But here there still be monsters. Before another day had passed, the FBI and DOJ made a show of intellectual property force under existing law (specifically the PRO-IP Act signed by Bush in 2008). They shut down the popular site Megaupload and jailed its principals, who happen to be non-U.S. persons not living in the U.S.

On Black Wednesday itself, the Supreme Court handed down a decision in Golan v. Holder that authorized Congress to re-copyright works that had long been in the public domain.

Then, last week, Poland joined with seven other nations — including the U.S., Japan and Canada — by signing ACTA (Anti-Counterfeiting Trade Agreement), the international trade agreement that criminalizes intellectual property theft across borders. The U.S. signed in 2010 when the negotiators termed ACTA an “executive agreement” instead of a “treaty”…because that allowed them to skip merrily around the Senate ratification that would have been required for a treaty.

As Timothy B. Lee explains on the Ars Technica site:

“If ACTA becomes a binding part of international law, it will create a precedent for future treaties that avoid basic principles of transparency and democratic accountability.

“More generally, the treaty continues the one-way ratchet toward ever-stronger copyright protections. ACTA establishes a new, higher minimum of copyright protections and enforcement that countries must provide, but it doesn’t require countries to preserve mechanisms like fair use and intermediary immunity that protect intellectual freedom.

“If Congress ever decides that IP rights have swung too far in one direction, it can always re-balance them by changing the law, right? Not exactly. International agreements like ACTA bind the hands of legislators unless the U.S. is willing to withdraw from them first.

“That’s why Rep. Darrell Issa (R-Calif.) last week called ACTA ‘more dangerous than SOPA.’ He added, ‘It’s not coming to me for a vote. It purports that it does not change existing laws. But once implemented, it creates a whole new enforcement system and will virtually tie the hands of Congress to undo it.’

“Unfortunately, these arguments are hard to explain to the general public. So too many ACTA opponents are, perhaps unknowingly, attacking ACTA for provisions that aren’t in the treaty. We’re not going to shed too many tears if this misinformation helps to kill a bad treaty, but we’d rather win the debate honestly — and prepare people for the upcoming ACTA sequel.”

Hmm. We agree that the poor treaty (or executive agreement for those U.S. presidents who can’t be bothered with Senate ratification) ought not be maligned for what it doesn’t contain. Especially when the wretched thing is detestable for what it really does contain…and for what it represents.

What the Internet has forced us all to confront is this: Free expression and the sharing of information that drives progress are not compatible with the notion — and state enforcement — of intellectual property. The cognitive dissonance is wide and growing between defense of intellectual property and the defense of liberty and acceleration of progress.

In today’s feature article, Stephan Kinsella explains more and, in doing so, throws down the gauntlet against the defenders of IP.

The SOPA Wake-Up Call to Abolish Copyright
by Stephen Kinsella (Source)

I’ve blogged quite a bit lately about SOPA and PIPA and the recent Internet blackouts and other protests against these bills, which threaten free speech and the open Internet (Mike Masnick et al. at Techdirt have also been great on exposing and analyzing SOPA).

As Jeffrey Tucker noted recently, the protests against SOPA started not with conservatives or even “libertarians,” but with civil libertarians of the “left,” as well as Silicon Valley tech types. Of course, some libertarians have been opposed to SOPA (and copyright) from the beginning — the more-radical and anti-state libertarians, in particular Austro-libertarians and left-libertarians.

Aside from the anti-state libertarians, however, most of the protests against SOPA concede that copyright is good, intellectual property is important and piracy is bad…but then they bemoan that SOPA “goes too far.”

For example, consider this article in PC Magazine, providing the response of 11 PC Mag staffers asked for their take on SOPA. The response to SOPA was universally negative, but most of them first prefaced their opposition to SOPA by genuflecting to copyright and recognizing that IP piracy “is, of course, a real problem.” For example:

• “Yes, theft of intellectual property is wrong, but it shouldn’t be protected at the cost of free speech and an open Internet”
• “SOPA is a perfect case of a disproportionate reaction to a real problem. Lawless websites full of pirated content are a real problem, but breaking the Internet isn’t the solution”
• “This proposed legislation is akin to having libraries monitored, or even shut down, because there is a chance that a book may contain a piece of plagiarized work”
• “IP is a precious thing. For example, every writer on PC Mag has had their work pirated at one time or another. However, this legislation goes” too far
• “There is definitely a need for content owners like movie studios and music labels to protect their content from piracy, but the proposed legislation isn’t the answer.”

This is the type of response that almost all the SOPA opponents have taken, such as Facebook and Mark Zuckerberg, which said that

“‘…rogue foreign sites that pirate American intellectual property or sell counterfeit goods pose significant problems for our economy,’ but PIPA and SOPA ‘are not the right solution to this problem, because of the collateral damage they would cause to the Internet.’”

This type of argument is extremely common. Depressingly common.

And not only do most opponents of SOPA accept the basic legitimacy of copyright, they also accept the RIAA/MPAA propaganda about “piracy” imposing billions of dollars of “cost” to the economy every year — even though there is no evidence of this.

The problem is that copyright obviously infringes free speech and other individual rights. This is no surprise, given its origins as a tool of censorship. As the Supreme Court recognized in its most-recent copyright decision, Golan v. Holder (the case authorizing Congress to re-copyright public domain works), “Concerning the First Amendment, we recognized that some restriction on expression is the inherent and intended effect of every grant of copyright.”

It is widely recognized that copyright (and even patent) restricts freedom of speech and expression. By assuming that copyright is legitimate — as the courts do — and that the First Amendment protects freedom of expression, a balance must always be found between freedom and censorship. And this is the dilemma most people find themselves in when they start with the premise that we must protect intellectual property rights, but we can’t “go too far” because otherwise we would harm free speech (and the open Internet) “too much.”

Obviously, there is a conflict between copyright and censorship and government control of ideas on the one hand, and freedom of expression and the open Internet on the other. This is being increasingly recognized. Leo Laporte recognized this in a recent episode of This Week in Tech. You have to choose: the Internet or copyright, he observed (opposed to technocrat Nilay Patel).

In the aftermath of the SOPA battle, we have people finally asking important questions. The Washington Times questions copyright abuse in its opposition to the Golan decision. The Daily Caller questions copyright’s legitimacy. Mark McKenna at Slate, in “Don’t Stop at SOPA,” asks: “SOPA and PIPA are (almost) dead. Now can we talk about the law that already exists?” Glyn Moody at Techdirt asks the important question: “OK, So SOPA and PIPA Are Both on Hold: Where Do We Go From Here?”

And what is the answer? Some people are hinting at it, or directly suggesting it: Abolish copyright. As Rick Falkvinge observes in “It Is Time to Stop Pretending to Endorse the Copyright Monopoly”:

“…the copyright industry is actually right that these ridiculous laws are needed to sustain the copyright monopoly. General-purpose networked computers, free and anonymous speech and sustained civil liberties make it impossible to maintain this distribution monopoly of digitizable information. As technical progress can’t be legislated against, basic civil liberties would have to go to maintain the crumbling monopoly. And these are the laws we’re seeing on the table.

“There comes a tipping point when somebody says that this entire system of cultural monopolies is absurd. A tipping point where the part before the ‘but’ is unceremoniously and collectively dropped, the part that didn’t count, anyway. A tipping point in which everybody just stops pretending to support it. I think it is time to create that point on the history line.”

Falkvinge here recognizes that if you support copyright, you should support SOPA. And conversely, if you oppose SOPA, you should oppose copyright. Copyright is the problem, people.

We are at a moment in history when people who have absorbed the idea of copyright, but who are not ideologically committed to it, have seen that it conflicts with more deeply held values: freedom of expression, commerce, digital life, the Internet. They are seeking a framework, a way to coherently express what they sense is wrong with escalated copyright enforcement. We need to let them know: The problem is copyright itself. If you have copyright, of course you want to enforce it. All the problems we see are merely symptoms of the copyright mentality.

We must press our fleeting advantage to let our halfhearted allies know that their intuitions are right: Censorship and SOPA and state control of private property and SOPA are wrong. And this means copyright, which is the engine behind all these things, is wrong, and must fall, or at least be radically scaled back, not strengthened.

The argument against patent and copyright is not a socialist or liberal one. It is, in fact, rooted in respect for private property rights, capitalism, the free market and competition. A coherent understanding of private property and free markets reveals that copyright is an anti-competitive grant of state power for purpose of censorship or favoritism that can only seek to undermine private property rights and empower the police state — as we are seeing now.

I remind our anti-SOPA brethren that the battle is far from over. They opposed SOPA and PIPA, but where were they when the 1998 Digital Millennium Copyright Act (DMCA), which has led to so much persecution and harm to the Internet, was enacted? Where were they in 2008 when George Bush signed the PRO-IP Act, which was instrumental in the FBI raids in New Zealand on the Megauploads principals, a day after the alleged SOPA blackout protest victories?

And what about the Golan decision, released the day of the SOPA blackouts, authorizing Congress to re-copyright works long in the public domain? What about the one-year federal prison sentence handed down to a man for uploading a copy of the Wolverine movie? What about the British student faced with extradition to the U.S. for having the wrong links on his website?

Where were they when President Obama signed ACTA (unconstitutionally, without Senate ratification), a global Internet treaty even worse in some ways than SOPA? Right now, nations are negotiating in secret the TPP (Trans-Pacific Partnership), an “agreement that the entertainment industry is betting on to get SOPA-like laws introduced around the globe.”

In other words, the dangers of SOPA are already here. This is because of copyright.

The problem is that all the people opposing SOPA undercut their opposition by acknowledging the importance of copyright and IP by condemning piracy. It is admirable that they are taking the ride side of the chasm caused by their cognitive dissonance, but dissonance it is. If you support copyright, you oppose piracy, and you support the state’s existence and its attempts to enforce these “property rights.” You cannot have both copyright and Internet freedom/freedom of speech.

The threat here to property rights, to individual rights, to Internet freedom and freedom of speech and expression and the press comes from copyright itself. We must strike at the root. SOPA is just a symptom of the disease. The disease is copyright.

Everyone is trying to treat the symptom — enforcement efforts like SOPA — with halfhearted treatments like labeling the response “disproportionate” or going “too far.” This is like trying to treat a brain tumor by taking Tylenol — sorry, acetaminophen — in response to the headaches caused by the tumor. All opponents of SOPA and censorship, all denizens of the Web and proponents of freedom, must oppose copyright itself (and patent too). Those libertarians and others who oppose SOPA and who are for copyright reform, but who are not for copyright abolition, should realize that a modest, fair, efficient, “reasonable” or “sensible” copyright system is completely impossible.

Since the dawn of copyright, its scope, length, penalties and enforcement have only increased, because of the relentless pressure by special interest factions like Disney, the RIAA, the MPAA, and other content providers and entrenched interests. As we can see with the pressure to adopt SOPA, PIPA, PRO-IP, DMCA, Berne, WIPO, TRIPS, COICA, Sonny Bono/Mickey Mouse Copyright Term Extension Act, ACTA, TPP and other measures (see “The Mountain of IP Legislation”), the Big Content interests are relentless and will not stop pressuring Congress and other legislatures to expand the war on information sharing and the Internet.

Even if we had a less-noxious copyright system — say, one with 10-year terms and less draconian penalties and enforcement — it would soon metastasize into what we have now, just as it has done (originally 14 years, now it is over 100). So a modest, “reasonable” copyright system is really off the table.

