“A state that does not claim the ability to heal, the legal right to heal, and the moral responsibility to heal is a night-watchman state. It does not make comprehensive claims for delivering men, so it does not make comprehensive claims on the allegiance of men. It is limited government, precisely because it acknowledges that it cannot heal.”

Ah, the limited government. As durable as the morning dew. Or the snowball in Hell.
We don’t think that the state can ever limit itself to nightwatchman. Not for long. It’s like the butterfly limiting itself to the caterpillar stage. All states must move toward their final form, growing as large, intrusive and destructive as they possibly can given the surrounding conditions of zeitgeist and economy.

So the state that started out as the freest the world had ever seen wound up using the riches generated by its (initially) laissez faire economy to become the world’s largest aggressor. Full of the most rampant fascist corporatism. The most military spending, the biggest army and greatest number of foreign entanglements. The one seeking to monitor every single thing its subjects do anywhere and at any time.

“Just return the government to the one proscribed by the Constitution!” you might say. But the Constitution itself was a power grab by the elites of the day. A “compromise” between the desires of the monarchy-minded Alexander Hamilton types and the existing Articles of Confederation…which themselves did a much better job of limiting how much central government there could be in these United States.

If you doubt this thesis, just take a look at the reality. Ask yourself how well the Constitution has protected liberty and limited government. Not that the Articles would have worked all that much better or for that much longer (though they might have).

Like any virus worth its capsomeres, the state will find a toehold wherever said toehold may be and then evolve to fit prevailing conditions.

And when conditions are right — when the host is rich and plump from laissez faire but still drunk with jingoism and the mythology of the “good, night watchman” government — then watch out. For such conditions will give you the monstrosity that is Washington, D.C., with its globe-spanning armies…its armada of flying robots that can spy or kill without ever being seen by their targets…its data centers through which every utterance, every whisper in the world will one day flow…

The nightwatchman state always harbors grand ambitions in its heart. It may promise to limit its roll to keeping you and your house safe as you sleep. But it dreams of barging into your home and carting you off to prison and taking your property as its own.

The State Can’t Stop At Night Watchman was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

The U.S. government is looking to plug up leaks on its tax slave ship. From CBS…

LOS ANGELES (CBS) — A bill authored by a Southland lawmaker that could potentially allow the federal government to prevent any Americans who owe back taxes from traveling outside the U.S. is one step closer to becoming law.

Senate Bill 1813 was introduced back in November by Senator Barbara Boxer (D-Los Angeles) to “reauthorize Federal-aid highway and highway safety construction programs, and for other purposes”.

After clearing the Senate on a 74 – 22 vote on March 14, SB 1813 is now headed for a vote in the House of Representatives, where it’s expected to encounter stiffer opposition among the GOP majority.

In addition to authorizing appropriations for federal transportation and infrastructure programs, the “Moving Ahead for Progress in the 21st Century Act” or “MAP-21″ includes a provision that would allow for the “revocation or denial” of a passport for anyone with “certain unpaid taxes” or “tax delinquencies”.

Section 40304 of the legislation states that any individual who owes more than $50,000 to the Internal Revenue Service may be subject to “action with respect to denial, revocation, or limitation of a passport”.

The bill does allow for exceptions in the event of emergency or humanitarian situations or limited return travel to the U.S., or in cases when any tax debt is currently being repaid in a “timely manner” or when collection efforts have been suspended.

However, there does not appear to be any specific language requiring a taxpayer to be charged with tax evasion or any other crime in order to have their passport revoked or limited — only that a notice of lien or levy has been filed by the IRS.

Source

We love the name! Before we delve into how insidious this measure is, we have to congratulate lawmakers on the moniker:

“Moving Ahead for Progress…in the 21st century!” It sounds like a cross between an empty corporate memo header, cheesy political campaign pablum and a Saturday morning science fiction cartoon. Well done, Congress!

Of course the tax net isn’t the entire point of the bill. From the Official Blog of the American Society of Civil Engineers:

The reforms included in MAP-21 allow for the nation’s surface transportation program to move forward. Consolidating the 90 programs into 30, creating a National Freight Network Program, expediting project delivery, creating reasonable performance measures, and enhancing the TIFIA program are all steps that will allow for a stronger, more results-oriented transportation program.

The legislation also reduces the core highway programs from seven to five, which include three new core programs and two existing programs. The new programs include a National Highway Performance Program, a Transportation Mobility Program, and a National Freight Network Program; while the remaining programs are the Congestion Mitigation and Air Quality Improvement Program and the Highway Safety Improvement Program. Other positive reforms include a new title, called “America Fast Forward”, which strengthens the TIFIA program by increasing funding to $1 billion per year; while Title 1 takes steps to improve the existing highway bridge inspection program and authorizes a national tunnel inspection program. The bill also establishes an outcome-driven approach that tracks performance and will hold states and metropolitan planning organizations accountable for improving the conditions and performance of their transportation needs, which ASCE has supported in the past.

Source

Hmmm…D.C. needs money to fix America’s failing infrastructure. And so lawmakers are turning the screws on its delinquent tax cows.

It is just us…or isn’t this a lot like debtors’ prison?

It’s as if all the country is one big jail. Those who owe the taxman won’t be allowed to leave. Right now, the coming legislation — and we see no reason this one won’t become law — only targets those who owe fairly large amounts. Over $50,000.

So to start, they’re restricting travel on the easy targets, the people that most honest and dutiful citizens can agree are not doing their “fair share.”

Before you know it, however, those travel restrictions will start to expand. It’s almost written in the stars. This is the sort of behavior a declining, bankrupt empire has to engage in as it fights the dying of its light.

This current legislation would also reduce the risk of tax dodgers dodging their burden forever by skipping town. And country. But don’t be too surprised if new reasons for being trapped in the U.S. start to become law.

Expect currency controls to ramp up, too. It won’t just be tax delinquents who won’t be allowed to leave U.S. borders. Funds may find themselves as forbidden to see other lands as tax debtors. Any money you haven’t already squirrelled away in a foreign account may also find itself tied inescapably to the Homeland.

Best find an escape route while you still have the chance. One of our favorite routes is spelled out in a report we send every new subscriber to Apogee Advisory. It’s called “How to Move Your Money Safely out of Harm’s Way”. This report describes “offshore gold storage programs” that are completely legal. And they’re truly accessible. No matter how much or how little wealth you have to stash away, this is definitely something you want to explore.

When we read the news about restrictions on tax debtors our own palms began to sweat.

We’d just done our taxes and found that we will owe our stern Uncle more than we can pay on the date due. Our own fault for spending the money we’d earned as an independent contractor as if it were our own. We will behave better next time.

Uncle Sam and his leg-breaking IRS men know we’re good for it and will surely give us some time to pay. We had no worry about that.

But when we saw the headline about travel restrictions for those with tax debt, we blanched. Then we read further and realized it was only for those who owed over $50,000. Then we remembered…we don’t even have a U.S. passport!

We’ve been in the U.S. almost as long as we’ve drawn breath. But we weren’t born here. So our citizenship and our passport are both from our tiny country of origin.

