America’s Last Statesman

submitted by jwithrow.
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Journal of a Wayward Philosopher
America’s Last Statesman

February 5, 2016
Hot Springs, VA

“The #1 responsibility for each of us is to change ourselves with hope
that others will follow. This is of greater importance than working on
changing the government; that is secondary to promoting a virtuous
society. If we can achieve this, then the government will change. The
best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of Liberty.”

-Dr. Ron Paul

The S&P closed out Thursday at $1,915. Gold closed at $1,157 per ounce. Crude Oil closed at $31.72 per barrel, and the 10-year Treasury rate closed at 1.86%. Bitcoin is trading around $388 per BTC today.

Dear Journal,

Most of the snow has finally melted here in the mountains of Virginia with only intermittent white patches left dotting the landscape. Having been covered for more than a week, the revealed ground appears saturated, muddy, and grimy – much like the current election cycle here in the U.S.

After ignoring the circus entirely for four months, I did tune in to a portion of last week’s GOP debate. I was primarily interested in observing Rand Paul as he seemed to move back towards advocating Liberty, having failed to adequately pander to the Straussian neoconservatives who have come to dominate the Republican party.

After distancing himself from his old man throughout his campaign, Rand even invited three-time presidential candidate Ron Paul to help rally supporters on the campaign trail in Iowa. Ron’s arrival was reportedly greeted by students chanting “End the Fed!”, which I must admit triggered heavy nostalgia within me. Continue reading “America’s Last Statesman”

The Nation Is Not the State

submitted by jwithrow.nation

Journal of a Wayward Philosopher
The Nation Is Not the State

August 11, 2015
Hot Springs, VA

The S&P closed out Monday at $2,104. Gold closed at $1,104 per ounce. Oil closed out just under $46 per barrel, and the 10-year Treasury rate closed at 2.24%. Bitcoin is trading around $267 per BTC today.

Dear Journal,

Last week I suggested that the growth of the nation-state in the 20th century brought forth the rise of collectivism. I speculated that we may have reached peak collectivism and thus inferred the nation-state model may be ripe for decline, however. Today I will point out the troubling macroeconomic trends once again in support of this speculation.

The democratic nation-state model has grown so massive largely because the political class has bribed people with half-baked social insurance (welfare) programs across the board. This has led to a massive accumulation of debt throughout the entire western world. Simultaneously, the demographics of many western nation-states is such that there are more aged people drawing from pensions and national social insurance programs than there are younger workers to pay for them. This dynamic has resulted in an absolutely gargantuan accrual of unfunded liabilities.

What this means is most governments in the western world are already bankrupt. Many people remain unaware of this fact because governments have kicked the can down the road by manipulating interest rates ever lower (negative in places!) and creating huge amounts of national currency out of thin air via the central bank mechanism. More and more people are slowly waking up to reality, however, and this is leading to a loss of trust in the nation-state model. Continue reading “The Nation Is Not the State”

How the Fed Grows Government

by Hunter Hastings – Mises Daily
Article originally published in the January 2015 issue of BankNotesEccles Building

We are told that elections are important, but the most powerful state institution, the central bank, is totally out of reach of the voter.

Ludwig von Mises viewed democracy as a utilitarian concept. It was the form of political organization that allowed the majority to change the government without violent revolution. In Socialism, Mises writes “This it achieves by making the organs of the state legally dependent on the will of the majority of the moment.” He identified this form of political process as an essential enabler of capitalism and market exchange.

Mises extended this concept of utilitarian democracy to citizens’ control of the budget of the state, which they achieve by voting for the level of taxation that they deem to be appropriate. Otherwise, “if it is unnecessary to adjust the amount of expenditure to the means available, there is no limit to the spending of the great god State.” (Planning for Freedom, p. 90).

Today, this utilitarian function of democracy, and the concept of citizens’ limitations on government mission and government spending, has been taken away by the state via the creation and subsequent actions of central banks. The state carefully created a central bank that is independent of the voters and unaffected by the choices citizens express via the institutions of democracy. In the case of the US Federal Reserve, for example, the Board of Governors state that the Federal Reserve System “is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”

Independent from Voters, But Not from Politicians

Importantly, the central bank is independent of the citizens in this way, but, in practice, not independent of politicians. Alan Greenspan, former chairman of the Federal Reserve, is quoted as asserting, “I never said the central bank is independent,” alluding to similar statements in two books he has written, and pointing to one-sided political pressure significantly limiting the FOMC’s range of discretion.

This institutionally independent, but politically directed central bank spearheads a process that enables largely unlimited government spending. It expands credit and enables fiat money, which is produced without practical limitation. Fiat money enables government to issue debt, which, at least so far, also has been pursued without restraint. The unlimited government debt enables unrestrained growth in government spending. The citizenry has no power to change this through any voting mechanism.

Thus, the state is set free from having to collect tax revenue before it can spend, and as Mises explained, in such a case, there is no limitation on government at all:

The government has but one source of revenue — taxes. No taxation is legal without parliamentary consent. But if the government has other sources of income it can free itself from this control.