The question that SOPA opponents have to ask themselves is would you rather have today’s copyright system, with its draconian terms and penalties and continual pressure to expand and internationalize it, or no copyright at all? Only one of these choices is compatible with opposition to SOPA and to censorship. The only way to stop SOPA-type provisions and to maintain Internet freedom is to get rid of today’s copyright system.

- Stephen Kinsella

This is bound to generate some discussion and argument (Oh, our aching inbox! ggibsonagora@gmail.com). Heck, as quite a few of our Whiskey Shooters have noticed and emailed us about, there’s a little copyright warning at the bottom of these very missives and everything Agora Financial publishes.

This is still fairly new territory we’re exploring. A couple of years ago, we were far more in the Ayn Rand/Objectivist camp when it came to intellectual property (though not as far as the entertainingly pro-IP libertarian Andrew Joseph Galambos, who reportedly changed his name from Joseph Andrew Galambos so as not to infringe on his father’s claim to the specific name and who dropped a nickel in a box every time he used the word “liberty” to pay the estate of the reputed coiner of the word, Thomas Paine). It’s only recently that our friend Jeffrey Tucker got us thinking — and rethinking — the issue.

There are a couple of ways to approach it. We’ll undoubtedly have cause to explore them all in future issues (like Stephan points out, there are too many state-backed monopolists with too much money on the line for these kinds of legislation to go away), but here’s one way of thinking about it that we really like…

Property rights are the natural way to deal with scarcity in a world of scarce physical resources. Without property rights — based in first occupancy, not labor or use of material — ownership reverts to a temporary condition determined by might. Property rights aren’t natural in the sense that gravity is, and not as fundamental, but very nearly so, in the context of human existence. They are as natural, as essential to peaceful co-existence as your right not to be beaten, killed and possibly eaten by your stronger neighbor.

Ideas — even complex ones — are nonscarce, unlike physical property. They are literally infinitely reproducible without damaging the original in any way or depriving the owner of its use. Yes, potential income is damaged in the absence of intellectual property monopoly enforcement, but that could be said about a great many things that aren’t protected by this notion of intellectual property. It takes some serious mental contortion and far-reaching legislation to make ideas and thought patterns scarce. This is what SOPA, PIPA, ACTA and all the rest are making us all realize.

When you see how far the state has to go to enforce monopoly use on nonscarce things…when you see how this monopoly enforcement really hampers progress and restricts the way people use their own property, as it does with these threats to a free Internet (people are now actually afraid to send links to public websites in private emails)…you have to start to wonder at the soundness of the premise.

The arguments for intellectual property strike us as about as sound as arguments for a flexible state-run currency…or for military adventurism…or for gun control…or for prohibition. That is to say, they are fundamentally unsound in that they rely on the force of the state to interfere with the natural forces of the market…with all the distortions you’d expect, along with a continual growth in state power to wage effectively.

At least that’s how we see it here in the Whiskey editorial room. We suspect the world is waking up to this fact as this unsound, indefensible idea gums up the engine of the digital world.

The only way to defend intellectual property in this digital age is for the states of the world led by the U.S. to keep on pushing this invasive, punitive legislation.

We don’t think that’s such a good idea. The entire world that benefits from a free Internet seems to agree, even if most of that world holds onto a belief in intellectual property.

We’re curious to see how this will play out. We suspect strongly that progress will win. Eventually. In fact, we’re willing to put our money where our big mouth is on that one. Those who bet on progress tend to win. Those who bet early win the biggest.

To Save the Future, Abolish Copyright was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

“Joe Lieberman is not a Democrat. He is an independent, as he resigned from the Democratic Party. Don’t you ever check things out before stating them as facts?

“Wish you the best with your paranoia,”

“– Steve K”

This comes from one of our most-faithful, unswerving, persistent critics. A man who has dutifully read our material for years so he can tell us why we’re wrong about the economy, politics, art, science and love.

Our copy editing department called us on this, too. In our rush yesterday, we copied and pasted the pre-edited version of Jeffrey’s article…instead of the one that the copy editors had edited. So our apologies for that.

But if we were to be honest with you (and we always are), we would have to admit that while it may be technically inaccurate to count Lieberman among the Democrats, it is a matter of semantics that doesn’t amount to a hill of beans.

These political labels can be distracting. Personally, we don’t care what Lieberman calls himself. We care about what he does. The man is as well intentioned as he is clueless…which makes him especially dangerous. He bends most of his energy to coming up with more powers for the state under acts with comically Orwellian names.

Note that the reader who pointed out our error also wished us well with our paranoia. We suppose he means our worry about things like Lieberman’s insistence that the state should strip Americans of citizenship based on no evidence, should the state feel it necessary.

We are amazed at how the state grows from an annoying goblin into a sulphur-spitting archdemon…how it can start biting people in half (figuratively, of course) and spear infants on its trident, while its victims shrug their shoulders and mutter, “I really don’t see that there’s any cause for alarm.”

But that’s not what we’re here to talk about today. As disagreeable as it may be, we turn our attention to yet another political figure…

Mitt Romney recently released his tax information for the past couple of years. Wouldn’t you know it, he managed to lower his effective tax rate to 13.9%…by giving away millions to things he cares about.

That’s not what the headlines blare, however. What you see is that this man who earned millions of dollars per year paid far, far less a percentage of that income to the feds than middle-class suckers.

This is supposed to rouse the rabble. That’s certainly what the impressively eyebrowed Sage of Omaha, Warren Buffett, meant to do when he compared his tax payments with those of his secretary.

During our regular morning confab, LFB executive editor Jeffrey Tucker said of this, “The only really fair tax would be a fixed-dollar head tax. Like $1,000 per year. Or whatever.”

We had to push our seat back away from the table to give ourselves the room to laugh uproariously. A fixed-dollar head tax? Ha!

Sure, it makes perfect sense. But this is modern America. We are all progressives now, comrade. From each according to his ability. To each according to his need.

A man who makes more can afford to pay more. And he must. At least until he makes enough to employ some impressive loopholes in the purposely convoluted tax code.

“Of course,” Jeffrey pointed out concerning the progressive tax payment model, “if private enterprise did this, we would all see this as unfair exploitation.”

And of course, Jeffrey is right. Could you imagine if you had to pay more for your gas, meat and bread because you earned more?

Now, individual merchants can discharge their goods as they see fit, giving discounts to whomever they wish based on whatever criteria they wish: height, age, looks, degree of familiar relation…

A butcher may give his elderly widow neighbor endless credit that he never means to make her pay (like the Fed does for the U.S. government). Or that same butcher may give the shapely, unattached 20-something with the playful smile an extra cut of meat at no charge.

But those are the minute decisions of the free market based on factors that only the individual players know and can adjust to. Government with its heavy hand — and with eyes that can’t see all the details — just across the board charges more for its “services” based on the “customers’” ability to pay. And it’s not like you can take your business elsewhere if you don’t agree…

The individual seller’s rationale for any progression in pricing will reflect his intimate knowledge of conditions surrounding the sale and the marginal benefit to him of the price variance. And it’s important to note that the market itself will bear only so much progressive pricing. Most folks won’t mind that the butcher gives the widow a free ride…or even that he gives the prettiest girls a bit more meat…

But should that butcher charge the higher earners more, he would quickly lose the business of those higher earners. That’s the market at work. Buyers and sellers determining what’s fair. This kind of market democracy we like! (It’s the political kind that leaves us cold.)

The government’s pricing rationale (taxes are the price we pay for government…which is not synonymous with civilization), however, is not quite so sound…

The government says that it should take more from the rich than the poor on grounds that the marginal dollar is actually worth less to the higher earner than it is to the lower earner. But how can we know this for sure? Value is subjective, and you can’t compare the worth of money between any two people.

Further, one could argue with more substance that there is even less reason to take money from the wealthy since that money is likely to be invested, saved or donated. Taxing the rich thereby taxes society more directly than when you tax poor people who mostly consume all they earn.

So back to Jeffrey’s fixed tax on each person…

“$1,000 per person per year would yield,” he notes, “about $300 billion all together. That was the cost of government during the Ford administration. Was government too small then?”

“Not sure,” we replied, “We’d say it was already too big by the Washington administration. And that the wooden-tooth bastard ought to have been hanged for treason after the Whiskey Rebellion…

“But I’m assuming that children would be subject to the tax, too,” we continued, “and that either parent would have to pay for them…?”

“Precisely so, but not that it matters that much. Say it’s only on everybody over 18 or some arbitrary age at which the state allows people to sell their skills in the marketplace. There were only about 75 million persons under 18 in the U.S. in 2011. So you still have very nearly $300 billion in taxes collected with just $1,000 per eligible taxee.”

“Hell, even panhandlers can come up with that,” we said. “Or would they even have to pay? They certainly don’t file income tax forms now…”

“Fine, reduce it to official households. There are over 130 million of those. So $130 billion in tax revenue. Which puts us squarely in the middle of LBJ’s crazed plan to bankrupt the country with guns and butter: 1966.

“One thing I want to make clear,” Jeffrey said. “Say you have a tax of 10%. Flat, right?

“No. 10% of $1 million is far more — 10 times more — than 10% of $100,000. High-income earners are punished far more. That’s why a head tax — as strange as it may seem to some — is the only flat tax.”

And we’re not really offering solutions. Because our suggestions amount to theorizing for now. We do, however, try to make sense of the degrees of our disgust.

We never saw a tax we actually liked. But there are taxes that make us want not quite want to revolt. If we had to pay some centralized warmongering nannies (and we do), we could live with a fixed tax like the one described above.

We hate when the government tries to incentivize anything, but a truly flat, fixed tax would indeed incentivize people to try to earn more. Earning more would reduce the impact of a fixed tax as a percentage of their incomes.

Of course, this won’t fly in modern America. The rich can pay more for the government we all get. So pay more they shall!

Local and even state taxes are another good example of taxes we can’t hate as much as the progressively looted chunk we send off to the feds every quarter. With more local taxes, we are clearly getting something of use for our money after all.

We can argue till our brown face turns blue about how much more efficiently the market would provide every single service the government does (though the shape of these things would likely be quite different)…

But concerning local government services — and the money extracted to pay for them — at least we can overwhelmingly agree with what our tax money pays for. This includes things like the sidewalks and roads we use and the police and fire protection.

Federal taxes are quite a different beast, however. The bullets used to tear into foreign brown skins…the guns used to fire them…the food and clothing of the soldiers holding the guns…the bombs dropped on insurgents and collateral wedding party attendees and teenage goatherds.

Which brings us to a letter we received today…

“Hi Jeffrey, Gary et al.,

“As always, I love your articles and critiques of how the America we love is slowly eroding away.

“I have a query, but first a little background…

“I am an Irish-American citizen living and working in Ireland since 2006…so I have seen this Irish economy collapse in sync with the economy I left in Michigan back in that hazy summer…

“To cut to the chase, my wife and I were blessed with our first child, born December 2011…

“Now she is eligible for Irish citizenship and she has her birth certificate to prove this. BUT she may also obtain her U.S. citizenship, care of me..

“My query?

“Given the near- and long-term future of the U.S….endless wars, increased poverty, insurmountable debts, increased taxes (and filing taxes even if she never lives/works in the U.S.) destruction of the middle class and the $$…etc.

“Why should my daughter become an American citizen?

“What are the reasons, given the glum future of the USA, to become one of us?

“Do the same reasons, land of the free and the brave, still hold through, or should she just stay Irish till her dying days?

