Tuesday, December 21, 2010

Why I would support the NEED Act

If you said “This shouldn’t be a responsibility of the Federal government”, you’d be correct about 99% of the time. If you went on to say “This shouldn’t be a responsibility of government”, you’d be right at least 95% of the time ... giving some credit to the state and local.

We certainly have ample and overwhelming evidence of the catastrophic failures resulting from central planning and concentrated government power. Furthermore, based on our experience with our own government, it’s understandable that we in the Liberty movement would have a reactionary “burnt child” response to virtually ANY proposal coming from Washington D.C.

I believe the new legislation authored by Dennis Kucinich (dubbed the NEED Act) is an exception, and an idea that the Liberty movement should strongly support.

http://kucinich.house.gov/UploadedFiles/NEED_ACT.pdf

We’ll have to forgive the silly “National Emergency Employment Defense Act” (NEED) acronym which is a D.C. standard. However, unlike the typical DC strategy of making a bill with a nice title covering up 2000 pages of freedom destroying, government empowering crap, this bill is less than 50 pages in length, and actually has some worthwhile substance.

If you read the legislation, there’s a lot of the typical “welfare state” language which we’ve come to recognize as the pretext for more government intrusion. Note however that most of these socialistic platitudes are in the “findings” (i.e. why we’re in this current economic mess) and at the end (i.e. explaining all of the good things that MIGHT be possible with the new law in place) The actual legislative content is in the middle and is generally very positive.

Primarily, the bill ends the Federal Reserve system, returning control of monetary policy to the Treasury, and ends fractional reserve banking, taking the money creation power away from the big banks. Opponents will argue that this amounts to a “government takeover” of the banks, but there is no truth to the argument. The bill just creates a fundamentally different business model for banks, based on the apparently radical concept that they should only be able to lend money that they actually have.

A potential flaw (this is my reactionary government mistrust) is that it still leaves government with the arbitrary power to manipulate the money supply. However, the specific mandate in the bill is for money supply governance that causes neither price inflation nor deflation. A good argument in favor of commodity backed money is that NOBODY should be entrusted with this power. However, Congress (with Fed enablement) ALREADY seems to spend whatever they want, far above and beyond their means, but borrows the money at interest. Furthermore, the Fed’s mandate already calls for “stable prices”, yet it has embarked on a renegade inflationary policy since its inception, with a secret balance sheet and NO accountability. A government panel with the same mandate and additional transparency could hardly be any WORSE.

Add to this bill some additional provisions which would overturn the sections of title 18 of the U.S. Code which criminalize the creation and use of alternative currencies (you can almost count on Ron Paul to propose that), and we could have a real winner.

The Liberty movement is full of those who advocate a gold standard or commodity backed money. If we ever established this sort of system without simultaneously eliminating the scourge of fractional reserve banking, it would accomplish very little. Even with the Fed out of the picture, the huge private banks and the international banking cartel would have the power to manipulate the money supply and perpetuate the boom and bust cycle. Furthermore, this immense “money creation” power, concentrated in private hands would continue to enable the undue influence of the banking cartel over our elected officials and appointed regulators.

A cursory glance at our current economic situation reveals that the millions of hard working people and small businesses which actually contribute to society by providing REAL tangible value are slaves to their debt and the debt-based monetary system. Meanwhile, the bankers who provide relatively little value, facilitating transactions and loaning money are prospering like never before. The big financial firms are taking in hundreds of billions of dollars in profits and paying record bonuses amounting to untold billions. I’m not making the typical class warfare argument which argues that the disparity must be addressed with government taxation and redistribution. It’s merely a strong indicator of a broken economic system where the people producing the real wealth of society struggle, and those that merely shuffle paper grow fabulously wealthy. It’s not a problem of too little government and insufficient taxation, it is a problem of a distorted economic landscape.

In contemporary politics, we serfs have our political differences, but we are arguing against each other in a world where we are all waist deep in the mire of debt and economic instability. Meanwhile, the bankers and political elites look down upon us from their mountains of wealth and laugh at our petty conflicts. If there is ONE issue upon which the average working class people should unite, it is the issue of monetary reform. In a fair monetary system, even based on a so-called “fiat currency”, we would at least be on a firm economic playing field. Of course our political differences wouldn’t instantly vanish. We in the liberty movement would still be focused on reducing government influence in our lives, maximizing individual liberty and advocating for non-interventionist foreign policy. With the real “den of vipers” rooted out however, the venom in the current false dichotomy “blame game” would be diluted as many of the problems to which we try to assign blame would slowly but surely evaporate.