Often we’ve been questioned about our lack of U.S. citizenship after spending over 95% of our life within U.S. borders. And just as often we’re urged to rectify the situation.

But we can’t help but feel that we’ve been right about putting off attainment of our U.S. citizenship. We always figured that when the time came, the U.S. would just revoke the U.S. citizenship of anyone it didn’t like. Just when we thought we’d be waiting forever, along came Charles Dent (R-PA) and Joe “Where’s My New Death Star?” Lieberman (I-CT)…

…and their Enemy Expatriation Act. We stopped looking quite so paranoid.

Mind you, this bill isn’t anywhere near being a law yet. And it only targets those who take up arms against U.S. citizens in the service of other armies…but like all government actions, this act is the proverbial camel nose under the tent. It’s the seemingly necessary but restricted draconian measure that will be expanded and wielded in creative ways down the road.

Better, we always thought, to hold onto some other citizenship and some other passport. We suspected it would become all the rage among the smart money one day.

And so it has! From the New York Times Economix blog:

The number of (wealthier) Americans who are renouncing their citizenship has been climbing in recent quarters.

Take a look at the chart below, courtesy of Andrew Mitchel, an international tax attorney who has been manually tallying the lists of expatriates (defined for this purpose as people renouncing their American citizenship or terminating their long-term United States residency) published in the Federal Register. The chart is taken from his blog:

The figures appear to refer primarily to those Americans wealthy enough to warrant notifying the Internal Revenue Service of their change of status, rather than all expatriates. A total of 499 Americans fell into this expatriate category during the first quarter of this year. The number during the first quarter in each of the previous seven years averaged 115.

Now I’m sure a few readers are going to blame “ObamaCare” for this burst of expatriation. Mr. Mitchel, however, suggests that two technical tax-related changes inspired more people to give up their citizenship.

He writes in an e-mail:

First, in 2008 the expatriation rules were changed. There is no longer the 10 year U.S. tax return filing requirement. Although there is now a mark-to-market regime triggering gains upon expatriation, up to $636,000 of gain can generally be excluded for individuals expatriating in 2011 (the amount is annually adjusted for inflation). Further, non-U.S. citizen, nonresidents can now annually visit the U.S. for 120 or more days without becoming taxed as U.S. residents (under the pre-2008 rules, visits to the U.S. for more than 30 days during any of the 10 years following expatriation caused the individual to be treated as a U.S. resident for that year).

With the $636,000 exclusion from the mark-to-market gain, many individuals can expatriate without paying any U.S. tax. It is important to note, however, that some individuals, especially those with assets in foreign pension plans, may unexpectedly pay more tax than they realize. The circumstances of each individual considering expatriation must be closely analyzed to determine the amount of U.S. tax that will be due upon expatriation.

The second reason for the increase in expatriations, I believe, is the recent publicity regarding the penalties and voluntary disclosures for failing to report offshore bank and other financial accounts. The U.S. tax rules for U.S. citizens living overseas can be quite complex. The increase in awareness of the penalties has caused many individuals with dual citizenship to conclude that their U.S. citizenship is not worth the stress and hassle of the U.S. tax filing rules. The U.S. is almost the only country in the world that requires its citizens that live permanently in another country to continue to file tax returns in the country of citizenship. Combine the U.S. tax return filing complexities with the potentially bankrupting penalties for failing to report certain items, and many individuals conclude that their lives would improve by shedding their U.S. citizenship.

Source

According to Mr. Mitchel, a lot of folks are effectively throwing their hands up in the air because of the complexity — and “potentially bankrupting penalties” — of U.S. tax law and saying “Screw it…I’m outta here!”

Expatriation and renunciation of citizenship are both sorely tempting, good patron. What liberty-loving person wouldn’t want to toss their slave papers at their federal masters and tell them to go pound sand…And to keep their grubby claws off their money?

But it is not for everyone. Notice that your non-U.S. citizen editor hasn’t permanently cut ties with the U.S. so he can continue to live here indefinitely.

This is despite the fact that he already has citizenship elsewhere. And a career (of sorts) that can generate income anywhere on the globe that there is a reliable Internet connection.

Even if you are like us and want to stay in your U.S. home as long as it’s not suicidal, you should have some insurance…and maybe even a “bug out” plan or two…

We’ve got foreign citizenship and a non-U.S. passport. We’ve also got a couple safehouses in the Caribbean and Latin America where we hope to be able to hide from drone attacks.

Getting a second passport would not be a bad idea for you at all. And we know it’s a stretch — and a bit of a hassle — but you may want to start looking into other possible citizenships. We here the Bahamas and the Dominican Republic are good places to look. Or maybe you could claim a place like Ireland based on your recent Irish citizen forebears.

Consider these things what they really are. Not extreme or paranoid actions. But smart, forward-looking geopolitical insurance during volatile times. It’s like stashing a parachute in your carry-on luggage if you know the plane you’ll be flying hasn’t been serviced in a decade or two.

An equally smart but far easier step is getting your money safely out of harm’s way. Both you and your money will likely be facing increasing restrictions on your movement. Best to get things moving right now.

You don’t have to up and leave the country quite yet (Though who could blame you for wanting to?). You don’t even have to get a second passport yet. But learning more about getting your money out of harm’s way is something you could do right now. Before you even get up from your computer screen. Just click here now to get started.

Regards,

Gary Gibson

U.S. to Become Tax Debtors’ Prison was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

We read those words to that effect from an article linked to by a libertarian website we visit very regularly.

“In Zimmerman’s case, Martin was an athletic six-foot-two-inch tall football player that had him on his back pounding on him. Martin got what he deserved.”

So wrote Paul Huebl, a former Chicago cop and proud member of the Screen Actors Guild.

We’ve tried to avoid having to write anything publicly about the shooting of Trayvon Martin. It’s too obvious a move for the black anarcho-libertarian to spout off on the matter. But we feel we must let our thoughts be known…

You see, dear patron, we spent a few years of our adolescence in the Central Florida town just south of where Trayvon was killed. We have some experience with being black in that corner of the world.

Further, the public voices who dwell close to our philosophical sphere seem to be saying some questionable things in their rush to defend gun ownership and denounce sleazy race-baiters like Al Sharpton and Jesse Jackson.

Like Thomas Sowell, the black conservative and intellectual who agreed with Geraldo Rivera’s advice to black and Hispanic youth to not dress to look so threatening.

First a few things about that part of Florida…

Like Caesar’s Gaul, Florida is divided into three parts…

South Florida as centered around the Miami-Dade metro area is essentially a continental Latin and Caribbean colony.

Central Florida is dominated of course by Orlando. It’s bloodless and its claim to fame is a tourist trap ruled over by a mouse created by a Nazi-sympathizer.

People often say that Florida isn’t really “The South”. And they’re right. But North Florida isn’t really part of Florida as much as it is the southernmost region of Georgia.

Once you head north of Orlando, the descendants of Castro-generated refugees and Jewish retirees become a distant spectacle. Much more immediate are the Confederate flags, monster trucks and occasional white supremacist tattoo.

