Tuesday, November 6, 2012

End the Fed!

In 1913, the federal government – at the behest of the houses of Morgan, Rothschild, and other plutocratic dynasties – created the Federal Reserve System, the nominal purpose of which was to protect the economy from the ravages of the boom-bust cycle and inflation, two supposedly primordial forces of the free market. Nearly a century has passed since the inception of the Federal Reserve, yet the boom-bust cycle remains more of a menace than ever. In fact, throughout the Federal Reserve’s reign, the threat of the boom-bust cycle has actually intensified, the sharp but swift panics of the 19th century replaced by the dreaded depressions of the 20th century. At the same time, the dollar has lost 95% of its value while under the Federal Reserve's purview, the steady rise of purchasing power in the 19th century subverted by the steady decline of purchasing power in the 20th century. In short, the Federal Reserve has made everything worse, but despite its utter failure, authorities assure the people that the system is working as intended and that life without a central bank would be even worse.

The Federal Reserve's failure is not from human error or corruption, but rooted in its very nature. In fact, the Federal Reserve is constitutionally incapable of achieving its objectives. Far from a check on the boom-bust cycle and inflation, the Federal Reserve is the chief cause of each, along with an unholy host of other evils. Any expansion of credit - the only trick in a central bank's book - is, in essence, inflation, and initiates a business cycle which begins with a boom of false prosperity and concludes with a bust of great anguish. Since the creation of the Federal Reserve in 1913, it has, at the very least, caused and prolonged the Depression of 1920-1921, the Great Depression of 1929-1945, the Great Stagflation of the 1970s, the dot-com, tech, and housing bubbles and busts. In fact, the current "Great Recession" is simply the inevitable bust - albeit one which incessant government meddling has given an unnaturally long life - of the housing boom, a bubble which was not the outcome of corporate greed, deregulation, or tax cuts for the rich, but credit expansion from the Federal Reserve.

The latest example of credit expansion from the Federal Reserve is Chairman Ben Bernanke's four rounds of "quantitative easing." The term quantitative easing is an obfuscation of what is simply an inflationary policy of printing $85 billion per month until unemployment falls below an arbitrary figure, even though an artificial expansion of credit spawns the boom-bust cycles which cause unemployment in the first place. Factor in the upward trajectory of taxes, government expenditures, and regulations, and the prospects for unemployment going anywhere but up appear grim. In other words, "QE infinity and beyond!"

There is a silver lining to Bernanke's repeated bouts of quantitative easing, however, for it has starkly exposed the absurdity of central banking and challenged people to start asking questions. Whenever the Federal Reserve's money printing fails, it simply prints more. A popular definition of insanity is doing the same thing over and over and expecting a different result every time. By that standard, therefore, the Federal Reserve qualifies as insane. Perhaps the spectacle of four failed rounds of quantitative easing - with the promise of it lasting into perpetuity - will inspire a renaissance of the wisdom of Austrian economics and its magisterial theory of the boom-bust cycle, and, at long last, an overturning the tables of the money-changers in Washington D.C.

How an Economy Grows...

One of the great strengths of the Austrian school of economics is that it is completely systematic and rigorously logical. Beginning with self-evident, "a priori" truths (knowledge independent from experience, i.e. "A is A"), Austrian economics methodically builds upon a foundation of pure reason. The final result of this meticulous methodology is a glorious, majestic body of knowledge, all of which is ultimately derived from fundamental axioms, and thus completely consistent. Although Austrian economics is not dependent on "a posteriori" truths (knowledge dependent on experience) for validation, nevertheless, history has vindicated Austrian principles time after time. As Austrian economist Hans-Hermann Hoppe wrote in the introduction to Democracy: The God That Failed, "Theoretical propositions...can be illustrated by historical data, but historical data can neither establish nor refute them."

As expected, Austrian business-cycle theory is rigorously systematic, and consistently integrated into the whole of a larger school of thought. Unlike the business-cycle theory of John Maynard Keynes, which was a disembodied doctrine entirely divorced from any overall system, Austrian business-cycle theory is simply a logical extension of the basic principles of Austrian economics - in this case, the consequences of overriding the subjective valuations of consumers. In fact, years before  Keynes concocted his reactionary, unsystematic theory, Ludwig von Mises and F.A. Hayek, two legendary Austrian economists of the 20th century, had been predicting the Great Depression throughout the 1920s, identifying an expansion of credit from central banks as its cause, and sound money such as full-reserve banking and a gold standard as its cure. From an Austrian perspective, catastrophic economic events like the Great Depression (which Keynesians consider sphinx-like in their inscrutability), are fairly easy to foresee and even easier to fix. Unfortunately, Mises' and Hayek's warnings that the "Roaring Twenties" were a period of false prosperity were ignored. Once the boom turned into a bust, their recommendations for recovery were even less popular than their previous predictions.

Austrian business-cycle theory originates with the concept of time preferences. Time preferences are the extent to which consumers prefer present satisfaction over future satisfaction. All else equal, present satisfactions are preferable to future satisfactions. Consumers balance their consumption over time according to their time preferences, consuming a proportion of their income in the present while deferring the remaining proportion to the future for future consumption (i.e. saving) as well. Since time preferences determine how consumers value present satisfaction over future satisfaction, time preferences, therefore, ultimately establish an economy's ratio of consumption to saving. The degree to which an individual values present consumption over future consumption determines the rate necessary to compensate him for foregoing the present use of his money - i.e. the rate of interest. Higher time preferences mean a higher-valued present, and thus a higher interest rate. A lower-valued present (and by implication, a higher-valued future) means a lower interest rate. Eugen Bohm-Bawerk, one of the elder Austrian economists, described interest rates as a "premium" on present consumption: a higher premium on present consumption yields a higher interest rate, and a lower premium on present consumption yields a lower interest rate. Everyone's individual time preferences, taken in total, establish what Mises termed the "originary rate of interest." Other factors, such as risk and inflation, complicate the picture, yielding an array of different interest rates, but time preferences determine the originary rate of interest upon which all these varying rates are based.

Another way of understanding how time preferences establish interest rates is grasping the role that time preferences play in determining savings. As described above, time preferences determine the degree to which consumers value the present over the future, and thus the degree to which consumers save and invest relative to their consumption. Those with higher time preferences value present consumption over future consumption, and therefore consume a greater proportion of their income than they save or invest. Those with lower time preferences, however, value present consumption over future consumption less, and therefore save and invest a greater proportion of their income for future consumption. Higher time preferences mean greater present consumption, lower savings, and higher interest rates, while lower time preferences mean greater saving/investment, lower present consumption, and lower interest rates. Since, as in any market, supply and demand determine the equilibrium price, then to the extent that time preferences determine the supply of savings, time preferences determine the rate of interest.

The production structure is best represented as a step pyramid, with each level representing a separate order of production. The base of the pyramid, the largest level of them all, represents consumption. Each successive level atop the base represents an additional order of production. Consumer goods are produced at the base, while capital goods are produced in the upper levels. Increased saving resulting from a fall in time preferences "lengthens" the production structure, simultaneously contracting the base and expanding the upper levels. If consumption ever increases, then the production structure will "shorten" to its original dimensions. In a free market, the dimensions of the production structure are zero-sum: a level cannot contract or expand without adding or subtracting resources from another level.

On a free market, falling interest rates are a signal from consumers to businesses that their time preferences have fallen and that savings have risen accordingly. Businesses take advantage of the falling interest rates by borrowing the newly available savings for "capital investments," such as the construction of a new factory or an upgrade to state-of-the-art equipment. Capital investments, centered in the "higher orders" of production most remote from consumers, yield greater future production, but are expensive and lengthy, and thus their financial viability is contingent upon interest rates. Because the fall in time preferences has led to a rise in savings, however, more time and money is now free for the financing of capital investments. The reduced interest rates render capital investments which were once unaffordable now profitable. Indeed, according to Mises, "A drop in the gross market rate of interest affects the entrepreneur's calculation concerning the chances of the profitability of projects considered," for "along with the prices of the material factors of production, wage rates, and the anticipated future prices of the products, interest rates are items that enter into the planning businessman's calculation." Previously, businesses who invested in building capital over producing consumer goods would have forfeited their share of the market and lost profits to their competitors. The fall in time preferences, however, not only encourages businesses to make capital investments, but also supplies them with the savings to sustain their investments. In the future, when consumers begin spending some of their savings, the completed capital investments ensure that future production will be capable of equaling - if not exceeding - future demand. Capital investments may be lengthy and expensive, but they boost productivity and output, which is what consumers are implicitly demanding when they exchange present consumption for greater future consumption.

As capital investment increases, demand for the goods and services - "capital goods" - used in the completion of such investments increases as well. Capital goods are of no particular value to consumers, except as intermediate goods used in the production of consumer goods. Businesses, spending their borrowed savings on capital goods like durable equipment, heavy machinery, raw materials, and construction, raise the prices of such capital goods. Holding all else equal, a savings-driven increase in demand for capital goods logically implies a decrease in consumption, and therefore a decrease in demand for consumer goods as well. Higher prices for capital goods are imputed to the originary factors of production - land and labor - in the form of higher rents and wages. Likewise, lower prices for consumer goods are imputed to the factors of production in the form of lower rents and wages. Following these inverse shifts in demand, factors of production currently employed in the declining consumer-goods industries take advantage of superior opportunities in capital-goods industries, shifting into the thriving production of capital goods. In short, in order to exchange present consumption for greater future consumption, economic resources are reallocated from the production of consumer goods to the production of capital goods. As Rothbard writes in Man, Economy & State, "An increase in saving resulting from a fall in time preferences leads to a fall in the interest rate and another stable equilibrium situation with a longer and narrower production structure."

Barring changes in time preferences, businesses will continue to rely upon a steady stream of savings to finance investments in capital goods and sustain the lengthened production structure. If time preferences rise, less savings will be available for the financing of capital investments. Businesses will then adjust to the change in consumer preferences, abandoning capital investments and resuming the production of consumer goods. Demand for capital goods having decreased, factors of production in the higher orders of production will be forced, at best, to accept lower wages and rents, but more likely will return altogether into lower orders of production, for the reason their job was created in the first place - lower time preferences - no longer exists.

To illustrate, suppose that savings rise as a result of a fall in time preferences. The increased supply of savings reduces interest rates, which makes capital investments more affordable. Since consumers are trading present consumption for greater future consumption - i.e. spending less today to spend more tomorrow - both time and money have been freed for capital investments. Taking advantage of this propitious signal from consumers, a German car manufacturer borrows the savings at the newly lowered interest rates in order to build a new plant in South Carolina. The construction of the plant increases demand for capital goods such as raw materials, equipment, and machinery, creating jobs and boosting wages in capital-goods industries. At the same time, since the construction is financed from savings, consumption has fallen, lowering employment and wages in consumer-goods industries. Resources like land and labor are diverted from their current occupation in the production of consumer goods into the production of capital goods. Because of capital investments from businesses like the German car manufacturer, men may abandon their current jobs to pursue more lucrative work in capital-goods industries like construction, mining, or the manufacturing of machinery. When the plant is completed, the German car manufacturer will be more productive, leading to lower prices from an increased supply, and satisfying the consumers' expectation of saving for greater future consumption. If time preferences ever rose, resulting in a shift in demand from capital goods to consumer goods, some of the resources currently employed in the production of capital goods would be forced to reallocate to employment elsewhere, the market for capital goods and consumer goods having contracted and expanded, respectively.

Falling time preferences are the key to economic progress, for they make possible the saving and investment which is the fountainhead of greater production, lower prices, and a heightened standard of living. Hoppe credits falling time preferences as the "process of civilization" by which civil societies become richer, healthier, more peaceful, and wiser.