“Would love to get your and your readers’ views on this..

“Cheers,

“Tim”

We would love to get views from the Whiskey patrons as well! Good patrons, please send those views here. ggibsonagora@gmail.com

And a hearty congratulations on the arrival of your daughter, Tim! We’ll buy you a shot should the chance present itself.

As for her citizenship…your Whiskey editor is torn on the subject. And far from qualified to offer any real advice. Especially in a legally binding sense. But we can share our biased, but considered opinion, for this is a matter we struggle with all the time.

We aren’t even U.S. citizens. Merely a legal resident who has lived here since he was a toddler. Many of the people we respect have been cutting their ties to the U.S., either just leaving physically…or actually giving up the legal right to live and work on these shores indefinitely.

Our own situation is different. Our own native land is small, poor and given to collectivist politics. We thus effectively possess refugee status. Our options for a long-term home should we fling our green card at a border guard and spit, “Here! Take it, for I no longer want any part of your warmongering, police-nanny state!”…well, those options are limited and poor.

We wouldn’t go back to the Caribbean. We suppose we could bounce around South America as long as someone paid us to write…and we could afford to leave various countries every few months to satisfy the visa requirements.

We are not experts (and we suggest you talk to one about this)…and we hesitate to be hypocrites. We do not even have U.S. citizenship, yet we remain in the U.S. Our first inclination is to tell you to spare your daughter of the burden (for the benefit-to-cost ratio of U.S. citizenship may continue to mount for the worse as she approaches adulthood).

But note that despite it all, we remain in the U.S. unwilling to break the inertia of our own living habits. We cast about the nation in search of a comfortable, quiet corner to call home. But we’re not quite ready to leave just yet…though each outrage brings us closer to the limits of our tolerance…

There is a good case for you to keep your daughter from ever becoming a tax cow for the U.S. Again, let’s put this to our Whiskey Shooters and see what we can come up with. We’ll probably run your responses this weekend. So get cracking: ggibsonagora@gmail.com.

In the meantime, let us consider this letter, which we received just minutes later…

“Mr. Gibson.

“It appears that you use the words citizen and national synonymously. They are not.

“The 14th Amendment (proposed by a Congress that lacked a quorum) was a solution to the 1850 Dred Scott decision, wherein the Supreme Court ruled that negros of African descent could not be citizens. The amendment granted a form of citizenship to those who were born in the United States and completely subject to its political (lawmaking) power. (It was a subsequent decision in which the court ruled that the subjection of the 14th Amendment was complete subjection in the feudal sense.)

“Before the 14th Amendment, citizens of the states established the qualifications for citizenship within their respective states, not the federal government. Citizens of the United States were so because of their immediate citizenship in the political body known as a state of the union. The sates of the union created the United States, so these sovereigns could not be completely subject to the lawmaking power of the United States in the feudal sense. Under certain circumstances, they could be subject to its civil, but not its political, jurisdiction. The United States was not their sovereign liege lord; sovereignty was vested in them, not in the government, state or national.

“As the court ruled in the Slaughter-House cases, the 14th Amendment gave nothing to state’s citizens. What it did do, and what you evidently do not see, is that the 14th Amendment created a new class of citizenship: citizen-serf, a human resource, part of the capital of the federal government, PROPERTY of the United States, aka, U.S. person.

“National is the word used by government today to describe what was formerly known as a state citizen, the person in whom the sovereignty is vested. He may or may or may not elect to be treated as though he is the property of the United States. According to the 13th Amendment, he has a choice.”

Wait a minute. Are you trying to tell us that the U.S. government, like every government everywhere else all throughout history, see itself in a feudal relationship with its citizens? That to the political class, we are not “purchasers of order and civilization,” but instead nothing more than cows to be milked for tax money?

OK, yeah, we see where you’re coming from.

Regards,

Gary Gibson

Hooray for the Rich Who Don’t Pay Taxes was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

He’s ponied up $49,000 to help pay down the national debt. He’s simultaneously matching voluntary contributions already made by Rep. Scott Rigell of Virginia.

Yes, $49,000 to Mr. Buffett is the equivalent of 49 pennies to the rest of us (Mr. Buffett is a billionaire and most Americans are thousand-aires or hundred-aires at best, so this is actually pretty accurate).

Buffett had issued a challenge in Time Magazine recently in which he promised to match voluntary contributions for reduction of national debt made by all Republican members of Congress an impressive three for one.

The image below is of the actual letter from Warren to Scott.

Buffet claims that rich folks and politicians competing to see who could donate the most to the feds is a form of competition the American people would applaud?

A competition to see who can throw the most of their money down the grand canyon of federal government deficits? That’s worse than watching reality tv and finding out which sap can make the biggest ass of himself in front of millions of viewers.

And what sort of example is this setting? What is the message? That if any of us have any extra cash lying around you ought to send it to the government? The same government which already takes around 40% of your nominal income off the top? We suppose if wrapping foreign aggression and subjugation to a police state in patriotism works, then making this sort of inanity seem patriotic will work, too.

We know there are those who defend taxes no matter what. We hear these people on the radio, see them on political talk shows and read their words in print (mostly in the New York Times). A few of them regularly read this letter and send us notes to stop whining about paying our “fair share”.

Of course our own decidedly Austrian stance feeds our love or the agora, the market place, as the best use of all funds, including those funds we can no longer use because the government took them under pain of imprisonment and death…

We maintain in our free market zeal that all needs would be met and all goods and services improved upon via the free market far, far better than they could by taxation and central planning.

(We also call upon history to lighten our burden of proof. The more centralized the economy, the poorer and less sustainable it has been. The freest economy the world had ever seen has become poorer and poorer the more centralized it’s become.)

Many would even agree. To a point. Except for things like infrastructure, national defense, public safety and security. And education. And medical services. And retirement income.

Ah, see. That list can keep growing. But let’s pretend that most of us can agree on just infrastructure and national defense (the things that even many libertarians would let the feds handle). Do we really buy that the federal government needs nearly half of most of our incomes in order to maintain infrastructure and an army?

Most of us normally don’t question how much of our money disappears down the federal maw. Because it generally does no good. We accept that what we supposedly get in return – highways and not going to jail – makes those taxes money well stolen.

But what happens when the cry comes to give even more of our earnings voluntarily? Might not a few us wonder why the enormous chunk we’ve already been forced to part with proved to be not enough? Just what is happening to all that money? Why are the central government’s debt equal to the amount of money the private sector upon which it relies generates every year…while that private sector has already been handing over nearly half its income to the selfsame central government?

We’d warn Mr. Buffett that therein lies the danger in encouraging “voluntary” contributions. People might be willing to let the government take as much as the government decrees it legally can…

They may be willing to lie to themselves about how that legally stolen money is being used…because if they don’t pay it, they will surely lose their property and freedom. So they wrap themselves in a comfortable fable in order to blunt the psychological trauma. In this respect they are like the prison punk who after each episode of forced buggery tells himself that his rapist cellmate really actually loves him.

But suggest that what the government needs is the voluntary offering of as much more as possible…and then people might start wondering what they’re getting for their money. After all, in every other area of their lives when they voluntarily hand over their money, they get something in return, something that they value more than the money they just handed over.

It could be a cup of coffee, a sandwich, the use of a space for living or to conduct business, a car, a piano, or a laptop, repair of an existing item or building of a new one, performance of a song, and so on. But there was something that the money-giver wanted more than a given amount of money he had on hand. Thus the voluntary exchange was made.

Heck, it could even be an act of charity like the one Warren is trying to encourage among rich people and Republican Congresspersons. But even then the voluntary contributor commits a charitable act, he gets something he values more highly than the money he parts with: the sense of having helped someone far less fortunate than himself. It’s the same reason he would give to a relative or other loved one in need. And – this is very important — we assumed that he’d want the money to be used responsibly, and not enable the recipient to remain eternally dependent.

Note that Mr. Buffett has sheltered the bulk of his billions in a charitable foundation, sheltered from federal tax. Even Mr. Buffett feels that this sort of charity is a better way to give the vast majority of his money away. Else he would have taken those billions out of the foundation and handed it over to the Treasury. He could have added this to any amount he’d match from Republicans who met his challenge.

But it’s not like the federal government is some hard luck case who deserves our sympathy and help. If it were a person, the federal government would be the guy in a natty suit, who comes to your store every few weeks to collect “protection” money from you. He would then use that protection money to keep his favorite prostitutes well fed and happy and to make turf war on the other guys running protection rackets.

Further, this shameless gangster would also be hopelessly indebted because of an impressive gambling habit! Never mind that the protection racket he’s running is a scam at gunpoint…He’s simply a horrible credit risk!

So here is the message:

“Help our government stop having to be in constant debt for its worldwide military presence (among other outright destructive redistributions). Give them more than they already demand from you.”

That’s right, citizen. Forget buying patriotic war bonds. In times like these, lending the government your savings isn’t enough. You ought to give the money and never ask for it back. We’ll start by asking the rich.

Granted, Mr. Buffett is only asking this sacrifice of those who actually have significant amounts of money left to spare. We suppose it’s assumed that “the rich” have tons of money that they’re not putting to good use, even after gold-plating their billion-dollar mansions. So why not throw it at the debts the government has run up?

Further he’s issued his challenge to Congressional politicians, people who draw paychecks from the government credit card.

But there are plenty of “progressive” thinking people who applaud the example Mr. Buffett is supposedly setting. Entire Web sites are devoted to garnering support for a Buffett-inspired increase in taxes on “the wealthy”.

We’d recommend all income earners who aren’t already at Mr. Buffett’s level of wealth to be very wary of this. The federal income tax itself started as a tiny burden on only the richest in the U.S. Within a century it grew to consume nearly half the income of the middle class as well. The truly wealthy, meanwhile, managed to find ways to shelter most of their money from the income tax after setting the initial example and bearing the initial burden.

Mr. Buffett even uses this point to make his own…that the situation must be re-addressed so that they wealthy are once again paying their “fair share”. We note with dismay that the first attempt to soak the rich via the IRS resulted, over time, in those of us making anything above subsistence wages having to fork over half our earnings to the feds.

Not that we think anything particularly sinister is at work here. Though we do find it less than coincidental that this $49,000 show of support comes the day after a popular uprising against wholesale federal-corporate control of the Internet.

Maybe Mr. Buffett really is a paid shill, but we suspect that he’s more likely simply an enthusiastic one. He believes. For all his financial and investing acumen, Mr. Buffett rests his economic understanding on some faulty foundations. Like we said, he believes. He honestly believes that money generated privately ought to be then funneled through the central planners to find its best use.

Those who get excited about Mr. Buffett’s suggestions and find inspiration in his example also imagine that the federal government would do a better job with the money…that the federal debt as it stands is just a matter of bad luck and not the inevitable result of economic law (As sure as gravity causes objects with mass to be attracted to each other, money stolen by elected officials at gunpoint will allocate resources worse than private interests working under pressure of profit and loss).

You can’t really argue with someone who would say these things. Well, you could, but you’d be wasting your time and theirs. It’s like the old joke. Don’t try to teach a pig to sing. It wastes your time and annoys the pig.

It’s not a matter of facts for the facts support liberty and free markets if you want to abolish poverty and raise standards of living across the world. It’s a matter of philosophy. Just as it is hard to argue about the nuances of evolutionary biology to a fundamentalist holding his holy text, it is equally hard to talk to a true believer in central planning about why the nuances of human freedom and free markets to improve everything…and why they shouldn’t so enthusiastically hand the central planners their money.