Geneva, Florida, is just a few miles north of Orlando and a few miles east of Sanford, Florida, where George Zimmerman shot Trayvon Martin to death.

Through a series of crises and accidents your editor came to spend his early teen years as a resident of Geneva. The town is home to just a couple thousand souls or so. The downtown has a section full of older homes, a section of newer tract homes (where your editor lived), three churches, an elementary school, a couple of gas stations, one post office, one feed store and one stoplight.

The rest of the place is a smattering of multi-acre properties, dirt roads and swamp.

While Sanford lies directly east, Oviedo, FL, is just south and to the west. Oviedo is a very nice, suburb of Orlando. It made at least one “100 Best to Live in the U.S.” list one year. The road from Oviedo becomes Geneva’s First Street. There is a specific moment as you travel along that road that you sense you’ve crossed some ethereal veil. It happens within a second or two of leaving the “Welcome to Oviedo” sign behind.

The new, colorful subdivisions stop abruptly. Wide open pastures take their place. Tiny herds of cattle and the occasional horse or two alternate with lone houses in big fields as you drive along.

You notice more pickup trucks, quite a few of them on giant tires. The few other cars you see on the two-lane road move more aggressively.

Twenty years ago when your editor’s mother bought one of those newer tract homes, one of the neighbors painted “NO NIGER” in huge red letters on our mother’s garage door. We assume the vandal meant “NO NIGGER”, but we also assume it was also dark when he wrote it and he lost track of how many g’s he’d already written.

A few months later someone left a pathetic attempt at a chemical bomb on the front porch of our family’s house. Our mother called the sheriff. The deputies told her that had the bomb worked, it might have killed her.

That was all over twenty years ago. But just a few years ago the son of the other black Caribbean family in town was carrying his own young son on his shoulders when he was run over by one of our neighbors.

The brother and his son survived with only minimal injury. The neighbor went to jail for a long time. The attack was racially motivated.

Back in January, 2010 we were visiting the old homestead, we were hit by a speeding truck as we walked along the road just beyond our mother’s house. The hit was surely accidental. It was the response of everyone involved that made us mad. And reminded us what the life of a black man is worth in that town.

The driver stopped, ran over to our prone form and asked us angrily what we were doing “in the middle of the road” as we lay moaning on the lawn where we’d landed. The owner of the home also seemed mad that we had landed on his lawn and had created trouble for the driver. Once we recovered our senses and realized that we were neither dead nor crippled, a fight very nearly ensued.

To heap even more insult to our relatively minor injuries, the emergency crew who came out (at our mother’s insistence, not our own) seemed annoyed at us, too.

We never lived in neighboring Sanford itself. But we spent an awful lot of time there. On the way to the city itself from Geneva, there is a little “Chocolate Village” called appropriately enough Midway. A poor black neighborhood in the middle of nowhere. Out of the 1700 or so people who live there 1600 are black while only a few dozen are white.

Sanford itself is a much bigger town with over 50,000 residents. Over half of those are white and a little less than a third black. The black population is largely concentrated in the Goldsborough neighborhood.

Sanford’s neck isn’t quite as red as Geneva’s, but there is still that uniquely Southern flavor of black-white tension on the air. Your editor can taste it every time he lands at Orlando International Airport. It increases the farther north you go from the airport and from Orlando. You could choke on it in Geneva. It’s not as bad in Sanford, but it’s still there.

Here’s an anecdote not from personal experience, but culled from the Wikipedia page on Sanford:

“On October 23, 1945, the Brooklyn Dodgers announced that they had signed Jackie Robinson assigning him to their International League team, the Montreal Royals.

“Branch Rickey, Brooklyn Dodgers General Manager believing he ‘knew’ Florida, thought his team could train there ruffling as few feathers as possible. Robinson and his wife were instructed by Rickey not to try to stay at any Sanford hotels. He and his wife didn’t eat out at any restaurants not deemed ‘Negro restaurants.’ He didn’t even dress in the same locker room as his teammates.

“As soon as the citizenry became aware of Robinson’s presence, the mayor of Sanford was confronted by a ‘large group of white residents’ who ‘demanded that Robinson…be run out of town.’

“On March 5th, 1946, the Royals were informed that they would not be permitted to take the field as an integrated group. Rickey was concerned for Robinson’s life and sent him to stay in Daytona Beach. His daughter, Sharon Robinson, remembered being told, ‘The Robinsons were run out of Sanford, Florida, with threats of violence.’”

“In his 1993 book, ‘A Hard Road to Glory: A History Of The African American Athlete: Baseball’ tennis great Arthur Ashe wrote in response, Rickey ‘moved the entire Dodger pre-season camp from Sanford, Florida, to Daytona Beach due to the oppressive conditions of Sanford.’”

Source

We share these anecdotes so you understand our bias. And not so much to explain Zimmerman’s actions — he was an overzealous cop wannabe whose stereotyping got him in over his head — but to explain the police response.

Black life doesn’t hold so much value in the region Trayvon was killed. And we sadly report that it often doesn’t have much value in the eyes of people with whom we tend to agree on other things like liberty and the right to bear arms.

It saddens us to be on the side of the national healthcare types on this one. (But again, we’re neither conservative nor liberal in any modern sense, but in love with liberty and the markets they foster.) Even if Trayvon got violent with Zimmerman…even if Zimmerman was getting the worst of it in a scuffle…he was the aggressor. He gave Trayvon reason to feel the need to defend himself. Zimmerman was the one “acting suspiciously.”

(Zimmerman also strikes us the type who admired authoritarian power and made up for his inadequacies by carrying a gun. But we don’t know the man personally and could be wrong. His idea of self-defense, however, seems in line with U.S. foreign policy: antagonize and escalate after the violent response.)

Lest you get us wrong, we believe in the right to bear arms to be as essential as the right to own property and to do as you will with your own body. We also believe in the absolute right to self defense and to stop violence toward your person and property with force.

But that doesn’t mean you get to create the situation in which you have to defend yourself.

Zimmerman is not white. Not really. But he stands in for all the white “conservatives” out there whose love of freedom extends only as far their right to bear arms. It doesn’t cover the non-white elements in “their” country, nor the Ay-rab countries their “conservative” political actors attack.

So no, Zimmerman isn’t white. But he has become the avatar for a large swath of the population who will never under any circumstances be sorry to see the Second Amendment used to lay waste to a young black man who probably had it coming.

Had Trayvon or any other black man behaved as Zimmerman had toward a white person…if a white man had been beating on then been shot by a black man who had been shadowing him…That is to say, if the races of the actors had been reversed (again counting the “white Hispanic” Zimmerman as a stand in for the white Second Amendment lovers who fantasize about some black punk giving them an excuse), then the gun rights crowd would be singing the opposite tune.

They would have decried the black man for stalking the white man in the first place. They would have cheered the white man for pummeling his black stalker. They would have called for justice for the fallen white man and for the imprisonment and even death of the black shooter.

