were lent to a class of businessmen who built factories and put the newest machines to work increasing the productivity of the people. This is known as the Industrial Revolution. (This same breath of freedom engulfed Britain herself and also led to the abolition of the anti-interest laws and to an industrial revolution. This enabled Britain to win the Napoleonic wars and become the dominant country in Europe for the remainder of the 19th century.)
The interesting thing about these movements is that they swept the country, destroying all opposition. When Sam Adams conceived the idea of making the American colonies independent of Britain (1763), his supporters could have fit inside a telephone booth (if they had had telephone booths in those days). By 1776, a majority of Americans favored the idea. By 1800, you could not find anyone in America who wanted to return to being a British colony. When Jefferson began his opposition to the central bank (1791), he was a political loner, in opposition to even his political friends. By 1800 he had been elected President. The battle over the bank was long and hard. It was abolished in 1811 but came back to life in 1816. This spawned a second political battle led by Martin van Buren and Andrew Jackson. (Jefferson died in 1826.) Jackson won election for President in 1828, and the issue of the second bank dominated his reelection campaign in 1832. Jackson declared that the people could have:
“a bank and no Jackson, or
no bank and Jackson.”
Jackson won a decisive victory. To put it in modern terms and eliminating the 2 minor parties, he received 59% of the vote as compared to 41% for Henry Clay, his principal opponent. The central bank died in 1836 when its charter expired, and a central bank became anathema in American politics for the remainder of the century.
When William Lloyd Garrison founded The Liberator in 1831, the anti-slavery movement in America was small. By 1865, it had become a majority of the country, and of course today there is no one who favors re-enslaving the black population of the United States.
In contrast with these movements which swept the nation, let us examine the battle over abortion which has gone on in our lifetime. Today there are two sides on the issue, pro-abortion and pro-life. And each has about the strength it had at the time of Rowe v. Wade. Instead of the contest being waged by reason, all we have is two sides shouting at each other, and the result has been absolutely no movement in either direction.
(I should note that my own position on abortion has recently changed. I have always been anti-abortion and rejected the argument that the fetus was not a person. However, I did not place a great deal of importance on the issue. Now with the creation of the Office of Health Information Technology by President Obama it is very clear that there is a larger anti-life movement in this country. The political left is attacking human life at both ends, killing you before you enter and hurrying things up as you leave. Further, several actions of the environmental movement in California are killing human beings on the premise that human life must be sacrificed to plants and animals. There is thus an anti-life movement in this country which is evil and must be opposed, and I erred in not placing enough importance on fighting the abortion issue.)
But here I am interested in the abortion issue because it is a perfect example of how politics is conducted in modern times. Two sides stomp their feet at each other, shout emotive slogans, and there is no attempt to devise a rational argument. The result is that there is absolutely no movement.
This is the German approach to politics. The man who did most to banish reason from the social atmosphere in America was Sigmund Freud. (When I say German, I am talking culturally and am referring to German-speaking Europe of the late 19th and early 20th centuries.) Freud declared that human beings were not moved by reason, and this idea is drummed into the heads of most American college students in almost every Social Studies course taught in the country.
What is the supposed proof that man is not rational? Freud never said. He never conducted a scientific experiment. He did not appear to know how. None of his predictions ever worked out, and the people who are following him have established a long record of failure. (As Ayn Rand pointed out, if Freud had adopted a rational approach and tried to prove to us that man was not rational, then he would have been contradicting himself.)
Since I became aware of this issue, I have made it a point of studying the different projects launched in our society under the premise that man is not a rational being. (Freud never did explain how this non-rational creature invented the internal combustion engine, discovered the principles of Newtonian mechanics, invented the airplane and the TV set, and he certainly failed to predict that men would walk on the moon.)
One of the big arguments for Freudian (and other variants of) psychiatry near the beginning of the 20th century was that large numbers of people were walking around with unconscious mental illnesses which were interfering with their happiness and undercutting their productivity. Once psychiatry had lifted this burden, there would be enormous psychological and real benefits. Yet if we look at our Freudian world today, just the opposite has happened. One very obvious example is the large rise in the divorce rate. This has caused an enormous amount of unhappiness, and one has only to compare the sense of life of the characters in the very early movies with movies (especially left-wing movies) of today. Much of this divorce was caused by Freudian (and neo-Freudian and post-Freudian, etc.) marriage counselors, who themselves were divorced.