Regards,

Gary Gibson

Buffett Puts His Loose Change Where His Government-Kissing Mouth Is was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Concerning national government debt, Detlev Schlechter said, “Wouldn’t touch it with a bargepole.” And who could blame him?

Just a couple of days ago, the debt of the U.S. government reached a symbolic level. This week we read in USA Today [emphasis ours]…

“The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion.

“That’s roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.

“‘The 100% mark means that your entire debt is as big as everything you’re producing in your country,’ says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. “‘Clearly, that can’t continue.’”

Now there are those who say that the U.S. doesn’t really owe that much money. The article continues…

Many economists, such as the Brookings Institution’s William Gale, say a better measure of the nation’s debt is how much the government owes creditors, not counting $4.7 trillion owed to future Social Security recipients and other government beneficiaries. By that measure, the debt is roughly a third less: $10.5 trillion, or nearly 70% the size of the economy.

Of course many economists also insist that the road to economic utopia is paved with money printing and war…so you have to take the opinions of these professionals with a handful or two of salt.

In this case they’re asking you not to consider the debt as all that high simply by ignoring some of the debt. That’s like a doctor not considering a morbidly obese patient not quite so morbidly obese by ignoring some of the fat.

We’ll continue counting all the fat if it’s okay Mr. Gale of the Brookings Institute. The fact is the U.S. government owes as much as its subjects can produce in a year. How would you feel if you owed as much as your pre-tax yearly income?

Or even better, how do you think your creditors would feel? And would you expect anyone to lend you more money at anything resembling a favorable rate of interest?

What’s more, nation state governments tend to spend their “income” — a polite term to describe the tax money they take from their subjects at gunpoint — on things that either do nothing to increase future income or entirely disrupt the productivity of their populations. We simply cannot look at lending these governments money as a good investment.

But it’s not just federal debt you may want to avoid. In the U.S., the states and their local municipalities are facing the same problems. They, too, are debtors who’ve made too many promises and written too many checks they won’t be able to cash.

Like overextended government everywhere, U.S. cities are having trouble making income match expenses. The case of Central Falls, Rhode Island, is the example that’s been making the news. The municipal bond market has been following the bankruptcy case closely for the last year since the tiny city of 19,000 souls may set the precedent for other struggling areas.

Today comes news that a federal bankruptcy court has allowed Central Falls not to pay its retired police and firemen as much as promised. This is so that the people who’d lent the city money in the first place can get paid in full.

Some precedent. Simply break the too-large promises made to one group to make good on the promises to another. Luckily for Central Falls, the pensioners are playing nice. According to the Financial Times:

“Rather than challenging the new law, a majority of retired police and firefighters in December accepted a deal that will cut their annual pay-outs by up to 55 per cent. However, the deal is contingent on the state setting aside at least $2m to reduce the annual pension reduction of any retiree to 25 per cent for five years to help ease the financial blow.”

You see, unlike the federal government, municipalities actually have to worry about deficits that increase to unpayable levels.

We’ve often pointed out that the federal government has a couple of benefits that state and local governments don’t. The federal government has a chummy central bank that will manipulate interest rates downward to make borrowing easier…and then buy up federal government debt — that is, lend it money — when no one else will.

States and municipalities have to worry about default and the resulting rises in interest rates for future borrowing. And they actually have to worry about not being able to afford basic services if there’s simply not enough money.

Those basic services are something that everyone living in a U.S. state or municipality (and that’s pretty much everyone in the U.S.) needs to worry about.

We’re not yet at the point where the general populace accepts that “basic services” like infrastructure, education and safety can be effectively, economically provided by the free market. So by and large local governments still have a monopoly on those things. And the people living in these jurisdictions rely almost exclusively on their state and local governments to provide these basic services.

So what happens when states and municipalities can’t find the money to pay for all these things?

Well, we’re nothing if not hopeful here in the Whiskey Bar. We see every retreat of the state toward bankruptcy as ultimately a good thing. It leaves room for the market to advance and show the world how private interests provide goods and services of increasing quality at lower costs.

In the case of the “basics” like roads, education, policing and fire protection, you need a good collapse to shake people from their rabid faith in the government’s ability to provide.

But there’s a lot of pain between here and there. The markets won’t just magically pick up the slack overnight.

In the meantime, trash could stop being picked up, police may not bother responding to “minor” crimes like burglary, and fires may not be put out before they cause massive amounts of damage.

And don’t think that desperately indebted states and municipalities will go down without swinging…and trying to find new ways to pick your pockets.

This is something we’ve been looking at for a while here at the Whiskey Bar. And it’s why we’ve been directing readers to this special report…

From Addison Wiggin’s Apogee Advisory:

“Can you imagine being the victim of a robbery… and knowing the police won’t be there to answer your 911 call?

“That’s the reality more and more Americans will be facing… because America as you know it is an illusion — built during an era of easy credit.

“Without that credit card, certain states are already trying every money-grabbing scheme they can dream of…

“According to U.S. News & World Report, ‘Over the last two years, 36 out of 50 states have raised taxes or fees.’ Aside from already collecting property, sales and income taxes, they’ve also put in place separate streetlight fees… fire hydrant fees… and new booze taxes. Nevada is even considering a new $5 surcharge on its legalized prostitution.

“A deadly combination — low tax revenue and massive pension and retirement promises — has forced certain states into a “lose-lose” situation. They’ll be the first to cut police… try desperate money grabs… and break promises.

“It’s a process that’s already under way. That’s why the first thing you need to do to prepare is to find someplace safe for your family to work and live.

“We’ve spent several months researching which states are best equipped to ride out the storm… and which you want to do everything to avoid.

“If you’re considering a retirement location, or if you have the flexibility to move your workplace and family out of harm’s way, we’ve assembled a list of five states — American Oases — where you’d be best situated.”

As long-suffering Whiskey Bar patrons know, your Whiskey Bar editor has been on the lookout for a while for a place to call home.

We are weary of the news of how the U.S. slouches into a dreary combination of economically declining paranoid police state and has-been empire. We thought seriously about setting up shop somewhere freer, cheaper, friendlier to business and less antagonist toward nuclear powers in the East…

But despite what the U.S. government does, America itself remains home.

We cannot ever forget, however, that America is also in for a rough time. if we’re going to stay, we want to do it someplace least prone to disruption.

There are the big things you can’t control and which will affect us all. We speak specifically of military actions overseas and central bank shenanigans…

But then there are the things that affect your everyday life. We speak specifically of the goings-on in the town you choose to call home…and how much you end up paying your local governments for your immediate quality of life.

We suspect that many of you Whiskey Shooters are in the same boat we find ourselves in. You either can’t or won’t run too far. The costs of expatriation may outweigh the benefits. It may simply not really be an option for you.

You simply may want to find a place to find a place in the country you know (and love despite its faults) where you can ride out the coming storm.

This doesn’t mean you shouldn’t internationalize your financial exposure. But while you shelter some of your labor’s fruits elsewhere, you yourself may want to remain here.

We certainly wouldn’t blame you. In fact, we mean to join you.

Just be sure you have the tools to pick the best possible place. Odds are very good that you won’t have to travel too far.

Regards,

Gary Gibson

Why Federal Deficits May Not Be the Ones That Matter Most to You was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

We’re continuing our conversation on what a scary place the U.S. is becoming — especially with that monstrous national defense bill about to land on the president’s desk. We keep wondering how much energy to devote to exploring our options elsewhere…and have invited you to do the same.

It’s quite the dilemma.The best move may be to stay in the U.S…even if it’s prudent to move elsewhere within the borders of the United States.

A lot of Americans are just saying “the hell with it” and jumping ship. About 6.4 million of them. From the Russian Times:

“Ever dream of leaving it all behind and heading out of America? You’re not the only one. A new study shows that more U.S. citizens than ever before are living outside of the country.

“According to statistics from the U.S. State Department, around 6.4 million Americans are either working or studying overseas, which Gallup says is the largest number ever for such statistic.

“The polling organization came across the number after conducting surveys in 135 outside nations, and the information behind the numbers reveals that this isn’t exactly a long time coming, either — numbers have skyrocketed only in recent years. In the 24 months before polling began, the number of Americans between the ages of 25 and 34 living abroad managed to surge from barely 1% to over 5.1%. For those under the age span wishing to move overseas, the percentage has jumped in the same amount of time, from 15% to 40%.

“While the United States of America was at one point (and largely still is) a magnet for foreigners in search of work, the statistics make it clear that an opposite trend is quickly picking up steam.

“‘There’s a feeling among more-entrepreneurial Americans that if you really want to get anything done, you have to get out of country and away from the depressing atmosphere,’ Bob Adams of America Wave tells Reuters. ‘There’s a sense of lost direction, so more people are looking for locations that offer more hope about the future.’”

We’re sure the search for opportunity has plenty to do with it. But something tells us that’s not the whole story…

We have no army of pollsters, no budget to fund a study.

We do have a hunch, however, based on our own anecdotal evidence.

You see, people are fed up. Not just with economic conditions. But with the political ones. We suspect that that frustration is tinged with fear. We know it is in our case.

The state is growing outright despotic…tyrannical. You have congressmen who make no bones about telling us that we should all be subject to arrest and detention by the military. This at a time when the definition of “terrorism” is expanding to include any activity that annoys the political class.

The government has been in the business of prohibiting personal behaviors, regulating

professional ones and eating out our substance since the beginning. It’s all only gotten worse over time.

But now the state is showing its true face. And it’s so horrible that many of us feel compelled to flee for our lives.

But where to go? That’s what the poster Michael asks in this dispatch from his website, endoftheamericandream.com…

“Millions of American citizens have already left the United States in search of a better life. As the economy continues to crumble and as our society slowly falls apart, millions of others are thinking about it. But moving to another country is not something to be done lightly. The reality is that there are a vast array of social, cultural, economic and safety issues to be considered. If you have never traveled outside of North America, then you have no idea how incredibly different life in other parts of the world can be. For those that are unfamiliar with international travel, it can be quite a shock to suddenly be immersed in a foreign culture.

“In fact, no matter how experienced you are, choosing to relocate to a new country is never easy. But things have gone downhill so dramatically in the United States that picking up and moving to a foreign nation is being increasingly viewed as a viable alternative by millions of Americans. A lot of people have decided that they simply do not want to be in the United States when the excrement hits the fan. So what is the best country in the world for Americans to relocate to in order to avoid the coming economic collapse?

“For each person, that answer may be different. A lot depends on how much money you have and what your career situation is. A lot depends on what stage of life you are at and what your family situation is. Moving to another country can be very complicated and it can be a lot of work, but there are millions of people that have found it to be very rewarding.

“So why are so many Americans looking to relocate?

“Well, our economy continues to get worse and worse. If you have not heard yet, it has been announced that an all-time record 46 million Americans are now on food stamps.

“A lot of Americans want to escape this country before they get sucked into the vortex of poverty that has trapped so many other American families. 2.6 million more Americans fell into poverty last year. In addition, according to the U.S. Census Bureau, the percentage of Americans living in extreme poverty today is higher than has ever been measured before.

“As poverty and despair spread across the United States, the fabric of our society is breaking down. As I have written about so many times, the thin veneer of civilization that we all take for granted is starting to disappear.

