But first, the crisis in Greece didn’t come to a head over night but it can’t be far away. Rival political parties have been unable to form a government. New elections are scheduled for the second week in June. The financial has definitely become political. The people have run out of patience with unsound money and the world built on it.

All that said, the Greeks managed to make a €430 million payment to hold-out creditors last night. Nearly 97% of Greek creditors agreed to the restructuring of the country’s debt in March. That wiped off over €100 billion in Greek debt and resulted in 70% losses for some of the bondholders who accepted the deal. Not all of them did.

Yesterday, the bondholders who didn’t accept the deal got paid in full. There is still about €6 billion worth of debt owed to creditors who refused to participate in the restructuring. You can imagine that the Greek decision to pay the holdouts would anger the creditors who agreed to the deal. They look like schmucks now. Schmucks.

But in the current scheme of things, €430 million is chump change. The real issue is whether the Greeks are going to default on €150 billion worth of government debt. If those bonds are owned by foreign creditors – let’s call them other European banks – then the Greek crisis becomes a European crisis. We’ll come back to this issue of “containment” shortly.

For the Greek people, the most alarming aspect of what’s going on is that their life savings are at serious risk of a massive, overnight, non-voluntary devaluation. There are a lot of words for the magical process of turning one thing into something else: alchemy, transmutation, and transubstantiation come to mind. But to the Greeks it’s going to look a lot like highway robbery.

You’ll go to bed one night with your life savings denominated in euros. You’ll wake up the next day with them denominated in drachma. And your euro savings will be automatically converted to drachma at an exchange rate not of your choosing. For example, your 1,000 euros will become 100 drachma…or even 10,000 drachma. The nominal amount won’t matter. What matters is that the devaluation strips you of 70% or 80% of your purchasing power.

Most people would avoid that kind of value destruction if they could. Maybe that explains why €700 million was withdrawn from Greek banks on Monday, according to remarks made by Greek President Karolos Papoulias and reported in the Wall Street Journal. The Journal reports that between €2 and €3 billion in deposits have been withdrawn from the Greek banking system each month for the past two years. January was a high point, with €5 billion.

A bank run by any other name would look as desperate. And who wouldn’t be desperate now?

Leaving the euro, devaluing the drachma, and defaulting on debt owed to foreign creditors are Greece’s best long-term economic survival strategy. But the unavoidable side-effect is to destroy the savings of the people, not to mention usher in a period of lower standards of living.

That won’t win you many votes. It may start a revolution.

And how do you prevent the Greek precedent from being imitated by the Spanish and the Italians? To be candid, we don’t think it matters much now. Greece can’t afford to stay in the euro. The Spanish and the Italians can’t afford to leave it.

The economies and banking systems of Spain and Italy are indispensable to Europe. If they leave the euro, there is no euro. The Greeks can leave, devalue, default and use a weaker currency to claw their way back to economic competitiveness. If the Spanish and Italians leave, they lose access to private capital, they lose access to the ECB and they take down Europe’s banking system. They can’t leave. More importantly, they can’t be allowed to leave.

This makes the task of the European Central Bank (ECB) much easier. It simply has to guarantee Greek debt owed to all non-Greek creditors. Or, it could simply buy that debt. This would solve the problem of anyone outside Greece taking losses on Greek debt.

This is what corporatism looks like, when the Big State and Big Finance become the Big Power in the economy. Losses cannot be tolerated. Any loss results in lower equity capital at a financial firm would require selling assets. Since everyone owns a piece of everyone else, and owes to everyone else, any major loss in one place results in losses everywhere.

Of course it’s absurd that Europe is moving toward this kind of “extreme socialism”. The people most responsible for the crisis are not accountable and the people who have saved get punished. The elite are enriched and everyone else is enslaved.

This is why the financial crisis could so quickly become a political and social crisis. When people don’t think they can get justice from the courts or the cops, and when they think that cheating is the only way to get ahead in a system, the political and financial order is on borrowed time. The clock is ticking.

Regards,

Dan Denning

The Daily Reckoning Australia

Why Greece Can’t Afford to Stay in the Euro was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Whatever you want to call it, the libertarian push is the animating force behind today’s most-exciting business ventures, technological innovations, cultural movements and political trends. Where the so-called left is most successful today, it is due to the urge to end war and protect civil liberties against state encroachment. Where the so-called right is most successful, it is due to the emphasis on keeping what you earn and giving freedom to the entrepreneurial class.

And think about all the exciting technologies that are transforming our lives in the digital age. They are wonderful not because they are giving us greater access to the dubious offerings of the public sector, but precisely the opposite. They are allowing us to re-create civilization itself based on human volition, voluntary association, borderless economic exchange and choice as the driving agent of change.

What if there were a kind of intellectual exposition of the most wonderful ideas in the world of liberty? It turns out that there is one. It is called FreedomFest. This year, it is in Las Vegas, Nev., July 11-14, 2012. This year is particularly exciting because it promises to be the biggest yet and to feature all the key minds that are carving out a future for human liberty, despite the continuing push by leviathan to control our lives.

I time attended two years ago, and the whole experience blew my mind. I might even go further and say that it changed my outlook on life and the prospects for liberty in our time. There was a gigantic diversity of people and institutions represented. There were large sessions attended by everyone and hundreds of breakout sessions you could attend based on your personal interest in some particular cause.

Because the subject of human liberty is as big as life itself, there really are no limits on what is being discussed. The result is somewhere between an intellectual salon and a large-scale commercial bazaar. It is both very serious and very fun. The levity that exists here makes for a great learning environment because the mind stays constantly stimulated.

It makes sense to me that a conference on liberty should be fun, enjoyable, unpredictable. Nothing should come prepackaged. This is something that Mark Skousen intuited when he started this event. Let the socialists be the dreary ones, wallowing in depressing predictions about the plight of the workers and peasants. Let those who love liberty celebrate ideas in an atmosphere of reckless disregard for convention and approved ways of thinking! This is what is encouraged and what you get at FreedomFest.

Laissez Faire Books is not only serving as the official seller at the entire event. We are also holding our own panel. This panel will be competing against other panels, so I wanted to put together something completely different that would attract people and give attendees a new point of view.

The theme concerns new ways to live a happy and free life, and promote the right ideas, in these odd times when the leviathan rules the physical world and liberty is making gigantic advances in the digital world.

Here is what we came up with: “Liberty That Works: New Approaches in New Times.”

We are featuring six presentations.