Are Americans more productive today now that they have all these psychiatrists lifting their unconsciousness burdens and repressions? You would have a hard time proving it. Henry Ford once sold half the automobiles in the world. Today’s U.S. auto companies run to the Government for a bailout.
To come back to politics, I noted in my analysis of the 2008 election that the late 20th century had a very good record of candidates who did a better job fulfilling their opponent’s promises than their own. This is because both sides have lost the Washington formula for winning elections. If one studies the elections of the late 18th and early 19th centuries, one understands that these were passionate men devoted to their political convictions. Even the bad guys were passionate (in a bad cause). Newspapers were founded (and folded). Political parties were formed. Careers were made, and broken.
The conclusion is obvious from a study of this period that political issues are the most dominant force in our society. Time and again the issue swept everything before it. If your newspaper was on the wrong side of the issue which gripped the people, it went belly up. If your candidate was on the wrong side, he went belly up. There was no institution which could stand against the will of the people.
Today, both parties (both lower case ”p” and upper case “P,”) “know” that being moral is impractical. Thus running an election on what they believe to be right means political suicide. So each party can count on the other to soft pedal its issue. The glib meaningless campaign run by Barrack Obama in 2008 is a good example. Consider the issue which cost George Bush, Sr. reelection in 1992, his promise “NO NEW TAXES” in 1988 and his breaking of this promise. The promise was made because it seemed expedient at the time. It was broken because that seemed expedient a few years later. The whole incident could not have happened 100 or 200 years earlier. If Bush had sincerely believed in no new taxes, he would never have broken his promise and, as sitting President, would never have lost to an unknown in ’92.
Or consider Richard Nixon. He went out of his way to fulfill every campaign promise in the Democratic Platforms of 1968 and 1972. In doing so, he lost the support of the active, intelligent conservatives of the day. When Watergate broke, he desperately needed these people (because his campaign to woo the left had been a dismal failure), but by that time they hated his guts.
To take the opposite case, when Ron Paul was a young Congressman, other Congressmen would come up to him and say, “I wish I could vote like you, but in my district they would kill me.” They were being polite. Ron was not elected in a Libertarian district. In fact, it was a Democratic district, and the Democrats expected to win it back easily after his first full term. Just to make sure they threw big money and big names at him. He increased his margin of victory. In 1980, the Texas state legislature was going to gerrymander him out of a seat. But gold bugs all over the nation rose up in protest. The Texas state legislators were faced with the possibility of big out-of-state money coming in to defeat them. This they did not need. They did a 180º reversal and gerrymandered Ron into a safe seat. All the polite Congressmen would have given their right arms for a safe seat.
One thing which becomes clear from a study of the 18th and 19th centuries is that again and again the American people support the twin planks of the classical liberal program: sound money/limited government in domestic affairs and a foreign policy of non-intervention in foreign affairs. (That is, mind your own business and defend your rights in domestic matters, and mind your own business and defend your rights in foreign matters.) So you have to ask, how come we lost on both issues in the 20th century? The answer is that the issue was never put to a vote of the people. Wilson ran against a central bank in 1912 and on a peace plank in 1916. F.D.R. ran as an economy-in-government man in 1932 and as the peace candidate in 1940. L.B.J. was the peace candidate in 1964 and smeared Barry Goldwater as a dangerous radical who would get us into war in Vietnam. Richard Nixon ran as a balanced budget man and an enemy of price and wage controls in 1968.
This must be the key to a new strategy for the pro-liberty movement. The American people want us. They vote for us again and again. But statism keeps advancing because both parties lie to us on issues, and the media misinterprets and spins the results of elections. What they have done is to erect a house of cards. All that is necessary is for us to huff and puff, and it will come tumbling down. (To be continued.)