...And Why It Crashes

Unfortunately, interference from the Federal Reserve disrupts the natural order of the market. On the free market, interest rates are a vital signal from consumers to businesses regarding the supply of savings in the economy and how savings should be allocated. When the Federal Reserve artificially lowers interest rates, however, businesses are deceived into thinking that the inflationary change in interest rates corresponds to a fall in time preferences and a rise in savings. In fact, no such change has occurred; credit has artificially expanded, but time preferences and savings have stayed the same. As a result, the investments that the businesses undertake in capital goods are doomed to fail, as they are predicated on savings which do not exist and will never materialize.

One of the Federal Reserve's two nominal goals is the promotion of full employment, which it attempts to achieve by expanding credit. The Federal Reserve can expand credit in two ways, both of which amount to the printing of money: expansionary open-market operations and reductions in reserve requirements. The former method, expansionary open-market operations, is when the Federal Reserve prints money to purchase Wall-Street bonds, in hopes that Wall Street, having borrowed for free from the Federal Reserve, will then lend its newly printed money to businesses for capital investment. The inflation in the money supply from the Federal Reserve's buying of bank bonds reduces interest rates, attracting new borrowers on the margin. The latter method of expanding credit, reductions in reserve requirements, is more straightforward than open-market operations. The Federal Reserve, in decreeing what fraction of deposits banks must hold in reserve, plays at regulating the fraudulent fractional-reserve banking system it perpetrates. If the Federal Reserve wishes to expand credit, it can simply reduce the reserve requirements of banks, increasing the amount of money they are legally permitted to print in the form of loans. In the fractional-reserve banking system which the Federal Reserve has foisted on the U.S., a reduction in reserve requirements means that banks will pyramid a larger amount of loans atop a dwindling base of reserves. Whichever way the Federal Reserve chooses to expand credit, inflation from printed money and artificially lowered interest rates from the inflated money supply will inevitably result in a boom-bust cycle of catastrophic proportions.

The Federal Reserve having expanded credit, the inflated money supply forces interest rates to fall. Businesses, who rely upon interest rates as a crucial signal of the level of time preferences and supply of savings, respond to artificially reduced interest rates as if time preferences had actually fallen and savings actually risen, borrowing at the lower rates to make capital investments in order to increase future production. Capital investments raise demand for capital goods, enticing factors of production away from the consumer-goods industries into more lucrative employment in the capital-goods industries.

Yet despite the muddled message businesses are receiving from manipulated interest rates, none of the economy's fundamentals justify the artificial reduction in interest rates. Time preferences have not changed, meaning consumers are still spending and saving in the same proportion they did prior to the Federal Reserve's expansion of credit. Unlike a genuine fall in time preferences, inflation, not rising savings, is behind the apparent demand for capital goods, as newly printed money from the Federal Reserve flows through the financial system to the capital-goods industries. Mises explains in his magnum opus, Human Action, that the "drop in interest rates falsifies the businessman's calculation," for "some projects appear profitable and realizable which a correct calculation, based on an interest rate not manipulated by credit expansion, would have shown as unrealizable." Therefore, the diversion of resources from consumer goods to capital goods is actually a systematic misallocation of resources, which, in restricting the level of present consumption demanded by consumers, not only lowers the overall standard of living, but also sets the economy on a crash course towards a bust. Businesses, in the belief that the reduction in interest rates implies a rise in savings, are tragically misled into making "malinvestments," capital investments which are based upon the expectation of savings which do not exist, and therefore are ultimately unsustainable.

Given the Federal Reserve's distortion of interest rates, the confusion of inflation with savings is entirely understandable. After all, interest rates, like any price, are a vital signal by which consumers communicate their preferences to producers. Prices, if left free, lead to the optimal allocation of scarce resources, "as if guided by an invisible hand," in the famous words of classical economist Adam Smith. Forcibly alter prices in any way, and chaos such as shortages or surpluses will inevitably ensue. Legislation from Congress cannot repeal the immutable laws of economics. Accordingly, when the Federal Reserves meddles with interest rates, the crucial information which consumers are trying to transmit to businesses is corrupted, overturning the natural equilibrium of the market, and leading to a wasteful and unstable misallocation of resources. Once the Federal Reserve prints money in order to artificially expand credit, the ensuing distortion of interest rates compromises its accuracy as a signal of the savings available for capital investment, twisting it into a counterfeit signal liable to lead trusting businesses from the straight and narrow into the jaws of roaring lions.

The difference between genuine economic progress from a fall in time preferences and a boom from a credit expansion is that in the former case the money supply is unchanged, while in the latter case the money supply inflates. Because the money supply stays the same, when time preferences fall, income and employment in consumer-goods industries shrinks, while income and employment in capital-goods industries grows. When credit is expanded, however, both consumer- and capital-goods industries grow, inflation having bloated income and employment in capital goods. Rothbard, in his magisterial Man, Economy & State, illustrates the difference in graphical terms:
“Increased saving on the free market leads to a stable equilibrium of production at a lower rate of interest. But not so with credit expansion: for the original factors now receive increased money income. In the free-market example, total money incomes remained the same. The increased expenditure on higher stages was offset by decreased expenditure in the lower stages. The ‘increased length’ of the production structure was compensated by the ‘reduced widith.’ But credit expansion pumps new money into the production structure: aggregate money incomes increase instead of remaining the same. The production structure has lengthened, but it has also remained as wide, without contraction of consumption expenditure.”
The credit expansion having sown the seeds of a boom in the capital-goods industries, malinvestments, the fruit of the boom, begin cropping up across the economy. The malinvestments of the boom are unsustainable because they are based upon a mirage of savings which will eventually vanish. Indeed, following the credit expansion, as soon as consumers spend and save their money according to their time preferences, the gulf between what interest rates are signaling about the supply of savings versus what consumers are actually saving would be starkly revealed. Since businesses would quickly learn that consumers are not saving in sufficient proportion to finance their capital investments, they would abandon their malinvestments before they took root. Factors of production currently employed in the production of capital goods would be temporarily displaced, but given the undiminished demand for consumer goods, would gradually find employment elsewhere. To counteract the reestablishment of time preferences and perpetuate the boom, however, the Federal Reserve must make its credit expansion a continuous, escalating process, in which ever-increasing sums of money are printed to force interest rates to ever-lower depths. Indeed, according to Mises, "The boom can only last as long as the credit expansion progresses at an ever-accelerated pace."

The boom cannot go on for all eternity. Since credit expansion is simply inflation in the form of lending, each loan of newly printed money depreciates the purchasing power of the currency. Once credit expansion is underway, calamity is inevitable, and the only question is whether the boom will end in a collapse of the currency (resulting from Weimar-style hyperinflation) or a crash in capital goods (resulting from credit contraction). The boom, according to Mises "could not last forever, even if inflation and credit expansion were to go on endlessly," for "it would lead to...the breakdown of the whole monetary system." A currency collapse having been the downfall of many a mightier empire than the U.S. government, the Federal Reserve always opts for the lesser evil of ceasing inflation by contracting credit, despite the certainty of a crash in capital goods. To contract credit, the Federal Reserve must deflate the money supply, and so reverts to a painful policy of selling bank bonds rather than buying them. The ensuing deflation leaves banks with less money to lend, leading to a rise in interest rates which contracts credit. Credit having contracted, the inflation masquerading as savings vanishes, revealing that the boom was a merely an illusion conjured up by monetary magic, or in the apt words of Mises, an "airy castle." Businesses, however, have grown dependent on borrowing to sustain their capital investments, so the credit contraction triggers a precipitous plunge in the demand for capital goods. Once the newly printed money which was confused with savings evaporates from financial markets, businesses learn the hard way that consumers were spending more and saving less than they expected. In particular, consumers were not saving in sufficient proportion to sustain capital investments of the boom. Although some underlying demand for capital goods still stems from savings, what little savings remain are far beneath what the artificially low interest rates led businesses to believe existed, and are incapable of supporting the massive malinvestments of the boom. "As soon as credit expansion stops," writes Rothbard, in his classic essay, Economic Depressions: Their Cause and Cure, "then the piper must be paid."

Instead of factors of production transitioning smoothly into other occupations, as is the case during a natural change in time preferences, the sudden and severe crash in capital goods leads to overnight widespread unemployment. Businesses, doing the best they could with the twisted signals they were given, believed they were building upon a solid rock, but had actually laid a foundation upon sinking sand. Inflation from the Federal Reserve, disguised as genuine savings, tricked businesses into making capital investments which seemed sound and sustainable at the time, but were, in the end, unsound and unsustainable. Mises uses the construction of a house as a metaphor to describe the boom-bust cycle:
"The whole entrepreneurial class is, as it were, in the position of a master-builder whose task it is to erect a building out of a limited supply of building materials. If this man overestimates the quantity of the available supply, he drafts a plan for the execution of which the means at his disposal are not sufficient. He oversizes the groundwork and the foundations and only discovers later in the progress of the construction that he lacks the material needed for the completion of the structure. It is obvious that our master-builder’s fault was…an inappropriate employment of the means at his disposal."
Rothbard, in a succinct eulogy of the boom, concludes that, "Businesses...seduced by the governmental tampering and artificial lowering of the rate of interest...acted as if more savings were available to invest than were really there," and accordingly "overinvested in capital goods and underinvested in consumer goods."

Unfortunately, malinvestments have already taken root in the capital-goods industries. Factors of production, responding to inflated wages and rents in the capital-goods industries, have hitched their wagon to a falling star. Because credit has contracted, businesses can no longer borrow newly printed money from the Federal Reserve to finance their capital investments, leading to a steep drop in demand for capital goods. Without sufficient demand, businesses must begin the painful process of liquidating their malinvestments. Income and employment in the capital-goods industries will be reduced. Labor will be unemployed, land will be vacant, and the wages and rents of both will be beneath what they earned during the boom. Rothbard, in Man, Economy & State, paints a bleak portrait of the economy in the wake of a crash in capital goods:
“The depression is the...stage during which malinvested businesses become bankrupt, and original factors must shift back to the lower stages of production. The liquidation of unsound businesses, the ‘idle capacity’ of the malinvested plant, and the ‘frictional’ unemployment of original factors that must suddenly and en masse shift to lower stages of production – these are the chief hallmarks of the depression stage.”
Known as the "bust" or "depression," this painful period of the business cycle is when, according to Rothbard, "the inevitable readjustments liquidate the unsound overinvestments of the boom, with the reassertion of a greater proportionate emphasis on consumers' goods production." In other words, the bust is when the mistakes of the boom are corrected. In fact, the bust is essentially the reemergence of the time preferences which were buried beneath the mountains of money the Federal Reserve lavishly heaped upon the economy. The factors of production are reallocating from the production of capital goods for which there is no longer - and was never - a market into the production of consumer goods for which a neglected market has been rediscovered. As old jobs in the capital-goods industries become obsolete, new opportunities in the previously neglected consumer-goods industries will emerge. Rothbard concludes that, "the depression phase is actually the recovery phase," in which the distortions of the boom are purged and the economy begins to rise again, harder and stronger:
“The depression period...is the necessary recovery period; it is the time when bad investments are liquidated and mistaken entrepreneurs leave the market – the time when ‘consumer sovereignty’ and the free market reassert themselves and establish once again an economy that benefits every participant to the maximum degree. The depression period ends when the free-market equilibrium has been restored and expansionary distortion eliminated.”
Once the bust occurs, optimal government policy would be total laissez-faire, i.e. the government does absolutely nothing. For the economy to recover, resources must be free to reallocate into the production of goods in accordance with consumer preferences. The unemployment of the bust will quickly vanish as the factors of production, responding to readjusting prices, reallocate from the higher orders of production to the lower, finding employment in new occupations geared towards satisfying consumer preferences. So long as the government abstains from intervening in the economy, busts will be steep but swift.

Sadly, it is not in the government's nature to do nothing, for the government always lusts for more money and power, and will always invent some pretext to do something. Waging an eternal war on the boom-bust cycle is the perfect pretext for the government to expand its usurpation of life, liberty, and property, for so long as central banks exist, booms and busts will never disappear. Thus, in a lame attempt to overcome the depressions it creates, the government expands credit, props up prices, and taxes and spends more money, usually all three at once. As expected, this unholy trinity of government intervention makes everything far worse, prolonging the bust and hindering a recovery.

