President Obama once again demonstrated his utter lack of understanding of the basic principles of economics during a meeting with his economic advisors on Monday. He chooses to blindly follow the misguided and discredited theories of Lord Keynes, among others, given him by his advisors. It is also most unfortunate for this country that the entire cadre of the presidents economic advisory team seem incapable of objectively analyzing the Keynesian model that they are so attached to, for if they could only extricate themselves from this “third way” paradigm and experience a few moments of economic lucidity, it is highly possible that even they could begin to fully understand just how utterly disastrous Keynesianism has been for the global economy in general, and our economy in particular. Unfortunately, they ignore the continued warning signs that keep popping up and continue to dig the United States ever deeper into this economic black hole that threatens to suck the very life out of what remains of our economy, and will ultimately take what remains of our liberty with it.

Let me be clear: what we are presently witnessing in the ongoing economic crisis is the natural laws of economics giving their referendum on Keynes. The current national unemployment figure of 10.2% simply underscores the point. In short, Keynesian theory suggested what has been called a “third way,” not fully capitalism and not fully socialism. It sought a system where the government, both through the power of the central bank and intervention through regulation, legislation and manipulation would be able to bring about a condition of perpetual prosperity, an end to recessions and economic cycles of boom and bust, and end to the bubble economy. The problem with the theory is that the very controls and manipulations demanded by Keynesians to “grow” and “sustain” the economy are the very things responsible for the creation of the economic bubbles and the business cycle, precisely because these things violate the natural laws of economics. Mises, Rothbard, Hayek and others have proven this time and again. The natural laws of economics correlate with human thought and action, and these things are wholly incompatible with bureaucratized central planning boards and central banks fixing prices, wages and interests rates at values much different than those the free market would deem proper. Attempting to isolate these things from the reality of the marketplace in essence creates the bubbles that are bound to burst at some point because they are at odds with the market, with the decisions and choices producers and consumers make on a daily basis.

Keynesian theory has been the driving force behind the economic policies of the industrialized world since the early twentieth century. Keynes’ model economy was viewed as having evolved beyond capitalism, thus noted above as being a hybrid between capitalism and socialism. It advocates corporatism. It is therefore by its own admission decidedly not capitalism. Those who prefer to cast the blame for the current economic mess on unrestrained capitalism are flat out wrong and woefully uninformed, because there has been no unrestrained capitalism in the United States – ever. Sure, we came fairly close up until 1913; however, once the Federal Reserve Act and Income Tax Acts were passed and the Constitution amended through the ratification of the 16th Amendment, all hopes for true capitalism were indeed dashed.

Mr. Obama and his advisors like to remind us how they inherited this economic crisis from the previous administration. There is nothing untrue in that statement. However, for anyone, especially a well trained and educated economist, to lay the whole blame for this mess at the feet of the Bush Administration without taking into account the overwhelming number of far more important factors that are truly the root cause, is disingenuous, dishonest, and grossly insulting to those of us who have studied anything other than Keynes, as well as an affront to the common sense of anyone who takes the time to question the current scenario and really think it through. Those economists who regurgitate the official government talking points and try to put a positive spin on the current course of action undermine their own legitimacy in doing so. It is simply incredible that so many of these economic advisors are so quick to declare unrestrained laissez-faire capitalism the root cause of this crisis when they know full well that the prevailing Keynesian school of economic thought that has been driving economic policy for the better part of a century is itself specifically defined as being something that is not capitalism. There is far too much at stake to play semantics and talk out of both sides one’s mouth.  (Continued...)

Michael Moore the millionaire Marxist is at it again.  Everyone knew it was only a matter of time until he came out openly Marxist, and with his latest piece of pro-Marixst propaganda, Moore does not disappoint.   In the film, “Capitalism, a Love Story,” Moore seeks to illustrate how capitalism has failed and thus socialism is the only viable system by which a sensible and advanced people may prosper. Unfortunately for Moore it is clear from viewing many of his previous films that he doesn’t know what capitalism is. It is also clear that while Moore may well indeed have a true empathy for those financially less fortunate than himself, he has no intention of spreading his wealth around. Why? Because, in his own words, he is just like us. A recent interview with Larry King revealed the following exchange:

Moore: Who's got the money? And whoever has the money has the power. And right now, in America, tonight, Larry, the richest 1 percent have more financial wealth than the bottom 95 percent combined.