In other words, when faced with the possibility of voter reprisals, members of Congress are reluctant to raise taxes. But if government spending no longer necessitates taxes, government becomes much more free to spend.

Without restraints on government spending, there are no restraints on government’s mission, or on the growth in the bureaucracy that administers the spending. The result is a continuous increase in regulations, and a continuous expansion of state power.

Has The Central Bank Limited Itself?

In the one hundred years since the creation of the Federal Reserve in 1913, US federal government spending has grown from $15.9 billion to a budgeted $3,778 billion in 2014 (a number we now refer to as $3.8 trillion to make the numerator seem less egregious). Spending as a percentage of GDP has advanced from 7.5 percent to 41.6 percent over the same period. A comparison of regulation growth is more difficult, but over 80,000 pages are published in the Federal Register annually today, versus less than 5,000 annually in 1936.

The evidence, therefore, is that voting makes no difference to this lava flow of spending and regulation. Whatever the will of the majority of the moment, government spending and government power will continue to expand, with consequent reduction in the economic growth that is the primary goal of the society that is being governed.

John Locke opined that, when governments “act contrary to the end for which they were constituted,” they are at a “state of war” with the citizens, and resistance is lawful. (Two Treatises of Government, p. 74). The theory and practice of unhampered markets and individual liberty are particularly relevant at election time.

Hunter Hastings is a member of the Mises Institute, a business consultant, and an adjunct faculty member at Hult International Business School

Please see the January 2015 issue of BankNotes for this article and others like it.

Election Day

submitted by jwithrow.voting-paper-ballots

Journal of a Wayward Philosopher
Election Day

November 4, 2014
Hot Springs, VA

The S&P has risen to $2,009, gold has dropped to $1,167, oil is down around $77, bitcoin is at $328, and the 10-year Treasury rate is checking in at 2.33% today.

Looks like gold is still sitting on the clearance rack begging to be purchased. Gold jewelry would be a great Christmas gift this year! Just be sure to negotiate the price down significantly from whatever the price tag says. Did you know there are still cultures out there that store their wealth in gold jewelry? People in places like India and China must not have gotten their central bank’s memo: gold is barbaric, government paper currency is civilized. (Pay no attention to all of those pointless wars that were financed by government paper currency.)

Speaking of civilization, it is Election Day! Election Day affords every American the opportunity to honor that great tradition known as voting by rushing off to their local polls to support whichever Joe, Bob, or Dick (or Hillary) has promised to fix all that ails us and to move us forward. I am not sure exactly why all of us need to be moved forward but this apparently isn’t open to inquiries. It is every American’s right and responsibility to participate in our fine electoral process else be called a “commie”.

But you know… not everyone is quite so enthusiastic about voting. Let’s give some of the dissenting voices a hearing for a minute:

“Democracy is two wolves and a lamb voting on what to have for lunch.” – Benjamin Franklin

“If voting made any difference they wouldn’t let us do it.” – Mark Twain

“Every election is a sort of advance auction sale of stolen goods.” – H.L. Mencken

“It makes no difference whom you vote for – the two parties are really one party representing four percent of the people.” – Gore Vidal

“It’s not the voting that’s democracy, it’s the counting.” – Tom Stoppard

“No matter who you vote for, the government always gets in.” – Neil Innes

“The difference between a democracy and a dictatorship is that in a democracy you vote first and take orders later; in a dictatorship you don’t have to waste your time voting.” – Charles Bukowski

“Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one’s government is not necessarily to secure freedom.” – Friedrich Hayek

“In politics we face the choice between warmongering, nation-state loving, big-business agents on one hand; and risk-blind, top-down, epistemic arrogant big servants of large employers on the other. But we have a choice.” – Nassim Nicholas Taleb

Hmmm.

Come to think of it, nothing ever seems to change no matter which bobble head gets elected. No major legislation gets repealed entirely; at best it gets replaced by something equally as draconian with twice as many earmarks in it. At worst even more legislation is dumped on top of the steaming pile that already exists. There’s never a sincere effort made to reduce the size and scope of government or to even curtail spending increases. There’s never a sincere effort made to shore up the run-away welfare state that has bankrupted the government nor is any effort made to reel in the out-of-control warfare state that constantly runs amok in search of dragons to slay.

Side note: Microsoft Word suggests that I correct the previous sentence. It has underlined “has bankrupted” in green and suggests that I change the phrase to “has not bankrupted”. I guess Microsoft thinks I am over-analyzing the severity of the situation and thus will be voting its little heart out today.

As for me, I think I will side with P.J. O’Rourke on this one: “Don’t vote, it just encourages the [jerks].”

I see it as matter of personal responsibility: I am responsible for the well-being of myself and my family – government has no role to play whatsoever.

More to come,
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Joe Withrow
Wayward Philosopher

For more of Joe’s thoughts on the “Great Reset” and regaining individual sovereignty please read “The Individual is Rising” which is available at http://www.theindividualisrising.com/. The book is also available on Amazon in both paperback and Kindle editions.