As it is many liberty and guns types see a smoking gun and big, dead, black kid and honestly don’t see a problem. They can’t believe the rush to judgment. Granted, the media is making the usual circus of this…And those charlatans Sharpton and Jackson are all over this like flies on a corpse…

And maybe therein lies the problem. Being black has become so politicized. The state is so involved in being black that blacks can’t help but live politicized lives. And have the occasional politicized death.

Economic integration — being useful in the marketplace — was resulting in social integration before WWI. Then along came the state with its wedge in the form of Jim Crow laws. So after the state prevented the natural integration of white and black, it took it upon itself to force integration at a later date. To make it a violent political matter when markets had been doing it peaceably.

After making integration as violent as possible, the state further amplified the divide between blacks and whites. It’s the state that cripples blacks with the crack cocaine of welfare. It corrals the visible mass of them in public housing and rewards them for creating one-parent homes. It traps their children in bottom-of-the-barrel public schools where they learn nothing.

After public education destroys their minds and welfare destroys their work ethic, the state creates quotas to get unqualified blacks into the job market. This only increases resentment from whites. Meanwhile blacks are kept from any meager but honest employment by means of minimum wage laws.

These laws strongly discourage employers from hiring anyone whose labor isn’t worth at least the minimum the government sets. If an employer MUST pay at least $7.25 per hour and a young black man’s skills are only worth, say, $5.00 per hour (because he is a product of public schooling, public housing and welfare), then that young black man will simply not be hired. That young black man will be further driven away from becoming a contributing member in the markets and therefore civil society.

Also the state persecutes blacks mercilessly when they engage in the most attractive trade available to the majority who won’t make it in music or sport, a trade that exists because of unreasonable prohibitions on human choice.

So the state does everything to shape dependent and resentful adults. Then the state’s wage controls keep young black people out of the labor market. Then it punishes them harshly for engaging in the black markets it creates with its senseless prohibition, often setting them on a lifelong cycle of incarceration.

The state has helped craft members of the black race into objects of hate. Parasites in weird dress, speaking in alien tongues. Their natural habitat is surely the prison, where more today reside than were enslaved in the early 19th century.

By “helping” blacks, the state turns them into subhuman caricatures. By making them its wards, the state creates a concentration of hopeless, dangerous, ignorant poverty with its own subculture and dialect. The state creates a population that the white majority views with unease at best and hatred at the worst.

So black men will always “have it coming” in the eyes of many in the liberty and guns crowd (to which your dark-skinned editor belongs). As long as so many black lives are shaped by the state’s inherently destructive assistance black men will always be deserving of suspicion in the eyes of those who have no biological urge to view them as extended members of the human family.

It’s natural enough for humans to identify along lines of kinship. Ethnicity is just extended family after all. And it’s unreasonable to expect people not to favor family. But the market provides a civilizing effect by rewarding cooperation, providing mutual gain and creating tolerance for those who aren’t related to us and don’t share our exact tastes. We manage to get along with each other in the market place where we interact and are rewarded for serving each other well.

Politics will have none of this. It thrives by amplifying divisions, creating social friction within and war without. Where markets demand peace and cooperation, politics demands conflict, otherness and hatred of it.

“Look at him!” the whites with guns cry about slain Trayvon. “He looks like a thug!” Tall, athletic, wearing that black dress code. Gold teeth. He was already dealing with that plant the government doesn’t like, according to the reports.

Nowhere in all this do those who are satisfied with Trayvon’s death say what Trayvon was actually doing to warrant Zimmerman’s attentions. Besides walking at night while black.

They will often ask what Trayvon Martin was even doing in a gated community. They sniff out the marijuana possession and the more recent Facebook photos. But they seem to have keep missing the part of the story that explained that Trayvon was on his way back to his father’s house in that gated community. They mock as biased the sympathetic note in the media’s voice, then cherry pick the parts of the story that suits their practiced narrative.

Trayvon was walking back home. But he had the misfortune of looking like the state-fostered cartoon that stirs the base, clannish reaction within whites.

“Hell, if I’d seen him there,” the white ones who tend to have the guns say, “I’d have wanted to confront him, too. And I wouldn’t have lost a wink of sleep over shooting him.”

Perhaps the only acceptable behavior from black men is to avoid areas where they’d make whites nervous, especially at night. Should they be confronted by a non-white, the only correct response is apologetic submission.

Maybe it’s not enough that black men not wear hoodies. Perhaps the good ones ought to wear iron collars to let non-whites know they are not looking for trouble, are not dangerous and can be trusted.

Regards,

Gary Gibson

Did Trayvon “Have It Coming”? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

That’s right. Bernanke is taking his easy money message to the streets.

According to Bloomberg:

“Now that the weather is nice, I’m half-expecting Ben Bernanke to set up a lectern outside Federal Reserve headquarters on Constitution Avenue so he can enlighten passersby about the need for easy money. He’s been delivering the message lately to anyone who will listen–including a couple dozen lucky students at the nearby George Washington University School of Business. The Fed chairman is worried that the economic recovery could stall out if the Fed yanks monetary stimulus too soon.”

Source

Dan Denning continues:

“He is returning to his roots as a professor. But professors must profess. So what is Dr Bernanke? Obviously he’s repeating the claptrap that to simulate growth you need to lower interest rates. But according to the rather nauseating article (which isn’t much more than an appeal to authority) Bernanke is going after Herbert Hoover’s Treasury Secretary Andrew Mellon.

“Mellon was asked by Herbert Hoover how to deal with the Great Depression. According to Hoover’s memoirs, Mellon replied:

‘Liquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.’

“Now there is some doubt as to whether Mellon actually said this. The only source is Hoover, who was trying to make himself look compassionate and enlightened by comparison. But if Mellon didn’t say it, he should have. This is a common sense view, which is probably why so many people oppose it. Time does not make bad investments go good. The recession/correction/liquidation is the cure for the disease of inflation.

“Mellon, if he actually said those words, certainly didn’t mean liquidation in the sense that say, Stalin, would have meant it. He wasn’t suggesting Hoover go out and shoot the farmers the same way Stalin liquidated the Kulaks who opposed his collectivist agrarian policies. But Bernanke reportedly called Mellon’s prescription, ‘pretty heartless’.

Isn’t that big of him?

“The ‘liquidation’ of bad investments is another way of saying that there comes a time when you must give up on the belief that an investment will come good. The sooner you do this, the better it will be for everyone. Resources like capital and labour will no longer be tied up in unproductive investments. But more importantly, human lives will no longer be engaged in activity that doesn’t make anyone more productive, wealthier, or happier.

“Bernanke is the heartless one in all of this, even if he thinks his heart is in the right place. He represents an idea that has destroyed the life savings and purchasing power of millions of people. The control of money by central banks has sucked even more people into investment and borrowing decisions that will take them years to recover from, if they ever do.

“It’s not only heartless to believe in fiat money. It’s brainless. Maybe that’s why the centralisation of the money supply by people who have infinite confidence in the technology of the printing press receives so much popular support. People who support it aren’t really thinking. They’re believing…and following orders. ‘Nothing to see here… move along.’”