• Robert Murphy, the economist who dared to eschew academia and set out on his own to become one of the great teachers and researchers of our times. He has a shy temperament, but he overcame it to use digital media to produce some of the greatest economic education tools you can find anywhere. He has written a leading text for high-school students, and he never misses an opportunity to teach, always with brilliance and wit. His topic is alternative educational institutions
• Wendy McElroy is a philosopher, historian and theorist whose work, dating back to the 1970s, seems incredibly prescient in the digital age. So far as anyone can tell, for example, she was the first to consistently apply the idea of liberty to the subject of intellectual property and publicly debate others who were waffling on the issue. She has a fabulous new book coming out from Laissez Faire called The Art of Being Free. It is brilliant, and I can tell you this: There are passages in here that had me nearly crying tears of joy. Her subject is simple, frugal, independent living
• Jacob Huebert is the young attorney who wrote the best primer on the topic of libertarianism. The audio version of his book is being released to members of the Laissez Faire Club. He is particularly enamored with finding practical ways to carve out large-scale zones of liberty in a statist world and has some unique thoughts on strategy as well. Example: He eschews political organizing completely. His topic is private forms of security and dispute management
• Chris Mayer is the author of World Right Side Up, a book that traces emerging markets around the world to show how we are transitioning to a post-American world economy. I’m particularly delighted with his participation because he has a nose for economic trends big and small. His book had my heart racing with excitement about the great trends for liberty in far-flung places. His topic is supporting capital and commerce globally through unconventional investing
• Stefan Molyneux needs no introduction to any liberty-loving student under the age of 30. He might be considered the philosopher king of the digital age. His audience is gigantic and his passion for liberty boundless. Yet he somehow manages to maintain a beautiful, service-oriented humility in the promotion and application of the ideas of the libertarian tradition. What’s particularly impressive to me is he has done this all on his own, without institutional support. His topic is redefining communities of peace and learning
• Finally, I’ll be speaking on the need to defy the plan through your own digital civilization. Yes, I’ll be speaking about the Laissez Faire Club, but also about many other ventures that are charting new paths toward building a global intellectual push for things that are most important in life.

A shocking diversity of people and ideas! This is the way it should be. I’m hoping to see what emerges when all these great minds come together in an atmosphere of freedom and learning. In the right kind of setting, with the right kind of encouragement, everyone can come away from an event like this with new, creative ideas for tackling the challenges ahead of us.

I hope to see you there.

Jeffrey Tucker

FreedomFest was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

The word “austerity,” beginning with the Greek government’s debt crisis two years ago, has been used by the financial media in one sense, and only one sense: reductions in spending by national governments. The word is not used with respect to the economy as a whole.

More than this: the word has been used to explain the contracting economies of Europe. The reductions in government spending are said to have caused the contracting economies. This explanation is based on textbook Keynesianism.

Keynesians call for increased government spending. This is the heart of Keynesianism. Keynesianism rests on a mantra: “Government spending overcomes recessions.” All else is peripheral: monetary inflation, graduated taxation, and free trade. These peripheral issues will always be sacrificed to the supreme economic premise: “Government spending overcomes recessions.”

This is where every analysis of Keynesianism should begin. Any economic doctrine, any economic policy, any proposed solution to the present crisis should be assessed in terms of the mantra. Anything that does not begin and end with the mantra is not Keynesianism. Anything that does, is.

It is a mark of the supreme triumph of any ideology when the self-professed critics of the ideology adopt both its conclusions and its rhetoric, and do so unknowingly. This means that the promoters of the ideology have set the terms of public discourse. It is very difficult to replace an ideology or worldview, once its promoters have established the terms of discourse.

It can be done, of course. But to do this, the promoters of a rival outlook must expose both the errors of the existing system and the implicit agreement of its supposed critics. This wins no friends among the hapless troops who think they are scoring significant victories by arguing against peripheral aspects of the enemy ideology, while accepting its central presuppositions and main policy prescriptions lock, stock, and barrel. They have been taken in hook, line, and sinker.

PHARAOH AND THE FROGS

A recent example of a well-meaning but conceptually confused anti-Keynesian was published in Forbes. It had a powerful headline: “Keynesianism Is the New Black Death.” It suggested that the great tragedy of Europe today is “austerity.”

As I have already said, the financial media universally define austerity as cuts in government spending. I have never seen the word used in any other way over the last two years. Any author who uses the word in any other way owes it to his readers to explain this new usage. The Forbes article offered no such distinction or alternative definition. I therefore take it at its word: austerity.

If austerity is the great evil, then the implication is inescapable: that which restores government spending and therefore overcomes austerity is positive.

This reminds me of the Pharaoh who decided not to let the Israelites journey for a week to sacrifice to God. Moses and Aaron then attempted to persuade him by way of a series of plagues. One of them was frogs. The land filled up with frogs. Everywhere anyone walked, he stepped on frogs.

The court magicians had to do something about this. They responded by a public display of the power of their magic that matched what Moses and Aaron could do. “And the magicians did so with their enchantments, and brought up frogs upon the land of Egypt” (Exodus 8:7).

Somehow, I imagine Pharaoh screaming at them: “No, no, you blockheads: not more frogs! Fewer frogs!” But the text does not record this.

The solution to the frogs of European recession is not increased government spending. Rather, it is the opposite: reduced government spending. In short, the solution is greater austerity.

AUSTRIANISM’S MANTRA

The Austrian economists also have a mantra: “Reduced taxation increases liberty.” Liberty is necessary for economic growth.

If a contemporary government cannot reduce taxes without going bankrupt, then it must cut spending if it chooses not to go bankrupt.

Europe’s national governments are all going bankrupt. Japan’s is, too. So is America’s. The solution is to cut taxes and cut spending even more.

“Not more government spending. Less government spending!”

“Not larger government deficits. Reduced government deficits!”

“Not higher taxes. Lower taxes!”

“Not more fiat money. Reduced fiat money!”

In short: “Let my people go!”

With this in mind, let us examine an article that argues that austerity is the great threat to Europe’s prosperity.

A DEATH SPIRAL?

The article begins with a survey of European politics. It points out that voters are tossing out politicians in nation after nation. Sarkozy was number eight over the last year. Why is this happening? Here is the proposed answer:

The voters of Spain, Greece, France, etc., understand that their governing elites have pushed their economies into austerity death spirals, and they have been expressing their unhappiness at the ballot box.

The more fundamental question is this: Why did these elites push their respective economies into this supposed death spiral? Why would faithful Keynesian elites do such a thing?

Let us not be naive. The West has been run at the top by Keynesian elites, or politicians holding Keynesian ideas, ever since 1930 – six years before Keynes offered his unreadable justification of politicians’ policies: “The General Theory of Employment, Interest, and Money.”.

The Keynesian central bank pushed Europe’s economies into a boom, 2001 to 2007. The voters loved it. Interest rates were low. There was lots of money to buy houses. The economies of the south – “Club Med” – were booming. So was the honorary member of Club Med: Ireland. Ireland’s property values quadrupled. It was all going to last forever. The elites – especially the economists – issued no warnings, except for Austrian economists, who were dismissed, as always, as dinosaurs.

Then came the bust phase. What the European Central Bank did before 2007 – inflate – it has done more aggressively ever since 2008. Governments ran even larger deficits. They all implemented Keynesian stimuli. This did not work. Europe is falling back into a recession.

In the spring of 2010, investors in northern Europe caught on to the fact that Club Med residents could not compete economically. They kept running deficits with the North. Those easy-going populations were living on money borrowed from the North. So were their governments. They had no intention of ever paying back these loans.

Any why not? This is what Keynesianism teaches. Government loans will not be paid off. Ever. Government debt will grow. So will prosperity.

Two years ago, Greece’s Socialist Party found out just how far in the debt hole the government was. Interest rates then started to rise in PIIGS nations. PIIGS governments were trapped. They could not run ever-larger deficits, because the cost of loans were rising.