“Mob violence is becoming increasingly common in America. As society breaks down, the government is becoming even more repressive in an attempt to maintain control. Paranoia has become standard operating procedure, and we are all considered to be potential terrorists. Sadly, the United States is rapidly being turned into a totalitarian ‘Big Brother’ police state. Millions of Americans are not excited about living in a giant prison, and they are starting to look for alternatives.

“Meanwhile, the U.S. government continues to pile up the biggest debt in the history of the world. Our government is drowning in debt, our businesses are drowning in debt and American consumers are drowning in debt. At some point, this entire house of cards is going to come crashing down.

“Are you sure that you want to be living in the United States when that happens?”

It’s not as simple as just buying a plane ticket, however. There are a few things to consider. The article lists six:

“Money

“It is a lot easier to move to another country if you are independently wealthy. Since most of us are not, you will likely have to consider how you will pay for the lifestyle that you plan to have once you move.

“There are some countries (like many of the nations of northern Europe) where the cost of living is extremely high. If you plan to move to Europe, that is something that you will need to plan for.

“There are other nations where the strength of the U.S. dollar is a huge benefit (at least for now). If you have a sufficient bankroll saved up, there are some areas of the world where you can literally live like a king.

“Jobs

“Unless you are retired, you will need to consider what kind of job you are going to have once you move. If you do not speak the language of the country where you are moving, that is going to really limit your career options.

“Also, you will need to keep in mind that wages in many areas of the world (especially in the Third World) are much lower than in the United States.

“Laws

“Americans are often shocked to learn that the rights that we enjoy in the United States do not apply in the rest of the world.

“You need to evaluate whether or not you can live with the laws that will be imposed upon you in the country that you choose to relocate to.

“For example, I would not have the same freedom of speech to write the things that I do in a lot of other countries. There are many countries that actually hunt down and arrest bloggers like me.

“Also, it is important to keep in mind that huge taxes or huge fees are often imposed on those moving to a new country. You may actually have to pay a tax on whatever possessions you bring with you.

“Security

“In many areas of the world, you will not be able to count on the police coming to help
you if a crime is committed.

“Even if police are available where you choose to live, that does not mean that they will not be corrupt.

“So it is imperative that you come up with a security plan. Keep in mind that in many countries, the ownership of guns is either banned or is severely limited.

“Family

“If you choose to relocate overseas without the rest of your family, you probably will not get to see them very often at all anymore.

“It will be important for you to evaluate whether you will be able to take long-term separation from your family or not.

“Also, it can be very lonely living overseas in a foreign nation where you do not know the language. In many countries, Americans are deeply hated, so you may find it difficult to make friends.

“Culture Shock

“This is something that should not be underestimated. Moving into the middle of a foreign culture can be absolutely shattering for many people. A lot of Americans have absolutely no idea what life is like on the other side of the globe.

“If you are thinking of moving to another country, it might be a really good idea to visit it first so that you can get a feel for what you are getting into.”

So what is the best country in the world for Americans to relocate to?

Obviously, there is no one answer. But some places would be horrible for most Americans, while other places would be perfect for different Americans.

We’re not too keen on anyplace in Europe, for example. The Old World is mostly pretty in that Old World way, but it is also expensive to inhabit, in love with central planning and going broke.

Latin America seems inviting. That’s why Agora Financial as well as our friends at Casey Research, Sovereign Man, The Daily Bell and The Dollar Vigilante all have a presence there, in Nicaragua, Argentina, Chile, Colombia and Mexico, respectively.

We hear that the Seasteading folks led by Patri Friedman — grandson of economist Milton Friedman — are looking away from the seas and inland to Honduras. They mean to create charter cities as allowed by that country’s constitution. These charter cities are to become free economic zones that will lift the locals out of property…and attract many liberty-minded entrepreneurs.

Meanwhile, in Guatemala, there is actually a library named after Ludwig von Mises! Who knew?

There’s much more to come on this subject, good patrons. Much more. We hope you’ll stick around for the conversation. And we invite you to weigh in with opinions on which country is the best for Americans looking for freedom and opportunity. (Send your opinions here: ggibsonagora@gmail.com.)

We still hold out hope that we all can make a go of it here. Maybe that hope is in vain, but we don’t think so. Not yet. And despite all the bad news. Maybe something will give. Maybe the awareness will continue to grow. Maybe we’ll even get a Ron Paul presidency!

We suspect, however, that the change we need will be more grassroots than top down. It will come from tens of millions of individuals living more deliberately…taking matters in their own hands…with some of them setting themselves up to live abundantly right here in these United States.

If you aim to be one of them, then we suggest you start by clicking here.

And we wouldn’t worry too much if we were you. Yes, these are perilous times. Yes, there are reasons to fear. But for those who are prepared and aware, there is opportunity everywhere.

Gary Gibson

If You Leave the U.S. Permanently, Where Should You Go? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

We note the passage of the anniversary in our typical Whiskey way: pissing off everyone in the room. Depending on your take on the Japanese “sneak attack” on Pearl Harbor, you may never forgive us for the next handful of sentences.

In his 2007 review of the book The Pearl Harbor Myth: Rethinking the Unthinkable by George Victor, John V. Denson writes:

“The author, Victor, includes a chapter from the viewpoint of the Japanese. They were being pressured strongly by Germany to enter the war by attacking the Soviet Union, thereby creating a two-front war for the Communist nation. This strategy came within the actual interests of Japan since they, like Germany, saw communism as a great evil and a threat to their respective nations. Furthermore, Japan had substantial claims to parts of Manchuria as a result of defeating Russia in the war of 1905. Both Germany and Japan wanted to avoid a war with America at almost any cost.

“Roosevelt was well aware of this pressure on Japan by Germany but he felt that it was necessary to protect the Soviet Union as being the best weapon against the Germans, and therefore, he wanted to prevent Japan from attacking Russia. Roosevelt began extensive provocations to cause Japan to abandon its attack on Russia and instead attack America, which also served the purpose of giving Roosevelt the reason to enter the war.

“Roosevelt launched an eight-point provocation plan primarily through the cutting off of oil supplies to Japan so that by the time of the attack on Pearl Harbor Japan was virtually out of oil and on the verge of industrial and military collapse. The attack on Pearl Harbor and the Philippines also would provide Japan with the ability to attack the Dutch interests in the Pacific, thereby giving them a new supply of oil.”

Some of you Whiskey Shooters will be incensed at this recounting of events. World War II was the last good war in the minds of so many…and the Japanese unforgivable cowards who attacked a blameless nation whose leadership had no idea it was coming. We risk earning some ill will at suggesting otherwise in order to draw a disturbing parallel about U.S. actions in Asia today.

Whether it was a deliberate machination of the progressive Roosevelt or not, interrupting the flow of the lifeblood of industrial civilization to an Asian power resulted in the U.S. entering a world war.

Looks like much the same is set to happen again.

We read in this morning’s Financial Times:

“The U.S. has sought to reassure China that its recent diplomatic and military initiatives in Asia were not directed against Beijing.

“‘The U.S. does not seek to contain China, we do not view China as an adversary,’ said Michele Flournoy, U.S. undersecretary of defense, after bilateral military talks.”

Maj. Gen. Luo Yuan of China doesn’t seem to agree when he says, “The United States is making much of its ‘return to Asia’, has been positioning pieces and forces on China’s periphery, and the intent is very clear — this is aimed at China, to contain China.”

The U.S. government may be whispering soothing words, but those words can’t be heard over the screaming of its actions. And come to think of it, not all those words are the soothing sort, either.

We gently remind you, good patron, that President Obama recently announced 2,500 Marines will be based in northern Australia. The president also made some rumblings about China’s dispute with its neighbors in the resource-rich South China Sea.

And then, also from the Financial Times, there’s this…

“The U.S. has also adopted a new strategic concept, AirSea Battle, which involves closer integration of the operations of the Navy and Air Force. The concept is meant to make U.S. forces more capable of operating in an environment where enemy forces are trying to deny area access.

“Chinese analysts see AirSea Battle as an anti-China concept. ‘Even if you say it’s not completely aimed at China, it is still mainly aimed at China,’ said Li Yan, a researcher at the Chinese Institutes of Contemporary International Relations. ‘For the Americans have said very clearly that AirSea Battle is mainly directed at anti-access and area denial warfare, and [past U.S. assessments] al l show that they believe China is conducting anti-access and area denial warfare.’”

Michael T. Klare writes in his article “Playing With Fire: Obama’s Risky Oil Threat to China” (found on TomDispatch.com):

“President Obama said in Canberra, the U.S. is now in a position to begin to refocus its military capabilities elsewhere. ‘After a decade in which we fought two wars that cost us dearly,’ he declared, ‘the United States is turning our attention to the vast potential of the Asia-Pacific region.’

“For China, all this spells potential strategic impairment. Although some of China’s imported oil will travel overland through pipelines from Kazakhstan and Russia, the great majority of it will still come by tanker from the Middle East, Africa and Latin America over sea lanes policed by the U.S. Navy. Indeed, almost every tanker bringing oil to China travels across the South China Sea, a body of water the Obama administration is now seeking to place under effective naval control.

“By securing naval dominance of the South China Sea and adjacent waters, the Obama administration evidently aims to acquire the 21st-century energy equivalent of 20th-century nuclear blackmail. Push us too far, the policy implies, and we’ll bring your economy to its knees by blocking your flow of vital energy supplies. Of course, nothing like this will ever be said in public, but it is inconceivable that senior administration officials are not thinking along just these lines, and there is ample evidence that the Chinese are deeply worried about the risk — as indicated, for example, by their frantic efforts to build staggeringly expensive pipelines across the entire expanse of Asia to the Caspian Sea basin.

“As the underlying nature of the new Obama strategic blueprint becomes clearer, there can be no question that the Chinese leadership will, in response, take steps to ensure the safety of China’s energy lifelines. Some of these moves will undoubtedly be economic and diplomatic, including, for example, efforts to court regional players like Vietnam and Indonesia as well as major oil suppliers like Angola, Nigeria and Saudi Arabia. Make no mistake, however: Others will be of a military nature. A significant buildup of the Chinese navy — still small and backward when compared to the fleets of the United States and its principal allies — would seem all but inevitable. Likewise, closer military ties between China and Russia, as well as with the Central Asian member states of the Shanghai Cooperation Organization (Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan), are assured.

“In additon, Washington could now be sparking the beginnings of a genuine Cold-War-style arms race in Asia, which neither country can, in the long run, afford. All of this is likely to lead to greater tension and a heightened risk of inadvertent escalation arising out of future incidents involving U.S., Chinese, and allied vessels — like the one that occurred in March 2009 when a flotilla of Chinese naval vessels surrounded a U.S. anti-submarine warfare surveillance ship, the Impeccable, and almost precipitated a shooting incident. As more warships circulate through these waters in an increasingly provocative fashion, the risk that such an incident will result in something far more explosive can only grow.”

We feel we’d be remiss not to note where we find issue with Mr. Klare’s analysis. He spends a few sentences wringing his hands over this mess resulting in drive for greater domestic energy dependency. He worries that that could lead to another Deepwater Horizon-type oil spill…greater reliance on the “dirtiest” of energies — the tar sands — and an increase in greenhouse gas emmisions.

But those are point to take issue with on another day. Mr. Klare’s take otherwise appears to be spot on.

A new Cold War is in the making. We’d all be lucky if that were the worst of it. The last time the U.S. tried to starve an Asian power of energy, the U.S. president got the war he was looking for…and the U.S. was the only one with atomic fire.