We think it’s fair to say that Ben Bernanke is willing to destroy the economy and your standard of living.

We don’t know if he’s part of a deliberate coordinated effort to transfer your wealth to the political and banking elite…if he does what he does knowing full well the destruction he’s causing.

Or maybe he just has a head full of bad ideas. Like a medieval “scientist” whose considerable knowledge all rests on the faulty premise of geocentricity.

No matter what Bernanke says, no matter how much the masses put their faith in his words, low interest rates and unbacked money creation cannot cause economic growth. Not the sustainable kind anyway.

All this interest rate manipulation causes are distortions. It may seem to create wealth and the appearance of economic vitality. But that activity is just misallocation of resources. And the misallocations will correct themselves soon enough. These corrections are attended by the disappearance of jobs in industries that should never have flourished (remember, these were misallocations).

Low interest rates distort economic signals. They tell producers that money is plentiful. Interest rates are the cost of borrowing money and when they are naturally low, it means that there is plenty of money looking for borrowers. The market is making borrowed money more available to both consumers and producers. This saved capital can be put to work to generate economic activity. Consumers will borrow to buy. Producers will borrow to expand start or expand production.

Artificially low interest rates, however, send a false signal to those consumers and producers. They get the economic juices flowing when capital is actually scarce.

Sure the economy may appear to grow. But they mask the reality, like when beer improves the appearance of the homely women at the bar. There are really no nutrients to support this growth. There is no saved capital. Low interest rates give the illusion of plenty of savings looking for investment. But it is just an illusion.

Also in an artificially easy money environment there are few corrective signals. This leads to malinvestment and to financial bubble. More nail salons and transgender studies degrees than there would have been without the easy money. Houses and company stocks may find they fetch a higher price than they otherwise would have, too.

And there we have it. The conceit of the Keynesians. They believe that good, honest growth can come by inducing borrowing with easy, greasy new money. Austrian school types insist that there must be savings first from which to borrow. Any boom based on low interest rates must necessarily result in a bust when the reality — There was no accumulated capital upon which to draw! — asserts itself.

But how do you go about monkeying with interest rates? Ah, that’s where having a monopoly on the money supply comes in really handy! You just create a boatload of new money and shovel it into the bond market.

And here the plot thickens. You see, a lot of this newly created money can buy up government bonds. That is to say, the central bank can lend the new money to the government through their preferred brokers.

Two birds, one stone. Interest rates are lowered (inducing “growth”) and the government has more borrowed money to play with. It’s a central planning jackpot.

Not enough tax money to cover the costs of all those wars and wealth transfers? No problem! Deficits don’t matter when the central bank is willing to keep lending you money…and keep the cost of borrowing (interest rates) down to boot!

Of course, these sorts of shenanigans can’t go on forever. It just seems like they can while your in their midst. But the reckoning must come. Anyone who is not prepared will be wiped out.

Interest rate manipulation and the creation of unbacked new money…it’s all part of a great con. We’re all told it spurs economic growth. But what it really does is destroy the things upon which growing economies rely: accumulated capital in the form of savings, and clear economic signals in the form of prices, both for goods and for the use of money itself.

We suspect that there are people who benefit from this degenerate non-market, central banking system and who know that they benefit from it at the expense of billions of their fellow humans. We’re not sure Ben Bernanke, however, is in the know.

Perhaps Greenspan was. But we think Bernanke really believes his lines. He is as fervent in his belief in artificial control of interest rates and fiat money as any free marketer is about his gold and silver. Ben Bernanke is a “fiat bug”.

Our advice is to stay as far away from Bernanke and the supply of paper he controls as you possibly can. That means physical gold and silver.

But “paper” gold and silver, along with other “paper” commodities may greatly benefit from Bernanke’s tender ministrations. At least for a little while before the whole house of cards comes down.

As the dollar goes down gold, silver and oil will obviously go “up”. But the stocks in the companies that look for and mine these things may benefit even more from a falling dollar.

In fact, the price of mining and oil companies and may be the only place Bernanke may be able to reach his stated goal of fighting deflation.

Bernanke considers your standard of living expendable. He’s willing to wreck the economy by sticking to his easy money claptrap.

Your employer or your customers will hand you Federal Reserve Notes for your labors. They have to by law. But you don’t have to keep those notes.

Protect your purchasing power and standard of living. Trade those notes for real money. Bernanke may only think something is “money” when its supply is under central bank control. But you know better.

After you get your gold and silver, however, be sure to get ready to profit even more from Ben’s efforts to fight price deflation. Get the right mix of gold and silver miners and energy companies.

Regards,

Gary Gibson

Ben Bernanke Considers Your Happiness and Security Expendable was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Normally we would not look upon buying a single family house for personal use as an investment. But these are strange times we live in.

Why don’t we consider a single-family house for personal use an investment?

In a completely free market (and a free market means no central bank with a monopoly on currency issue and the ability to manipulate interest rates) housing prices would probably act like the price of all other goods and services. That is to say, that they would tend to move downward over time due to increasing production efficiency and competition among producers against the backdrop of precious metals money and competing currencies that would tend toward stability.

The notion that housing prices should rise at all is born of generations experiencing constant expansion of the money supply by the central bank. Rising house prices are just a byproduct of inflation. A house’s price has no more natural inclination to rise than the price of a gold coin, a good suit or a laptop sans inflationary policy and artificially low interest rates.

A house is at base merely a very durable good for consumption. It provides its user with an essential function: shelter. In terms of assets a house for personal use is more like a car or a kitchen appliance than it is like a stock in a company.

That is unless the house is used like an apartment building. When bought and rented out at a profit, then a house becomes sort of like a dividend-paying stock.

Even in a fiat currency environment with its strong inclination toward inflation, we see small pockets of the free market driving prices downward over time. Technology springs first to mind. But even items whose prices rise due to inflation tend to do so more slowly than wages so that the items themselves require shrinking percentages of median income.

This is not the case with markets in which the state tinkers most: things like medical care, education and housing.

In the case of both education and home ownership, government has tried to increase availability by encouraging increasing levels of debt thus driving up the costs. This is the opposite of the market’s mechanism of fostering lower prices through innovation and competition.

We want to make clear that housing for personal use would likely become increasingly cheaper in a free market. A home would never have been misconstrued as an “investment” in such a free market. It would have been seen for what it really is: a durable good meant for consumption and enjoyment.

The population would have rightly cheered the tendency for homes in this environment to get more and more affordable, just like they do when their electronic geegaws get more sophisticated while coming down in price. (The laptop on which your editor is typing this has a 17” screen, an absolute luxury that would have costs thousands of dollars just a few years ago which now costs us a little over $400). There wouldn’t have been this happy expectation of rising home prices (and simultaneous perverse fretting creating “affordable housing” for the poor who find home ownership increasingly impossible because of those rising prices).

As it is we don’t live in the fantasy land where free markets reign. We live in a world of government tinkering and central bank manipulation of currency supply and interest rates. We live in conditions that foster speculative asset bubbles. We have no choice but to act accordingly.