That was when the reality of Keynesianism hit: deficits do matter. Money is not free. Debts must be rolled over at market interest rates. The horror!

That was when governments in the South started cutting back on spending. Not much, you understand. The deficits are still unprecedented: above 6% of GDP.

Keynesians labeled this “austerity.”

It is not austerity. It is deficit spending on a massive scale. Austerity is where national governments run surpluses and use excess revenues to pay down the national debt.

There has not been austerity in Europe since approximately 1914.

The gold coin standard enforced austerity, 1815 to 1914. That was its chief function and its great service to mankind. It kept the West’s governments austere. This enabled the private sector to dine at an ever-expanding feast.

Keynesians hate the gold coin standard. That is because they believe that high government spending is the basis of high consumer spending, and consumer spending – not private thrift – is the foundation of prosperity.

The public, which prefers consumer spending to the austerity of thrift, cheers on the politics of Keynesianism. Deficits without end, borrowing without pain, growth without ceasing: Keynesians promise, and voters believe.

But the day of reckoning arrived in 2010. The free money got expensive. The party did not stop, but some of the guests were sent home, to join young adults, who have sat and watched TV, because there are no jobs.

The public feels betrayed. Voters believed in the Keynesian dream, which was articulated by the original Keynesian, who said, “If thou be the son of God, command that these stones be turned into bread” (Matthew 4:3). When the target of this challenge refused to rise to the bait, the Keynesian went looking for other takers. In the second half of the twentieth century, he found them. Lots of them. Millions of them. Politicians promised to accomplish the feat. Voters applauded.

But times have changed, the article tells us.

Unfortunately for Europe and the world right now, there are no pro-growth candidates and/or parties on the Continent to offer relief from the austerity programs that are grinding their economies to dust. With no one to vote for, all that European electorates have been able to do is to vote against. They have sought to register their protest by defeating incumbents.

The incumbents over-promised. They had long told the voters that deficits don’t matter. Deficits did not matter for as long as banks in northern Europe kept lending to PIIGS at rates associated with German frugality. But then came reality.

Europe as a whole is in recession, and Greece, Spain, and Portugal are in depressions. What are the people supposed to do if the economic chefs on both the political Left and the political Right are offering the same poisonous “austerity” menu?

Balanced budgets remain mirages a far as the eye can see. Token spending cuts, which are made in the name of reducing deficits to about 3% of GDP in ten years, are part of a “poisonous austerity menu.” Put in a more familiar terminology, there are too many stones and not enough bread. The voters will not tolerate this.

The reason why there are no economic chefs promoting growth is simple: somebody has to bankroll the growth of government spending. Who will that be? Who wants to trust PIIGS?
The louder the voters scream about austerity, the fewer the number of lenders, meaning lenders at rates under 10%.

PLAGUE!

The article eventually gets to the point.

So, what happened in Europe? The short answer is, “plague”. The Black Death of the 14th century was caused by the Yersinia pestis bacterium, which was spread by rats. Today’s plague is the result of Keynesianism, which is being spread by the economics departments of major universities and The New York Times. Unfortunately, unlike Yersinia pestis, Keynesianism does not respond to antibiotics.

How does the article define Keynesianism? Erroneously. It says that Keynesians favor tax increases and spending cuts.

Austerity, as currently being practiced in Europe, is based upon the Keynesian belief that tax increases and government spending cuts have the same effect upon both the government deficit and the economy. In fact, the most virulent strains of Keynesianism cause people to believe that raising top marginal tax rates and increasing government spending can actually boost GDP, because “the rich” have a higher “marginal propensity to save” than do the recipients of government handouts.

Fran‡ois Hollande, the winner of Sunday’s election in France, is a Keynesian. He believes that raising France’s top marginal tax rate to 75% while hiring 60,000 more unionized teachers will make things better.

Excuse me? What does an avowed socialist politician have to do with Keynesianism? Keynesianism is what Paul Krugman proclaims, which is greater deficit spending, plus sufficient central bank money expansion to finance this expansion.

Which Keynesian economist or politician has come out forthrightly for spending cuts, i.e., austerity? Austrian economists have. Ron Paul has. This is why Austrians and Ron Paul have been marginalized by the Keynesian media as cranks.

To a leader whose mind is infected by Keynesianism, it makes sense to try to close a budget deficit with a combination of tax increases and spending cuts, with the balance between them determined by some combination of political considerations and “fairness”.

There are many politicians in Europe who have imposed taxes on the rich. The voters have cheered them on, as always. The voters are outraged by the spending cuts. Spending cuts reduce the flow of funds to government bureaucrats and welfare state clients. This is why Greek union members riot.

Traditional Keynesianism calls for increased spending, more borrowing, and – if private lenders demand high rates of interest – monetary expansion by the central bank to purchase government debt. The article wisely rejects monetization. But it does not call for a gold coin standard. Rather, it defends the euro.

As damaging as tax increases are to an economy, monetary depredation is worse. Only a Keynesian could think that replacing the euro with a new drachma could be a solution for Greece. The result would be a new currency backed by the full faith and credit of a government in which no one has faith and to which no one will extend credit. In reality, the collapse of the Greek economy would not even wait for the introduction of the new currency. It would not be possible to keep preparations for a new drachma a secret, and even rumors of such a move would be enough to create a cataclysmic run on the Greek banking system. Capital, and people with capital, would flee.

The article suffers from an illusion: that the euro is not just another medium for inflation, that it is anything more than drachmas for Keynesians.

The Keynesian political hierarchy imposed the euro on the voters in 1999. The elite’s spokesmen have decried the departure of Greece from the eurozone. The unelected Greek technocrats, like technocrats all over Europe, were either former Goldman Sachs employees or wanna-be’s. They are now being tossed out by the voters. The voters are populists and socialists. They are fellow travelers of Keynesians only in the boom phase of the Keynesian welfare state. When the bills come due, they revert to locally issued fiat money, taxation of the rich, trade unionism, and increased government spending.

CONCLUSION

Keynesianism is in a death spiral. So is populist socialism. So is fiat money fascism. They are all in death spirals because they all reject this premise: “Lower taxes increase liberty.”

Liberty will prevail. This is an eschatological affirmation. One of the ways that it will prevail is through the bankruptcy of the Keynesian social order: high taxation, high regulation, high deficit spending, and high inflation.

Let’s put government on a diet. Let’s have austerity where it belongs: government spending.

That is what Europe’s voters do not want. That is what they are going to get.

“Not less austerity. More austerity!”

Regards,

Gary North

The Case for Austerity was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

After all, we have been predicting that people in the US and most of the western world will soon find themselves living in a Terminator-esque world where they will be tracked every moment of the day (US Government Builds World’s Biggest Domestic Spy Complex), 1 the US Government can jail indefinitely and even kill its own citizens (NDAA Bill Can Send Americans to Prison Indefinitely Without Trial), that the assets of westerners will be taken and consumed by their vampire overlords (France mulls 100% tax rate), they will be restricted in their ability to travel outside the country (Congress about to pass a bill that restricts travel and revokes passports with no trial) and it will be impossible to get your money outside of the country to protect it from confiscation (capital controls).