Monday, December 20, 2010

Merry Christmas and Happy Festivus!


A couple of years ago my family spent some time during the Christmas season with my sisters, one of whom actually owns a Festivus pole. For those of you who don’t know, Festivus is a made-up holiday which was introduced to “the rest of us” on the television show Seinfeld. In addition to easily explainable events being labeled as "Festivus miracles,” traditions include the “Airing of Grievances,” during which participants hold an unadorned aluminum Festivus pole and gripe about everything from obnoxious drivers and inconsiderate shoppers to slimy politicians.

Having participated in such a gripe session I can assure you it is hysterically funny as well as extremely therapeutic. This year I have a few suppressed diatribes just waiting to be released so I thought I would grab the Festivus pole right now. Here goes:

My first grievance is with the political correctness surrounding Christmas. If anyone had peeked in my kitchen window the weekend after Thanksgiving they would have been privy to a private performance of Handel’s Messiah, with several encores of the Hallelujah Chorus (I sing all four parts, too.) Christmas always makes me nostalgic for this magnificent musical work, which I performed along with the other member of my public high school chorus three out of the four years we attended. Yes, that was a public high school, back before diversity and sensitivity relegated all things western and religious verboten. What a great loss this has been to our American culture, which, as much as we hate to admit, derived primarily from religious and western influences. What a personal loss it would have been to me had I not been introduced to the works of Handel and instead been allowed only the paltry, secularized musical diet of Frosty the Snowman and Winter Wonderland today’s public school choirs are confined to. True inclusion and tolerance would include all members of a society, even the majority.

Along those lines I give you my second gripe – the labelling of crimes as “hate crimes.” A few weeks ago a red-haired student at my local middle school was kicked by some of her classmates because it was “Kick a Ginger Day.” As a “ginger” myself, and the mother and sister of several others, I recognized this instantly for what it - a crime based on a physical characteristic, or a “hate crime.”

Though around the same time letters were pouring into the newspaper regarding allegations of racial taunts on the Career Development Center bus, no one spoke up on behalf of this girl, who had actually been physically assaulted. Not much happened to the kickers but few seemed to notice. Unfortunately for this student, she was not a member of a protected minority. If she had been, this assault would have carried stiffer penalties.

As we read in George Orwell’s Animal Farm, some animals are more equal than others and “hate crime” legislation is a perfect example of this.It elevates one group over another based on physical or cultural characteristics and fosters inequality. In this nation we are supposed to be equal under the law. As Martin Luther King said, “Injustice anywhere is a threat to justice everywhere.” Hate crime legislation is not only unjust; it is insulting to the favored and unfavored alike.

My final gripe - and it’s a big one – is with British economist John Maynard Keynes, the man who, in my opinion, is most responsible for the current fiscal disaster that is our economy. Keynesian economic theory is obviously too complicated to cover in an newspaper column but, in short, Keynes advocated the use of governmental fiscal and monetary measures to mitigate the adverse effects of the economic recessions and depressions that naturally occur in free markets (therefore rendering them unfree.) We see Keynes’ handiwork in the destructive TARP and stimulus plans being foisted upon us today as well as “Quantitative Easing” and war as the new norm. Many Keynesians view military spending as stimulative and therefore desirable. In a nutshell, Keynes believed governments should spend money they do not have and most have been more than happy to test his theory out. Unfortunately, this philosophy has permeated all of society to the point where we are dependent on credit and consumption rather than savings and production. On both a national and personal level this has produced devastating results.

The only bright spot in all this is the re-emergence of the Austrian school of economic thought. Friedrich Von Hayek, the Austrian school’s foremost representative, was Keynes contemporary and intellectual rival in the depression-dominated 1930s. Hayek was a prolific writer and producer of economic theory so it is impossible to sum up his theory in a single sentence, but he believed savings and investment rather than credit led to a more stable business cycle. He also said order in the free market is the product "of human action but not human design" and governments could not possibly predict the independent actions of millions of individuals. Therefore, they could not control the overall consequences of those actions.

This seems reasonable to most laypeople, which may be why Hayek is getting a new hearing. Sound monetary principles bringing about a sound economy - why, it’s a Festivus miracle!