So while we lament the absence of freedom and free markets, we remain on the lookout for the financial pitfalls of a bubble-prone world. And we look out for the resulting opportunities.

And the opportunity right now? Use borrowed money to get a house for personal use. (Then fill the basement with nickels and silver, guns and non-perishable food).

Ten years ago our advice was different. We said to anyone who would listen, “Sell your house, rent a place instead of buying another house and use the proceeds from your sale to buy silver.”

That was the trade to make back when silver had been languishing in the single digits for two decades, having tumbled from an all-time high of nearly $50 in 1980. Housing in the meanwhile was starting to feel the effects of artificially low interest rates and becoming the bubble du jour. Real estate prices were rising fast as people took on more and more debt to buy houses.

The prices rises were beginning to fuel a bona fide mania. The public came to believe that real estate was a “can’t miss” investment whose prices would never go down again. Just about everyone wanted to get in before they were left behind forever.

Little did they suspect that there would be plenty of opportunity to get into real estate cheap in just a few years.

Silver was clearly undervalued for many reasons. Meanwhile real estate was in full speculative bubble mode. Anyone not caught up in the mania (and who recognized silver’s potential because of monetary and industrial demand reasons) would have sold the increasingly overvalued asset and bought the undervalued one. How well would that have worked out?

Pretty well. After 2006 real estate prices started sliding while silver started really taking off. Real estate is down around 30% from its 2006 while silver is up over 500%.

Now this may seem so clear in hindsight, but it’s the exact kind of clarity that the masses and the mainstream media never seem to have while honest money advocates often have it in spades. That’s because hard money advocates can see speculative bubbles for the central bank-induced temporary distortions they really are. Even when those bubbles are growing in precious metals.

For example, we have no problem admitting that at some point gold and silver will be in absolute bubble territory. There will be a time to get out of precious metals and into something else. We don’t know what shape the dollar or other currencies will be in at that time. But gold or silver may have reached their highs against other things. Like houses. Surprisingly, that time may be right now for gold.

Take a look at this chart:

It shows the median home price in the U.S. priced in gold going back over a century to 1890. Notice that in 2010 gold could buy as much house as it could during its previous all time high back in 1980.

The only other time gold has been able to buy as much house was back in 1980.

What is more likely at this point? Will houses get cheaper or more expensive in terms of gold? We would argue that the trend is ready to revert to the mean. The dollar may continue to fall so that both gold and houses get more expensive in dollar terms, but houses would get expensive more quickly. If the gold price in dollars stays relatively flat, then house price in dollars is likely to go up.

Bottom line: houses are set to get more expensive in terms of gold. Just as it was a good idea to trade your house for gold and silver before 2006, it is now a good time to trade your gold (at least) for a house.

Or more specifically, you should trade your gold for a down payment and then mortgage the rest. Get dollars for your appreciated gold in order to place a down payment. Then borrow the other dollars necessary.

You see, we wouldn’t actually recommend staying in dollars more than you have to. The dollar’s long-term fate remains the same. So locking in a fixed amount of dollar debt at today’s low borrowing cost means you are almost guaranteed to be paying back in much cheaper dollars in the future.

You can take advantage of gold appreciation to secure another inflation hedge at the bargain rates created by the Federal Reserve with the housing bubble and bust and today’s low interest rates.

The Fed is handing you a gift. Sure it is wrecking the economy, but like we said before, you can’t stop that. All you can do is act accordingly to protect yourself.

We may have our problems with Warren Buffett as a shill for the state in general and taxes in particular. We often wonder if the government actually pays the man to act as its charming spokesperson to lull the masses with his homespun advice.

But we have to acknowledge his business acumen even as we scratch our heads at his economic and political philosophy. The man has made ungodly amounts of wealth from knowing where to place his bets. And now he’s calling real estate the smartest place to put your money.

In a February 2012 interview with CNBC Buffett said that if he had a way to buy “a couple hundred thousand single-family homes” and easily manage them, he would “load up on them” and “take mortgages out at very, very low rates.”

Buffett said that right now a single-family home with a 30-year mortgage is a better choice than even stocks for investment purposes.

According to Buffett, “It’s a terrific deal. It’s a leveraged way of owning a very cheap asset now and I think that’s probably as an attractive an investment as you can make now.”

Why would we take Buffett word’s so seriously now? Because we can’t help but notice that he seems to be on the money no matter how you slice it.

Also it lines up with the opinion of another uncanny investor with a very sound understanding of economics…

Agora Financial managing editor Chris Mayer spotted this trend a while back. A little over a year ago he wrote:

During the past few years, rare was the investment thinker who said you should buy a house. Housing was in a bubble that was deflating.

But the investment seasons turn. Today some smart investors are once again saying you should a buy house. John Paulson is one of them.

You may know him as the man who turned the greatest trade of all time. Betting against the housing market, he netted a cool billion dollars for himself in 2007. One fund he managed rose 590% that year. Today, he is one of the richest men in America.

His advice today is very different. “If you don’t own a home, buy one,” Paulson said. “If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.”

That’s a strong endorsement. It sounds similar to the advice another investor gave his audience in 1971, at the dawn of one of America’s biggest housing bull markets. The investor was Adam Smith (George Goodman) on The Dick Cavett Show. Here is a snippet from that conversation:

Smith: The best investment you can make is a house. That one is easy.

Cavett: A house? We were talking about the stock market. Investments…

Smith: You asked me the best investment. There are always individual stocks that will go up more, but you don’t want to give tips on a television show. For most people, the best investment is a house.

Cavett: I already own a house. Now what?

Smith: Buy another one.

It was good advice. In the 1970s, US stocks returned about 5% annually, which failed to keep pace with inflation. Still, it was an up-and-down ride. In 1974, the stock market fell 49%. But here are the average selling prices for existing homes in the 1970s as inflation heated up:

1972 – $30,000

1973 – $32,900

1974 – $35,800

1975 – $39,000

1976 – $42,200

1977 – $47,900

1978 – $55,500

1979 – $64,200

You can see that housing held up pretty well. And think about the effect of a mortgage on 80% of that house in 1972. That would mean $6,000 in equity, a sum that went up fivefold in eight years. It’s hard to find a better inflation fighter than that. Granted, today’s market is different, but still.

Apart from this, you might also reflect on the fact that it is quite absurd today to think that anyone can buy an average house for any of these prices – and that, too, is the point. The average price today is $257,500 – even after the great collapse in the last few years.

“If you have a 7% mortgage and your house is worth half a million dollars,” Adam Smith writes, “you may gripe about shoes and lamb chops and tuitions like everybody else, but your heart isn’t in it.” Your heart won’t be in it because you’ll be in fine fettle with your house.

Of course, you can do a lot better than 7% today. For the first time, the rate on 30-year mortgages slipped below that on the 30-year Treasury bond. You can get a 30-year mortgage at little more than 4% today.

Factoring in mortgage rates, housing affordability is back to where it was in September 1996. Then mortgage rates were 8% and the average price of a home was $171,600. As Murray Stahl writes: “One can actually buy a home for a monthly payment that is not very many dollars different from the monthly payment one would have needed in September 1996, when rates were significantly higher.”