On the topic of capital controls we had predicted what is now happening. We’ve been writing about it for some time. The only thing that has surprised us is the speed in which it is all happening. We are rarely shocked but we have been surprised at the speed with which the world’s banks have stopped accepting US citizens as clients.

It was only a few weeks ago that we penned, “International Banking Options for Americans Closing Down Fast” and stated that our sources had notified us of at least one bank (in Latvia) which has stopped accepting US clients because of the rules put in place by the IRS in the Foreign Account Tax Compliance Act.

That was then, this is now. Here is just one man’s recent statement:

“I don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”

The phone has been ringing off the hook at TDV Media and Service’s headquarters. Nearly hourly word has come in of another bank that has stopped accepting US clients. Some have even started closing accounts for US clients… a trend we definitely expect to continue.

Don’t believe us? Check out this article from the San Francisco Chronicle. They only got one thing wrong. The title of the article is “U.S. Millionaires Shunned by Banks as Tax-Evasion Law Looms”. But, it’s not just millionaires. It’s all US citizens with a foreign bank account.

BLOODBATH

It’s a bloodbath. People who make their living off of helping US citizens set-up foreign bank accounts to diversify some of their assets outside of the country are closing shop… all in the last few weeks. They are walking away from their honest, often decades-old business like victims of a bomb blast… in shock.

We feel very bad for them but we knew this was coming and have been hiring people almost daily to help out with the demand. If you are a US citizen and have money in a foreign bank account that you would like to keep there, expect a call any moment. It’ll be the bank and they’ll tell you that you have 72 hours to close your account and to tell them where to send the funds. If you don’t want to send it back to the US where Barack O’Bomber already has grand plans for how to spend it then your options are seriously limited.

But, here’s the good news, there is still options. Here are just a few options that are still on the table:

• There is at least one bank in the Caribbean that is still willing to accept US clients. If you get a call from your bank that you must move funds immediately and do not want to repatriate them then you can open an account with them. We have already identified the bank and have set-up relationships to get your account opened and processed all via the internet within 24-48 hours . Contact info1@tdvoffshore.com for more information
• You may still have a few months before your bank contacts you. In that time, we have found a number of ways to get a second, foreign passport inside of 30-60 days. Once you have a passport other than a US passport you can then convert your foreign bank accounts to your new citizenship and avoid having your accounts closed or reported to the IRS. Contact info1@tdvpassports.com for a consultation on the best solution for you.
• You can also convert a significant portion of your cash into precious metals… which is a very smart move to begin with… you can easily buy and/or transport these assets to a number of international destinations where property rights are respected and the governments are not in massive debt and in need of confiscating your assets. This includes Singapore, Switzerland, Hong Kong, Uruguay and many more. See “Getting Your Gold Out Of Dodge” for specific, detailed actionable info on doing this.

Even if you don’t need any of these types of services at this time, but it is finally dawning on you that the fiscal cliff is approaching very quickly and want to be prepared for what is to come, all of this type of information is the main focus of The Dollar Vigilante newsletter. Subscribers are regularly updated with news, analysis and info for how to survive the coming western financial system collapse.

SELF INTERESTED SCARE MONGERING?

You may be thinking, “this guy just seems to be trying to scare us and promote his own products”. If you’ve followed my writing for any length of time you will know that I’ve been writing about these events for years. And, up until recently we didn’t even offer products. We began writing The Dollar Vigilante two years ago because the writing on the wall had become clear and we wanted to help as many as possible to survive the coming western nation-state and financial system collapse… but we were inundated with emails asking us, “Ok, we agree with your prognosis but what can we do to protect ourselves?”

It was then that we began scouring the world looking for second passport and offshore bank account services and found them lacking. We looked for other information such as is included in Getting Your Gold Out Of Dodge and came up empty. That’s when, as good entrepreneurs and capitalists, we decided to offer the products ourselves. That’s what good capitalism is about… finding ways to help people in need.

The monetary system that the world has lived under for the last 41 years, since the US went off the pseudo-gold standard in 1971, is entering the end game. And we are sorry if we need to be so abrupt in trying to wake you up to it. But, to show you the kind of brainwashing and psychological issues we are regularly up against, here is a conversation we recently had from a woman who had called us to see if she really needed to make her move to protect herself ASAP:

Jane: I just don’t believe it is that urgent. There is nothing on the nightly news about this… and my financial advisor says there are green shoots and we are in recovery.

TDV: What would it take you to realize that it was time to get out of the US?

Jane: I’m not leaving until they shut down the border.

We sat there speechless for about a minute after that one. She has normalcy bias. And, normalcy bias is very dangerous in times like these when everything is about to change.
We suggest you don’t wait until the borders close to get out. And, this is not just a US phenomenon. The entire west will follow in its footsteps… and other nationals as well, such as the Chinese, also should see the need to internationalize themselves (and they do, “China’s Millionaires Looking For Way Out”). There is already a wall around China, don’t wait until there is one around you before you start taking the steps necessary to protect yourself from leviathan.

Regards,

Jeff Berwick

Hear That? It’s The Sound Of The Doors Closing For Americans was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Sweet! Only one thing — this passenger car is for the U.K. You can’t drive this car in the United States. We have a Passat, but it gets nowhere near this excellent mileage. Even stranger, many of the engines in these, which are driven all over Europe, are actually built in the U.S. The trouble is that it can’t jump through the regulatory hoops in the land of the free.

This fact was first brought to my attention by a video blogger who had been driving a van version of this amazing car in the U.K. He came home to ask his Volkswagen dealer about it. The dealer quickly informed him that this model is not allowed on U.S. roads. The Passat in Europe runs on a 54.1-fluid ounce common-rail four-cylinder engine. The standard in the U.S. is a 67.6-fluid ounce engine. For this reason and a few others, the version you can drive here gets 45 miles per gallon.

The blogger was furious as he reported this, and he further explained the absurdity. It seems that the emissions regulations are calculated based on a per gallon basis. The U.K. Passat does not pass because its emissions pollutants are slightly over regulation.

The blogger further pointed out the silliness: The car goes much farther than the American version on a single gallon, resulting in less overall pollutants. But that doesn’t matter, given the manner in which fuel-efficiency happens to be calculated. In the U.S., a car with low emissions could get 1 mile per gallon and pass, but one with slightly higher emissions couldn’t get through, even if it went 100 miles on a gallon.

Infuriating, yes. But because the video was widely circulated, the revisionists started getting to work to debunk the claim. One blogger called Volkswagen. The spokesman made several salient points. A gallon in the U.K. is actually slightly larger than in the U.S., thereby reducing the mileage disparity between the U.K. and U.S. models. Further, these 54.1 engines are actually not that popular in the U.S. market because Americans don’t really care that much about mileage. Finally, mileage is actually calculated differently in the U.K., so the cars aren’t quite comparable in this sense.

Now, that’s all very interesting, and provides an interesting corrective, but it begs the critical question: Can this record-breaking, high-mileage car be sold in the U.S.? It would appear that the claim of the original video blogger stands: It cannot. You might want this car. VW might want to sell it. Europeans love it. But we, as Americans, are not permitted to buy it, and VW is not permitted to sell it. Regardless of the details, these are facts. The VW spokesman was really just talking around the point, as all corporations do when they are confronted with the awfulness of regulations.