First and foremost, the government must resist falling prey to the temptation of inflating its way out of a bust. Even if reinflating the bubble provides a temporary stimulus, it resolves none of the fundamental issues plaguing the economy, and merely delays and deepens the inevitable day of reckoning. Another round of credit expansion will spawn more malinvestments that must eventually be liquidated and debase the purchasing power of the currency. Like an addict clamoring for one more indulgence, credit expansion may feel good in the moment, but only makes the inevitable detoxification worse. Since it was an expansion of credit which crashed the economy in the first place, the folly of resorting to the same measure should be evident, but the government is not above cheap tricks to exculpate itself from responsibility for its failures, if only until after the next election.

Second, without prices free to readjust as an expression of consumer preferences, the natural recovery of the economy will be subverted. Government meddling with prices can take several forms, ranging from imposing a minimum wage to bailing out bankrupt businesses. A minimum wage, by restricting the levels to which the price of labor may fall, keeps a few employed at artificially an artificially high wage rate, but keeps many more unemployed. A minimum wage, therefore, creates systemic unemployment, the effect of which is amplified during a bust, when the number of unemployed willing and able to work at wage rates that the government has forbidden is greater than ever. Attempts to "prop up wage rates or prices of producers' goods," according to Rothbard, "will prolong and delay indefinitely the completion of the depression-adjustment process," causing "indefinite and prolonged depression and mass-unemployment in the vital capital-goods industries." A minimum wage is not the only way that the government meddles with prices, however. Bailouts overturn the vital signals of profit and loss, without which a free market cannot function. Profits are a signal to businesses from consumers that they are producing something which consumers demand, as well as a call for greater supply. To increase supply, businesses invest in expanding production, bidding away resources from other less profitable businesses. Losses, by contrast, signal to businesses that they are no longer producing something which consumers demand, and that resources could be better-utilized elsewhere. Accordingly, businesses respond to losses by cutting costs (freeing up resources), and attempting to improve or redevelop their products (trying to more efficiently utilize their remaining resources). Bailouts, however, disrupt the free market's circle of life, diverting resources to failing businesses for the sake of saving jobs as if they were an end in themselves, not a means to producing what consumers demand. The signals of profit and loss thus perverted, the strong are punished while the weak are rewarded. Scarce resources will remain wasted in jobs which consumers have signaled no longer produce anything of value, and businesses which actually satisfy their consumers will be unable to expand production fully. So the vaunted Bush-Obama bipartisan bailout of Detroit, which "saved" the U.S. auto industry, was actually a colossal misallocation of resources, keeping land and labor employed in obsolete jobs in defiance of consumer preferences. Rothbard cautions against attempts to "prop up unsound business situations," stating that the government "must never bail out or lend money to business firms in trouble," for "doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease." In both cases, government intervention thwarts the valuable signals which falling prices send, preventing the reallocation of resources from malinvestments and into productive employment.

Last but not least, the government, in the words of Rothbard, "must do nothing to encourage consumption, and it must not increase its own expenditures." Aside from the obvious absurdity of confiscating property from taxpayers for redistribution to tax-beneficiaries will grow the economy (what Mises rightly ridiculed as "Santa Claus"), the logic of Keynesian economics - that consumption drives output, "under-consumption" causes depressions, and that stimulating consumption can counter the business cycle - is spurious, root and branch. In fact, it is "over-consumption," not under-consumption, which causes the bust in the first place, as businesses, acting on information which indicated that consumers would spend less and save more than they actually did, made investments in capital goods which proved ultimately unsound and unsustainable. As Rothbard keenly observes, "What the economy needs is not more consumption spending but more saving, in order to validate some of the excessive investments of the boom." Salvation can be found in saving, yet Keynesian fiscal policy sacrifices saving on the altar of consumption, thereby exacerbating the depth and duration of the bust. For at a time when savings are the only hope of redeeming misguided malinvestments, savings are seized to spend on stimulus.

In 1850, Claude Frederic Bastiat, a French classical liberal, wrote a brief but brilliant essay titled, "That Which is Seen, and That Which is Not Seen." Bastiat begins his essay with the profound insight that:
"In the economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen."
Bastiat concludes that a bad economist merely "takes account of the visible effect" and thus "pursues a small present good, which will be followed by a great evil to come," but that a good economist is "one who takes account of both the effects which are seen and also of those which it is necessary to foresee," and thus "pursues a great good to come, at the risk of a small present evil." Bastiat then proceeds to refute all forms of economic intervention - including stimulus, known then as "public works" - on the basis of their evil unseen consequences. Indeed, the seen effects of stimulus are the multitude of supposed benefits from public works, but the unseen effects are the opportunity costs, the alternative possibilities which could have been achieved had all the money taxed and spent as stimulus remained in private sector. What is seen are "jobs created" from repairing pothole-ridden roads during rush hour, or "jobs saved" (to borrow a particularly preposterous piece of Obama's parlance) from bailing out broke state and local governments and their unions, but what goes unseen are the jobs that would have been created or saved if consumers were able to spend and save more of their money according to their own preferences. Furthermore, while the seen are jobs favored by politicians for whatever reason, the unseen are jobs stemming from consumer demand. The seen are jobs created at the expense of others for some politician's pork-barrel project, but the unseen are the jobs that would have been created for the production of a good/service mutually beneficial to the business and consumer alike. Factoring in the detrimental substitution effects of taxation, it becomes clear that when government endeavors to counteract the boom-bust cycle, it does more harm than good. Just as the Wizard in "The Wizard of Oz" urges Dorothy and her companions to "pay no attention to the man behind the curtain" as he attempts to dazzle them with sound and fury, so the government attempts to awe the people with the seen while keeping the unseen concealed. Indeed, revelation of the unseen deals a fatal blow to the entire concept of countercylical policy, and thus a source of tremendous money and power for the government.

The terminology of the two rival schools is shockingly revealing. Austrian economics prescribes a natural healing process in which the economy recovers as the factors of production reallocate to reflect the preferences of consumers, while Keynesian economics demands that "shocks," "jolts," "injections," and even "experiments" be forced upon the economy in order to "stimulate" it back to life. Austrian economics treats the economy like a recovering addict struggling through rehabilitation, while Keynesian economics treats it like Frankenstein's monster.

Rothbard concludes that any government intervention, however well-intended, is doomed to fail, and that a pure policy of laissez-faire is the only way for an economy to overcome a depression and resume its natural progress:
"Thus, what the government should do, according to the Misesian analysis of the depression, is absolutely nothing. It should, from the point of view of economic health and ending the depression as quickly as possible, maintain a strict hands-off, laissez-faire policy. Anything it does will delay and obstruct the adjustment process of the market; the less it does, the more rapidly will the market adjustment process do its work, and sound economic recovery ensue."
Fame, Fortune & the Federal Reserve

Since Woodrow Wilson enacted the Federal Reserve into law in 1913, every president has circled the wagons around the Washington D.C.'s own counterfeiting cartel. Wilson, obeying the orders of the Rockefeller puppet-masters of his presidency, was following the ignoble example of Dishonest Abe, who signed the National Banking Acts of 1863, 1864, and 1865 at the behest of his Treasury Secretary, Salmon Chase. All of these men, however, puppets and puppet-masters alike, were part of Alexander Hamilton's grand design. Hamilton, the American godfather of central banking, national debt, high taxes, and corporate welfare, schemed to unite the economic interests of the wealthy with the power of the federal government, in hopes that the wealthy would then develop an entrenched interest in consolidating federal power. As soon as American independence was won, Hamilton embarked upon a subversion of the Revolution, what his arch-nemesis Thomas Jefferson trenchantly labeled "the means by which the corrupt British system of government could be introduced to the United States." After orchestrating the overthrow of the classical-liberal Articles of Confederation, Hamilton, acting as George Washington's Treasury Secretary, under false pretenses of "establishing national credit," incurred an enormous national debt, levy exorbitant taxes, and found an unconstitutional central bank. A national debt would grant rich bondholders access to the spoils of the federal treasury, and a regime of high taxes would plunder taxpayers to repay the bondholders - stealing from the poor and giving to the rich. The most damning example of Hamilton's dishonor and greed was his formation of an insider trading ring among his political allies. Hamilton and his cronies, acting on privileged information, bought war bonds from patriots of the Revolutionary War at a steep discount, which they redeemed at face value once the federal government nationalized the states' wartime debts. Hamilton, a veteran who served under Washington himself, had ulterior motives in fighting for American independence: not for freedom from English tyranny, but for control of the very same tyranny reestablished on American shores. Far from a Founding Father like Jefferson or Madison, Hamilton's betrayal of the founding principles of the U.S. makes him more of a Founding Stepfather than anything else.

The First Bank of the United States would be Hamilton's crowning achievement. As with the national debt and taxation, Hamilton pretended to support the First Bank of the United States as a matter of public policy, but he harbored ulterior motives. Specifically, a central bank like the First Bank could provide cheap credit to Northern bankers and manufacturers - inflation be damned - further wedding the economic interests of the wealthy to the federal government, all part of Hamilton's plan to create a ruling class in the North. The South, which was predominantly classically liberal, agrarian, and reliant on free trade (unlike Hamilton's North, which was predominantly statist, industrial, and mercantilistic), refused to be enslaved in a Hamiltonian regime of central banking, high taxes, and corporate welfare. For generations, the South fought for its freedom in corridors of Washington D.C., the halls of state capitals, and, ultimately, on the battlefield. Today, Hamilton's corrupt union between the wealthy and the federal government - what Thomas DiLorenzo calls "Hamilton's curse" - is still plaguing politics, and has only worsened with age. As columnist George Will profoundly observed, "We honor Jefferson, but live in Hamilton's country." In particular, the supposed success stories of Mitt Romney and Barack Obama capture how Hamilton intended for central banks to corrupt politicians of any party.

Romney, the Republican presidential candidate attempting to weasel out of his statist past and into a taxpayer-funded lavish lifestyle in the White House, is, predictably, a staunch proponent of the Federal Reserve. In token tribute to the Ron-Paul libertarians his campaign ruthlessly suppressed at the Republican National Convention in Tampa, Romney makes vaguely sympathetic noises about "auditing" and "overseeing" the Federal Reserve, but otherwise ignores the subject altogether, instead rallying Republicans around "repealing and replacing" ObamaCare (with RomneyCare, the blueprint for ObamaCare), "cracking down" on China for "manipulating its currency" (to prop up the dollar, keep Chinese goods affordable in the U.S., and finance federal deficits), and drawing a "red line" on the impotent Iranian government's nuclear ambitions (which, if they ever existed at all, were abandoned almost a decade ago). Romney as a supposed alternative to Obama is a disheartening prospect, to say the least, but that is what a century of two-party statism has wrought: two tyrannical political parties that differ only in degree, not in kind.

As chief of Bain Capital, Romney made his billions during the longest bull market in U.S. history. Alan Greenspan, Chairman of the Federal Reserve during Romney's reign at Bain, oversaw monetary policy that was so inflationary - even by central-banking standards - that Wall Street invented a term, "the Greenspan put," to describe Greenspan's proclivity of expanding credit to prop up securities markets. Romney, like other private-equity investors at the time, made his money by taking advantage of the artificially low interest rates from Greenspan's Federal Reserve to acquire small but stable companies which he promptly resold after stripping for parts and saddling with debt. Shortly after Romney plundered his profits, most of the companies in which he invested would declare bankruptcy, unable to cope with the burdens that Romney had left them. David Stockman, Ronald Reagan's budget director, calls private-equity investors "capitalism's natural undertakers - vulture investors who feed on failing businesses." In a free market, this ugly but essential role would be a part of the market's circle of life - reallocating resources from lower-valued to higher-valued uses. Thanks to the Federal Reserve, however, Stockman says "they have now become monsters of the financial midway that strip-mine cash from healthy businesses and recycle it mostly to the top 1%." Although Romney tries to pose as John Galt, he did not build a business the old-fashioned way, by investing his savings and creating a customer, but by leveraging cheap credit, speculating amid a bubble, and banking on bailouts.