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
Sunday, May 17, 2009
WHERE NOW ECONOMY?
by Howard S. Katz
2009-05-18
I would like to give an economic review to help you orient yourself and make the proper decisions for your life in the coming years. The situation is far worse than almost anyone recognizes, and almost all believers in the establishment will be economically destroyed.
The first thing to keep in mind is the onion of lies. The intention of the power structure is to steal the wealth which you produce, and since the principle of democracy is deeply ingrained in America, they have chosen the policy of fraud (pioneered by the Fabian Society in Britain). Thus we have the continual manufacture of lies, one on top of the other. As these lies are accepted, more lies are manufactured until there is a solid core of deception which has so permeated the language that it becomes very difficult to enter the public discussion without unintentionally accepting some of these lies. This is the problem with many good conservatives. They discover some error in the prevailing establishment and become energized on this point. Then they fall into accepting all the rest of the onion of lies without thinking about it.
For example, the political left in this country calls itself liberal. This is false. “Liberal” is a Spanish word, coined in the early 19th century by a Spanish political group who admired the French Revolution and America’s Founding Fathers. They believed that the proper function of government was the protection of its citizens’ rights. That is, liberal means pretty much what libertarian means in America today. This is the origin of the word in 19th century Spain, and this is the meaning of the word in most countries in the world to this day. (Indeed, when I ran for U.S. Senate on the Libertarian ticket in Massachusetts in 1982, against Ted Kennedy, I spoke before an all-Spanish speaking group. My major thesis was that the Libertarian Party was the liberal party in America today. This is a proposition which would provoke some opposition among Americans. But I noticed that my translator was rendering “libertarian” and “liberal” by the same Spanish word, reducing my controversial thesis to a tautology.)
What happened was that some of the social democrats of the 1920s-30s did not want to admit that their political philosophy came from Germany. So they made up the lie that they were liberals. Today the “conservatives,” thinking that they are conservative have decided to apologize for torture, because it sounds like the conservative thing to do.
But the essence of any system of domination of one human being by another is economic. In the Middle Ages, the aristocracy produced no wealth. Instead it lived off the labor of the average person, who was reduced to the position of a serf. (That is, he had lost the freedom to choose his job.) Today in America we have an aspiring aristocracy who wants to live off our labor but has not yet reduced us to serfdom.
This aspiring aristocracy secured the privilege to counterfeit money in 1933. A group of commercial bankers, working with the Federal Reserve, create money out of nothing. The bankers use this money to make loans. This is in contrast with the old-fashioned saving bank or S&L, which made loans with deposits which it attracted by paying interest.
The extra money created by the Fed/banks causes prices to rise. All of the wage earners of the country watch their wages lag the rise in prices. All of the retired people are stuck on fixed income while the prices for the necessities of life go out of sight. These two groups together constitute 95% of the people of America.
As the bankers win from the interest on their loans, some of this is passed through to their loan customers, principally the nation’s big corporations. These big corporations also gain because the wages they pay do not rise as rapidly as prices. And they further gain because many of them are heavily in debt and can pay their debt in depreciated money (e.g., Donald Trump). In toto, the vast majority o Americans get poorer, and a small group consisting of the bankers, the big corporations and Wall Street, make big fortunes. This is why the gap between rich and poor is getting wider today while it got narrower during the 19th and early 20th centuries.
Once they had slipped through the privilege to counterfeit money (March 9, 1933, the first day of the New Deal), the bankers sought for a group of economists who would apologize for their privilege. Such a group existed, the followers of William Trufant Foster and Waddill Catchings. These men had written a book, The Road to Plenty, in 1928 arguing that paper money was the road to plenty for a society. Wealth, they said, did not have to be created by labor. It could simply be created by printing money.
One difficulty for the bankers was that Fosters and Catchings were known, by the economists of the day, as crackpots. To get around this fact, the bankers were saved by one of the great confidence men of all time, John Maynard Keynes. Keynes plagiarized The Road to Plenty, but he knew how to PR it. He called it the “New Economics” and threw around a lot of mathematical folderol. The bankers then bribed the nation’s top colleges to hire this “new” school of economists to teach their students.