The original blogger suggested conspiracy. But then, there is Hanlon’s razor: Never attribute to conspiracy what can easily be explained by stupidity. Regulations are inherently stupid because they presume the perpetuation of an existing technology and production model. They can never account for change or improvement.

No matter how you write them, no matter how smart you are, there will come a time when the intended results of all regulations will reverse themselves. They will inhibit, rather than advance, progress. They will degrade, rather than improve, products. They will block, rather than inspire, technological improvement. This is an unavoidable fate, no matter how smart the regulators are.

In a private market, rules and standards adapt to change. This is because private parties get that the point of a rule or standard isn’t the rule or standard but the results. The point is to achieve results. If the exact reverse of the point is observed, the rule is changed over time. In this way, private markets are flexible in ways that government regulations can never be.

Let’s raise a point about another incredible and wonderful thing: the flying car. It appears that the Terrafugia “roadable aircraft” is finally going into production and might be available for purchase sometime next year. It has recently been subjected to vast media attention, and that’s all to the good.

Now, one might suppose that the journalism on this car would focus on what an amazing thing this really is, how it takes us a step toward the Jetsons’ world, how it might make a contribution to unclogging highways and so on.

But no, that’s not what the stories have been about. It seems that the major “work” that has gone into the engineering behind this flying car has nothing to do with making it amazing for you and me. It is all about the endless government regulations that have stood in its way. The bureaucrats, not the consumers, rule the day.

Imagine: It’s hard enough to build a car that complies with regulatory bureaus. It’s hard enough to build an airplane that complies with the mandates of regulatory bureaus. It appears to be darn near impossible to make something that complies with both! It has to pass emissions tests, crash tests, navigation tests, design tests, mileage tests and a million other tests. Then there’s the problem of licenses for the drivers and fliers and the compliance with airport and road regulations. What a nightmare! It seems that the bulk of the energy of the company has been spent on this.

The actual reality of the flying car has been around since the 1930s. It keeps being revived again and again. What’s making it flounder? The problem is that this innovation is neither fish nor fowl from the point of view of government bureaucrats. Therefore, they don’t know what to do with it.

The results are, quite frankly, rather disappointing. The Terrafugia is a small plane with foldable wings so that you can drive it around. That’s it. There will be no levitating out of traffic. There will be no landing in your driveway. You have to drive it like a car to the airport, and then take off, fly, land and drive home again. That’s kind of cool, yet it raises the question: Why not just park your car and hop in your airplane?

You have to have a wild imagination to see the world that would exist were it not for government controls. These controls wreck innovation. They deny us access to seeming utopias. They kill the entrepreneurial spirit and set society back. They thwart progress and forbid us from working toward a future that is better than the past.

We will never know what we are missing so long as we continue to allow government to throw the whole of society into a regulatory thicket. Life is pretty amazing, true, but it could be far more so. Instead, we suffer in ways we don’t know. This is the big, horrible picture.

Regards,

Jeffrey Tucker

The Case of the Missing High-Mileage Car was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

In any case, the details distract from the reason I’m bringing this up at all: The store was bustling with activity and filled with rural people of all ages. Yes, lots of kids too. Prepare yourself for a shock: these kids actually work on the farm!

We city people don’t really understand this world. We know that, and so do they. That’s okay. I marvel at the social structure of rural agricultural life, the way kids learn and work from an early age, how extended families and communities all share in the work, how impervious and protected the culture is from the mechanized, regulated and planned life the rest of us live.

To me, the milk on the farm tastes like butter and the butter tastes like cheese, and I don’t really understand where and how all this food comes from, much less how it is that young kids can learn to drive gigantic tractors and shoot varmints out the kitchen window with shotguns without blinking an eye. But it is all marvelous, regardless.

And on this very day, the news came across my screen. The Department of Labor had planned to destroy it all, and then barely pulled back when faced with massive protest. The bureaucracy was on the verge of passing new rules that would have banned many kids from working on farms. An exception in the law against “child labor” has always been made for agriculture. FDR would have been impeached if the 1938 law had not included that exception. (Other exceptions include family businesses, child actors and wreath makers.)

As a member of the Corleone family might say, the Obama administration don’t respect nothin’. The urban elite who run the government think it’s just awful that kids are getting up at the crack of dawn to feed chickens and bale hay when they should be reading a civics text that instructs them about the glories of government. Another sector that probably finds it awful: big agriculture that is fed up with dealing with these pesky extended family farms that keep horning in on their monopoly.

The proposed regulations were being pushed as an update to the last update from 1970. In government parlance, an update always means worse. The list of “shall nots” was extremely long and tedious and amounted to a complete ban on work by anyone under the age of 16 or, in the case of driving tractors, the age of 18.

The proposal was first made last August, to the cheers of “Human Rights Watch,” which apparently doesn’t believe in the right to be productive. Since that time, the Department of Labor had been getting closer and closer to making it law. Such a rule would transform rural life in America. Or maybe people will just ignore the law and stick with tradition? The government thought of that. The Department said it would use “all enforcement tools necessary to ensure accountability and deter future violations.”

Just think of it. One in two college graduates doesn’t have a job. Teen unemployment has never been higher in the whole of American history. Young kids are desperate for opportunities. So what does government do? It proposed to ban yet another opportunity, spreading misery as far and wide as possible.

But look at it this way. If this wiped more people off the labor rolls, unemployment would go down again. This is truly how this works in an Orwellian sort of way. It’s like poisoning people to death and then happily noting that sickness among the living is down.

The proposed law made an exception for children of parental owners, but no one took comfort in that. Most farms use extended family to help: nephews, cousins and the like. You can’t draw a strict line between nuclear families and extended families and not cause havoc in this world. For this reason, rural farmers protested bitterly and the Obama administration backed down — for now.

Anyone who has been exposed even slightly to the agricultural lifestyle knows that working on the farm or ranch is not really like any other job. It is part of who you are and what you do. Everyone pitches in from the earliest ages to the oldest. There is great pride among all these people in the life they lead. A rule like this would be devastating.

Also as part of the legislation, reported The Daily Caller, the government would have mandated replacing 4-H training programs and private systems with a government-administered program. To be sure, I know nothing about 4-H, but I do know that for many people in this world, this program is as central to one’s childhood experience as Sunday school in the suburbs or Catechism class in Catholic communities.

Thank goodness the Department of Labor has backed down. Regardless, this kind of thing should not be a threat in a free society. There would be no hectoring from Washington about things government can’t possibly manage or understand. The outrage is that this is threatened at all. No one should have to protest such a law; it should have never been proposed in the first place.

And while we are at all, let’s put in a good word for the city folk too. These so-called child labor laws came about 1938 only as an effort to prettify the unemployment data and give some extra market leverage to the labor unions that FDR was trying to win over.

Look at the 13-, 14- and 15-year-olds today. They have no opportunities to learn anything useful. They are denied a chance to be part of the world of remunerative work. They are thereby denied the opportunity to learn adult-like responsibilities and serious skills beyond repeating what the teacher says while they are strapped in their tax-funded desks.