Obama, the reigning president poised to win reelection despite doubling the federal deficit (which he promised to halve), keeping unemployment above 8% for practically all of his presidency (which he promised his stimulus spree would prevent), codifying into law Dubya's unconstitutional surveillance, detention, torture, and assassination powers (which he promised he would abolish), expanding the foreign wars in Afghanistan and Iraq (which he promised he would end), has recently learned the value of the Federal Reserve's printing press to a president intent on spending trillions of dollars until kingdom come - priceless. Before his days of dancing on the Ellen Degeneres Show and "slow jamming" the news on Saturday Night Live, Obama worked in Chicago as a "community organizer" for the Association of Community Organizations for Reform Now (ACORN). In its "People's Platform," ACORN pledged that, "We will continue our fight until the American way is just one way, until we have shared the wealth." A glorified shakedown syndicate, ACORN was a creature of the Community Reinvestment Act, truly idiotic legislation which, in the name of equality, violated banks' property rights and fiduciary duties by coercing them into making excessively risky loans to minorities with poor or no credit. ACORN, one of the "community organizations" created under the CRA to enforce its affirmative-action lending, would threaten banks that unless they paid a bribe, ACORN would file a lawsuit with the Federal Reserve, which was in charge of administering the CRA. Although ACORN was supposed to loan the money it pilfered to subprime borrowers (what could possibly go wrong?), most of it was redirected to voter-registration drives, donations to political campaigns, and lobbying efforts. To put it bluntly, ACORN committed legalized extortion, relying on the threat of punishment from the Federal Reserve to intimidate banks into submission. Many innocent businesses facing lawsuits are subject to the same infuriating dilemma as ACORN's victims, for the cost of fighting and winning a legal battle is much higher than the cost of simply settling out of court. Past presidents, despite their unforgivable crimes against life, liberty, and property, at least came from honest professions, and many were even self-made men, war heroes, or scholars - sometimes all three. Barack Obama's origins, however, were as a low-life criminal with delusions of grandeur who collaborated with the Federal Reserve to profit from the exploitation of unjust legislation, and that was before he went into the organized crime of politics.

To paraphrase U.S. Senator Robert Toombs' exhortation to his native Georgia to secede from the Union, no wonder Romney and Obama cry aloud for the glorious Federal Reserve, for by it they got their wealth. In protecting the Federal Reserve for their own personal gain, Romney and Obama are crony capitalists of the ruling class after Hamilton's own heart. Thanks to the Federal Reserve, Romney, a private-equity pirate who sailed the stock-market seas in search of sinking ships to sack, made his fortune, and Obama, a street thug who muscled banks into paying protection money to him and his fellow militant Marxists, made his name. The Founding Fathers, their Revolution having been betrayed, must be rolling in their graves, but Hamilton, his diabolical plan proceeding exactly as he foresaw, is surely sleeping like a baby.


Love of sound money and hatred of central banking is as American as apple pie. Gold and silver are the only forms of money endorsed in the Constitution, while the issuance of paper money is prohibited. Thomas Jefferson feared that central banks were "more dangerous than standing armies," and Andrew Jackson condemned central banks as "a den of vipers and thieves." Both of the Federal Reserve's predecessor banks were enthusiastically abolished, and the most prosperous periods in U.S. history were those founded upon a gold standard. Despite the success of sound money and stigma of central banking, however, the Federal Reserve still exists, and has become a permanent fixture in the federal pantheon, its pronouncements accorded undeserved reverence from the rulers and ruled alike. Nothing could be more contrary to America's heritage than the mere existence of the Federal Reserve, to say nothing of the outrageous respect it commands.

So long as the Federal Reserve exists, the economy will continue to lurch from boom to bust, the country's prosperity dwindling with every crash. The Federal Reserve is a cancer afflicting the economy, and until it is abolished, all other economic issues are obsolete. In the full scheme of things, whether tax rates are a few percentage points higher or lower, whether government expenditures should comprise a greater or lower share of gross domestic product, and whether regulations should tighten or loosen, is meaningless beneath the towering shadow of a Federal Reserve which generates massive misallocations of resources that can trap the economy in a permanent state of stagnation or regression. All other economic issues pale in comparison. In the words of Ron Paul in End the Fed:
"After all is said and done, the Fed has one power that is unique to it alone: it enables the creation of money out of thin air [...] Given that money is one half of every commercial transaction and that whole civilizations literally rise and fall based on the quality of their money, we are talking about an awesome power, one that flies under cover of night. It is the power to weave illusions that appear real as long as they last. That is the very core of the Fed's power."
"Ending the Fed," as Ron Paul urges, would preserve peace and prosperity, as well as protect the life, liberty, and property of the people. Austrian economics shows that the writing is on the wall for the Federal Reserve. Even if the Federal Reserve is never abolished, it will ultimately destroy itself, for the economy cannot survive an eternal onslaught of booms, busts, and inflation. The Federal Reserve will either be repealed voluntarily or collapse beneath its own weight, for an institution that unnatural and evil cannot endure forever. In the wise words of Bob Marley, "As it was in the beginning, so it shall be in the end."

Tuesday, September 11, 2012

Civil War in Tampa, Class War in Charlotte

The Republican and Democratic parties, the twin pillars of the imperial government currently occupying the state of Virginia, just recently finished their taxpayer-funded conventions in Tampa and Charlotte, respectively. Statists of both colors, red and blue, came creeping out of the woodwork to bend the knee to their presidential candidate, marvel at their own magnificence, condemn their opponents as enemies of truth, justice, and the American way, and of course, worship at the altar of the almighty government. Would that the convention halls of Tampa and Charlotte, crawling with sociopathic mass murderers, glorified looters, and meddlesome petty tyrants, receive the same judgment which God accorded to the depraved Old-Testament cities of Sodom and Gomorrah, the world would be a far better place for life, liberty, and the pursuit of happiness.

"This Is How Liberty Dies - To Thunderous Applause"

Since the 2008 presidential campaign, Ron Paul and his libertarian alliance, have devoted themselves to working within the system of the Republican Party. The plan was to take advantage of the party framework to obtain publicity for Ron Paul's message which he would not have otherwise received, while also gradually gaining influence within the party to restore its Old-Right tradition of men like non-interventionist Robert Taft and anti-Fed Charles Lindbergh. Although Paul encountered vicious resistance from the Republican establishment in both 2008 and 2012, the persuasive power of peace, liberty, and prosperity continued to prevail against the entrenched statism of the neoconservative-dominated Republican Party. Ron-Paul libertarians began cropping up across the country, from places as different as frosty New England, the sleepy South, and the wild West. Ron Paul rallied a diverse group of people to the cause of liberty, including active-duty soldiers who knew firsthand the horrors of war, housewives who home-schooled their children in fear of public-school indoctrination, entrepreneurs who helped themselves by helping others, senior citizens who had seen it all and then some, and of course college students bursting with idealism. Most of Ron Paul's supporters were not lifelong libertarians, but disenchanted Republicans and Democrats who had become jaded by the status quo of politics. Ron Paul inspired people not only to volunteer and contribute to his campaign, however, but also to become active in politics themselves, leading to the election of many "liberty candidates" at local, state, and federal levels. Ron Paul sowed the seeds of a truly bottom-up revolution in defense of liberty, which he hoped would take root in and benefit from the infrastructure of the Republican Party. Sadly, he was terribly mistaken.

In the 2012 Republican primary, Ron Paul won a majority of the delegates in nine states - Virginia, Louisiana, Maine, Minnesota, Iowa, Oregon, Massachusetts, Oklahoma, and Nevada, a diverse group of Rebels, Yankees, and cowboys only Ron Paul could unite. According to the Republican Party's own rules, any candidate who wins a plurality in five or more states is considered a presidential nominee, and is accorded a speaking position and a vote on the convention floor. Since Ron Paul won at least five states - indeed, he won nine - he was an official nominee due certain privileges. The Republican Rules Committee, however, fearing that the image of a divided party would undermine the presidential prospects of the establishment-anointed Mitt Romney, treacherously decided to amend its rules in order to subvert the democratic process so that Ron Paul's voice and his delegates' votes would be suppressed.

Leading up to the convention, the Republican National Committee, hoping to preempt a Ron-Paul presence, twisted technicalities to decree that the duly elected delegations of Louisiana, Oregon, Massachusetts, and Oklahoma - all Ron-Paul states - were disqualified. Despite going to great lengths to disenfranchise Ron-Paul delegates, the RNC still failed to achieve its goal of lowering Ron Paul's states to beneath the five-state minimum. In response, the Republican Rules Committee tried to amend the five-state threshold to a ten-state threshold. Fortunately, that blatant power play was defeated, thanks to the opposition of a Virginia committeeman who appreciated how the amendment would disenfranchise not just his state, but any minority voters outside of the Republican establishment. Thwarted, the RNC then tried a different strategy. After reinstating a few of the previously banned Ron-Paul delegates from Louisiana and Massachusetts, the RNC then unilaterally stripped the entire Maine delegation of its eligibility. Because the RNC did not reinstate enough Ron-Paul delegates to restore his fairly won majority in Massachusetts and Louisiana, the removal of the entire Maine delegation left him with only four states, the other five he won having been banished from the convention by executive fiat.

As if the fact that the Republican establishment cheating Ron Paul of his hard-fought and well-earned place at the convention and disenfranchising delegations from five Ron-Paul states were not bad enough, the manner in which the Republican establishment seized power added insult to injury. Romney delegates applauded and chanted "USA! USA! USA!" like football fans from Oakland or Philadelphia as the RNC, in the fashion of a Communist government staging a sham election, dictatorially overruled primary results, depriving Maine delegates of their democratically won positions, and replacing them with establishment-appointed lackeys who would vote for Romney as their masters commanded. "It's a disgusting, disgusting display of a hostile takeover from the top-down," moaned an unseated Maine delegate.

Apparently, to Romney delegates, either the ends justify the means or there is something "American" and worthy of cheering in the outright stealing an election. What made the RNC's bullying of Ron-Paul delegations so puzzling was that Romney's nomination was already assured, his delegates outnumbering Ron Paul's four to one. The RNC could have completely avoided controversy by seating Ron Paul's delegations, granting Paul the privileges he was due as a nominee, then proceeding to anoint Romney anyway, but they chose conflict over comity. Romney and the RNC have forgotten that the point of a convention is for all factions to come together to discover common ground and reconcile differences, not for the majority to lord itself over the rest of the party. Indeed, despite the fact that Ron Paul represented 20% of the Republican delegates and millions of politically active voters from all walks of life, Romney has made a point of not courting Paul at all, and has actually distanced himself from Paul on many issues. The RNC's treachery against Ron Paul and his delegates was not practical but personal, a vindictive insult and pointed threat aimed at any with the audacity to champion, peace, liberty, and other principles of the Founding Fathers in the Republican Party. "There's nothing American about what just happened," protested a Nevada delegate after the RNC refused to seat him and his fellow delegates. "This is the death of the Republican Party." Good riddance, he might have added.

