Dollar hegemony as the world reserve currency is unwinding and coming to an end. While major monetary changes are ahead, the direction that things will go is still far from certain. We know that government and central banks want to get rid of cash because they’re always telling us so. We also know that they want total economic surveillance. Ironically, crypto-currencies provide both of these things for government. Ron Paul discusses this and more on today’s Liberty Report.
By Chris Rossini
Ever since The Federal Reserve opened its unconstitutional doors, the American economy has been on a perpetual roller-coaster of "this time is different" booms, followed by heart-crushing financial busts.
It can be no other way. The Fed creates bubbles and the bubbles have to pop. It's not complicated.
This immoral cycle enriches the politically-connected few at the expense of everyone else, so it does serve a purpose for them. If everyone were to be harmed equally, there would be no point in having a Federal Reserve.
The Fed creates all the financial booms and busts. There's nothing we can do about that. But how government responds to those busts, we have a very small outside chance of influencing.
Even though voters have minimal influence on their so-called "representatives," it's not zero, so there's always a possibility for the right thing to be done when the next Fed bust occurs.
For example, most people have never heard of the bust of 1921. There's a very good reason for that. It was short. It was still a bone-crushing economic collapse, but it didn't last long.
The reason that it was a quick collapse was because of the policies of the president at the time -- Warren G. Harding.
It's probably safe to say that most Americans have never heard of Harding.
He did the right thing, so he's not considered one of the "greats".
When the Fed's bust arrived in 1921, Harding said:
“Gross expansion of currency and credit have depreciated the dollar just as expansion and inflation have discredited the coins of the world. We inflated in haste, we must deflate in deliberation. We debased the dollar in reckless finance, we must restore in honesty.”
Such a response is unimaginable from modern-day presidents.
No one mentions the actions of the central bank. It's ignored completely.
Harding went on:
“All the penalties will not be light, nor evenly distributed. There is no way of making them so. There is no instant step from disorder to order. We must face a condition of grim reality, charge off our losses and start afresh. It is the oldest lesson of civilization…No altered system will work a miracle. Any wild experiment will only add to the confusion.”
In other words, the central bank, via a "gross expansion of currency and credit," created "disorder."
That's what the Fed does. It creates an artificial and distorted economic reality. Nothing makes sense, yet there are always those who say: "this time is different."
No it's not.
Nothing but a return to economic reality, and a liquidation of all the investments that should have never taken place, can fix the situation. That's what Harding's policy was, and that's what took place.
Harding did the right thing. The pain was sharp, but short.
Everyone forgot about it...and him.
Unfortunately, the Fed didn't go away. When the bust was over, they went on another binge of money and credit creation.
We've all heard about the "Roaring '20's" right? Well, it was the Fed that made it roar.
By 1929, it was time to pay the price...and boy was it a big price.
The stock market crash was monumental.
But this time, Warren Harding wasn't there to do the right thing. This Fed-created bust would land on the lap of President Herbert Hoover, a massive government interventionist.
Hoover would not let a return to economic reality to occur. He would not let the necessary liquidations to take place. Instead, Hoover would throw everything the government had at it, in order to make the bust stop.
“We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever involved in the history of the Republic.”
Did it work?
Of course not!
But that never deters government.
FDR would step in as the new president. He would take Hoover's interventions and put them on steroids!
Did that work?
Of course not!!
The combination of Hoover and FDR's massive interventions into the Fed's economic bust created The Great Depression.
They prolonged the economic pain.
While Warren Harding did the right thing....and was forgotten, FDR did everything wrong, and is now considered one of the "greats".
The lesson in this should be glaringly obvious.
When the next big bust occurs (and there's no escaping it) how the government reacts will dictate how long it lasts. If they go all in to stop it by intervening even more than they do now (if that's even possible) then we're in for a long and painful depression.
Based on how government reacted to the bust in 2008, things don't look good. Government can't fix the economic pain, but they can extend it.
And the Fed?
Well, the Fed shouldn’t exist at all.
We can live much better economic lives without the fairytale idea that a few central planners, who sit in ivory towers, are capable of "running the economy."
Foreign affairs analyst Jim Jatras joins today's Liberty Report to discuss the new US National Security Strategy scheduled to be released next week. Big changes? New approach? We'll discuss...