Adjusted for inflation, Stahl points out that the payment for an average-priced home today is about 30% lower than it was 14 years ago.

The advice of Paulson and Smith starts to make sense now, doesn’t it?

Essentially, real estate is a way to buy now and pay later. And the case for housing extends to other property types, too. Owners of quality real estate are getting deals on mortgages that we are unlikely to see for a generation.

Real estate, after a long absence from the menu, is back on.

–Chris Mayer

Now, if you don’t plan on sticking around for around three years or more, then buying a house for personal use could be much more expensive than merely renting.

Sure, your monthly carrying costs will ultimately be lower than paying rent (at least in a non-bubble market when people would rather have a pricey mortgage than a cheap rent for a comparable property).

And of course you can deduct the interest payments (structured to be a higher portion of the monthly payment in the earlier years of the mortgage) from your income taxes. Add it all up and your monthly mortgage and interest payments could be as little as half renting a comparable property. And you are also moving toward ownership of the property (in a mere thirty years…after which time if you don’t pay the local government “rent” in the form of taxes, they will show you to whom the property truly belongs).

But that lower monthly carrying cost doesn’t come for free. There are those property taxes you’ll have to pay as long as you “own” the property, along with the transaction costs which could be 2-3% of the selling price. You would have had to save up as much as 20% of the total cost of the home in order to qualify for those lower monthly costs.

When you rent, that down payment money is available to do other things. When you buy that money is locked up in the house. In this environment, however, that may not be such a bad thing. The Fed has abolished the reasons to save the money while precious metals prices have already moved much higher making them less attractive to purchase now. The bargain now lies with housing. The advantage is more in favor of taking on a mortgage than it has been in years.

Lower housing prices, artificially low interest rates and almost guaranteed rising inflation make taking on a mortgage a smart move right now. It’s almost like getting a low interest loan in order to make a huge purchase of gold or silver back when they were cheaper.

Again, this wasn’t the case years ago when houses were expensive and precious metals were incredibly cheap. Try securing a fixed low interest rate loan from anywhere in order to buy precious metals. You won’t get that sort of a deal. But you will for a single family house, which right now can provide the same sort of hedge against a falling dollar that gold and silver do.

Right now perhaps the greatest opportunity to hedge yourself against inflation is getting a mortgage. Buy your inflation hedge now and pay for it with devalued dollars later.

Essentially real estate is the new inflation insurance that you can get on the cheap, much like silver and gold were back around the turn of the century.

Further a mortgage taken out now lets you leverage a whole lot of this cheap insurance, giving you command of much more money than you likely have available. If inflation takes off in the coming years, you could sell your house for far more inflated dollars than you would owe at that point.

Imagine if someone had lent you $250,000 at 5% interest fixed for thirty years in order to buy 50,000 ounces of silver in 2003. You would be sitting on over $1.5 million in silver right now.

That’s sort of the situation that getting a mortgage now could put you in. Of course a house has maintenance costs that precious metals do not. But these are costs you’d be covering with renting in any case.

And with this particular inflation hedge, you have a place to store your silver…along with your ultimate deflation and inflation hedge, the humble nickel (but more on that another time).

Regards,

Gary Gibson

Is a Mortgage a Better Inflation Hedge Than Gold and Silver? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

And they ain’t lyin’!

Writing for Forbes Louis Woodhill gets this seeming contradiction right. He views the price of gas not in terms of the depreciating monopoly money issued by the politically-empowered central bank…but in terms of the market’s favorite money: gold.

When viewed in relation to gold, gas prices are low…only 82% of their average over the past 41 years.

Gas prices aren’t high. The dollar is just falling, its value being undermined by politically-driven over-issue. So if you count the Fed-issued dollars as money — and are actually using it as a savings vehicles — then your world is being rocked by rising gas prices (and rising prices in everything else, too, except for computing power).

But it’s not just the rising prices of everything that threaten all of us. In his article Mr. Woodhill reminds us:

“Right now, the threat posed by rising gasoline prices is not just to family budgets. An even greater danger is that the government will use escalating oil prices as an excuse to do something stupid.

“After President Nixon abrogated the Bretton Woods monetary arrangement in stages starting in September 1971, both gold prices and oil prices started to rise. The government responded by imposing wage-price controls. This made a bad situation much worse.

“This time around, the stupid policies being considered to ‘deal with’ rising gasoline prices include additional cuts in payroll taxes and higher taxes on energy producers.

“During the 1970s, the toxic combination of a weak dollar, high tax rates, and onerous regulations introduced a new word into America’s economic vocabulary: stagflation. Reaganomics banished this word to the history books. Now, President Obama and Fed Chairman Bernanke are teaming up to give stagflation another try. It is not likely that Americans will like it any more this time around than they did 40 years ago.”

Source

It amuses us that the “gold is for nutters” crowd loves to point out when a mere 250 of their beloved dollars could acquire the gold they hate so much. Yet they seem to forget that their dollars could buy more than ten times as much in the past — back before the Federal Reserve was established.

They also write off those times when gold reveals the inherent weakness of their treasured paper currency…like when the gold price surged to $850 in 1980…and now as the price of gold hovers near $2000 thirty years later.

If you look at it the right way — in terms of the eternal golden money — it’s the dollar’s periods of strength that are the aberration.

It’s not gold and silver prices that are volatile. Those have been incredibly consistent for thousands of years in terms of commodities they could buy. And because of the increasing standard of living being raised by free market economies, in a very real sense these eternal monies actually buy more. It’s the dollar that has been erratic in its overall declining trend ever since it’s been cut loose from gold (and silver).

Again, people looking at the cost of a gallon of gas, or of milk, or the cost of a nice suit, or rent from behind their piles of gold and silver are finding very little to worry about. In fact, to them, prices are lower than normal and declining.

Also the price of oil has tended to track the price of silver awfully closely for about as long as oil has been industrially useful. And so it’s no mistake that you can still get a gallon of gas for about about $0.20…as long as that $0.20 is composed of a pre-1964 90% silver dimes.

Or you could use a pre-1964 90% silver quarter for that gallon of gas and get back some change.

You see, the pre-1965 quarter is worth $6.38 as I type this. The pre-1965 dime is worth $2.55. These coins hail from a time when the dollar was still tied to gold (at the official price of $35 per ounce prior to Nixon nixing the gold standard). The dollar was still as good as gold — even though Americans themselves were forbidden to own gold bullion from 1933 till 1974 — and there was actual silver in the coinage until that content was reduced in 1964 and eliminated in 1965.

Those old silver coins shine the harsh light on the strength of the currency and the abuse that currency suffers from the feds and the Federal Reserve.

If you’d been saving in gold, then from your point of view gas prices have been coming down for the past few years. If you’d been saving in that old “junk” silver (pre-1965 quarters, dimes and half dollars), then gas prices are a downright bargain, too.