The Republican establishment did not stop at persecuting Ron-Paul delegates, however. Just as the Roman Empire salted the earth upon which the ruins of Carthage stood to ensure that nothing would ever grow upon that fallow ground again, the RNC staged a coup to prevent a grassroots uprising from ever daring to challenge the establishment again. To accomplish this bold task, the Republican Rules Committee proposed "Rule 16," an amendment which turns primary elections into less of a bottom-up process in which the voters have the power and into more of a top-down process in which insiders and officials in smoked-filled rooms call the shots. Specifically, Rule 16 forces state-level Republican officials to revise their state's primary election procedures so that delegates are apportioned on a winner-take-all basis, and grants state parties the authority to dismiss delegates attached to candidates of whom they oppose. Rule 16's changes to apportionment turn state delegations into monoliths which disproportionately over-represent the plurality winner and are less-representative of how the people actually voted. Rule 16's changes to how delegates are "bound" allows the state party and primary candidates to enter into a conspiracy in which delegates can be removed and replaced at will, in direct contravention of how the people of a state actually voted. For example, if four Republicans ran in a state primary, with Areceiving 45% of the vote, B and C receiving 10% between themselves, and D receiving 45% of the vote, Rule 16 would allow the two 5% candidates to remove their delegates and replace them with D-appointed delegates (perhaps in exchange for preferential treatment when sharing the spoils of the presidency), thus redistributing their 10% to D, despite the fact that the people of the state voted for B and C. Rule 16 makes a mockery of democracy, suppressing large swathes of voters in a misguided mania of projecting unanimity and placing plenary power in the hands of the party and politicians over the people. Grassroots candidates must now overcome new RNC-erected barriers in the already formidable fight of overthrowing an incumbent. Rule 16 reveals that disenfranchising Ron-Paul delegations was only the first step in a greater plan to institute obstacles which ensure that those brave few who follow in Paul's footsteps will be at an even greater disadvantage than their intrepid predecessor.

There were some, however, who resisted Rule 16, rightly seeing it for the shameless usurpation of power it was. While debate raged on the convention floor, the delegations from Virginia and Rhode Island, which opposed Rule 16, were forcibly detained from the vote, circling around the convention in a bus for 45 minutes. By the time the delegations finally arrived, the deed had been done: Rule 16 was on the books. Even more egregious, however, was the shocking revelation that the floor vote on the adoption of Rule 16 was not a legitimate vote, but a completely scripted sham. John Boehner, current Speaker of the House presiding over the proceedings, called for a verbal vote, in which delegates in favor of centralizing electoral power were to shout "aye," and delegates in favor of keeping elections decentralized were to shout "nay." Despite booming shouts from both sides, Boehner quickly declared that, "In the opinion of the Speaker of the House, the ayes have it," ratifying Rule 16 without ever taking a real vote. Footage from the convention reveals that Boehner's "opinion" that "the ayes have it" was actually a line he was instructed to recite from a teleprompter. In other words, the Republican establishment had determined the election results ahead of time, the vote itself a mere charade to conceal the coup. Unfortunately, when ardent opposition to Rule 16 and Boehner's weak performance revealed the Republican establishment's ruse, Romney delegates lacked the integrity to demand a fair vote, applauding their false victory like an unethical football fan who cheers when his team benefits from a bad call. Perhaps the Republican establishment was giving the party a free preview of what life will be like under Rule 16.

While Republican insiders are busy slapping themselves on the back for ramming through cheap shots and power grabs the way the Democrats rammed ObamaCare into law, perhaps they might reflect on the story of how Ronald Reagan, by far the party's most popular president at home and abroad, won the presidency. In 1976, Reagan, a conservative outsider within the Republican Party, challenged the statist Gerald Ford in the presidential primary. Reagan and other conservative delegates fought Ford doggedly, and were able to force a brokered convention. Ford went on to lose the presidential election to Jimmy Carter, but by 1980, because of the grassroots uprising of 1976, Reagan had risen to prominence and was in a position to win the presidency. Such underdog success stories are precisely what Rule 16 targets for elimination, however. Brian Dougherty, a delegate from Pennsylvania, explains how Rule 16 would have changed the course of Reagan's life:
"Now these rules as they are, if they were in place in 1976, Ronald Reagan would never have risen to power in the Republican Party. When he challenged Ford in 1976, he would not have had a say. And then he would not have been in a position to win in 1980. So we would not have had a President Reagan if these rules had existed back then."
Chances are, the Republican establishment does not want to risk aborting a potential Reagan, especially when Reagan is the standard by which every other Republican presidential candidate is judged - and falls short.

The full aftermath of the Republican establishment's despicable, despotic tactics in Tampa remains to be determined, but it is certain that the party may have purged millions of passionate and principled voters, sealing its doom in the coming presidential election as well as jeopardizing the future of the party altogether. Michael Steele, former Republican National Committee Chairman, ridiculed the Republican establishment's abuse of Ron Paul and his delegations:
"What the Republican National Committee did to Ron Paul was the height of rudeness and stupidity for this reason: why would you alienate an individual who has the ability to attract a new generation of voters, who are already skeptical of your institution but are willing to at least listen through the vehicle of this individual and the words that he is saying? Why would you alienate them, get on the floor and not let them speak? Not have his name go up on the board and see the number of electoral votes that he receives? This is crazy! They fear that which they cannot control."
Steele is right; if the Republican establishment was thinking strategically, it would realize that it has far more to gain in an alliance with Ron Paul and his liberty candidates. Unfortunately, statism is deeply embedded in the Republican Party, driving irreconcilable differences between neoconservative Republicans and Ron-Paul libertarians that make an alliance unlikely. The reason the Republican establishment is so afraid of Paul is because the bills for decades of fiscal profligacy, arrogant imperialism, and avaricious centralization of authority are finally coming due. Ron Paul is ardently opposed to everything for which the Republican establishment stands - sound money over central banking and fiat money, peace and trade over imperialism, a government limited to defending property over the entitlement and welfare state, and Thomas Jefferson over Abraham Lincoln - and has, much to the Republicans' chagrin, been prophetically predicting the coming crash for years. Ron Paul is right, which infuriates the declining and falling Republican establishment to no end. The fact that Ron Paul's message of peace and liberty resonates with such a diverse cross-section of Americans is truly terrifying to the Republicans in power.Seeing the writing on the wall - not just in the descent of its empire but in the ascent of Ron Paul - the Republican establishment fears the impending loss of its money and power, and like a cornered, wounded, frightened animal, is overpowered by instincts of self-preservation, lashing out with all its might.

The Republican Party's treachery in Tampa should come as no surprise to Ron-Paul libertarians. After all, the Republican Party, despite its brief Old-Right phase during the first half of the 20th century, was originally conceived in the 1850s as a pro-government/anti-liberty party of mercantilism, and seized power in the 1860s to inaugurate mass murder and economic exploitation against the free and independent Southern states. John Sherman, brother of Federal war criminal William T. Sherman, explained that the goal of the Republican Party was "to nationalize as much as possible, even the currency, so as to make men love their country before their states. All private interests of individuals, all local interests, all banking interests, the interests of individuals - everything - should be subordinate now to the interest of the government." No wonder the Republican Party was not above crushing a fifth of their delegations in the name of party unity; authoritarianism runs deep in their blood. In more recent years, the Republican establishment has fought the ascendancy of Ron Paul tooth and nail, employing tactics ranging from the overt (attempting to exclude Ron Paul from primary debates, sanctioning intimidation tactics and outright violence against Ron-Paul delegates, trying to nip liberty candidates in the bud by funding/endorsing establishment candidates in Republican primaries, etc.) to the covert (portraying Ron Paul as a "kook," maligning his principles as "crackpot" and "anti-American," accusing him of racism and "blaming America for 9/11," minimizing his presence in presidential primaries, etc.). The Republican establishment is afraid of letting Ron Paul be heard because they know that, as Samuel Adams said, "It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men." Free speech for Ron Paul means freedom in the minds of men - a threat to the U.S. empire over which Republicans and Democrats share rule, and from which they share the spoils.

Republicans have chosen ideological purity over strategy; they want pro-government/anti-liberty neoconservatives marching obediently in their ranks, not independent-minded libertarians, paleoconservatives, constitutionalists, or any Old-Right faction for that matter. Even the Tea Party, a fairly conventional conservative grassroots movement, is considered too extreme for the statists of the Republican establishment. Rather than continue to work within a system in which they are not welcome, Ron-Paul libertarians should part ways with the Republicans, choosing between joining an existing third party (like the Libertarian Party), running independently, or forming a new third party. For Ron-Paul libertarians to associate with the Republican Party, no matter how convenient, inflicts serious damage upon their personal credibility and, more importantly, the persuasive power of their message. Now that the Republican establishment has just forced Ron Paul and his delegations from the convention, the futility of trying to compromise with the Republicans should be crystal clear. The Republican establishment views Ron Paul as an enemy, not an ally, so much so that it would actually risk civil war at its own convention in order to disenfranchise his delegations and deprive him of his privileges as a nominee.

Working within the Republican Party has always taken an optimistic and short-term view of politics at the expense of a realistic and long-term strategy. It may help, as Ron Paul noted in a post-convention interview on the Tonight Show, liberty candidates (who would have gone unnoticed otherwise) promote libertarian principles to larger audience, but runs the risk of the words of liberty candidates (Ron-Paul libertarians posing as Republicans) becoming associated with the actions of statist Republicans, like the Bush Administration or the current "Tea-Party" House of Representatives, both of which have gleefully grown the government. In the mind of the average voter, the "R" behind the Ron-Paul libertarian and neoconservative's name closes the gulf between the two, and automatically places the libertarian at a huge deficit in redeeming his reputation and regaining credibility. By uniting with Republicans, libertarian ideas become associated with Republican policies, leading to tragedies in which freedom takes the fall for the failures of government intervention, which was exactly what happened during the housing bust. Then, in 2007-2008, capitalism, innocent of any crime, was punished, while the government, guilty of all charges, got away with murder. Republicans waving the flag of freedom while enriching and empowering the government undermine the cause of liberty, and are as dangerous as those waving the flag of tyranny. Free from the Republican Party, that time and energy spent undoing a negative could have been devoted to doing something positive. A civil war for control of the Republican Party will cost more than victory is worth. Ron-Paul libertarians stand to gain more by seceding from the Republican Party - abandoning them to rot in the grave they dug for themselves - in order to form their own identity and determine their own destiny in a new party of their own - the Liberty party!

So, in sum, when the Republican establishment failed to defeat Ron Paul - who won ever-increasing support while playing by the Republican Party's own rules - it treacherously changes the rules by executive fiat and claims victory. The RNC's shocking usurpation of power from the people and despotic tactics befitting a banana republic were more than just the closing chapter in a vendetta against Ron Paul, but an attempted abortion of all future grassroots challengers who dare defy the Republican establishment. The Republican establishment may have won the battle in Tampa, but having now built its foundations on shifting sand, Ron Paul will ultimately win the war for freedom. Hopefully the disenfranchised victims of Tampa - from Ron-Paul libertarians to Tea-Party conservatives - will oblige the Republican establishment and take their business elsewhere. The Republican establishment should remember the words of Oscar Wilde: "There are two tragedies in life. One is not getting what we want; the other is getting it."

Condoleeza Runs Her Mouth

Condoleeza Rice, George W. Bush's former National Security Director and Secretary of State, gave a widely ballyhooed speech in which she, in addition to criticizing Obama for insufficient aggression against the perceived enemies - despite the fact that he has escalated war in every theater, intervened in whole new conflicts, and codified Bush's illegal wartime practices into unconstitutional law - tooted her own horn in a story about growing up amid segregation:
‎"A little girl grows up in Jim-Crow Birmingham. The segregated city of the South where her parents cannot take her to a movie theater or to restaurants, but they have convinced her that even if she cannot have it hamburger at Woolworths, she can be the President of the United States if she wanted to be, and she becomes the Secretary of State...Yes, America has a way of making the impossible seemed inevitable in retrospect, but we know it was never inevitable."
Rice believes she can build a personal brand around the fact that she grew up during segregation. Most black people her age did, too, but instead of making a career out of it they obtained real jobs. More importantly, however, the Civil Rights Act was an unconstitutional and immoral violation of private property. People should have the right to "discriminate" on their own property, with what they own - and pay the price. Discrimination may result in the loss of a lucrative customer base or a potentially qualified employee, or it may result in customers valuing whatever good/service the property owner offers less, thereby costing him business. Either way, the property owner reaps what he sows. There is nothing inspiring or patriotic about the federal government using its military might to force someone to sell a cheeseburger to Rice. There is nothing "American" about the federal government seizing authority over private property and depriving property owners of their right to use their property in whatever manner they wish. As much as it may offend the polite sensibilities of liberals and conservatives alike, discrimination is not immoral; it is absolutely amoral, for what a property owner does with his own property is his own business. So long as a property owner does not aggress against the property of another, he should be left alone, not forced under penalty of asset seizure or imprisonment to obey arbitrary rules and regulations. In fact, the Civil Rights Act was a coup against the whole concept of property, for if a property owner does not have absolute dominion over his property, he cannot be said to truly own anything at all.