For example, in 1948, the Manhattan Bank (today part of J.P. Morgan) endowed a chair of economics at Harvard on the proviso that John Kenneth Galbraith be appointed. Up to this time, a college being offered an endowment would reply, “We graciously appreciate your offer, but no one has the right to dictate whom we select as our teachers, and if that condition is attached, then we must respectfully decline.” Harvard said, “Hey, we’ll take the money.”
Other colleges imitated the most prestigious ones, and rather quickly the new crackpot school of economics dominated higher education in the United States. This is one good example of why you can not live your life in accord with authority. The bankers (and the remainder of the paper aristocracy) want to steal your wealth. Being a group of anemic wimps they lack the physical courage to use the technique of a common thief; so they need the power of government in order to live off our labor. But to gain the power of government in a democracy they need to deceive millions of people. Their basic technique of deception has been to adopt the guise of the authority figures of our society. Mr. Smith-Jones is the Highly Distinguished Professor of Economics. Therefore, when he says that down is up and rich is poor, you must believe everything he says.
Interestingly, our society has a great deal of experience with authority figures. The central issue for western man for most of the past 2 thousand years has been how to get into heaven. And the authority figures of that time were the priests of the Catholic Church. This, of course, was a completely untestable hypothesis. Nobody ever came back from heaven; so there was no way to know if the priest had gotten you in or not. And indeed, these priests were ignorant semi-pagans who did not even know God’s name. (“Jehovah” is not a real word. It is a composite formed by taking the consonants from God’s name and combining them with the vowels from the Hebrew word “lord.” If God exists and if there is a heaven, then my guess would be that God would not be very inclined to grant favors to people who could not get his name right. The actual name of God used to be pronounced once a year, on the High Holy Day, by my family back in the first millennium B.C., but it was lost when the Romans destroyed the second temple in 70 A.D. And to this day no one knows what it is.)
This is why the Protestants did western society a great service when they said, “question authority, rely on the inner light” (meaning the judgement of your own mind. A great battle had to be fought before this principle was partially established, and much of what western man has accomplished over the past few hundred years has been due to this principle.
The record of modern economists since 1948 (and for most of the 20th century) has been a disaster. The record of the late 18th and 19th century economists was one of great achievement. Adam Smith proved that it was the proper function of government to protect the rights of property and contract, and when a government confined itself to these two tasks, the human benefits were enormous. Adam Smith’s theories were dominant primarily in the English speaking world in the 19th and early 20th centuries. And these countries produced more wealth (by far) than any other society in human history. They also produced a closer distribution of wealth where the gap between rich and poor was narrower than any other society in history. The “egalitarians” of the modern left, who pretend to support the absolute economic equality of all men have now started the pendulum back in the old direction. Since 1972, the real wages of the average American have been on the decline, and since 1982 the wages of the nation’s CEOs have exploded and become an open scandal.
During the period 1944-1971 the Republicans favored the balanced budget. This put a limit on the creation of money by the Fed, and the stealing from the poor to give to the rich was slowed. But after Nixon completed F.D.R.’s job of taking the U.S. off the gold standard (in ’71), the Fed has become the nation’s counterfeiting machine. The great majority of Americans have gotten poorer and the paper aristocracy has gotten richer. The Republicans have given the country massive budget deficits. This takes some time to manifest itself in higher prices because commodities are slow to respond. When the paper money picked up steam under J.F.K. in 1963, commodity prices were stable for 8 years. By 1971, they were quite undervalued, and they tripled over the decade of the 1970s. These high commodity prices fed through into consumer prices in the late ‘70s. By 1980, commodities were overvalued and spent the ‘80s and ‘90s going down. Reagan and Bush printed money like crazy, but this did not cause serious increases in price because at that time commodities were going down. (From 1980 to 1999, the Commodity Research Bureau index fell from 337 to 183.) Now, however, commodities are back on the upside again. They have been rising since 2001. The CRB has gone from 183 to 400. Gold has gone from $254 to $900. This rise in consumer prices was beginning to hit in spring-summer 2008. The high price of food was causing food riots around the world in March 2008, and the government of Haiti fell because of a food riot. By mid-’08, the U.S. consumer price index was advancing at a year-over-year rate of 5.4%, which should be sufficient to alarm the country.