King: You're in that 1 percent, though?  (More...)

In a speech aimed at further demonizing Wall Street by once again failing to accept that government also bears responsibility for the much of the ongoing financial meltdown, President Obama declared, “I have always been a strong believer in the power of the free market. I believe that jobs are best created not by government, but by businesses and entrepreneurs willing to take a risk on a good idea.”

It is one thing to utter such words in a speech, and yet something entirely different to put them into action; and to date, all of Mr. Obama’s actions relative to the economy have been wholly manipulative and hostile to the idea of free market capitalism. To be fair, Mr. Obama is certainly not alone in his hostility toward true free market capitalism, for since the inception of the Federal Reserve in 1913 U.S. economic and monetary policy have been overwhelmingly interventionist and inflationary, building an faux economy with a fragile basis in easy money, easy credit, fiat currency.  (continued... examiner.com)

Change is coming whether we want it or not.  In fact, it is already here.  The nation’s financial system is in turmoil.   The nine largest banks in the country have all but been nationalized by the federal government, the markets are scared and showing it; and, the possibility of a long and deep recession is beginning to put pressure on average folks who are trying to find what all of this means for them. To be sure, everyone will have to more closely watch his or her finances and strive toward a more frugal, long-term outlook. 

While economists are still in general disagreement as to how long, how deep and how significant this recession will be, we are even now witnessing rising unemployment, a lack of credit, and the Fed leading the charge toward hyper-inflation as they crank up the printing presses and create money out of thin air. And while the miscreants on Capitol Hill speculate, hypothesize and hold hearings and point fingers of blame for the current mess, the specter of authoritarian socialism looms over this republic, but the only people who seem to want to acknowledge this fact are those on the right – and no one, most certainly no one in government – seems to be taking us seriously. Indeed, of those who are even willing to acknowledge where we are headed, few will admit that we have already been on our way, ‘fellow travelers,’ so to speak, for quite some time.

To better illustrate this fact, I shall endeavor to point out the glaringly obvious with the help of Karl Marx. The following are what Marx in his Communist Manifesto deems as 10 essential elements to achieving socialism:

1. Abolition of property in land and application of all rents of land to public purposes.

2. A heavy progressive or graduated income tax.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of all emigrants and rebels.

5. Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.

6. Centralization of the means of communication and transport in the hands of the State.

7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal liability of all to work: Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

10. Free education for all children in public schools: Abolition of children’s factory labor in its present form: Combination of education with industrial production, etc.

Marx also notes:

“Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.”

Certainly no one would be foolish enough to suggest that the United States has already gone full-blown “commie.” But, one would have to be a fool to deny the fact that our government and politicians have been moving us steadily toward socialism by their insistence on more and more social and entitlement programs, giveaways, and interference in the economy and our personal lives. Even a cursory glance at the list above ought to raise a few red flags (no pun intended…). Of course the US has not met all of Marx’s essential requirements to facilitate socialism, but the groundwork has indeed been laid.

That said, here is something the average citizen should understand but does not: government is force, and every time government increases the amount and extent of its interference in the economy, in our social relations, in our commerce, it usurps our liberty little by little. It is unnoticeable at first, as such usurpations seem incremental; until suddenly the nation wakes up to realize that it is no longer free, that liberty has been sacrificed for empty promises of physical and economic security, and that the people have received – and will only receive – nothing for the sacrifice of their liberty. People don’t understand this because they have only been taught that government is good and benevolent and that its most noble purpose is to help the people on their way to success. Over the last several decades the general perception of what government is vis-à-vis what it ought to be has shifted decidedly in favor of bigger government and the welfare/nanny state.