By Ron Paul
By Liberty Report Staff
The U.S. military is reporting that there are 44,000 American troops deployed to "Unknown."
This should not happen in a Republic.
Ron Paul discusses below (starting around the 2 minute mark):
Secretary of State Rex Tillerson told an audience this week that the US was ready to begin direct talks with North Korea without pre-conditions. But the White House has denied that the Administration's position has changed. Is Tillerson free-lancing it? Or is something else going on?
By Ryan McMaken
The FCC is preparing to vote this week to roll back "net neutrality" regulations adopted in 2015. Supporters of net neutrality claim the regulations protect internet traffic from discrimination and ensure broadband providers don't abuse their power as gatekeepers to the internet. Supportersalso claim "[n]et neutrality is the principle that all traffic on the internet should be treated equally."
The problem, of course, is that net neutrality regulations do none of these things.
In the past, we've explored how government regulatory panels cannot and do not ensure fairness. In fact, they encourage abuse by the most powerful actors in the marketplace.
Moreover, as Peter Klein has noted, it is impossible to allocate goods "neutrally" even if government regulators were untouched by corruption.
Another problem results from the fact that internet regulation like net neutrality is just another form of central planning which requires a centralized rule-making body which must functions without the essential first-hand experience and knowledge of real-world market actors. In other words, the main conceit of central planning is this: a group of experts sitting in a room knows more than countless consumers, producers, and innovators working in the marketplace.
In a functioning marketplace, of course, consumers and producers are constantly making decisions based on available resources, current prices, and how each person subjectively values the products and services he or she wishes to buy. The complexity of the situation is enormous.
Central planners, however, act as if the wants and desires of countless consumers can be known by a small group of regulators, and thus a "fair" plan can be hatched.
From the perspective of an economist, of course, this is an impossible dream.
As Ludwig von Mises pointed out long ago, market prices — which form as a result of countless voluntary decisions in the marketplace — are an essential component of any economy. Without them, producers can't know what to produce. Net neutrality, like other centralized regulatory schemes, is built on decisions made without this key information. As a result, the policymakers at the FCC are groping around blindly, merely guessing as to what is "fair" or what the correct prices are, or how resources ought to be allocated.
Moreover, the more centralized this decision-making is, the worse the problem becomes.
In his essay, "The Use of Knowledge in Society," F.A. Hayek explains:
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources — if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
In other words, the world is a very complex place and it is impossible for a panel of political appointees to understand all the details and varied environments that create market prices and the way in which resources are allocated.
This is especially problematic in cases where technology changes and adapts rapidly. In these cases especially, reserving key decisions to a "central board," as Hayek calls it, destroys the ability of market actors to respond to changes in real-world circumstances:
If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used.
Regulating the internet via the FCC, of course, thoroughly prevents innovators, consumers, and producers from taking advantage of the experience and knowledge of those who are actually working in the marketplace.
This isn't a problem, apparently, for those who insist that government must dictate to consumers and producers alike. After all, we have "experts."
Unfortunately, when it comes to something as complex and non-clinical as a functioning market, "experts" of the type employed by government panels are of little help. Hayek continues:
Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation.
The "experts," may indeed be experts on some precise scientific question or clinical studies. Whether or not this knowledge can be usefully applied to the marketplace and millions of consumers, however, is something else entirely.
Instead, net neutrality gives us an Olympus of experts who shall hand down their decisions to millions of market actors for whom there will be no escape from the central planners.
Who Gets To Be an Expert?
Ironically, the fallacy that the FCC can wisely employ its regulatory expertise is being called into question by supporters of net neutrality themselves.
"You don't understand how the internet works" insists an open letter to the FCC from tech gurus Steve Wozniak and Tim Berners-Lee.
Anyone familiar with the federal regulatory state, of course, should not be surprised in the least to find out that regulators don't understand the inner workings of the industries they regulate. The same might be said of the federal judiciary where judges who barely know how to turn on a computer have been handing down decisions about tech matters for decades.
Unfortunately, Wozniak and Berners-Lee fail to see the irony of their situation in pointing out the FCC isn't qualified to regulate something as intricate as the internet.
For supporters of net neutrality, of course, their problem with the current FCC is not the impossibility of a handful of government appointees regulating a vast complex of markets and industries. For those who subscribe to this naive view, this problem of central planning can be overcome by putting in "the right people."