You know that I have a very low opinion of our present society. Well, I over-estimated. because what happened in September-October 2008 was too insane to be believed. Right in the middle of (what will turn out to be) the greatest rise in prices in American history the whole nation went into a state of hysteria in fear of a massive decline in prices. The “respectable” establishment predicted a “recession.” Alarmists shouted that we were in a “depression.” As in any society this had a self-fulfilling aspect. Because people believed that we were in a period of declining prices, they sold goods. This caused a sharp decline in commodities and stocks, which fact was used to justify a Fed policy of massive printing of money. At the present time, the monetary base has more than doubled from its early Sept. 2008 level. And the Fed has promised another trillion dollars to come.
The result is that prices are now very undervalued in terms of fundamentals. Those who listened to the establishment and sold are the losers. The stock market likely made its bottom in early March. Commodities likely made their bottom last December. The declines of July-Dec. will be made up, and those who sold will be out of luck.
We all know that the high prices of midi-2008 were badly hurting the American people. $4.00 gasoline was on every one’s lips. People were restricting their driving and were buying economy cars. Vacations were cut back, and people rode bicycles to work (which was better than the starvation which briefly appeared in some countries). It would therefore seem to be common sense that, when the country received the benefit of (less than) $2.00 gasoline in December there would have been a general sense of relief. This represented a large transfer of wealth from Saudi Arabia, Iran and Venezuela and from the oil companies to the American people. Yet hardly a word was heard. The papers were so full of gloom and doom that there was no time for the reporting of any good fact.
It was the same in the early 1930s. Consumption of meat rose from 129 lb per person per year to 144 lbs. People switched from margarine to butter. They gave more to charity. The report that this was a depression was a lie, pure and simple. It was a depression for the bankers and Wall Street. It was a good time for the American people.
To understand the declines of ’08, one must begin by realizing that most everyone has the lies associated with the early 1930s firmly in their minds. They imagine that such contractions come out of nowhere with no cause. They have been fighting this imaginary depression since Sept.
The original “depression” of the 1930s was used by F.D.R. and his banker friends to steal wealth from the American people and give it to the bankers. However, this was carefully disguised to be the opposite. The price decline of 2008 was used by Henry Paulson to steal wealth from the American people and give it to his Wall Street friends and to Goldman Sachs, of which he was the former chief executive. Most of the bailout money went to companies which owed big sums to Goldman and would have been unable to pay on their own.
But Paulson was not as clever as F.D.R. His argument that, if the banks were not bailed out, the whole economy would collapse, went over like a lead balloon. The McCain campaign went down the tubes precisely at the time Paulson announced the bailout and McCain supported it. (Obama supported it as well, but he remained in the background. It was Bush and McCain who led the charge.)
The welfare state enacted a program of robbing the poor to give to the rich, but it was cleverly disguised as its opposite. In 2008, the welfare state came out into the open with a plan to rob the poor and give to the rich openly acknowledged. I do not believe that the American people will stand for this. It is a fatal error. Whichever party adopts a platform of reversing the bailout of 2008 will win the next major election. The money taken from the American people must be returned. The people who took the money must go to jail. Robbing the rich is bad, but robbing the poor is even worse. (By the way, the media reported this as a taxpayer bailout. This is another layer of the onion of lies. The money for the bailout was not taken from a tax increase. There was no such tax increase. The money for the bailout was simply printed by the Federal Reserve, and (as noted) at this writing the U.S. monetary base has more than doubled from its level in the summer of 2008. Thus, the average American will not be injured by seeing his taxes go up. He will be injure by seeing the prices he pays for virtually all goods go up. His pay will buy less, and his standard of living will go down.
America cut its final tie to the gold standard in 1971. The real pay of the average working man topped out in 1972, and this is the first generation of Americans to be poorer than their fathers.