Things are a little different this time around. Nuclear weapons are in the hands of the nations the U.S. is provoking. And the current president may not actually be looking to start a fight…though he will likely get one anyway.

Regards,

Gary Gibson

Is the U.S. Warming up for a Hot War With China? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

“WASHINGTON (AP) — It’s just about over for a special deficit-reduction supercommittee, which appears set to admit failure on Monday, in its quest to sop up at least $1.2 trillion in government red ink over the coming decade.

“‘There is one sticking divide. And that’s the issue of what I call shared sacrifice,’ said panel co-chair Sen. Patty Murray, D-Wash., on CNN’s State of the Union.

“‘The wealthiest Americans who earn over a million a year have to share, too. And that line in the sand, we haven’t seen Republicans willing to cross yet,’ she said.

“Republicans said Democrats’ demands on taxes were simply too great and weren’t accompanied by large-enough proposals to curb the explosive growth of so-called entitlement programs like Medicare and Medicaid.

“‘If you look at the Democrats’ position it was: “We have to raise taxes. We have to pass this jobs bill, which is another almost half-trillion dollars. And we’re not excited about entitlement reform,”‘ countered Republican Jon Kyl of Arizona on NBC’s Meet the Press.”

We haven’t been paying much attention to the Whiskey Bar. It seemed a nonissue to us.

The $1.2 billion per year they were supposed to cut was only a drop in the deficit bucket. It would be a tiny bit more difference than, say, a horse urinating in the ocean makes to sea levels. Yet the committee couldn’t even agree on the token amounts. Even as a dog and pony show, this has been a disappointment.

They could have just taken congressman Ron Paul’s advice about military adventurism. They could have wiped out about two-thirds of the deficit right there!

But that’s not politically possible right now. We’re not sure how many Americans, in their heart of hearts, truly believe that we’d be overrun with Islamic fundamentalists if the U.S. government pulled its forces out all the countries it’s currently occupying. But we imagine it’s a lot. Just about every politician aside from Dr. Paul seems to agree.

Military adventurism may be the main cause for the red ink that will, likely, lead to a central bank bailout of the U.S. government a la the printing press. But it’s not the only cause. As much as governments love the expensive business of pushing people around abroad, they love buying votes with welfare at home at least as much.

There’s no moral difference between corporate welfare and the more popular kind that includes the so-called entitlement programs. The thing is those measures to “help” and to provide for the aged, infirm and destitute require money from an increasingly impoverished private sector. And the help amounts to subsidization of nonproductive activity and some horrible decisions that other people will have to fund…

We’re home for the holidays, dear patrons. Our sister picked us up from Orlando International Airport last night. These drives from the airport take about an hour. The time and inherent isolation leave far too much room for discussions to turn political…which they often do.

With advancing age, however, your Whiskey Bar editor has learned to keep his big trap shut. When we were younger, we might have felt the need to punctuate every sentence from our driver with a correction. These days, we grunt noncommittally and nod imperceptibly.

Mostly, we just listen. We ask just enough to show interest and to keep the other person talking.

“I saw my old best friend Crystal at Wal-Mart the other day,” our sister was saying. “She looked pretty bad.”

“How so?” we asked. “Did she get really heavy or wrinkly?”

“No, just the opposite. She was so skinny that it looked unhealthy. And she got breast implants that look ridiculously out of place on her skinny, little body.”

“Is she a stripper?” we wondered aloud. “Spending money to look that way would be an investment if she works in a strip club.”

“No, she washes dishes at a restaurant.”

“Hm. Isn’t her husband an unemployed felon? And doesn’t she have (at least) two kids?”

“Yes and yes,” our sister replied.

“So where did she get the money for the implants (which will not earn a return on investment if she’s washing dishes for a living)?”

“She got $5,000 in tax returns last year.”

“OK. How do you get such a huge tax return on a dishwasher’s salary?”

“Oh, after the low income tax credits, she always gets back more than she pays out.”

“And she goes and buys breast implants with this money?!” we asked.

“Yeah, I know. Plus, she’s on public assistance. So she and her husband were at the store using a WIC card to pay $1 for a gallon of milk that would’ve cost me $4.”

“Seems like this attempt to help out the less fortunate is subsidizing some awfully bad decisions.”

Your editor’s sister was growing angrier with each sentence. She continued, “It’s not like Crystal came from a poor home, either. She even had a scholarship to the university. But she partied and didn’t finish school…

“Meanwhile, I sacrificed, finished school and got a good job. Yet I can only afford to raise one child properly, while my tax money goes to pay for her two children and for her breast augmentation. It’s just not right!”

“You’re not kidding!” we agreed.

“If the government is going to give people so much money,” our sister continued, “then the government should put restrictions on what that money may be used for.”

Here we had to part ways philosophically. But as we said earlier, we learned to keep our anti-nanny state opinions to ourselves when dealing with family. We don’t mind sharing them at the Whiskey Bar, however…

We don’t want government telling anyone how they can and can’t spend their money. But we also don’t want governments taking money from one set of people to dole out to another in the first place.

In short, we are against theft and all for personal freedom. (Markets like these things, too.)

The programs that the Democrats refuse to touch appeal to those who believe that there is some mystical collective village, defined by geopolitical borders, in which strangers are financially responsible for other strangers.

The trouble with this is that over time, the people who are being paid for have less and less incentive to work. Meanwhile, the people who pay for them have less and less money to spend on the things that make economies grow. The people in need end up with fewer ways to become less needy.

This is the essence of malinvestment. Some may find it unfair to underscore the point with the story of one white-trash girl frittering away other people’s money on breast implants (and her tax credit is, in the end, simply a transfer payment from net taxpayers to net tax recipients).

While this specific case of new boobs may be unusual, even the smaller and arguably necessary purchases represent malinvestment.

The WIC card she used to buy subsidized milk? That’s money being used to feed children she forfeited the ability to feed herself when she made her decision to drink, instead of making herself employable at a level that supports a family.

If it seems cruel to call any of her children a misallocation, think of the child or two that our hard-working, responsible sibling won’t have because she has to support the care and feeding of her friend’s children. (And for the best primer in unseen costs, please read Henry Hazlitt’s seminal Economics in One Lesson.)

“OK, fine, stop taking from the middle class,” a moderate redistributionista might counter. “But go ahead and take more from the rich. They can afford it!”

We fail to see how it is moral to take by force what someone has rightfully earned or even been bequeathed. We’ll just note that the rich (always denoted as those with some hilariously arbitrary level of income or wealth) tend to be the ones with the capital needed to provide investment and employment…

And in a free market with an inflation-resistant market-chosen currency, their capital investments end up causing goods to be produced and services to be provided more cheaply over time. As long as government doesn’t get in the way by protecting corporations from competition under the auspices of necessary regulation and patent and copyright protection.

This immoral system of stealing from some arbitrarily “rich” segment of society to pay for another segment actually hastens decline.

What about the entitlement which the entitled ostensibly paid for themselves? What about Social Security? A good patron sent us this note with an opinion on the matter we often hear…

“I take exception to a part of one line in your writings of today.

“You said,

‘Forced redistribution in the form of Social Security, Medicare, Medicaid and welfare breed dependence. Over time, takers overwhelm providers.’

“I take exception to you including Social Security in with the other things. Social Security is paid for by me, not the government. The Congress has actually robbed the Social Security funds and then said in effect, ‘Who, us?’

“Remember the discussions about privatizing Social Security? I am not in favor of making me invest my Social Security payments, because I might not be at all smart about the investing and end up with insufficient funds for retired years. (Well, I am a pretty good investor, but I speak of the average person.)

“But the fact is that if the Social Security tax funds were properly managed and invested, there would be plenty of money to pay the ones eligible for the payments. Perhaps the government is not at all capable of good management, and the Social Security funds that I paid in should be managed by an intelligent private nonprofit entity. Of course, getting government to turn loose of that system is probably never going to happen. At least not until we destroy the present Congress and the system that we laughingly call ‘Democracy.’

“Yes, I do collect Social Security payments!

“I worked hard until age 78, and from age 17, I paid a great deal of money in the form of Social Security taxes. I will very likely not survive long enough to get all my taxed payments back, much less collect extra amounts that come from some other source.

“When people who don’t know the facts talk about ‘reducing entitlements,’ I can get very angry when they include Social Security as one of those entitlements. I PAID FOR IT!”

Giving up control of your savings to government in the hopes that they’ll care more about it than you will, and that they have the smarts and incentive to handle it better…may not be such a solid plan.

[Editor's note: For a much more sensible approach to retirement -- and to have an entity a lot more reliable than government fund it -- just click here.]

In any case, Social Security could never be sustainable. Remember that the very first recipient only put in less than $25…but got back nearly $23,000…

If one really expected to get back only what one rightfully earned and contributed…then we have to ask…why bother giving it to the government in the first place?!

Of course, you can’t not give and expect to stay out of prison. So we turn from action to expectation.

In a recent article on older workers and their retirement prospects Dr. Gary North recently had this to say (emphasis ours):

“So here is their situation. They have no savings to speak of. Their houses are falling in price. The unemployment rate is 9%. The economy is flat-lining. The number of future competitors is increasing. The skills required just to stay even are getting more rigorous. Workers in India are able to compete in digital-based occupations. They work cheap. Price competition is increasing because of the Web. Profit margins are tightening.

“For the mass of salaried employees, their careers are based on relatively passive order-taking and repetitive operations. Both of these are being replaced by computerized systems.

“When the survey respondents were asked about their biggest retirement fear, 42% said, ‘I can do all the right things today and it still won’t be enough for tomorrow.’

“So they think the system is rigged against them. They have lost hope. They did not perceive early in life that things do not take care of themselves. They counted on Social Security, but they never looked at the numbers. The article says that 37% said they have no fear because “it will work itself out.” They have been saying this since age 18. They think the federal government will be there to make their golden years comfortable.

“Then we read this: ’29% of people in their 60s have saved less than $25,000 for retirement.’ This is the real world — not the world of those with $100,000 in investable capital.

“The journalistic reports on retirement are upbeat. They appear in popular media that sell advertising space for ‘investing for retirement.’ They cater to the 20% who do have assets of over $100,000 to invest.

“As it becomes clear to younger workers that the existing government-funded system is rigged against them, that the system really is a Ponzi scheme, they will revolt. They will vote for candidates who tell them that their futures are being sacrificed in the name of statistically doomed programs that will go bust when they retire. They will then vote in their own self-interest.

“The two big welfare systems still find political support because those on the dole or close to it vote in their own self-interest. They vote in higher percentages than younger workers do. But statistically speaking, they are in the minority. Those on the positive end of a Ponzi scheme always are. When the voters who pay the taxes finally realize that the Ponzi scheme really will go bust before they cash in, they will elect congressmen who turn off the spigot in the financial bathtub.”

The sad truth is that Social Security has always been just another transfer payment. It’s a bit harder to see because we all have to actually pay something into it. Unlike other transfer payments that occur in the present, Social Security was set up as a transfer payment from the future to the present and past.

Either way, it’s as unsustainable as the transfer payments of the working to the unproductive. As unsustainable as the military adventures. What we have is a government that has long since run out of money to pay for things that only destroy capital, no matter how politically popular they may be.

Eventually, our government — along with the rest of the Western World — will lean on the central bank to ease the deficits…to become the buyer of the government’s bad debts when no one else will.

Understand that that day is coming. The U.S. government’s credit card will be cut. Then the central bank will step up and set the currency ablaze. It will bail out the government and sink the rest of the economy.