The Federal Reserve and Federal Income Tax Acts both of 1913, the New Deal and Great Society and all the social-welfare programs contained therein, and, yes, the extraordinary consolidation of executive powers through the Department of Homeland Security and the Patriot Act are just some of the more glaring examples of government interference and interventionism. Certainly one cannot omit the government forcing the nation’s nine largest banks to “participate” in its bailout program, by which these banks taken federal money under coercion and the government assumes what it terms as “observer status” with a non-voting seat on the board. This sounds innocent enough, except for the fact that it is highly probable that at future board meetings the “observer” from the government might offer “advice” or “suggestions” to the controlling officers of the institution as to the government’s position on a particular course of action. Such situations easily conjure up images of the Soviet Political Officers or KGB officials inserting themselves into the everyday business of the citizenry.

It is noteworthy that this is not where we are headed – it is where we presently are. So, what of the future? What will define what is rapidly becoming our American Socialism? Will it merely be an iPod and a cell-phone in every child’s book bag, enrollment in the new national healthcare program, and annual re-distribution checks sent out from the Treasury to those too “poor” to contribute, or will it devolve into something even more sinister? 

The great economist Ludwig von Mises wrote a great deal on the subject of government encroachment in the economy of nations, and we and our “representatives” in Washington would to well to heed his warnings. Mises concluded that government meddling in the economy, interventionism, can only lead to socialism, and that socialism cannot subsist unless it takes on an authoritarian nature, which is its tendency. 

In his essay “Middle-of-the-Road Policy Leads to Socialism (1950),” Mises wrote, “There are two methods available for the transformation of capitalism into socialism.” The method by which the US is moving toward socialism is, according to Mises, “…the method of the Hindenburg plan, the originally German pattern of the welfare state and of planning. It forces every firm and every individual to comply strictly with the orders issues by the government’s central board of production management. Such was the intention of the National Industrial Recovery Act of 1933, which the resistance of business frustrated and the Supreme Court declared unconstitutional. Such is the idea implied in the endeavors to substitute planning for private enterprise.”

Mises continued his remarks on British and German socialism relative to the United States: “The United States embarked later than these other two countries upon this decline, and is today still farther away from its end. But if the trend of this policy will not change, the final result will only in accidental and negligible points differ from what happened in the England of Attlee and in the Germany of Hitler. The middle-of-the-road system is not an economic system that can last. It is a method for the realization of socialism by installments.”

The devolution of a nation into socialism has as much to do with economics as with politics. Government intervention in the market in the interest of enforcing “fairness” or in striving to manipulate such conditions as to create artificial conditions to continue an economic “boom,” leads to ever more widespread encroachment and manipulation to perpetuate artificial “boom” conditions, because it cannot be otherwise. If government implements price controls for one commodity it follows that the new condition will affect the production of that commodity to where its components must be strictly regulated and controlled, thereby expanding government intervention into areas of the economy never intended by enactment of the original policy. This is the law of unintended consequences, which itself is the result of the short-sightedness of policy makers and economists who look to the immediate solution or fix for one aspect of the economy or one class of people (farmers, middle class, etc.) without taking the time to think through the potential long-tem affects of their brainchild, and whether and to what extent those affects would be beneficial or not. 

Government is force and money is power and the two, force and power, should never be allowed to become concurrently subject to the arbitrary whims of government officials, bureaucrats and spineless and corrupt politicians. Should such a thing occur, as it has recently here with government acquisition of the nation’s nine largest banks, a republican form of government and rule of law will not long endure such temptation and tyranny. 

Socialism is coming no matter the outcome of the presidential election, and in many ways it is already here. The only way to stop it is to un-elect it by re-forming the ideological and socio-economic outlook and understanding of the people. In other words, demonstrate to the masses how government deceit, corruption and misguided planning, subsidy, welfare and other interventionist policies set about to ruin a solid free-market system that works best when simply left alone and unencumbered by government nonsense and politics. Given the current state of the economy and the possibility of what is to come with a pro-socialist majority in both Houses of Congress and occupying the White House we can be sure that things will get worse before they get better. Ironically, for that we might actually be thankful soon, for in our need to gather evidence and data to present and make our case against socialism to the people, government will have largely done our work for us. All we need do is present what they provide, which should be sufficient.

