Silence on bombing brown people.

Applaud support for gay marriage.

What really changed Obama’s mind on gay marriage.

More evidence against the propaganda put out by liberal racist bigots and neoconservatives.

Of course, this will be ignored and the leaders of this country, the great liberals, and “conservatives” will bomb them anyway. All hail death of thousands due to sanctions of war.

What’s the cause of this?

For the liberal it’s just simply greed. All hail such a great explanation.

For anyone who lives in reality, it’s the increase in demand.

I am currently reading The Mystery of Banking by Murray Rothbard. I am a little more than halfway through and I would highly, highly recommend this book to everyone. It’s not particularly bias (although it has its moments) but it explains, in detail, how inflation is created, how banks get away with it, how they do it, and how central banks work. It’s an excellent book and you can buy it fairly cheap, although, it can get a little technical and it’s not for somebody who is just getting into economics. It’s definitely for somebody who has been exposed a little to economics.

As a side note, you’ll really see how libertarians are not at all pro-business. The liberals will actually really like that about this book.

A little while back I submitted an article to The Freeman about why we don’t need a central bank. I highly doubt it’s going to be published so I figured I’d put it on Tumblr! It’s called, “Central Banks? No Thanks”

There’s a quote that makes Thomas Jefferson look like the Austrian economist of his day. Claiming that a private bank that controls the currency will end up leaving everyone homeless and poor. Okay, so maybe he didn’t write it but it’s still a damn good quote! The question “should the Federal Reserve be abolished?” shouldn’t even be asked. The question should be, was there a good reason to have it in the first place? Once that answer has been established, we can ask whether there should be a Federal Reserve or not.

Whenever a government decides that it wants to muck up some grotesque monster in a lustful body (of, oh, say 3 or 4 thousand pages), one should always ask, “who does this benefit?” More often than not the answer is, “definitely not the average citizen.” I think it’s a safe bet to say, after almost 100 years of the Federal Reserve, it’s been proven empirically.

This answer is far from astonishing given government track records. With bills such as the Federal Reserve Transparency Act, we have all the evidence we need to see who benefits most from the Federal Reserve. Obviously banks benefit tremendously. Simply borrowing money at a very low interest rate. Now we’ve seen other central banks have benefited, too. Hell, foreign banks were given $600 billion. And with the help of legislative branch, all of the recipients of multiple bailouts were also benefited. If you’re waiting for the part where I tell you how the Federal Reserve has helped anyone who is not a banker, CEO, politician, or a recipient of TARP, you’re sadly going to have to wait for forever.

The most obvious participant of the Federal Reserve lovefest are the politicians who reap all the benefits then blame those greedy capitalists. How so? Well, for one, it keeps neoconservatives happy so they can finance their not-so-stealthy quest for imperialism. Then of course are the liberal politicians who are for the “little” guy or “main street”. They may not know that the Federal Reserve helps them but it most certainly does. It helps finance the empire that the neoconservatives so badly want financed. It helps finance things that Democrats love such as universal health care, medicare, medicaid, etc.

Compounding on that a little bit more, we can flirt with the subject on whether there should be a Federal Reserve in general while still answering who benefits. I should be more specific when I say “politicians” in a broad sense of the term. The Federal Reserve benefits, for the most part, only American politicians. For instance, the Chinese government probably does not appreciate being paid back in dollars that are worth less than when they first issued the loan. It’s easy to pay back a loan when you can have the money printed up & sent first class mail with a note that says, “thanks for the business!” However, the creditor does not appreciate being paid back in something that may be the same number of dollar bills but just worth less than originally credited for. More simply put, being paid back in dollars not adjusted to inflation. Who knows, some people might just want to drop that kind of currency as a reserve.

Probably the biggest problem with the Federal Reserve is that it is a slave to the legislature and executive branches. While they claim to be independent, it appears they actually are not. They are pressured heavily by the lobby economists we call Congress. By lobby economists I simply mean, that congressmen somehow know economics as soon as a lobbyist asks them to do something. Whether it’s to push for cheaper homes because there’s no such thing as moral hazard or to pass TARP funds because everyone is too big to fail (by everyone, of course, we mean the CEO’s and board of directors). By passing the Federal Reserve Act of 1913, Congress essentially created a new branch of government. One that has no checks or balances, but just a creature to do as they say because they say it.

To be fair, though, it can’t just be Congress that is responsible. It is also a bad philosophy and bad reasoning. The philosophy of force by regulation and the bad reasoning of destruction as a benefit. I understate Lord Keynes theory but these two really bad ideas are part of the black plague of economic thought. Congress forced banks to rake on risky loans and the Federal Reserve happily subsidized it. When the recession hit, which, of course was a surprise to everyone according to Ben Bernanke, the only possible solution was to keep money flowing through the economy. Never mind the folks who are trying to save their money, they’re part of the problem, according to Ben, we must keep up consumption. We must keep pumping more money into the economy. Never mind the older folks who have a dollar that’s worth less now. Maybe the war will keep the economy a float? Never mind that it diverts production from a useful commodity to a commodity that will is just used for destructive purposes.