Regards,

Gary Gibson

Did Anyone Really Think the Supercommittee Would Make a Difference? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Herman Cain seems to think so. We read today in The Christian Science Monitor:

“Herman Cain on Thursday became the first Republican presidential candidate to receive Secret Service protection.

“Cain asked for the security, and Homeland Security Secretary Janet Napolitano and congressional leaders approved his request Thursday, Secret Service spokesman Ed Donovan confirmed.

“There have been threats against Cain, who had been experiencing a bounce in the polls, according to an official with knowledge of the situation, who asked not to be identified because of the sensitive nature of the situation. The nature of the threats was unclear.”

The times sure are changin’. Dave Gonigam of The 5 Min. Forecast reminded us this morning that a British ambassador once knocked on the White House door, only to have it opened by President Thomas Jefferson…wearing his “house dress” and slippers.

In Herman Cain’s case, the worry about violence seems to stem from his race…

“On June 1, Cain’s campaign office in Stockbridge, Ga., reported receiving a call from someone who did not identify himself, but who claimed to be a member of the Ku Klux Klan. The man said that Cain, who is black, should not run for the White House.

“‘Tell him not to run’ and ‘there’s no such thing as a black Republican,’ the man said, according to a written statement Cain’s administrative assistant, Lisa Reichert, gave to the police.The caller did not explicitly threaten violence.

“The Associated Press obtained a copy of the police reports using Georgia’s open records law.

“Local police alerted the FBI and the U.S. Secret Service to the incident.”

While Mr. Cain is taking precautions against racists, the Patriotic Millionaires seemed to be inoculating themselves against the anger of the crowds…

As we reported in yesterday’s missive, this handful of the 1% see the writing on the wall. And they are marking their doors with lamb’s blood before the angel of death can make his rounds. The not-so-rich-and-getting-poorer are mobilizing. And the Patriotic Millionaires figure it’s best to make nice now and offer up more of their own money…and that of their neighbors…to let the mobs know which rich folks they should refrain from eating when the time comes.

A reader took exception to our characterization of these Patriots…

“Gary,

“I read and enjoy your writing, your ranting, your missives…for the most part. But you are off-base this morning. As to why you miss the forest for the trees, I will not guess. However, your criticisms of Mr. Fink and his cronies are off-base. Mind you, a few of them may, indeed, enjoy funding foreign wars, they may even be willing to pay up to get the infamous 1% off the hot seat, but more important is their basic belief that the public good is better served by them doing their fair share of the lifting.

“If Mr. Fink so offends you, spend your angst terrorizing the lying lobbyists who are paid huge salaries to produce NOTHING at all, and forever scheme to lower Mr. Fink’s taxes. Tell me why they escape your ire…

“Respectfully,

“–Leonadi”

We don’t mind if people make money “producing nothing.” Heck, we wish our readers would take our advice on how to make more money just by putting their money in the right places.

We do, however, weep because there is money to be made at all in getting the politicians to provide unfair advantage.

And here, we must admit that we fail to see the nobility in supporting “the public good.” One-half of the country would have us believe the government should spend the stolen money on butter. The other half on guns. We humbly suggest that government spending must, by its nature, be less efficient than private-sector spending…and that it is, generally, harmful. Further, that spending is funded by what’s taken by force from the private sector directly…or indirectly, through inflation.

And further still, that spending has a way of producing some spectacularly awful results. Escalating military spending against threats that never seem to diminish…and more and more, social welfare promises that cannot ever be paid for…

We note that war is too expensive for free markets to support, that war is a wasteful undertaking only achievable by the state with its monopoly on legal theft….

But what about the feeding and care of the elderly, the poor, the indigent? Surely, this is the “public good” that the state provides that the market cannot!

Actually, no. We note that markets are all about building wealth. And by that, we don’t mean concentrations of the stuff. Capitalism — the seeking of profit in a competitive environment — tends to prevent the continued concentration of wealth in few hands because of unfettered competitions. Today’s innovators and producers become tomorrow’s bankrupt has-beens, as competitors continually bring down profit margins and bring newer, better products to market…

Meanwhile, all of society benefits from this tussle, this “greed.” Today’s pricey luxuries become tomorrow’s cheap commodities. The “poor” need less and less taking care of, because everything from food to smartphones becomes so damned cheap…

At least they do in the absence of regulation that strangles competition…or fiat funny-money systems that degrade the currency, destroys savings and supplants capital formation with debt as the foundations for economic growth…

As we’ve often tried to illustrate, governments are, primarily, in the business of hampering competition in favor of the already-established and powerful “capitalists” (in quotes because capitalism actually requires competition to work), whose money buys political favors and favorable legislation.

Meanwhile, the state claims that it wants only to help those in need…with other people’s money. But the state’s methods, actually, just breed more need. They demonize deflationary tendencies of the market — arguing that supporting price “stability” promotes a healthy economy — while penalizing success in order to subsidize dependence.

Of course, each is free to give freely as much as he wishes. But if the markets are allowed to work — if the state gets out of the way — there is less need to give.

“Just don’t get it do you, Gary?” another reader asks…

“Can’t stand that there really are a lot of wealthy 1% that are rational, logical and most of all, patriotic. They realize that we are all together in this country on a small global spaceship, and we need to allow everyone a chance to succeed.

“I think it’s mostly the 1% wannabes that have the real greed virus.

“I’m contributing to OWS, what are you doing besides whining? It’s just a matter of time that democracy and human sense of fair play will start winning the elections and the day.

“You cannot fight the math and physics of logic and moral high ground. Whining can be a lot of work, but if you can get paid for it, that’s the free-market system, and you don’t even get calloused hands. It’s the unfair job market and social system that has people riled up.”

[Editor's Note: Our hands got plenty dirty and calloused and we both froze and sweated throughout our '20s and early '30s -- as we've already noted -- doing other work. But if a free-market system actually requires less overall sweat, discomfort and calloused hands for all of humanity, we see that as a good thing.]

“A great country cannot survive when its social safety nets are in the scale of SS and MM. Those need to be realistically reduced, and to get there, you have to implement fair taxation that starts us trending back to a middle class that can support itself with families, and in retirement. When 95 %-plus of the population starts dying penniless and on the public dole, everyone loses, even the whiners.

“–Lloyd”

The dangers of greed? Oh, dear (possibly former) reader, greed without politics is merely boorish. It’s politics that make greed dangerous.

There is nothing wrong with “greed.” Most of us are greedy for more love, esteem or material comfort. Often, all three.

We understand the protesters are angry that politics have been used to benefit a few. But we do not believe that politics should be used to benefit the many either.

We don’t like political solutions. They always, always, always amount to theft from from one group for redistribution to the other. Moral arguments are often used to justify it, but it always come down to the group with a monopoly on force (the state) taking from others on pain of imprisonment or death.

We favor a system of voluntary exchange, sound money as chosen by the market and a respect for property starting with the individual’s complete ownership of himself. We look at history and see that the more societies lean toward these things, the wealthier and better off they are.

Forced redistribution in the form of Social Security, Medicare, Medicaid and welfare breed dependence. Over time, takers overwhelm providers. To paraphrase the famous line, it works great until you start running out of other people’s money.

It’s the free markets that have allowed the growth of the population. It’s the markets that built the systems that provide so much cheap food and all the creature comforts we take for granted today. Interfering with these markets is what’s most likely to cause the kind of privation you get in command economies. More regulation will further wound wealth generation (wealth being a measure of value addition and abundance, not merely printed paper).

If we seem hard on the OWS protesters, it’s because in their understandable anger they are calling for more of what has been ruining economic progress all along. We’re as disgusted with thieving, government-enabled commercial bankers as anyone else, but we understand that the answer to socialism for the well connected is not socialism for the masses.

(They are not calling for less state, like the anti-war protesters did in the past. Jeffrey Tucker will address this point in tomorrow’s weekend edition.)

The masses themselves don’t understand this. And as we feared their mood is turning uglier almost by the day.

Protests are turning into riots even as we scribble these words and send them to you. We see a few possible outcomes, none of which we like…

• The protesters get what they want. Good and hard. More regulation, more redistribution. And the nation winds up poorer for it. Incentive gets penalized even more. Progress halts, even reverses. Public debts increase even as public dependence on government increases.
• The state uses the worsening public conditions to justify more monitoring and control of its citizen-subjects. Random stops in public, invasions of homes and outright violent seizure of private property or persons become the norm in order to combat “domestic unrest”
• The state figures that’s what’s needed to fight domestic unrest is a good war with an opponent who has the means to fight back hard.

We actually expect some unholy combination of all three.

Regards,

Gary Gibson

Politicians and the 1% Preparing for Social Unrest was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

That’s how our friend Detlev Schlichter signs off his weekly reports on his website, papermoneycollapse.com. It’s appropriate. Now more than ever.

On Monday, we sent you Detlev’s latest on the continued debasement of the euro. We also reported on Bundesbank president Jens Weidmann’s opposition to further monetization of national debt via the European Central Bank. Detlev sent us his thoughts…

“Hi Gary,

“Weidmann’s position is understandable. He knows that this will lead to disaster. The Bundesbank is strongly opposed to the ECB’s buying of government bonds. I am pretty confident that concerns over this type of policy are also more widely shared, and more intensely felt, among the German public than in many other countries.

[Editor's note: Germany's recent history is real-world proof of the evils of monetizing government debt with newly created money. For a detailed account of hyperinflation in early 20th-century Germany, get a copy of When Money Dies here, for 20% off.]

“The President of Germany, Christian Wulff, has publicly opposed it, and two senior central bankers in Germany have resigned in protest: Axel Weber, who was a shoo-in to succeed Trichet as ECB president, and Jurgen Stark, who is still chief economist of the ECB, but will leave soon.

“But none of this will change the final outcome. These people are fighting a battle they have already lost. The ECB is already committed to supporting the euro-government bond market. The ECB had bought €160 billion in bonds a few weeks back but has since bought more Italian debt. I guess they must be close to €200 billion in total by now. The ECB is the single largest creditor to the Greek government. But what about the treaty, the ‘ban on monetary financing’? Rubbish. The ECB has simply argued that it is buying these bonds to allow a proper transfer of its monetary policy, to sustain orderly markets. And if need be, politicians will simply change the treaty. These people do as they please.

“The Bundesbank has two people on the ECB board. They can easily be outvoted. Those who left in protest will be replaced with more-compliant bureaucrats. While Weidmann was giving this interview to the Financial Times, the chief economist of Deutsche Bank was calling for unlimited purchases of Italian bonds by the ECB to keep yields below 5%!

“This thing will unfold as I predicted.

“Best wishes,

“–Detlev”

Just a few hours after getting Detlev’s response, we woke up to find the world rushing to unfold just as Detlev has been predicting. Not to be outdone by the Fed and the ECB, the Bank of England pours on the speed in the quantitative easing marathon. We read in the Financial Times:

“Bank of England Signals More Quantitative Easing”

“Economic activity will be ‘broadly flat’ until the middle of next year, the Bank of England warned in a gloomy inflation report which signalled that its monetary policy committee [MPC] will announce more quantitative easing in the coming months.

“Sir Mervyn King, the governor, said on Wednesday that ‘inflation is more likely to be below than above the target’ over the next two years, implying that the bank believes more asset purchases will be necessary. The report’s central forecast shows inflation falling to far below the Bank’s 2% inflation target toward the end of 2013, the forecast horizon the MPC considers when deciding whether or not to conduct further quantitative easing.