# # #
Howard S. Katz can be visited at http://www.thegoldbug.net.
2009-05-18
I would like to give an economic review to help you orient yourself and make the proper decisions for your life in the coming years. The situation is far worse than almost anyone recognizes, and almost all believers in the establishment will be economically destroyed.
The first thing to keep in mind is the onion of lies. The intention of the power structure is to steal the wealth which you produce, and since the principle of democracy is deeply ingrained in America, they have chosen the policy of fraud (pioneered by the Fabian Society in Britain). Thus we have the continual manufacture of lies, one on top of the other. As these lies are accepted, more lies are manufactured until there is a solid core of deception which has so permeated the language that it becomes very difficult to enter the public discussion without unintentionally accepting some of these lies. This is the problem with many good conservatives. They discover some error in the prevailing establishment and become energized on this point. Then they fall into accepting all the rest of the onion of lies without thinking about it.
For example, the political left in this country calls itself liberal. This is false. “Liberal” is a Spanish word, coined in the early 19th century by a Spanish political group who admired the French Revolution and America’s Founding Fathers. They believed that the proper function of government was the protection of its citizens’ rights. That is, liberal means pretty much what libertarian means in America today. This is the origin of the word in 19th century Spain, and this is the meaning of the word in most countries in the world to this day. (Indeed, when I ran for U.S. Senate on the Libertarian ticket in Massachusetts in 1982, against Ted Kennedy, I spoke before an all-Spanish speaking group. My major thesis was that the Libertarian Party was the liberal party in America today. This is a proposition which would provoke some opposition among Americans. But I noticed that my translator was rendering “libertarian” and “liberal” by the same Spanish word, reducing my controversial thesis to a tautology.)
What happened was that some of the social democrats of the 1920s-30s did not want to admit that their political philosophy came from Germany. So they made up the lie that they were liberals. Today the “conservatives,” thinking that they are conservative have decided to apologize for torture, because it sounds like the conservative thing to do.
But the essence of any system of domination of one human being by another is economic. In the Middle Ages, the aristocracy produced no wealth. Instead it lived off the labor of the average person, who was reduced to the position of a serf. (That is, he had lost the freedom to choose his job.) Today in America we have an aspiring aristocracy who wants to live off our labor but has not yet reduced us to serfdom.
This aspiring aristocracy secured the privilege to counterfeit money in 1933. A group of commercial bankers, working with the Federal Reserve, create money out of nothing. The bankers use this money to make loans. This is in contrast with the old-fashioned saving bank or S&L, which made loans with deposits which it attracted by paying interest.
The extra money created by the Fed/banks causes prices to rise. All of the wage earners of the country watch their wages lag the rise in prices. All of the retired people are stuck on fixed income while the prices for the necessities of life go out of sight. These two groups together constitute 95% of the people of America.
As the bankers win from the interest on their loans, some of this is passed through to their loan customers, principally the nation’s big corporations. These big corporations also gain because the wages they pay do not rise as rapidly as prices. And they further gain because many of them are heavily in debt and can pay their debt in depreciated money (e.g., Donald Trump). In toto, the vast majority o Americans get poorer, and a small group consisting of the bankers, the big corporations and Wall Street, make big fortunes. This is why the gap between rich and poor is getting wider today while it got narrower during the 19th and early 20th centuries.
Once they had slipped through the privilege to counterfeit money (March 9, 1933, the first day of the New Deal), the bankers sought for a group of economists who would apologize for their privilege. Such a group existed, the followers of William Trufant Foster and Waddill Catchings. These men had written a book, The Road to Plenty, in 1928 arguing that paper money was the road to plenty for a society. Wealth, they said, did not have to be created by labor. It could simply be created by printing money.
One difficulty for the bankers was that Fosters and Catchings were known, by the economists of the day, as crackpots. To get around this fact, the bankers were saved by one of the great confidence men of all time, John Maynard Keynes. Keynes plagiarized The Road to Plenty, but he knew how to PR it. He called it the “New Economics” and threw around a lot of mathematical folderol. The bankers then bribed the nation’s top colleges to hire this “new” school of economists to teach their students.