Furthermore, despite her cruel words for the South (in addition to implicitly criticizing Birmingham as "a city of the South," after Rice's speech she noted in an interview that "American values have not been in evidence there"), it was the federal government she so reveres that propped up slavery with fugitive slave laws and even an abortive Lincoln-backed constitutional amendment (the "Corwin Amendment"), and Northern states that instituted "Black Codes" (racist statutes which ranged from denying blacks rights to prohibiting them from living in a given state) as early as the 18th century. What Rice shallowly defines as "American values" appear closer to the quasi-socialist egalitarian principles of the French Revolution ("liberty, equality, and fraternity") rather than the traditional classical-liberal principles of the United States ("life, liberty, and property"), and reveals her true ignorance, for there has never been an authentic "American" culture - although there have been attempts to impose one by force.

For example, after the federal government's conquest of the Confederacy - a historical tragedy Rice no doubt applauds - one of the objectives of the legalized looting spree known as Reconstruction was to indoctrinate Southerners into adopting the crassly commercial, violently nationalistic, obsessively puritanical "American" culture of the Yankees - the same "American values" which Rice now trumpets, and which the U.S. government spreads around the world at gunpoint. The constitutions of Southern states, once free and independent sovereigns which won their freedom from the British Empire and formed the federal government as an agent to serve them in a limited capacity, were forcibly rewritten in deference to the now-almighty central government. The Fourteenth Amendment, which consolidated untold power - the nebulous, potentially limitless power to enforce equality at gunpoint - in the federal government, was ratified illegally, the Northern states having to resort to brute force in temporarily disenfranchising the recently conquered Southern states resisting ratification of the amendment, clearing the way for greater centralization of power - eerily similar to the Republican establishment's convention coup against Ron Paul and his duly elected delegations. Even though the Fourteenth Amendment was ratified illegally, it still barely passed over the objections of many other non-Confederate states like New Jersey and Oregon, which rightly saw it as a coup by which the federal government would usurp the rights of the people of the states. Rice's remarks about "American values" were reminiscent of an encounter between Confederate Lieutenant General Richard Taylor and a Federal officer during Taylor's surrender to Federal Major General General Edward Canby:
"There was, as ever, a skeleton at the feast, in the person of a general officer who had recently left Germany to become a citizen and soldier of the United States. This person, with the strong accent and idioms of the Fatherland, comforted me by assurances that we of the South would speedily recognize our ignorance and errors, especially about slavery and the rights of the states, and rejoice in the results of the war...I apologized meekly for my ignorance, on the ground that my ancestors had come from England to Virginia in 1608, and in the short intervening period of two hundred and fifty-odd years, had found no time to transmit to me the correct ideas of the duties of American citizenship. Moreover, my grandfather, commanding the 9th Virginia regiment in our Revolutionary army, had assisted in the defeat and capture of the Hessian mercenaries at Trenton, and I lamented that he had not, by association with these worthies, enlightened his understanding. My friend smiled blandly, and assured me of his willingness to instruct me."
Taylor was being humble, omitting the fact that his father was Zachary Taylor, a former U.S. president. Rice unwittingly plays the part of the haughty, ignorant foreigner when she speaks condescendingly of "American values" lacking in the South. Southern culture existed for ages before there was ever an "America," and will endure long after the U.S. colossus finally reaps what it has been sowing. Settled primarily by English Cavaliers hoping to preserve their noble way of life and Celtic pioneers seeking freedom on the frontier, the South evolved into a decentralized society in which individuals were sovereign over their property (usually a plantation or family farm), loyal first and foremost to their local community (such as county or state), and defensive of their liberty (since most had fled their homeland to escape oppression in the first place). Because Southern culture was bottom-up, local institutions like family and church gained great significance, and top-down interlopers like the federal government were held in contempt. Finally, because the South was populated by Cavaliers and Celts, both of whom were descended from proud chivalric traditions, duty and honor figured prominently into Southern life. Because of the independence of Southern life on the farm or frontier, classical liberalism - a political ideology of laissez-faire, liberty, and peace - flourished in the South. In fact, it was the Southern classical-liberal political tradition which ultimately produced many of the Founding Fathers, men of monumental significance like Thomas Jefferson, James Madison, and George Washington, as well as lesser-known but equally important leaders like Patrick Henry, George Mason, John Randolph of Roanoke, John Taylor of Caroline, and St. George Tucker. The South has a glorious cultural heritage, and has nothing for which to apologize, least of all to authoritarian warmongers like Rice, who would not know culture if it up and bit them.

Overcoming adversity was a theme of Rice's throughout the night. Earlier in her speech, she spoke of great challenges which "the nation" has "overcome:"
"...a Civil War, brother against brother, hundreds of thousands dead on both sides, but we emerged a more perfect union.  A second founding when inpatient patriots were determined to overcome the birth defect of slavery."
Rice is reciting the usual cliches about the so-called "Civil War," and is wrong on four levels. First, and most obviously, the "Civil War" was not, in fact, a civil war. A civil war is a war fought between multiple factions for control of a government, but the "Civil War" was a war in which the South fought the North for freedom from the federal government - in particular the economic burden of federal protective tariffs upon Southern agriculture.

Second, the image of "brother against brother," a standard "Civil-War" trope, is largely a myth invented to conceal the ugly truth that the "Civil War" was actually an imperial conquest of North over South, and reinforce the post-bellum propaganda that the U.S. was a "nation," and "indissoluble Union," not a diverse, divided, decentralized republic of sovereign states. Brother did not fight brother; one country conquered another. The South, after decades of abuse, seceded from the Union for freedom from taxation without representation, and the North, dependent on the federal regime of economic exploitation of the South, waged total war against the South, until the South - at a disadvantage in money, manpower, and materiel - could no longer sustain the horrific costs of war, and was forced to surrender to Northern rule once more.

Third, the U.S. did not emerge from the "Civil War" as "a more perfect Union." If by "more perfect Union," Rice means a Union built upon the bones of over 600,000 slain soldiers and civilians, a Union based on force of arms instead of consent of the governed, a Union in which the central government tore the Constitution asunder as it rapaciously usurped liberty of the people, a Union which fanatically waged a war of conquest to subjugate the free and independent Southern people, then  yes, congratulations, the "Civil War" did form a more perfect Union. If anything, the U.S. victory in the "Civil War" was a Pyrrhic victory, since it marked the death of the U.S. as a uniquely American republic and rebirth as a European-style empire. So, in a sense, Rice is right when she says that the "Civil War" was a "second founding," but fails to realize that this second founding was a regression rather than progression, that Lincoln and Republicans overthrew the classical-liberal principles which inspired the first founding and erected a quasi-socialist ideology in their place. The "Civil War" was a second founding: America's own version of the French Revolution, in which Republicans played the role of the Jacobins, slaughtering the innocent in the street, desecrating time-honored traditions and institutions, and seizing vast amounts of money and power for themselves - all in the name of progress. In fact, if anything, it was the South which stood for Rice's precious "American values," and the North which betrayed them.

Fourth, slavery was not a "birth defect" of the U.S., but rather an institution inherited from the British Empire. At the time of the "Civil War," slavery had been abolished peacefully throughout the Western world; not a single European country resorted to violence in abolishing slavery. Market forces alone were slowly but surely rendering slavery obsolete as a costly and inefficient form of labor, to say nothing of the growing moral consensus that slavery was contrary to classical liberalism and Christianity. Despite the inevitability of peaceful abolition in the South, zealous abolitionists in the North screeched that slavery must be overthrown violently, idolizing lunatics like John Brown as liberators rather than murderers. Motivated by a personal lust for Northern hegemony in the U.S., as well as a superstitious fear that they must act as the instruments of God in purifying the world in order to escape divine judgment, these intolerant abolitionists considered all cultures different from theirs sinful, particularly the antebellum South and what was left of the Native-American tribes. Although the North started the "Civil War" for economic reasons, abolition proved a convenient flag for Lincoln and the Republicans to wave in order to revive flagging Northern morale and discourage foreign intervention. In the course of the supposed Northern crusade to "free the slaves," however, not a single slave was freed - despite the hype, the Emancipation Proclamation actually explicitly protected slavery in U.S. territory, conveniently abolishing it in Confederate territory where the federal government had no authority - though many slaves were tormented, raped, murdered, and conscripted by Federal forces.

In short, Rice glorified imperialism and mass murder, all to Republican applause thunderous enough to rival Hurricane Isaac. Rice's speech was actually trumpeted as one of the highlights of the convention, overshadowing Republican celebrities like Chris Christie, Mike Huckabee, and even Paul Ryan. Frighteningly, Rice is rumored to have Romney's ear on foreign policy. Under the influence of a sociopath like Rice, expect President Romney to invade peaceful foreign lands for the alleged crimes of their governments ("liberate oppressed people"), stage coups against their governments ("overthrow tyranny"), establish U.S.-friendly puppet regimes ("promote democracy"), confiscate the land's natural resources and people's property for redistribution to politically connected crony capitalists ("help build the economy"), murder freedom fighters who resist imperialism ("fight terrorists") and permanently occupy the country to protect his puppet regime ("make them ready for democracy"). In other words, expect Radical Reconstruction in the Middle East.

Romney Glorifies Government

Romney, who in the primary touted his economic expertise (i.e. a career of flipping businesses and growing government) as a presidential qualification, failed to criticize the spectacular failure of Obama's economic policies - particularly the atrocious Keynesian stimulus - or articulate an alternative approach. Obviously, this failure is because at heart Romney and Obama differ only in degree, not in kind. On economics, Romney and Obama both believe in countercyclical economic policy (i.e. spending and printing money), central banking (government monopolization of the money supply in order to commit legalized counterfeiting), and bailouts (interfering with vital signals of profit/loss to enrich politically protected crony-parasites). Romney may believe that the federal government should lower tax rates a few percentage points, grow federal spending at a slightly slower rate, but in the words of Ron Paul, such "tinkering around the edges" will not make a meaningful difference. Voters will not opt for a counterfeit when they can purchase the genuine article.

In his speech, Romney generally avoided tackling economics, despite the fact that economics is the decisive issue this election. Instead, Romney mentioned education, energy, women, Bain Capital, and even Neil Armstrong. The Wall Street Journal offered a brief but compelling example of what Romney could have said on the subject of economics:
"President Obama will say I want to cut taxes on the rich. But a fairer tax code with lower rates for everyone will lead to more investment, faster growth, and more middle-class jobs. I want to eliminate the special tax favors that the rich can exploit because they have political power that average Americans don't. Mr. Obama wants to keep the current tax code because it gives the rich and powerful in Washington more money power. I want average Americans to have more money and power instead."
Such a statement would have been nothing radical, solidly within the establishment's narrow range of officially approved opinion. Reducing taxes to stimulate economic growth has been a bipartisan activity throughout the 20th century: Calvin Coolidge in the 1920s, JFK in the 1960s, and Reagan in the 1980s. Still, Romney could not even summon up that much courage, instead devoting a significant amount of time to the mirage of "better" government, rather than truly conservative ideal of "less" or even "no" government. If Romney cannot deliver an inspiring economic message, Obama will run circles around him with promises of government "investments" in everything under the sun, horror stories about "the rich getting richer and the poor getting poorer," and fairytales about "created or saved" jobs.