(In fact, we strongly believe that silver is still severely undervalued. While gold is more than twice its 1980 high in terms of dollars, silver still hasn’t quite hit its 1980 all-time high when less than an ounce of silver could buy a barrel of light sweet crude. Silver may be more expensive in dollar terms than it was ten years ago…but it’s still incredibly cheap in terms of both gold and in terms of oil…

…Back in 1980 at silver’s peak it took less than one ounce of silver to buy a barrel of oil. Oil is going higher…and silver is likely to try to play catch up and outpace both oil and gold. Silver is just as much a monetary metal as gold…and just as much a vital industrial commodity as oil. Yet again, silver is severely underpriced in relation to both gold and oil. And it stands to gain more than both as both climb higher. So physical silver has been and continues to be our favorite, simple way to hedge against the demise of the dollar.

We turn now to the Wall Street Journal where they find U.S. monetary policy more than a little at fault for the rising dollar cost of gas…

“Oil is traded in dollars, and its price therefore rises when the value of the dollar falls, all else being equal. The Federal Reserve throughout Mr. Obama’s term has pursued the easiest monetary policy in modern times, expressly to revive the housing market. It has done so with the private support and urging of the White House and through Mr. Obama’s appointees who are now a majority on the Fed’s Board of Governors.

“Oil staged its last price surge along with other commodity prices when the Fed revved up its second burst of “quantitative easing” in 2010-2011. Prices stabilized when QE2 ended. But in recent months the Fed has again signaled its commitment to near-zero interest rates first through 2013, and recently through 2014. Commodity prices, including oil, have since begun another surge, and hedge funds have begun to bet on commodity plays again. John Paulson says he’s betting on gold, the ultimate hedge against a falling dollar.

“Fed officials and Mr. Obama want to take credit for easy money if stock-market and housing prices rise, but then deny any responsibility if commodity prices rise too, causing food and energy prices to soar for consumers. They can’t have it both ways, as not-so-stupid Americans intuitively understand when they buy groceries or gas. This is the double-edged sword of an economic recovery ‘built to last’ on easy money rather than on sound fiscal and regulatory policies.”

Source

It seems so simple to us. The politicians want to prop up certain markets with inflation from the central bank…while keeping it easy for the government to borrow. But like any man-made abomination worth its salt, those newly created dollars don’t ever behave exactly how their creators want.

Stock and house prices are mostly flat or outright falling. The dollars meant to be puffing them up are instead spilling over into everything else.

The housing market is like a sad, burst balloon. Air just flows in and right back out. The stock market seems to be filled to capacity, its size delineated by annoying fundamentals like earnings. The price for these earnings is just too high right now and more new money in the economy just can’t drive those stock prices much higher.

That new money — the various QEs — is having an affect on other prices though. All the stuff you use to live. If you insist on believing in the dollar — and writing gold and silver off as barbaric nonsense — then you will be able to afford less and less of the life you want and to which you’ve become accustomed. Further if the history of paper monies is any kind, you could find yourself completely wiped out if you store your wealth in dollars or euros or pesos or whatever other paper lie is set to unravel next.

They will tell you that creating new money is necessary to keep the economy growing, to fight unemployment, to promote the general welfare, etc, etc.

But all it does is destroy your savings and make it easier for the feds to keep on borrowing to pay for welfare and wars. If you want to make sure the dollars you earn today can pay for the same amount of food and energy down the pike, trade those dollars for something of real value right now. We heartily recommend the type of money that actually fulfills that “reliable store of value” function.

Regards,

Gary Gibson

Why Gas Prices Are Actually Falling was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

That’s the latest “with us or against us” salvo trotted out to justify more government intrusion into private life. This time, it comes from Canada’s public safety minister as a response to concerns over the new Protecting Children From Internet Predators Act.

Reuters reports: “[The] new law gives police stronger powers to track what Canadians do online, but raises concern from the privacy watchdog about ‘warrantless access to personal information.’”

The article continues:

“The Conservative government says the draft law it unveiled on Tuesday aims at hunting down pedophiles or other criminals by giving police, the country’s spy agency and the Competition Bureau increased access to customer data from Internet service providers.

“Law enforcers will no longer need a warrant to ask Internet providers to hand over ‘identifying information’ such as names, addresses, email addresses, unlisted phone numbers and IP addresses.

“Ottawa says it is simply modernizing its crime-fighting tools and notes that that similar laws are already in place in the United States, the United Kingdom and Australia.

“But Chantal Bernier, the assistant privacy commissioner of Canada, said the bill raised serious concerns.

“‘There is an outstanding issue that to us remains of concern, and that is that it still allows warrantless access to personal information…and it’s not framed either in terms of suspicions of criminal activity or in the context of a criminal investigation,’ Bernier told Reuters.

“‘It’s wide-open, so it could impact on any law-abiding Canadian,’ she said.

“The government named the bill ‘Protecting Children From Internet Predators Act’, framing it as a new tool to end frustrating delays police face when they seek to track suspects’ online activities.”

A new “threat” has joined the pair that Western governments have been using to justify their increasing intrusiveness into private life. Pedophiles, pirates and terrorists…oh my!

There are undoubtedly pedophiles, rapists, thieves and murderers in the world. We just wonder if the best way to combat them is to chip away at privacy till there is none left. That’s sort of like treating an infection by immolating the patient. Or something like that.

This is the typical state approach, however. Create a new enemy or overstate the danger of an existing one. Then tell the subjects that they have to give up more money and liberty so that the state can make us all safer.

We’re reminded of the rules in the city of New York that make it illegal for an adult not accompanying a child to sit on a bench in a public park area designated as a playground. We’re not sure that criminalizing sitting on a park bench is more effective than keeping an eye on the creepy guy leering at the children from a safe distance.

And never mind that in somewhere around 90% of child sexual abuse cases, the offenders are either close relatives (30%) or trusted friends and acquaintances of the family (60%). That leaves around 10% of child molesters who are actual strangers who rely on outright opportunistic abduction.

And we note that ticketing anyone who sitting on a bench too close to a set of monkey bars probably doesn’t do very much to stop those strangers. It would be far better simply to look for and react to actual creepy activity on a case-by-case basis (like the neighbors of child killer Ryan Brunn tried to do when they reported his disturbing behavior to the owners of their apartment complex some time before he abducted and murdered Jorelys Rivera; before he killed himself in his cell, Brunn admitted to having molested two girls while babysitting years ago).

But the state loves to dress up its proscriptions and penalties as moral crusades. Morality makes a fantastic mask for intrusions that would otherwise seem outrageous.

Want to molest white octogenarian ladies and small children in order to remind your subjects who’s boss? Simply agitate foreigners with some invasions, cry “Terrorism!” when they strike back and hand out some uniforms to some checkpoint agents. Your victims will thank you for violating them.

Want to be able to silence the voices that use new technology to poke holes in your legitimacy? Again, it’s simple. Cry “Piracy!” make up some insane numbers about the money your monopolist buddies are losing and have at it.

Want to be able to monitor every move your subjects make? Tell them you’re peeking at their Google searches and setting up the cameras in their bedrooms in order to protect the children.

Does Privacy Equal Child Pornography? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

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.