Congress gives the broad to-do list to the Fed, which includes whatever the lobbyist want, and then the Fed, with their pro-destruction and pro-regulation policies, take the step further.
The final nail in the coffin is really just looking at why the Federal Reserve was created in the first place just to realize that it failed miserably. After the Panic of 1907, the Democrats were convinced that there must be currency and banking reform. The Federal Reserve was created for situations like that in which they can be the secondary bank and if there were to be a recession, it would be necessary for the Federal Reserve to shorten its length.

In less than seven years after the creation of the Fed there was already a depression that started worse than the upcoming Great Depression. What is important to note here is the length was so short, just one year. What is also important to note is the Fed did minimal, if anything, to stimulate the economy. There may be a debate on whether cutting the size of government and its welfare had contributed to the fast recovery but what is not being debated is the fact that the Federal Reserve did nothing and the economy bounced back on its own.

About nine years later the Great Depression is well on its way. The Federal Reserve fails on its promise to stop the bank runs. It proves less than twenty years later that it can be the necessary bank for banks. The Monetarists blame the Fed for inactivity causing wide spread panic. This assumes that the Fed could even stop them in the first place. On the topic of stopping bank panics, the monetarist may say that there needed to be emergency lending to stop banks from failing. There is a new term for that; bailout. Have the bailouts worked? In the short term, absolutely. However, this just buys time. It’s not a fix, it’s just masking the symptoms of bad monetary policy. This ties in with another cause for the creation of the Fed, currency elasticity. Ask Germany or Argentina how well currency elasticity is. The Federal Reserve acts like currency is forever elastic but even the strongest rubber band can break.

Finally, what has the Federal Reserve actually done to help? There have been eighteen recessions or depressions since the Federal Reserve was created. The durations have the recessions or depressions have since stayed the same as the ones before it. Simply looking at the facts, there is nothing to suggest that the Federal Reserve has successfully combated what it was meant to and  has only helped government officials, bankers, and board of directors, not the people it was marketed to protect.

Has the standard of living risen in the past 99 years? Absolutely. This doesn’t make the case for the Federal Reserve, though. The reason why the standard of living has risen is not because the Federal Reserve is just, oh so responsible in terms of currency stabilization but more because the free markets have produced more and caused higher real wages, making things more affordable.

No Federal Reserve? Than what?

The question comes next to, if no Federal Reserve then what? Are we supposed to prop up another central bank? Heavens no! If the Federal Reserve can’t work, I don’t see why another one would. We simply replace it with nothing. And without it, there goes the fiat currency. This means that the dollar would have to either vanish or represent something. It doesn’t have to be gold but that seems to be where the market would decide it would like. A dollar, if it were to still exist, would most likely represent the weight of gold or silver. No longer would it represent a bank note backed by nothing.

Many of the arguments against gold typically come from a lack of understanding. No, you will not have to carry around gold bullion’s. There will not be a lack of gold to support the world. The “bad” money will not drive out the “good” money. The world will not be fall into an apocalypse just because people are now paying in gold, or receipts of gold, as some seem to think.

I don’t know what people imagine when they think of people paying for things before the United States went off the gold standard but they weren’t necessarily walking around with all of their gold on multiple horses. Banks, credit, and debit still exist. Besides that, generally, silver is often used to buy smaller items anyway. We see the concern of having to walk around with gold does not hold much weight. Aside from the bad pun, there’s not much else to say about this.

As for Gresham’s law, that is to say, the rule that says bad money (for instance, chipped gold) will drive out good money (for an example, gold that is not worn). This is not the correct definition but it is a common criticism. The problem with this is that paying with gold is paying with weight. It is not paying with a certain dollar amount. However, government typically stepped in and said that the chipped gold (which were not the correct weight) were to be considered as good as the regular gold. This is not a desirable, free market law. It is one that is artificial and enforced by government.

One of the other common criticisms is that there is not enough gold to back all the transactions. They say there is not enough supply of gold. This misses out that the total stock of gold is relational to the value of gold. The two are inseparable. If the total stock of gold is down, the value of  it as an exchange medium goes up bringing prices down. It is not desirable to have a high stock of gold because it devalues gold as an exchange value. Similarly, is the “problem” of hoarding. While some people may hoard their money, it does not create a problem. It merely removes gold from circulation thus creating a higher value for gold.

Another thing to keep in mind is that, even if these concerns were true, why would we stick with gold? Free banking does not mean gold. That’s not free. Free banking means we let the people decide what they’d like to use as a currency.

Conclusion

While some things have not been discussed, such as fractional reserve banking, which is essentially what the Federal Reserve does, or the business cycle, I think some major points are proven simply by looking at the history. The Federal Reserve has failed all of its major duties. It has not stopped bank runs, it has not shortened depressions, it has only helped bankers, politicians, and people who were bailed out. The average American is left with no job, devalued money, and no bailout. Americans should not assume that the Federal Reserve knows how to run the economy. They should not assume that the Federal Reserve knows what’s best for all of us.