Obama is a tyrannical statist with a particularly obnoxious sense of sanctimony. He is not the worst president of all time, but definitely not one of the best, and certainly one of the most annoying. While in power, Obama has presided over countless usurpations of life, liberty, and property. Most significantly, over the past three years, the economy's natural powers of recovery have not been able to overcome the heavy hand of Obama: unemployment remains high, economic growth remains low, and all the while, the oppressive burden of government continues to mount. Yet despite Obama's enormous vulnerability in reelection, the Republicans - supposedly reinvigorated by conservative grassroots movements like the Tea Party - ultimately nominate Romney, the most bland, liberal, and politically perilous of all the candidates. Romney, who signed the state-level version of ObamaCare into law as Governor of Massachusetts, has absolutely no credibility on the subject of healthcare, one issue on which the American people are united in opposition to Obama. Romney could conceivably turn the issue to his advantage, claiming that as someone who misguidedly signed the ObamaCare prototype into law, he has firsthand experience with its failure and wants to protect the rest of the country from the terrible mistake he made in Massachusetts. Instead, Romney has dug himself into an even deeper hole, recently stating in his too-slick-for-his-own-good, million-words-per-minute, talking-out-of-both-sides-of-his-mouth Yankee style that he would not repeal ObamaCare in full - despite repeated assurances to the contrary - and would actually retain many of the worst elements of the law. Romney does not need to "repeal and replace" ObamaCare with more government intervention, such as mandating that insurers provide coverage to preexisting conditions (i.e. further socializing health insurance by redistributing healthcare costs from the young and healthy to the old and sick), just repeal ObamaCare altogether, along with the myriad other federal distortions of healthcare economy. In nominating Romney, the Republicans forfeited their winning issue against Obama, and practically ensured his reelection. Unless Romney finds a way to transmute his chronic flip-flopping into a selling point, rally CNN and MSNBC to his side, and beat Obama at playing the blame game, Republicans should get used to seeing Obama's stupid grin for another four years.

A Teetering, Tottering Platform

The platform which the Republicans adopted in Tampa is predictably consistent with the party's postwar legacy of "despotism at home and aggression abroad" to quote Lord Acton. Two points of the platform bear comment: "unequivocal support" for the State of Israel, and the perpetuation of corporatism disguised as laissez-faire.

The State of Israel is accorded "unequivocal support," despite the fact that it is an authoritarian, womb-to-tomb socialist, fully militarized police state with one of the largest nuclear arsenals in the world. The unholy alliance between the U.S. and Israeli governments is a relic of Cold-War geopolitical strategy, when the U.S. allied with the State of Israel in order to balance power in the Middle East after the Soviet Union allied with various Arab regimes. Conservative Christians have been deceived into believing that the State of Israel is descended from the oppressed Jewish people of Biblical times, and that the regional antagonism towards the State of Israel is the manifestation of a far greater spiritual battle between good and evil. In fact, nothing could be further from the truth. The State of Israel has a greater resemblance to the fallen rule of Ahab and Jezebel than the righteous reigns of David or Solomon.

Zionism, the 19th-century Jewish nationalist movement which led to the United Nations' creation in 1947 of the State of Israel from the Palestinian territory of the former British Empire, was first and foremost a secular movement. According to the Bible, however, it was God, not the U.N., who in Genesis 12:1-3, 22:16-18 made a covenant with Abraham and his descendants for the Promised Land. In Ezekiel 39:21-24, it was God who described how he would punish the descendants of Abraham, along with its neighboring nations, for their transgressions. Finally, in Jeremiah 16:14-16 and Zechariah 13:9-9, it was God who promised that he would ultimately restore the descendants of Abraham to the Promised Land. God has plainly stated that He will accomplish the restoration of Abraham's progeny. No secular authority, certainly not the abominably evil U.N., can fulfill God's covenants. When Christians bow before the word of the U.N., they dishonor God's promise.

Furthermore, in His original covenant with Abraham, God never even sanctions a given government, promising only that if Abraham ventured forth to the Promised Land, He would "make [Abraham] a great nation." A "nation" does mean a "government" (a nation is a group of people of common culture, language, history, but not imply a government), and certainly not a social-democratic state over three millennia later. In fact, although the descendants of Abraham did eventually become a great nation in Canaan, it was the advent of secular government (the United Monarchy) which marked the downfall of the descendants of Abraham from the decentralized days in which Jewish government was theocratic, prophets and judges upholding God's commandments in each of the Twelve Tribes. The State of Israel blasphemously seizes these holy covenants to build legitimacy for its rule, but it is a false prophet, a semi-socialist secular state without any authentic lineage to the Old Testament.

Sadly, after the Assyrian Captivity of Israel and the Babylonian Diaspora of Judah, the Biblical nation of Abraham's progeny went into exile and ceased to exist. God has sworn that He will one day restore the Jewish nation to its former glory, but as a spiritual nation, not a secular government like the State of Israel. Christians love to fret over the passage, "I will bless those who bless you, and the one who curses you I will curse," yet the secular Zionists who orchestrated the founding of the State of Israel are not the descendants of Abraham - the last remnant of them were deported from Judah in the early 6th century B.C. - and so are not owed any "blessing" from people mindful of God's judgment. Besides, even if the State of Israel were deserving of the "blessing" of Christians, that does not logically imply that Christians must lobby the U.S. government to employ coercion against its taxpayers to involuntarily fund coercion against the perceived enemies of the State of Israel. Christians who take their moral duty seriously should promote peace and spread the Gospel, not play politics or levy war. Government is legalized aggression against one's neighbor, the institutionalization and systematization of plunder, and is thus the antithesis of the peace, love, and joy of Christianity.

Furthermore, in the Bible, the Jewish people are the perpetual underdogs, always defending themselves against bigger, badder enemies like the Canaanites, Egyptians, Assyrians, Babylonians, and Romans. Today, however, the State of Israel is a mighty and militaristic government, aggressively consolidating power in the Middle East while courting favor in the U.S., all under the guise of self-defense. Since its founding, the State of Israel conquered new territory from neighboring Middle-Eastern states. The State of Israel, through its lobbyists, think tanks, and media, has been extremely successful at marketing itself as a helpless victim besieged by evil on all sides - even using the Holocaust as a card to play in deflecting any criticism of its actions - when its military and alliances make it a chief hegemonic and destabilizing power in the Middle East. The State of Israel's foreign policy relationship with the U.S. government has enabled Israeli bellicosity, poisoned Israeli-Arab relations, and has led to less peace and more war than would have existed otherwise.

On the subject of foreign policy, Jefferson counseled "peace, commerce, and honest friendship with all nations - entangling alliances with none." The U.S. government should keep Jefferson's advice in mind when meddling in the Middle East. Like any nation, the State of Israel has a right to exist and to defend itself, and has vigorously done so in the past, oftentimes in spite of so-called international authorities like the UN. In fact, the State of Israel's foreign policy is the embodiment of the old saying that "the best defense is a good offense." By lobbying the U.S. government to preemptively strike places like Iran, however, the State of Israel is simply trying to outsource its imperialism to a greater power. If the State of Israel does not believe a battle is worth fighting itself - and it is more than capable of fighting - then it should not try to convince others to fight that battle on its behalf. Sadly, the U.S. government has proved far too obliging of an ally, intervening in regional conflicts and even starting wars at the behest of the State of Israel. If the U.S. government stopped intervening in the Middle East, a balance of power would emerge in which the fear of defeat would keep aggression in check and trade would link the interests of all together. In such a balance of power, the State of Israel may not be as mighty, but the U.S. government's picking and choosing of friends and enemies in the Middle East is precisely what has prevented peace.

An example of the folly of foreign intervention is the current condition of Egypt, Libya, and Syria. Two years ago, a wave of popular uprisings swept the Middle East. Dubbed the "Arab Spring" by gawking Western onlookers eager to jump on the bandwagon, the uprisings toppled many crusty old regimes, the two most prominent of which were Mubarak in Egypt and Gaddafi in Libya. Obama, despite lacking the constitutionally required consent of Congress, illegally supplied munitions, materiel, manpower, and of course his magic mouth to rebels. After the downfall of Mubarak and Gaddafi, however, the regimes which the rebels erected in their place were hardly the liberal social democracies the U.S. government expected. In Egypt, the Muslim Brotherhood has begun restricting the rights of women and religious minorities like the Coptic Christians. In Libya, al-Qaeda, the terrorist organization behind 9/11, was revealed to have orchestrated the entire rebellion, and its flag now flies from Gaddafi's former palace. The so-called rebels were not heroes fighting for freedom from oppressive governments, but militant terrorists fighting for control of governments which they believed were too secular and tolerant - in other words, not oppressive enough. Despite this disheartening revelation, Obama has not learned his lesson, and has intervened in the Syrian civil war by providing "non-lethal assistance" such as radios to al-Qaeda rebels. Of course, radios to al-Qaeda are still indirectly lethal as they facilitate terrorist operations against the Syrian people, as well as free up funds for al-Qaeda to spend on lethal operations which it could not have otherwise afforded. In addition to this public assistance, Obama has also directed the CIA to smuggle automatic rifles, antitank weapons, rocket launchers, and ammunition to al-Qaeda through a secret, shadowy network of Middle-Eastern intermediaries. Obama's professed goal in Syria is "regime change," although regime change will be futile if the new regime is worse than the old, which is exactly what happened with the Muslim Brotherhood in Egypt and al-Qaeda in Libya. The U.S. government should have seen that it had no dog in the fight between terrorist rebels and decaying dictatorships that was the Arab Spring - now an Arab Winter - and refused to intervene on either side. Instead, the U.S. government rushed to ally with the rebels, and thus propelled into power today the very same terrorists it may be fighting tomorrow.

The second troubling aspect of the Republican platform is its economic statism, best described as "corporatism," the corrupt collaboration of big business and big government for mutual political gain. The Republican Party, despite laughably claiming in its platform that it was "born in opposition to the denial liberty," was actually founded in the 1850s as the party of mercantilism - an ideology that employs economic fallacies to justify empowering the government to enrich its crony-parasites - and are, in calling for corporatism, simply reconnecting with their Lincolnesque (i.e. firmly statist) roots. Although the Republicans claim that they will "pursue free-market policies," a sample of eight of their ideas should disabuse any free-thinking voter of that notion:

1) A "federal-state-private partnership" to "invest in the nation's infrastructure"

Infrastructure expenditures are the federal government's favorite excuse to spend other people's money. The government argues that the free market does not supply some goods/services - known as "public goods" - in adequate quantity or quality, and thus the government must intervene to correct this market failure. Roads, bridges, and lighthouses, and other elements of infrastructure are some common examples of the so-called public goods. Unfortunately for the government, public goods are an economic fallacy. Public goods are based on the idea that goods like roads will not be provided on a free market because of a "free-rider problem," in which others who did not pay for a good/service experience positive spillover effects, such as being able to drive on a road for which they did not pay. The existence of free riders, says the government, deters people from demanding necessary goods/services like roads. The truth, however, is that the government itself disproves its own argument with the methods it employs to finance the construction and maintenance of roads - tolls. Instead of paying taxes and tolls to the government, consumers could pay tolls to a privatized road, or perhaps purchase access to roads on an advance subscription basis. Some may object that the U.S.' infrastructure is already "crumbling," and that private corporations will make it even worse. Infrastructure may be crumbling in this country, but it is because the federal government is responsible for its management and maintenance. In a free market, quality and quantity rise while prices and costs fall - a textbook case of an increase in value - while in government, the reverse happens - quality and quantity fall while prices and costs rise. Finally, privatized infrastructure would be subject to profit-and-loss test, a vital signal which indicates whether more or less of a good/service is in demand, as well as the extent to which firms have reallocated undervalued factors of production to higher-valued utilization. Applied to infrastructure, profit and loss would not only make the provision of roads more efficient, but also eliminate the possibility of expensive boondoggles, such as Alaska's "Bridge to Nowhere" and high-speed rail crisscrossing Florida.