Here’s a news-flash you won’t see on CNN, FOX, or any other media outlet of ill repute for that matter: the US Government thinks you are stupid. So do the politicians we continue to elect to “represent” us at the legislative and executive levels. So do the bureaucrats that are appointed and hired by the government. They all think we are stupid, and they might even be right.

Why would I even suggest such a thing, that we the people might just really be as stupid as the politicians assume us to be? Here’s my answer: because we are acting like it. And if we don’t wake up real soon and take some serious action we are going to be jolted awake one morning only discover that we no longer live in a free republic, and all the evidence, coupled with the total economic impact of the events of the last several weeks suggest that we are coming perilously close to that day.

Many, if not most, who are reading this would agree with this assessment, but for the sake of those who haven’t been paying attention to history, have no clue that we have a Constitution that is being knowingly and continually violated with seeming impunity by our elected representatives, bureaucrats and judges, and for those who, being either blissfully ignorant about the truth regarding the economic catastrophe our once-free market has become or who simply nod their heads at the assurance of government that they are working hard to fix the problem and everything is going to be OK, I have some disturbing news for you: the government and the politicians you elected are all lying to you – because they think you are stupid. And if you continue to believe them, then you are stupid.

Here is the ugly truth: In the last month your government has committed to spend approximately $1 trillion to bail out various Wall Street financial institutions, along with Freddie Mac and Fannie Mae. That brings the officially acknowledged federal deficit to roughly $10 trillion. And there will most certainly be more regardless who wins the election: more spending, more promises of programs to help homeowners in over their heads, more debt. The Treasury will have to continue bailing out the FDIC as it (the FDIC) has already paid out the $45 billion fiscal insurance policy it holds to the many banks that have already failed. Amid all this chaos the government officials and elected representatives and candidates for office step up and promise they’ll fix it. One of these reprehensible bulwarks of all that is wrong in the world, Rep. Barney Frank – a man who is at the very least (along with his many Democrat and Republican comrades) complicit if not guilty of gross negligence in facilitating this mess has promised to do “major surgery” on the nation’s financial system. 

If Frank and his compatriots in the Congress hold true to their promise you can bet there will be more bank failures and this current recession will likely devolved into a long depression. Why? Because the whole reason the world’s financial system is on the verge of total collapse is because of government meddling in the economy by trying to manipulate and perpetuate artificial conditions of a growing economy. This is called central economic planning, a long discredited manipulative policy that has been proven unsustainable over time, as we are currently witnessing. You will never hear your Congressman or Presidential candidates speak of this, for to do so would betray the truth, and the truth would set us free, so to speak. 

Speaking this truth would be the equivalent of admitting that our planned and over-manipulated economy is no more a true free market system than was the Soviet economy that imploded in 1991 – and as this ugly truth stares us in face all we hear from politicians and bureaucrats is that “greedy Wall Street CEOs” are the ones to blame. In fact, some in Congress are already holding hearings featuring testimony from CEOs of several of the companies recently bailed out or that have failed. The Congress has the sheer audacity to lay 100% of the blame at the feet of these CEOs, who certainly deserve their share of the blame to whatever degree they jumped on the high-risk bundle bandwagon, while conveniently overlooking their own actions that directly contributed the creation of an environment where such catastrophically stupid business practices were not merely possible but were strongly encouraged. One party accuses the other of deregulating the finance industry as if that were the cause while the other accuses the first party of enacting senseless regulations as if those were the cause – and to an extent, both are correct. What was had prior to deregulation was a lot of bad regulation that was replaced by nothing that would solve the problems the bad regulation created, and most would agree that this is so.

However, while enacting laws for the purpose of regulation of commerce is a legitimate function of the Congress, enabling the Federal Reserve to secretly enact policy of its own, and for which it is unaccountable and un-auditable, specifically designed and intended to manipulate the money supply and interest rates to create and perpetuate a false prosperity nicely contained in a bubble that is an anomaly of free market operation, is not. In fact not only does the existence of a central bank go against the advice of the Founding Fathers of our country, it essentially violates all of the core principles upon which the Constitution is founded.