For example, in 1948, the Manhattan Bank (today part of J.P. Morgan) endowed a chair of economics at Harvard on the proviso that John Kenneth Galbraith be appointed. Up to this time, a college being offered an endowment would reply, “We graciously appreciate your offer, but no one has the right to dictate whom we select as our teachers, and if that condition is attached, then we must respectfully decline.” Harvard said, “Hey, we’ll take the money.”
Other colleges imitated the most prestigious ones, and rather quickly the new crackpot school of economics dominated higher education in the United States. This is one good example of why you can not live your life in accord with authority. The bankers (and the remainder of the paper aristocracy) want to steal your wealth. Being a group of anemic wimps they lack the physical courage to use the technique of a common thief; so they need the power of government in order to live off our labor. But to gain the power of government in a democracy they need to deceive millions of people. Their basic technique of deception has been to adopt the guise of the authority figures of our society. Mr. Smith-Jones is the Highly Distinguished Professor of Economics. Therefore, when he says that down is up and rich is poor, you must believe everything he says.
Interestingly, our society has a great deal of experience with authority figures. The central issue for western man for most of the past 2 thousand years has been how to get into heaven. And the authority figures of that time were the priests of the Catholic Church. This, of course, was a completely untestable hypothesis. Nobody ever came back from heaven; so there was no way to know if the priest had gotten you in or not. And indeed, these priests were ignorant semi-pagans who did not even know God’s name. (“Jehovah” is not a real word. It is a composite formed by taking the consonants from God’s name and combining them with the vowels from the Hebrew word “lord.” If God exists and if there is a heaven, then my guess would be that God would not be very inclined to grant favors to people who could not get his name right. The actual name of God used to be pronounced once a year, on the High Holy Day, by my family back in the first millennium B.C., but it was lost when the Romans destroyed the second temple in 70 A.D. And to this day no one knows what it is.)
This is why the Protestants did western society a great service when they said, “question authority, rely on the inner light” (meaning the judgement of your own mind. A great battle had to be fought before this principle was partially established, and much of what western man has accomplished over the past few hundred years has been due to this principle.
The record of modern economists since 1948 (and for most of the 20th century) has been a disaster. The record of the late 18th and 19th century economists was one of great achievement. Adam Smith proved that it was the proper function of government to protect the rights of property and contract, and when a government confined itself to these two tasks, the human benefits were enormous. Adam Smith’s theories were dominant primarily in the English speaking world in the 19th and early 20th centuries. And these countries produced more wealth (by far) than any other society in human history. They also produced a closer distribution of wealth where the gap between rich and poor was narrower than any other society in history. The “egalitarians” of the modern left, who pretend to support the absolute economic equality of all men have now started the pendulum back in the old direction. Since 1972, the real wages of the average American have been on the decline, and since 1982 the wages of the nation’s CEOs have exploded and become an open scandal.
During the period 1944-1971 the Republicans favored the balanced budget. This put a limit on the creation of money by the Fed, and the stealing from the poor to give to the rich was slowed. But after Nixon completed F.D.R.’s job of taking the U.S. off the gold standard (in ’71), the Fed has become the nation’s counterfeiting machine. The great majority of Americans have gotten poorer and the paper aristocracy has gotten richer. The Republicans have given the country massive budget deficits. This takes some time to manifest itself in higher prices because commodities are slow to respond. When the paper money picked up steam under J.F.K. in 1963, commodity prices were stable for 8 years. By 1971, they were quite undervalued, and they tripled over the decade of the 1970s. These high commodity prices fed through into consumer prices in the late ‘70s. By 1980, commodities were overvalued and spent the ‘80s and ‘90s going down. Reagan and Bush printed money like crazy, but this did not cause serious increases in price because at that time commodities were going down. (From 1980 to 1999, the Commodity Research Bureau index fell from 337 to 183.) Now, however, commodities are back on the upside again. They have been rising since 2001. The CRB has gone from 183 to 400. Gold has gone from $254 to $900. This rise in consumer prices was beginning to hit in spring-summer 2008. The high price of food was causing food riots around the world in March 2008, and the government of Haiti fell because of a food riot. By mid-’08, the U.S. consumer price index was advancing at a year-over-year rate of 5.4%, which should be sufficient to alarm the country.