These laws have been wrecking lives for far too long. And with labor law enforcement today, there are ever fewer opportunities to work for cash. Then when that magic day comes when they graduate from college and we shove them out into the workforce and say, “Go to it!” it should be no surprise that they have no idea what to do.

The feds can’t think of anything better to do that make sure that this pathetic situation spreads to another sector of life — and do it on on behalf of big agriculture. And what will the bureaucrats say when yet another generation is wrecked by mandatory sloth in prison-like educational institutions? Maybe they will tell us that they all should have become child actors. That exemption still lives. For now.

Jeffrey Tucker

Executive editor,

How To Ruin A Kid’s Life was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

It’s one of the top questions we get. After all, not all of us have sizable amounts of savings that we can nestle upon. In fact, most in the western world don’t after they’ve had most of it siphoned off by the state. And even those who think they do, and have a bank account flush full of green pieces of paper or who receive large government pension cheques backed by those same Federal Reserve Notes will soon find out that their “wealth” was illusory.

In this article we will discuss some common misconceptions of the opportunities in the world today.

COMMON MISCONCEPTIONS

The West is filled with misconceptions. The majority of what almost everyone believes is just not true – it’s what makes living there next to impossible for free-thinkers. But here are a few common misconceptions that relate to the topic we are discussing today:

We are rich, they are poor. This is, on a generalized basis, simply not true. The perception is that the West is quite rich and the rest of the world is destitute. This was true for a period… about 40 years ago… but humans have a tough time adjusting to paradigm shifts so many continue to believe this.

When the US Government went bankrupt for the second time in 1971 it denoted the change of the world as we knew it. By that point, the Chinese had nearly finished with their disastrous communist experiment. The great criminal Mao finally shed his mortal coil in 1976 and soon ushered in the new age of Deng Xiaoping and “to get rich is glorious”. By that point the USSR was already circling the drain and, unbeknownst to most, the US began its decline as well for all the same reason as the USSR… too much government involvement in the economy (for the record the perfect amount is 0%).

When total government and personal debt is added to the average net worth in the west, almost everyone is indebted… whereas developing and “third world” countries and the people who live there have no debt. Almost everyone in places like Latin America and Asia all have cell phones, most have cars, most have computers, many have homes… the only difference is that all of it is paid for, not on their credit cards or mortgages.

There is more opportunity in the West. This used to be absolutely true. But things change and if you get stuck in the old paradigm you’ll find yourself wasting time and money and more. The days of moving to the US, getting your kids into a good school and them building a life for themselves is mostly over. Now it is more likely to end up with them getting indoctrinated in socialist culture, pepper sprayed, heavily indebted with student loans to learn things which are all available for free on the internet and then, if our predictions are correct, forced into the military or Homeland Security to pay off their debts. The real opportunities today are mostly in Asia, Latin America and former Soviet Bloc countries as we will talk further about below.

My kids need a good job [There is opportunity for my kids]. This is another anachronistic mindset. All the slaves on TV drone on about how they need jobs… but this is a direct result of placing young children in socialist child prison camps for 12 of their most formative years. Anyone remember their “Introduction to Entrepreneurship” class from elementary school? Of course not, it does not exist in public schools. That is because the entire system is designed to produce worker slaves who are conditioned to show up at 9am and not leave until at least 5pm, sit in a cubicle for the entire day and not ask questions.

Once you get outside of that mindset the world is your oyster. You don’t need someone to create a job for you… you just need to see an opportunity to add value to someone or something and seize it. This makes expatriating to a foreign country infinitely easier.

If I stay where I am I’ll get a good company pension and Socialist Security cheques as well in 10 or 15 years. You can forget all about that right now. We’ve shown countless times how the Western nation-states socialist security systems are a bankrupt ponzi scheme.

But even corporate pensions won’t be worth much in a few years time. There are a few reasons why. For one, most corporate pensions are invested in the stock market – yes, that same stock market that has made no nominal gains for the last 10 years… or the bond market which will soon evaporate..

And, even if they do manage to grow their funds, the payments will be made in fiat currencies that simply won’t exist 5-10 years from now. Just consider them gone right now and save yourself a few years of fearful anticipation.

ESCAPE FROM AMERICA

Again, if you are stuck in old paradigms, you will not see the massive changes going on all around you. Lou Dobbs is a perfect example of this. Every night on Fox he’ll decry foreign workers from sneaking into “our” country and stealing “our” jobs. There’s just one problem. Everyone’s leaving. In fact, Lou should move his schtick to Mexico and decry the influx of Americans into Mexico as a recent Pew Research Report states, “In the five-year period from 2005 to 2010, about 1.4 million Mexicans immigrated to the United States and about 1.4 million Mexican immigrants and their U.S.-born children moved from the United States to Mexico.”

For first time since Depression, more Mexicans leave U.S. than enter.

Many of them are Mexicans who are returning to Mexico. This snippet from a Washington Post article shows why:

It is better to be unemployed in Mexico than to be unemployed in the United States, he said, because most migrant workers leave their families in Mexico. “They miss the warmth of being in a welcoming community,” he said, adding that with tougher border control and more deportations, Mexicans would rather be in a “precarious situation than in a situation of fear.”

That’s not the only reason, either. There are simply more opportunities in Mexico than in many parts of the US now despite all the propaganda about there being a deadly drug war and the Obama administration running guns into the country. It would come as a big surprise to most Americans to hear that the Mexican stock exchange has gone up nearly 1,000% percent in the last ten years.

Now, as with all stock markets today, you have to take the numbers with a large grain of salt as they don’t account for inflation and the Mexican peso money supply likely plays a significant role in the rise… but certainly prices have not risen four fold in Mexico since 2005… but the Mexican stock exchange has.

A net rise in Mexican immigration vis-a-vis the US and a booming stock market? Maybe the government and the media aren’t telling you the whole story!

SEEING IT FOR YOURSELF

This is why “seeing it for yourself” is the only way to go. The governments and media is so full of propaganda and skewed world-views that it is actually dangerous to your mental health to pay attention to them.

Even listening to friends or trusted sources can’t possibly give you the big picture about any one location. Even if you were able to clone yourself and send a different clone off to the same location every week for a year, they would all have different perspectives on the area. That is because our views are formed by our experiences and it is impossible for two different people to have the exact same experiences. All it takes to ruin a location for many people is one pickpocket… and all it takes to make a place the most wonderful paradise on Earth is for you to cross paths with one beautiful girl whom you fall in love with.

For this reason it is imperative to visit any location in which you are considering living and spend a significant amount of time there first. Of course, you can listen to like-minded people are publications you feel you can trust [like The Dollar Vigilante and Whiskey & Gunpowder] but that just gives you the big brush picture. You’ll never know if a place is right for you until you actually go there.

Regards,

Jeff Berwick

The Dollar Vigilante

Making A Living In A Foreign Country was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

You see, to do serious business in America requires vast campaign contributions to several layers of elected politicians, an army of lobbyists in Washington, retired government employees on your board and public devotion to the American civic religion. It goes on every year and restarts every election cycle.