The Founders knew all too well the pitfalls of a fiat currency, that is, a currency of paper money that derives its “value” by the arbitrary authority of government declaring it’s worth, as it is in reality not backed up by any tangible assets. During the Revolutionary War, the Continental Congress financed itself partly by its self-produced Continental currency – paper money like we use today – that was not backed up by gold or anything else of any intrinsic value. The people were forced to use it, and the government simply was able to produce more of it by printing it, until they had printed such an overabundance of it that the currency itself became entirely worthless. Unfortunately the geniuses in government and those at the fed have not correctly understood the warnings of the Founders, because we have been doing the same thing since 1971 when Nixon took us of the gold standard. Either that or they know exactly what they are doing, which would be even more disturbing.

The fact of the matter is that those running the Fed are not stupid – everything they do is calculated. So why would they deliberately choose to destroy the dollar, because that is exactly what our government’s economic “rescue plan” or bailout will achieve if it continues the current charted course. They are destroying the dollar because the fundamental element of this “rescue plan” is the infusion of massive amounts of cash into the monetary system. The problem is that the treasury has none, and so it is left to the Fed to print it. With each new dollar that gets printed and injected into the system, the value of all the other dollars out there is diminished so they become worth even less on the market; therefore the buying power of individuals is likewise diminished as the value of the dollar goes down. The more currency produced, the less value it has. 

This is “inflation 101” and everyone on Capitol Hill and in Washington ought to know that. But, then again, these are by and large the same folks who signed on to creating the conditions that ultimately brought about this catastrophe, so it is not entirely surprising that they would sign on to allowing massive amounts of money to be printed and injected into the system. My dark theory on this is that in doing so they are inviting hyperinflation, which is when so much fiat currency is produced that it becomes essentially worthless (take Italy, for example, where you would pay 10,000 Lira for a pack of cigarettes). Perhaps they know this. Perhaps they don’t care. At the very least, they’d tell us, they are working hard and doing something to “fix the problem. 

But that is exactly the root of the problem in the first place, and so here is where the idea of individual responsibility and self-government comes in. The people are running like sheep in whatever direction the government leads – even if it is off a cliff- and unfortunately they have become so conditioned to looking to government to solve their problems that to do otherwise is often not even an afterthought. The people are not asking the right questions either – if they’re asking them at all. But, they are demanding that government “do something.” If they were living up to their civic responsibilities in the first place they would have been paying attention and seen this coming and would have been able to put enormous pressure on their elected representatives to stop the insanity before the crash became inevitable. 

The fact that this is happening in a Presidential election year makes the idea of individual self-government all the more important. The people are panicking as they see a long and deep recession looming, the politicians are panicking because they are afraid they’ll not be re-elected, and no one wants to tell the truth about how we got here in the first place. And now with the totality of the erosions of our Constitutional liberties having been much accelerated in recent years and the government nationalizing massive segments of industry, taking over individual home mortgages to presumably have courts renegotiate rates or perhaps dictate them, a complacent and uninformed electorate is only weeks away from electing a relatively unknown, unprepared, and untested politician who has spend the vast majority of his life immersed in the world of radical socialist ideology while pretending not to be. Our economy, our nation, our republic is being handed to him like John the Baptist’s head on a platter.

The people are crying, “Do something!”   Be careful what you ask for, because now that the government is doing something everything is going to get worse. You don’t believe that? Then name something outside of the realm of military action or law enforcement that the government does well. Incidentally, the national defense and law enforcement are really the only useful Constitutionally mandated obligations of the Federal Government, aside from the construction of roads, and the legitimate regulation of commerce. 