“The bank is due to finish buying the £75billion worth of asset purchases that the MPC announced in October by February. Analysts had already expected more quantitative easing to be announced at that point. But a further round of asset purchases could now be brought forward.

“Chris Williamson of Markit said: ‘Concerns over deflation have grown. If the situation in the eurozone fails to improve, then there is a good chance that the MPC could introduce more QE at its December meeting, though it is more likely to wait until the new year.’”

We remind our long-suffering readers every chance we get: Price deflation is a good thing. It’s the thing that free markets do best…turning luxuries into increasingly affordable everyday commodities.

That’s what happens in an environment of free enterprise, competition…and a stable form of money (and stable forms of money are exactly the kind that the markets pick when left to their own devices… without a “flexible” currency imposed on them by a central bank with the force of government law behind it)…

The modern economic myth is that “deflation” — falling prices — is the bogeyman, the killer of economic growth. This myth supports the existence of central banks, whose primary mandates include “price stability.”

Ha! “Price stability” means pumping the economy with more and more money to keep prices from falling.

This is always a bad idea. Because money supply inflation by the government-backed monopoly currency issuer is legalized counterfeiting. It transfers wealth from savers to the central bank…which then doles it out to its commercial bank stooges and eventually to underwater governments…

But the pursuit of so-called price stability is especially malicious during a depression, when falling prices would help the common man the most.

During an economic depression, one of the breadwinners in a household may lose his or her job. The other may not get a raise for two or three years…or ever worse, the remaining jobholder may get a pay cut. Is it better for such a household to have “stable” or rising prices for groceries and gas? Or would they be better off if prices came to reflect general economic conditions and, you know, actually declined?

Governments and central banks don’t see it this way. FDR certainly didn’t when he did everything in his power to prop up food prices “to protect the farm industry” even as it became harder and harder for everyone to afford to eat.

And we haven’t even yet considered that central bank action is what makes the boom and its attendant bust possible in the first place. They cause the illness. Then they prevent the healing. When the condition of the economy worsens, they enthusiastically administer more of the virus.

The result? An increasingly weak economy. The politically well-connected make out just fine under such conditions. After all, they’re the ones who benefit from the inflation-wrought transfer of wealth!

The middle class, however, suffers. They slip into the ranks of the poor. And often, they have no idea why. The mainstream media aren’t exactly of much help in telling them either. In his article “Why the Old Media Ignore Ron Paul,” Thomas DiLorenzo explains why:

“All governments, Rothbard wrote, rely crucially on a set of myths and superstitions about its alleged greatness and benevolence, coupled with accompanying lies, myths and superstitions about the ‘evils’ of freedom, voluntarism, private enterprise and the civil society. These myths and superstitions are not spread by government bureaucrats as much as by various intellectual prostitutes in academe and in the media. The ‘court historians’ of academe spin tall tale after tall tale about the alleged need for more and more government (Keynesian economics would be a good example), while these ideas are spread about to the general public by pundits and journalists.

“This, too, is why the media ignore Ron Paul. There are a few exceptions, but for the most part, they have invested many years of schooling and work as propaganda mouthpieces for the state. They are as much a part of the state apparatus as is any government bureaucrat or any politician.

“They are the essential tool of the state in dumbing down the general population so that it will peacefully acquiesce in the never-ending expansion of the state and the financial enrichment of all its functionaries, while losing their own freedom and prosperity at the same time.

“They are the paid professional liars who repeat, over and over, such absurdities as ‘Higher taxes and more government spending will make us prosperous’…”recessions and depressions are caused by sudden outbursts of greed and animal spirits” (according to John Maynard Keynes); ‘capitalists get rich by selling people products that harm or even kill them’; and on and on and on.”

With this in mind, we cast our dubious, Whiskey-soaked eye upon an article in The New York Times with the headline:

“Middle-Class Areas Shrink as America Divides Into ‘Two-Tiered Society’ of Rich and Poor

“Study: 44% of families lived in middle-income neighborhoods in 2007, down from 65% in 1970.”

To be fair, the article didn’t prescribe the usual stuff — more regulations, more taxes on the productive, more redistribution. It just points out the growing gulf between the haves and have-nots, along with the social ramifications.

But it also failed to do what all the other articles from the mainstream media do. Like a cop on the take at a crime scene, it pretended not to notice the muddy footprints leading straight back to the perpetrator’s hideout.

The growing disparity in incomes started in the early 1970s. Despite nominal increases in their wages, working American families haven’t seen real increases in wages or purchasing power since around 1971.

Note, good patron, that was just after President Nixon severed the last ties of the U.S. dollar to gold. We’ve found our perp…and he’s still holding a smoking gun!

The world has been floating on a sea of unbacked currencies ever since. With the luxury of a flexible currency governments have been freer to rack up debts. The financial sector also benefited at the expense of manufacturing. And as Bill Bonner recently put it, “The fed’s funny money system caused the export of millions of good jobs to emerging markets.”

Wealth has been harder to build for the middle class, and now they’re falling hopelessly behind.

You won’t see the press or the academics talking about the damage wrought by unbacked fiat money, however. They’ll point you to the dangers of free trade…or the speculators…or the profit seekers.

They won’t tell you that the one thing that kept the state in check — the gold standard — was the only thing that could have prevented the collapse now unfolding across the world.

(For a more-thorough explanation of how the gold standard kept the state in check and provided the environment for economic progress, please read Congressman Ron Paul’s minority report, The Case for Gold.)

This catastrophe was inevitable. But all hope is not lost. Though the masses may find themselves falling into poverty — and while the mainstream media continue to mock gold and venerate central banking — those in the know have been taking the steps to protect themselves.

Step one is the ownership and continued purchasing of precious metals. Gold and silver are your very first line of defense as the central banks around the world continue to debase their currencies.

Sadly, gold and silver aren’t the bargains they used to be. As we mention from time to time, perhaps the world is slowly waking up to the nature of the problem. Sure, the media and benighted protesters around the world may call for more “help” from the state…but we get the sense that more and more people are figuring out the root of the problem. And they’re bidding up the prices of gold and silver.

Regards,

Gary Gibson

Bank of England Announces More Currency Destruction was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

It seems like an odd result for a man to be in such a hurry to get to, at least until you consider the alternative. In a way, it’s an early example of government not being able to get anything right. Not even a hanging…

You see, Guy had just watched his fellow English-Catholic conspirators hanged until nearly dead. Then they were cut down. Their most private parts and entrails were removed and burned before their eyes. Then they were beheaded.

This all happened to Guy Fawkes, too…except wily Guy made sure he was too dead to notice. So what offense warranted this extreme torture and dismemberment?

Guy and his co-conspirators felt that the crown made life miserable for the Catholic minority in England. In truth, the crown was doing exactly that.

So on the 5th of November, they planned to ignite the dozens of barrels of gunpowder they’d packed under Parliament. Their plan was to blow up the king.

The conspiracy was uncovered and thwarted. Torture, confessions and painful executions followed. This was the end of the now-famous Gunpowder Plot.

For centuries afterward, Londoners have organized a curious bonfire on the Nov. 5th anniversary of Guy’s bust. They even gave it a catchy phrase…

“Remember, remember the fifth of November,” they chant.

We say “curious,” because it seemed that half the chanters hated Guy… while the other celebrated his rebellious spirit.

The “Gunpowder” part of our name comes from the Guy Fawkes story. The “Whiskey” comes from the 1794 rebellion in western Pennsylvania, when residents protested new whiskey taxes imposed by Treasury Secretary Alexander Hamilton.

Hamilton had raised taxes in an effort to pay off the national debt. Sound familiar?

I guess you can say Whiskey & Gunpowder welcomes the idea of rebellion.

We believe it’s not only our right, but our duty to fight back when a select few try to tell the rest of us how to live our lives.

Frankly, folks in Washington, D.C., are more concerned about sucking as much as they can from the system before the whole thing collapses.

They’re more concerned about bailing out fellow friends and CEOs than they are about creating a friendly environment for entrepreneurs to thrive.

Take our currency, the U.S. dollar, for example…

It’s been nearly 40 years now since the dollar had even the slightest connection to gold.

Our money is backed by nothing but empty promises. The government holds the power to print itself out of any problem.

That “power” the government holds has corrupted the system. Banks and well-connected businesses know they are very likely to be backstopped by the feds.

So they can still pocket the profits… while you and I shoulder the risks of their bad decisions.

Or take interest rates…

In an effort to create more liquidity — and, subsequently, higher profits for banks as they pay less interest to depositors – the Feds pushed interest rates to historic lows.

Their perverted economic policies encourage Americans to SPEND, rather than SAVE, their money.

Back in Guy Fawkes’ day, the government was punishing Catholics. Nowadays, it’s not about religion.

It’s about the government telling us what we should and shouldn’t eat… forcing us to wear seat belts and helmets for nearly everything… and, most importantly, for punishing the hardworking savers and entrepreneurs that create growth.

In short, it’s the idea people and middle class that are getting squeezed. Actually, hanged is more like it.

Think about it: It’s not the bankers and politicians that’ll be most affected when this economic s%$t hits the fan. They’ll likely have their backdoor deals and bailouts. There’s little you or I can do to stop this.

The poor won’t be affected, either. That’s because they haven’t saved anything that the government can destroy. They don’t have anything to lose. Instead, they’re kept happy, oblivious and complacent with food stamps and social welfare programs. It’s the middle class that will feel the most pain.

The people who’ve worked hard… tried to play the game honestly… saved… and invested wisely.

The people who are frustrated by rising prices… who are now pushed into risking money in the stock market in order to try to gain a decent retirement income.

That’s why, for the first time ever, we’re asking you to band together to celebrate our own fifth November…

How You Can “Remember, Remember the Fifth of November”

This Nov. 5, we’re organizing our own Guy Fawkes event.

Don’t worry…we’re not organizing a protest…we’re not aligning ourselves with the Occupy movement to “quit the banks”…and we’re NOT suggesting violence in any way.

And we’re not suggesting you stock up on gunpowder, like our friend Guy did.

Instead, we want to organize a mass rejection of the U.S. dollar as our currency of choice by ditching the dollar!

That’s right. It’s time to tell Ben Bernanke, Tim Geithner and the Wall Street banks that the fiat dollar experiment — which has sucked wealth away from every American family — has failed!

We want to prove that we as a nation won’t stand for reckless spending… out-of-control money printing… and the threat of future taxation.

So I’m asking you to band together to show the government that we’re “opting out” of this failed U.S. dollar experiment.

In its place, we demand a currency that cannot just be “printed” at the whims of a small group of men with ulterior motives.

It starts today…with two special reports we’d like to send to you for free.

The first report I’d like to send you, for free, shows you how to take advantage of what literally could be one of the LAST hard money loopholes on Earth.

It’s one of the safest “zero downside” investments I’ve ever seen.

You literally… can’t… lose… money… on the deal.

Seriously.

Complete upside.

Inside, you’ll find a simple secret that allows you to turn every U.S. dollar bill into something worth $1.10.

You will also learn how a hedge fund trader — who made millions during the credit crunch — recently put $1 million into this last hard money loophole. He then said in an interview, “You really ought to call your bank and buy some now.”

I call it The Last Legal Hard Money Loophole in America. And it’s yours free when you click here.

Regards,

Gary Gibson

Why You Should Remember the Fifth of November was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.