Even then, it is hard to know if you are going to get what you pay for.

It’s easier and more efficient in Mexico. You pay bribes directly. The decision maker gets the money. He or she clears the path for you to do the thing. The facilitator takes a slice. People mostly keep their promises. The deal is done.

Apparently, bribe paying in the United States is a sign of a healthy, functioning democracy; doing the same thing in Mexico in a more streamlined way is a criminal violation of the standards of good corporate governance.

Here we have The New York Times “exposing” the shocking and presumably ghastly fact that over several years, Wal-Mart paid out some $24 million in payoffs to politicians, bureaucrats and petty gatekeepers in Mexico, all in the hope of employing people who need jobs and bringing goods and services to those who need them.

The breathless and bloviating Times expose is written as if these intrepid reporters were exposing a violent mob engaging in killings to get its way. You never quite get that Wal-Mart would much rather have used the money to expand its business, hire more employees or beef up its inventory. Money used for bribes is a loss to any company, a terrible price of doing business under the state.

In any case, the trove of information was shoveled on the paper by disgruntled employees. And it is hardly unusual. It’s how business is done. Regardless, the Times is out for blood — not from the extortionists who run the system, but the victim, Wal-Mart.

At last count, there were 1,200 news stories about this on the wire. Forbes reports: “Wal-Mart Stores will likely face the wrath of the U.S. Department of Justice for reining in an internal investigation into bribery allegations at its Mexican subsidiary.”

I’m sure that congressional investigations are around the corner, with all the named executives hauled before committees and harassed by regulators.

The bitter irony is that it will transfer more of the Mexican system to the U.S. To survive, Wal-Mart will be forced to spend more than the $12 million-plus it already spends every year on campaign contributions and lobbying.

All that enforcement of the Foreign Corrupt Practices Act (FCPA) does is increase the amount of domestic corrupt practices. Indeed, that is the way the system is supposed to work. Truly, if the FCPA were actually enforced as written, business around the world would come to a grinding halt.

Under the well-known Mexican system, people called “gestores” specialize in interfacing between business and bureaucracy. They deal with inspectors, permit issuers, environmental bureaucrats, labor officials and zoning regulators. If the gestores can make the deal, they keep 6% as a matter of convention. Even average citizens use these people to stand in line for them — all in an effort to find nonviolent means around the bureaucrats.

Given the ridiculous barriers in place, it’s not a terrible system. Corrupt government that you can buy your way around is far better than “good government” that blocks all progress.

The rap on Wal-Mart is that it did far worse. When the company discovered this was going on, it buried it, rather than go public. No kidding. Maybe the company imagined that it would be smeared and attacked?

Bribing officials is illegal in Mexico, just as it is in the United States. But of course, that is just the gloss. Anywhere there is government, there is corruption. That’s the purpose of barriers to enterprise, to extract wealth from those who want to get past them.

Is it worth it? It is either pay or don’t do business, which means lasting poverty. Today, Wal-Mart Mexico employs 209,000 people and is the country’s largest employer. It has provided a fabulous example of the merit of private enterprise in this country, which is finally getting on its feet economically. It has brought food, goods and services to millions of people who otherwise would not have them. It has done more in 10 years for Mexico than all the government bureaucrats have done in one hundred or a thousand years.

For its crime of bringing economic development to this country, it must be smeared, beaten and forced to pay obeisance to the American political class. Why should Mexico enjoy such largess when there are millions of American bureaucrats who need to be part of this gravy train?

You can read thousands of academic papers on the problem of “corruption” in countries around the world and completely miss the central point. The way to eliminate the corruption is to eliminate the barriers to enterprise. Why is this not obvious? Because many people imagine a utopian ideal that does not now and never has existed: good government. They imagine that government rules can be enforced impartially based on science or the public good.

It’s sheer nonsense. As Ludwig von Mises writes in Human Action:

“Unfortunately, the officeholders and their staffs are not angelic. They learn very soon that their decisions mean for the businessmen either considerable losses or — sometimes — considerable gains. Certainly, there are also bureaucrats who do not take bribes, but there are others who are anxious to take advantage of any ‘safe’ opportunity of ‘sharing’ with those whom their decisions favor… Corruption is a regular effect of interventionism.”

But here’s the part that upsets me so much. Somehow, private enterprise is always and everywhere blamed for perpetuating corruption, when the truth is obviously that the blame rests with government. It’s like watching a mugging and blaming the mugged for carrying too much money. It’s like telling anyone who faces the demand “Your money or your life” should always choose to give up his life.

The background here is nothing short of anti-capitalist resentment. The elites loathe Wal-Mart for its achievement in putting on display the incredible reality about capitalism that you never hear about in school: It is a system that is maniacally focused on the well-being of society in service of the common man.

Go to Wal-Mart and you see the workers and peasants not rebelling against the system, but buying stuff that makes their lives better. It looks rather mundane. It’s how civilization is built: one economic exchange at a time. The people who stand in the way don’t deserve a dime, but private enterprise is kind enough to cough it up, anyway. Wal-Mart deserves sympathy, not condemnation.

Jeffrey Tucker

Wal-Mart, The Victim of Extortion was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Here’s Obama on the campaign trail: “The problem is … speculators and people make various bets, and they say, you know what, we think that maybe there’s a 20% chance that something might happen in the Middle East that might disrupt oil supply, so we’re going to bet that oil is going to go up real high. And that spikes up prices significantly.”

While blaming economic conditions on speculators is the common stock in trade of demagogues and politicians of all stripes, what is the president actually saying?

People who need energy to keep their businesses working, business that make modern life possible, look around at world events and grow concerned that the U.S. government and others may conspire to interrupt the flow of oil. Behaving like good stewards of their enterprises, they and their agents seek to assure needed oil supplies in an uncertain future by contracting for tomorrow’s oil needs today.

While Obama deprecates the activity, saying that those trying to prepare for future conditions, are “betting,” most oil users would actually prefer stable prices and would just as soon forego the guessing game about future prices. It’s a game that costs them if they are wrong and only allows them to stay in business if they are right. Most are happy that someone – those speculators politicians love to vilify – are willing to take on the risk of being wrong about future price movements for the rewards of being right. The real oil users can then count on liquid markets when they need them and keep their attention – and their capital – focused on delivering the blessings of modern life instead of betting on the movement of prices.

And there is something wrong with this? Hold the phone a moment!

It’s not as though those seeking to secure oil for their future needs are making something up. They’re not concerned about some fantasy development, some exogenous agent like space aliens appearing out of nowhere to suck up all of earth’s oil. This isn’t science fiction. They’re trying to keep things working in the face of very real and very familiar government threats to our way of life.

Maybe they should be praised, not condemned.

While one administration bureaucrat has claimed there is a “Wall Street premium” on the price of oil, it takes government to make a war. Speculators trying to anticipate future prices in the event of a war don’t impose embargoes. Nor do they launch airstrikes.

In The Dollar Meltdown, I estimated that during the constant saber rattling and elective wars of the Bush years, the fear premium on the price of oil may have run from $20 to $40 a barrel, depending on developments. It was, in any case, a huge transfer of wealth from the American people to the oil sheikdoms, Putin’s Russia, and Chavez’s Venezuela.