Also of note is Article I, Section 8. Under the title “Power Granted to Congress,” paragraph 5 reads: “To coin money, regulate the value thereof, and of foreign coin and fix the Standard of Weights and measures.” Note that nowhere in this paragraph is there mentioned an entity known as “The Federal Reserve,” nor is the authority to coin money and fix its value given to a single principal in the person of the Chairman of the Federal Reserve. Furthermore, it is important to note that the Constitution as written is binding as the Supreme Law of the Land, except where amended and ratified. No amendment created the Federal Reserve; rather, by the Federal Reserve Act of 1913 did the Congress unconstitutionally give charter to the Federal Reserve and illegally abdicate its obligation to coin money and set its value. Indeed, as if the creation of the Fed as an illicit central bank wasn’t bad enough, think for a moment of the sheer audacity and arrogance in thinking that one person with even the best and brightest minds to assist them, could ever permanently manipulate the forces of the free market to create a condition of permanent prosperity. And that is a major part of the problem.

If the markets were left to themselves there would indeed be periods of growth and periods of correction; however, absent mountains of poorly defined or ill-scoped regulation and meddling politicians abusing their lawful authority to implement self-serving policies pandering to their own constituencies and thereby exerting massive, undue influence and encroachment on the machinations of the free market, those corrections would be comparably mild and sort-lived. Yet those very persons responsible for creating those conditions encouraging greed and corruption are now the same who demand of us still more of our money and our trust. The talking heads on the TV, with few notable exceptions, tell us repeatedly that as unfortunate as it is, we have no other option. 

To those who suggest as much I say this: economic freedom and liberty are inseparable – you cannot have the one without the other. If the market can be so easily manipulated by the arbitrary will of government for the benefit of the few, then the market is not free and neither are those who participate in it. If, on the other hand, the market is allowed to dictate unto itself and to its participants the worth of goods and services and the worthiness of those who seek them, then all are able to prosper to the extent that they wish to share in that prosperity. Such is free-market capitalism is spared undue meddling of government. That is our other option, indeed our only option; for if we do trust these power hungry fools again, the hegemony of the government, then we are exactly as stupid as they think we are, and we deserve the misery that shall most certainly befall us. If not for liberty we would only then have no other option but follow along like sheep and give to government all that it demands. We are now at a crossroad in the history of this nation, and the decisions to be made and the actions to be taken in the immediate future will have a profound and perhaps irreversible impact on our lives and those of our children. 

Let us not fool ourselves: we have been asleep at the wheel for far too long, and if we don’t immediately wake up and grab the wheel we run the very serious risk of driving right off the cliff. If you don’t believe in the possibility of an authoritarian socialist regime in the United States you are either very naïve or ignorant of history, because the possibility is not only very real but is staring us in the face. Right now our system is still the best in the world, albeit imperfect. It would be even better and we would be returned to great prosperity if our representatives and government were actually abiding by the Constitution. They will not do so unless we the people force them too.

It could be argued that we are in the beginning stages of tyranny, of the proverbial “benevolent dictatorship.” The government is moving now, through the Fed, to take over controlling interest in even more of the banks in the US. The government is also planning on purchasing mortgages and will thus become the largest homeowner in the world. As they “loan” billions to the auto industry and then, doubtless, to others they will likewise require oversight, if not “public ownership” in those companies. Does “public ownership” sound familiar?   Once government encroaches on a segment of the private sector it will not extricate itself unless the people force it to do so. Remember, the New Deal was sold to the people on the premise that it was a temporary measure to meet the needs of an extraordinary crisis. This same line is being sold to us today. Don’t believe it.

At a time when government encroachment into the private lives of citizens at the federal and state level is at an unprecedented level, where state executives and legislatures usurp the rights of parents by mandating that children receive certain “vaccines,” where the Federal Government is pursuing a course to take over massive segments of the economy, where private sector jobs are being lost while government jobs are being created, and where the most likely winner of the upcoming Presidential election will seek to force state run health care, “world” taxes payable to the UN, and the elimination of the right of Americans to keep and bear arms, complacency is not an option. We must be organized and united starting today, for we must take back control of our government and make it work for us and not against us. Government encroachment into areas heretofore left to the individual self-government and personal responsibility of each citizen is out of control, and if left unchecked it will consume us. Keep this in mind: our Founding Fathers sacrificed their very lives for the liberty we are letting the government illicitly usurp piece by piece. So, as you witness these current events continue to unfold, keep asking yourself this question each day: “Am I sovereign or a subject?” Wake up, America, before it’s too late.