Sure, the current crop of FCC appointees don't understand the internet, but when we get the "right" people in, everything will be fine. Those good guys will be immune to lobbying from industry interest groups, and will know exactly the right prices, regulations, and directives that will be dictated to 320 million Americans to keep everything "fair."
Needless to say, this is fanciful thinking in the extreme, and to the tech geniuses point out the lack of internet savvy, we must also note: "you don't understand how an economy works."
This article was originally published at The Mises Institute.
With ISIS defeated in Syria, Russian President Putin announced this week that he was withdrawing the bulk of Russian military equipment and personnel. Russian assistance was requested by the Syrian government as ISIS and al-Qaeda appeared poised to take control of the country. Meanwhile, the US has just admitted it has more than four times the number of troops in Syria than it earlier claimed. And Defense Secretary Mattis said the US, though illegally in Syria, would not be leaving. Why?
By Adam Dick
Libertarian communicator and former presidential candidate Ron Paul says he is optimistic that philosophic changes taking place in America will lead to greater government respect for liberty. Paul made the assessment in a recent interview with host Marc Clair at the Lions of Liberty podcast regarding Paul’s new book The Revolution at Ten Years. “The philosophy comes first, and I think that’s where we excel,” says Paul.
Paul, in the interview, challenges “the propaganda” belittling the status of the libertarian revolution. While Paul notes that libertarians “don’t control the Congress, the presidency, or anything else” in Washington, DC, he argues that libertarians appear to be making good progress now to be in position to reshape government in the future.
Listen to Paul’s complete interview here.
Purchase Paul’s book, in which he discusses the libertarian revolution in more detail, here.
This article was originally published at The Ron Paul Institute.
By Ron Paul
Last week the Supreme Court heard oral arguments in the case of Masterpiece Cakeshop v. Colorado Civil Rights Commission. The case stems from the refusal of Masterpiece Cakeshop, a bakery, to bake a wedding cake for a same-sex couple. The bakery was found guilty of a civil rights violation and ordered to stop refusing to bake and design cakes because they are for same-sex weddings. The bakery was also required to file reports on the steps it takes to comply and whether it turns down any prospective customers.
The decision to force the bakery to change its business practices reflects a mistaken concept of rights. Those who support government intervention in this case view rights as a gift from government. Therefore, they think politicians and bureaucrats can and should distribute and redistribute rights. This view holds it is completely legitimate to use government force to make bakeries bake cakes for same-sex weddings since the government-created right to a cake outweighs the rights of property and contract.
This view turns the proper concept of rights on its head. Rights are not gifts from government, so the government cannot restrict them unless we engage in force or fraud. The bakery did not use force to stop any same-sex couple from getting a wedding cake. It simply exercised its right to decide who it would accept as a customer. No one would support private individuals forcing bakery employees to bake a cake at gunpoint, so why is it right for the government to do it?
Some people claim that forcing the bakery to bake the cake is consistent with libertarianism. The reason they make this claim is they view the bakery’s actions as rooted in bigotry toward homosexuals. But even if this were true, it would not justify government intervention. Bigots and others with distasteful views have the right to use their property as they choose. The way to combat bigotry is through boycotts and other means of peaceful persuasion.
Instead of considering whether Colorado has violated the bakery’s rights of property and contract, the Supreme Court is considering whether Colorado’s actions violate the bakery’s religious liberty. The argument for a religious liberty violation is based on the fact that the bakery owner’s refusal to bake the cake was rooted in his religious objection to same-sex marriage. Looking just at this argument means that a victory for the bakery would implicitly accept the legitimacy of laws dictating to whom private businesses must provide services, as long as an exemption is made for those with religious objections. This reduces property and contract rights to special privileges held by business owners with “sincere religious convictions.” It also allows judges, bureaucrats, and politicians to determine who is really acting on sincere religious convictions.
Just as business owners have the right to decide who to do business with, individuals have the right to form any arrangement they wish as long as they do not engage in force or fraud. This includes entering into what many consider unconventional or even immoral marriage contracts. What no individual has the right to do is use government to force others to accept his definition of marriage.
Even if the bakery wins in the Masterpiece Cakeshop case, its victory will only protect those businesses acting on a “sincere religious conviction.” Those who oppose forcing bakers to bake cakes and who support private business owners’ right to decide who to accept as customers should work to restore respect for everyone’s rights.