If Obama is prepared to further de-capitalize the American people and deliver another blow to an economically-depressed world by supporting an Israeli strike on Iran and risking the closure of the Strait of Hormuz, isn’t it a good thing that he has to confront at least some of the cost of such recklessness?

He’s a politician. He should pay a political price.

George W. Bush never did. But we would be better off economically if he had to reckon with the price for his elective war.

Might Bush have been dissuaded from his unnecessary war if he had known that it would cost not under $50 billion, as his administration claimed, but more like $5 trillion?

Would Bush have given up plans for his counterproductive war on Iraq – a war that has only consolidated Iran’s Shi’ite power bloc in the region – if he had known that he would preside over an explosion of the nation’s visible debt from $5.7 trillion to $10.6 trillion?

Would Bush have foregone his wasteful war justified by forged documents and phony intelligence if he had known that its cost would help trigger the steepest downturn in America since the Great Depression, even as the cost of the Vietnam War helped create the stagflation decade of the 1970s?

If he had known the costs and the outcome, would Bush have been capable of better decisions?

Nah. Bush was not capable of forethought or making wise decisions. When he ran for reelection in 2004, Americans still hadn’t come to terms with the monstrosity of his bogus war. And his opponent, John Kerry (“Reporting for duty!”) wasn’t willing to risk defeat by opposing the prevailing war fever. Had he done so, he would have still lost in 2004, but could have easily been elected on the “told you so” platform by the time people began seeing through Bush’s war in 2008.

Whatever Obama’s real view about war with Iran, he at least has enough foresight to know that it will result in even higher gas prices.

At his first press conference of 2012, Obama responded to a question about gas prices with a question of his own, asking the reporter, “Do you think the President of the United States going into reelection wants gas prices to go up higher? Is there anybody here who thinks that makes a lot of sense?”

Obama knows that the price at the pump can cost him the election.

If it is wariness about the political cost of higher oil prices that has Obama preferring “engagement” to bombing Iran, it is a good thing. If it is speculators buying oil against future possibilities that keep Obama from reacting as Romney and the neocon Republicans egg him to start another needless and ruinous war, then we owe speculators a debt of gratitude.

Regards,

Charles Goyette

I Love Oil Speculators was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Then the feds got involved. Or so I now gather. I didn’t know this for a long time. Every time I would buy a mower, I would be disappointed in the results. I kept buying mowers with ever-larger engines. Then I would buy them with different bag designs, and then a different brands, and then different features. Nothing worked.

The problem was always the same. I would mow and most of the grass would go in the catcher. But some didn’t. Some landed on the lawn in a line. When the grass was wet, it left an even bigger trail. Or when I would go from the grass to the sidewalk, a big clump would fall out from underneath the mower onto the sidewalk, requiring that I get a broom and sweep it up. Then I would have to empty the bag long before it was full.

It took me many years of thinking to figure out the problem. After all, I never had this problem when I was a kid. Have companies started making lawn mowers that don’t work? Are manufacturers worse than they used to be? It all seems crazy. I would mow with a smartphone in my pocket that could check my blood pressure, make the sound of a flute or surf the Web. Why can’t private enterprise seem to make a mower that works?

I would try to forget about the problem, adjust to the downgraded reality and finish up the growing season. But the next year, it would all come back to me. Grass trails. Clumps on the sidewalk. Emptying too often. Buying a new mower and finding the same problem all over again.

What is the source of the problem? The spinning blade cuts the grass and creates a flow of air that lifts the grass and throws it into the catcher. A flow requires circulation, and where does the circulation come from? It can’t be a vacuum seal. You can’t create a small wind tunnel without a source of air. Where is this coming from? Nowhere. The base of the lawn mower is flush against the grass. The blades spin but create no suction effect.

Why is the base so low to the ground? I tend to mow my grass pretty low just because of the variety of grass and the topsoil level. But doing this causes a perfect seal between the mower and the ground, cutting off all airflow and denying the blade the air it needs to create the wind tunnel to empty the grass.

It is pretty obvious, right? So why have manufacturers not responded by raising the steel casing on the lawn mower? Why would they keep selling mowers that don’t work well? I’m hardly the only person who has the problem. Lawn mower forums all over the Internet are filled with people asking exactly the same questions and having the same symptoms. The manufacturers are shy to mention the real reason. They talk about changing blades, removing obstructions and things like that. Users know better. There is another factor.

I was just looking at the detailed regulations for lawn mowers. In particular, the relevant passage is 16 CFR PART 1205 — the Safety Standard for Walk-Behind Power Lawn Mowers. Here we find that the height of the lawn mower case must be low enough to pass a “foot probe” test. No matter how high or low the wheels are adjusted, it cannot be possible to stick your foot under the case.

Now, when I was young, you could stick your foot under the mower. We didn’t do that, of course, but we could. Therefore, there was suction. The air sucked from underneath and swirled up and out in the grass catcher. It was like running a vacuum cleaner over a floor. It shaved the grass, and not one grass blade was left anywhere in sight. It all went into the catcher.

The new regulations, which apply only to walking mowers that you use at home, went into effect sometime after 1982. I still used my old mower for years after that date. I fact, I didn’t have a reason to buy a new one until about 15 years ago. That’s when my troubles began.

Now I know the cause. The bottom line is that federal regulations have degraded the lawn mower. In the name of safety, the government has forced all manufacturers to sacrifice functionality. They are forced to sell equipment that doesn’t do what it is supposed to do. All the while, I’ve been blaming private enterprise. It turns out to be the fault of government.

The government’s central plan for walk-behind mowers is mind boggling. That bar you have to squeeze and hold on the handle to make the wheel move? Mandated by government. That annoying plastic piece that covers the blow hole for the grass that you have to push out of the way? Mandated by government. The government has mandated the blueprint for the whole machine and thereby frozen its structure in place with an inferior and unalterable design.

It is not enough that regulations have invaded the bathroom, ruined our showers and toilets, degraded our detergent, made it ever harder to unclog drains and made essential medicines hard to get. Now I find that regulations have even made it difficult for me to do something completely American like mow my own lawn!

It is now as it was in the 19th century when Herbert Spencer wrote his amazing work, The Man Versus The State. It remains a powerful explanatory essay about what is wrong with the world and what to do about it.

This also explains why so many of my neighbors are using lawn mowing services that have giant riding lawn mowers. It turns out that these particular regulations do not apply to them. It wouldn’t surprise me to find that lawn services were actually instrumental in lobbying for these safety regulations. This is how commerce works these days: Compete for a while, but when that doesn’t work, turn to the government to wreck the competition.

Government hates lawns — except at the White House, of course. They consider private lawns to be wasteful and vain, a symbol of conspicuous consumption. If they had their way, we would all have rocks in our front yards. Or maybe we wouldn’t have front yards. We would have little window boxes, and surely that would be enough for us.

It’s all in the interest of your safety. And security. What about your freedom? It’s been mowed under, and it landed like clumps of grass on the sidewalk.

Sincerely,

Jeffrey Tucker

They Wrecked Our Mowers was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.