Even Stiglitz acknowledges liberals shouldn’t be so simple-minded as saying “IT WAS BECAUSE OF GREED THAT X!”

I give him and Krugman credit. Reading both of them and comparing those two to your average liberals makes them look like revolutionary intellectuals. It’s just unfortunate that they’re not. Otherwise they wouldn’t be liberals, right?

Just bought both of these books on Amazon. Joseph Stiglitz vs Murray Rothbard… let the battle begin!

The concept and existence of self-ownership is very important because of its implications and what it entails. Self-ownership is not a concept that is subject to preference. This means we cannot decide whether it is something we ought to follow. Rather it is an ontological question. Does it exist or is it a myth? What is important about it is it could mean two things: private property is possible, Marxism is wrong, and all government, through taxation and laws, has been a huge injustice or the very opposite is true. It means that private property is a myth, capitalism is wrong, and private property is, indeed, theft.

In The Ethics of Liberty, Murray Rothbard argues that there are three possibility of self-ownership:

1. There is a communal and small percentage of individuals that belong to everyone.

2. Partial ownership of one group by another based on majority - a democratic rule.

3. 100% compete self-ownership.

Rothbard went on to criticize the first two proposals finally conlcuding that 100% self-ownership is best for man. However, as mentioned before, this issue is ontological, not ethical. It is not subject to which is preferable, rather, it is a fact of existence. Although, he does make the ethical claim that a person who owns another person is making an act of aggression towards them, this ethical fact is rendered moot if the normal state is that of partial or no ownership. He gives far too much credit to those views. Going as far as to say that it is “utopian” and “impossible” in the context of practicality. That is far too much credit than those views really have to offer. The question is which one of those four is the onotological truth. This intended to be a short criticism of the alternatives with an even shorter inquity into why 100% self_ownershi is the only logical conclusion. The criticisms to be made need not be specific because they are abstract enough to fall into all of the alternative views.

The first criticism is confusion on what it means to own something. The supporters of the first two alternatives don’t seem to have an explanation. It seems intuitive to say that to own something is to have, at the very least, some kind of control over it. Currently I am typing on a computer, I have, at the very least, some kind of control over it. A computer is different than an individual, of course, but the point still stands. This is, actually, inarguable seeing as how the collective group believe, too, that ownership and control are tightly linked. For if it weren’t, nobody would have ownership of anything or anyone. The proponents of any kind of partial ownership may say they have the RIGHT to control over something, or someone, but that is not the same thing as actually having control over a particular thing. They may argue from the moral perspective that they OUGHT to be able to control somebody, however, they can’t take away somebody’s free-will (not to be confused with their freedom). A community can only control somebody through voluntary contractual agreement or through coercion. However, the individual is not a machine in which the collective can sit in a computer room and be controlled. So what exactly does it mean to own something to those groups? It looks to be arbitrary. Since the collective does not have direct control over an individual, it would be arbitrary to say that, “oh well, we define ownership as p.” I am not going into a full discussion on what it means to own something, however, as mentioned before, it seems intuitive to believe that ownership entails at least a small amount of control.

Another problem would be determining what exactly the collective owns. They face the ontological mind-body problem that arises from Descartes’ inquiries into ontology. There is a much stronger reason to believe that the collective does not own the mind. If it did, it would be able to control it. The collective group cannot do that. However, the collective group can try to claim that it owns the body. This is a serious problem. How can it own the body if it’s the mind that controls it? The collective may not lay claim to one without the other. Simply put the argument looks like this:

P1. It is impossible to own the body without the mind because the mind controls the body.

P2. The collective lays claim to own the body.

C1. Therefore the collective must lay claim to the mind and body.

However, we know this not to be true because the collective does not control the mind. It has no access to the mind other than what the individual decides to let them know about themselves. The collective may try to lay claim or a RIGHT to it but that fails on the account that we ought to do only what we can do. Controlling own’s mind is something that is impossible unless it is through external forces. From a moral perspective, we ought to do only what we can do. This may seem controversial at first but if we examine that it’s morally correct to help others in need, would somebody be held accountable if he could not stop a murder and a rape that was happening at the same time in two different areas? That seems preposterous because it is. And we ought to do only what we can do. Even in the context of morality, the collectivist fails.

These two major problems can be solved by accepting the 100% self-ownership. Self-ownership is exempt from the first issue because we have, at least, some kind of control. Perhaps you may deny free-will but we have at least a minimal amount of free-will and that discussion is mostly likely irrelevant to the context in which I am speaking of self-ownership. The second problem is simple, nobody can control somebody’s mind through internal forces. It must be manipulation or external forces. That, of course, still means somebody controls their own mind but has been misled. It is also exempt from the mind-body problem. If we truly do own ourselves completely, it is irrelevant whether the mind and body are separate. We still own both, our minds and our bodies. The collectivists can’t say the same. And lastly, an argument that Hans-Herman Hoppe has put forth, to argue against self-ownership is self-defeating and only proves self-ownership to be true. The very fact of having to use external forces to persuade somebody that there is no self-ownership is evidence enough to show the opposite to be true.