You know that I have a very low opinion of our present society. Well, I over-estimated. because what happened in September-October 2008 was too insane to be believed. Right in the middle of (what will turn out to be) the greatest rise in prices in American history the whole nation went into a state of hysteria in fear of a massive decline in prices. The “respectable” establishment predicted a “recession.” Alarmists shouted that we were in a “depression.” As in any society this had a self-fulfilling aspect. Because people believed that we were in a period of declining prices, they sold goods. This caused a sharp decline in commodities and stocks, which fact was used to justify a Fed policy of massive printing of money. At the present time, the monetary base has more than doubled from its early Sept. 2008 level. And the Fed has promised another trillion dollars to come.
The result is that prices are now very undervalued in terms of fundamentals. Those who listened to the establishment and sold are the losers. The stock market likely made its bottom in early March. Commodities likely made their bottom last December. The declines of July-Dec. will be made up, and those who sold will be out of luck.
We all know that the high prices of midi-2008 were badly hurting the American people. $4.00 gasoline was on every one’s lips. People were restricting their driving and were buying economy cars. Vacations were cut back, and people rode bicycles to work (which was better than the starvation which briefly appeared in some countries). It would therefore seem to be common sense that, when the country received the benefit of (less than) $2.00 gasoline in December there would have been a general sense of relief. This represented a large transfer of wealth from Saudi Arabia, Iran and Venezuela and from the oil companies to the American people. Yet hardly a word was heard. The papers were so full of gloom and doom that there was no time for the reporting of any good fact.
It was the same in the early 1930s. Consumption of meat rose from 129 lb per person per year to 144 lbs. People switched from margarine to butter. They gave more to charity. The report that this was a depression was a lie, pure and simple. It was a depression for the bankers and Wall Street. It was a good time for the American people.
To understand the declines of ’08, one must begin by realizing that most everyone has the lies associated with the early 1930s firmly in their minds. They imagine that such contractions come out of nowhere with no cause. They have been fighting this imaginary depression since Sept.
The original “depression” of the 1930s was used by F.D.R. and his banker friends to steal wealth from the American people and give it to the bankers. However, this was carefully disguised to be the opposite. The price decline of 2008 was used by Henry Paulson to steal wealth from the American people and give it to his Wall Street friends and to Goldman Sachs, of which he was the former chief executive. Most of the bailout money went to companies which owed big sums to Goldman and would have been unable to pay on their own.
But Paulson was not as clever as F.D.R. His argument that, if the banks were not bailed out, the whole economy would collapse, went over like a lead balloon. The McCain campaign went down the tubes precisely at the time Paulson announced the bailout and McCain supported it. (Obama supported it as well, but he remained in the background. It was Bush and McCain who led the charge.)
The welfare state enacted a program of robbing the poor to give to the rich, but it was cleverly disguised as its opposite. In 2008, the welfare state came out into the open with a plan to rob the poor and give to the rich openly acknowledged. I do not believe that the American people will stand for this. It is a fatal error. Whichever party adopts a platform of reversing the bailout of 2008 will win the next major election. The money taken from the American people must be returned. The people who took the money must go to jail. Robbing the rich is bad, but robbing the poor is even worse. (By the way, the media reported this as a taxpayer bailout. This is another layer of the onion of lies. The money for the bailout was not taken from a tax increase. There was no such tax increase. The money for the bailout was simply printed by the Federal Reserve, and (as noted) at this writing the U.S. monetary base has more than doubled from its level in the summer of 2008. Thus, the average American will not be injured by seeing his taxes go up. He will be injure by seeing the prices he pays for virtually all goods go up. His pay will buy less, and his standard of living will go down.
America cut its final tie to the gold standard in 1971. The real pay of the average working man topped out in 1972, and this is the first generation of Americans to be poorer than their fathers.
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Howard S. Katz can be visited at http://www.thegoldbug.net.
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