2) "Overhauled...federal training programs"

Federal jobs training programs are programs in which the federal government trains the unemployed in job skills federal bureaucrats deem relevant. Labor, if left free, is one of the most mobile factors of production, adjusting to changes in supply/demand, technology, and productivity. Unemployed workers are capable of learning new skills without federal assistance, and for those few who cannot, employment is assured so long as they are flexible in accepting lower wages. Even if jobs retraining were beneficial, it would come at the expense of the taxpayers who were deprived of their property, and would have been better-spent elsewhere if it had been left in the private sector.

3) Intervening to ensure that "adequate credit and financing are available to spur manufacturing and expansion"

If a borrower cannot attain financing for a project, it is because the lender believes that the project is likely to fail and the borrower default. If the federal government intervenes, either in guaranteeing the loan, or providing funds it calls "credit" but is really just a glorified subsidy, it has diverted resources away from other projects which lenders would have judged a wiser use of their funds, and towards misconceived projects which never should have existed in the first place. The lenders, after all, are the men and women with the fiduciary duty, fiscal stewards who have the greatest incentive to manage their money carefully. The government, by contrast, has no accountability for its failures, and can only attempt to ape fiscal responsibility. The spectacular failure of Solyndra, the Northern-Californian solar-panels manufacturer which Barack Obama and Joe Biden both visited to  tout as a model for the green-jobs economy and an example of the benefits of stimulus, should serve as a warning to politicians eager to interfere with how the free market allocates credit.

4) A " value-added tax or national sales tax" contingent upon the "simultaneous repeal of the Sixteenth Amendment"

The fact that a value-added tax is even on the table speaks volumes about the statist leanings of the Republican Party. A few years ago, even speculating about a VAT as a potential solution to the federal government's fiscal crisis was anathema among Republicans, yet now the once-reviled VAT is worthy of inclusion in the party platform. A VAT is a pervasive consumption tax, popular in the social-democratic states of Europe, which levies taxes upon goods/services at every order of production. Specifically, manufacturers are taxed on the "value added," the difference between the price paid for a higher-order good/service (say, ore) and the price for which it was ultimately sold as a lower-order good/service (say, steel).

Many economists, ranging from supply-side to neoclassical, claim that consumption taxation is preferable to income taxation because it does not punish work or saving. Even if this were true, saving is not superior to consumption. In the end, saving, along with all other economic activity, is merely a means to consumption. Interestingly, however, a consumption tax like a VAT would ultimately burden income - and therefore, saving. If a VAT were instituted, firms would not simply "shift forward" the costs of taxation to their customers, as many economists breezily predict. Firms already set prices at their profit-maximizing level; if firms could raise prices without losing profits, they would have already done so. The theory of firms "passing on" costs is shallow. Instead of passing the costs of a VAT down the line, the costs of a VAT would proceed in the opposite direction - backwards, decreasing firms' demand for intermediate goods and factors of production (land, labor, and capital). Falling demand for land, labor, and capital imply falling incomes as well, meaning a reduction in wages and rents. Therefore, although originating as a tax on consumption, the ultimate incidence of the VAT falls upon income, penalizing work and savings just like an income tax.

The Sixteenth Amendment will not be repealed. Under the pretense of the Sixteenth Amendment, the federal government has seized enormous amounts of unconstitutional power - for example, the authority to ignore the Fourth Amendment - far too much power for it to ever willingly relinquish. The federal government also has no compelling reason to switch from the taxation of income to the taxation of value added, especially if the proposition is revenue-neutral. Although repeal of the Sixteenth Amendment is, politically speaking, out of the question, now that both parties are considering a VAT, taxpayers should gird themselves for some form of a consumption tax as "tax reform" rather than "tax reduction." Indeed, Republicans have long been led astray by "tax reform" - broadening the tax base and lowering tax rates - at the expense of "tax reduction." For example, in the Republican primary, Herman Cain's 9-9-9 plan proposed the reduction of income-tax rates to 9% in exchange for the creation of two new consumption taxes, also at 9% - rates which would, no doubt, rise over time, just as the income tax originated as a minor levy on the ultra-wealthy but grew into a behemoth over time. Similarly, the FairTax, a supposedly "grassroots" tax-reform movement, is a revenue-neutral plan to replace the income tax with a national sales tax of 23%. In both cases, the federal government would continue to confiscate and redistribute the same amount of taxpayer money every year, but the burden would be distributed among more people. What matters is not, to paraphrase the French absolutist Jean-Baptise Colbert, how the goose's feathers are plucked, but rather the amount that are plucked. To make a difference, taxes must be reduced, not merely reformed.

5) A plan to "restructure the the twentieth-century entitlement state"

Propositions to save Social Security and Medicare are frightening not only in their disturbing ignorance of the extent of the entitlements' bankruptcy, but also in the horrific means which would be necessary to accomplish their ends. Republicans and Democrats alike are terrified to acknowledge that federal entitlements are a looming crisis. In the Republican primaries, when Texas Governor Rick Perry criticized Social Security as a "Ponzi Scheme," Romney criticized him from the left, singing the praises of federal entitlements. Perry, however, despite getting blasted for sticking his head over the trenches, was right; Social Security is a Ponzi scheme, and a collapsing one at that. A Ponzi scheme is a financial con in which purported returns are paid to existing investors from funds which new investors contribute. In reality, however, there are no returns, just more contributions from new investors, so when no more new funds can be solicited, the scheme collapses and the con is revealed. Social Security works exactly the same way: payments to retirees are not generated from returns, but taken from the taxes of younger working taxpayers. Similarly, a growing population of new taxpayers is necessary to sustain the system, otherwise there will not be enough taxes to maintain payments to retirees. Unlike a Ponzi scheme, however, Social Security is mandatory, not voluntary; at least Ponzi did not force anyone to invest in his scheme. Unfortunately for federal entitlements, the tide has turned: the U.S. population is shrinking, not growing, and thus the system is becoming excessively top-heavy and unsustainable. Like a Ponzi scheme running out of new investors, Social Security is running out of new taxpayers, and will soon crash like Bernie Madoff's fund. Because of this demographic shift, Social Security has accumulated vast unfunded liabilities, none of which are "on-budget" as part of the national debt, but all of which are very real. Currently, the present value of the unfunded liabilities of federal entitlements over the coming 75 years is approximately $222 trillion. This does not mean that for the federal government to meet its obligations it needs $222 trillion over the course of 75 years, but that the federal government needs $222 trillion right now in order to meet its obligations over the next 75 years.

Nothing short of the total enslavement of the population would be necessary to secure such a sum, which may not even be economically possible. If it were possible, tax rates would be raised to such confiscatory levels that many people would simply lose the heart to work, at which point the federal government would intervene, forcing people to work against their will. After removing cost-of-living adjustments from Social Security - itself an implied default - the federal government would then count on the Federal Reserve to inflate the money supply in order to decrease the value of the payments owed to the beneficiaries of Social Security. Since the degenerate days of the Roman Empire, inflation has served as a time-honored way for governments to default on their debts without ever having to accept responsibility. As economist Gary North has noted, however, episodes of hyperinflation have only ever raged for a few years before ending in utterly devastating economic and societal crashes. If the Federal Reserve attempts to hyperinflate the unfunded liabilities of federal entitlements away, it will backfire, causing a crushing depression that makes matters even worse.

Given that not even hyperinflation is capable of fully devaluing the unfunded liabilities of federal entitlements, the more likely scenario is a milder but still miserable regime of higher payroll taxes, lifting the cap on taxable income, reneging on payments to richer taxpayers, removing cost-of-living adjustments from the benefits formula, and inflation to devalue whatever liabilities are left. Such measures are what grand bipartisan plans to "save" federal entitlements will inevitably entail.

Even if federal entitlements could be saved, they should still be abolished, for they do more harm than good. Every year, federal entitlements rob trillions of dollars from taxpayers, trillions which if left to their rightful owners could be channeled into the private sector as authentic savings and investments. Savings would satisfy individual time preference, and investments would finance the production of new goods/services in the future. The opportunity cost of what those trillions of dollars could have accomplished if left free is gargantuan. Instead of being saved and invested, however, those trillions go to the federal government, which, although legally obligated to sequester the funds for redistribution to current beneficiaries, irresponsibly squanders them on general expenditures instead. Under the false pretense of mandating savings, the federal government confiscates trillions of dollars for its own consumption. If those trillions of dollars were saved and invested, rather than confiscated and wasted, the economy would be immeasurably richer. Since savings and investments - deferring present production/consumption to develop capital or technology which will yield greater production/consumption in the future - are the source of a progressing economy, the federal government's annual seizure and sterilization of trillions of dollars in potential savings and investments has inflicted untold economic damage, and probably been as economically retrogressive as the evils of central banking and income taxation.

In addition to the staggering question of "what could have been?" is the fact that the payroll taxes which nominally finance federal entitlements constitute burdensome employment taxes, artificially depress wages, and create a severe disincentive to hire new employees. The bankruptcy of federal entitlements presents a prime opportunity to seal these black holes once and for all. The sooner federal entitlements are abolished, the better. Yet the Republicans claim that this is a system worth fighting for.

6)"Transparency and accountability of the Federal Reserve"

The Federal Reserve is constitutionally incapable of achieving the objectives which it has arrogated unto itself - price stability and full employment - yet the Republicans meekly believe that transparency and accountability will somehow make a difference. Transparency and accountability are beside the point; the issue should be reining in the Federal Reserve's status as a government-enforced banking cartel and legalized counterfeiter, with the ultimate goal of total abolition of the tyrannical abomination that is central banking.

Central banks like Federal Reserve, according to the Austrian economics, are the most significant enablers of the business cycle of periodic booms and busts. Since its inception on a dark, stormy night at J.P. Morgan's estate on Jekyll Island, the Federal Reserve has presided over the decline and fall of the U.S. dollar (a loss of over 95% of its purchasing power since 1913), the U.S. economy (boom-bust cycles in 1920-1921, the Great Depression, and the tech/dot-com/housing bubbles of the 1990s-2000s), and the U.S. itself (monetization of federal deficits to enable the waging of both World Wars, the Cold War, and now the War on Terror). The reason the Federal Reserve is such a menace is because it artificially expands credit, which leads to malinvestments destined to fail because they are predicated on a mirage of rising savings, and inflates the money supply, which devalues the purchasing power of the currency.

Oversight of this system will not make central banking any less of a destabilizing agent in the economy. Oversight may reveal some dark secrets of the Federal Reserve, but it is the legalized counterfeiting which the Federal Reserve undertakes in broad daylight, announces triumphantly to the press, and for which it receives political protection from its conspirators in the federal government that warrants its abolition. The Federal Reserve's guilt is already plain as day; ample evidence exists to try, convict, sentence, and execute the Federal Reserve. A Federal Reserve free from corruption would still be the cause of boom-bust cycles and inflation. Besides, the federal government and the Federal Reserve are dependent on each other: the Federal Reserve (its officials appointed by the president and confirmed by the Senate) derives its power to enrich its member banks by artificially expanding credit from the federal government, and the federal government depends on the Federal Reserve to enable its fiscal profligacy by monetizing its deficits whenever needed. The federal government has a significant financial interest in central banking, and so cannot trusted with holding the Federal Reserve accountable.

In addition to its abysmal record of utter failure, the Federal Reserve is also unconstitutional. In the Constitution, Congress is authorized, "To coin money and regulate the value thereof." First, most obviously, the Federal Reserve is not Congress: it is a government-enforced banking cartel to which Congress has illegally granted the authority to commit legalized counterfeiting. Second, less obviously, the Federal Reserve is not really coining money. In the Constitution, coining means the actual minting of commodities like gold or silver into coins, not merely printing paper money. Third, the Constitution never grants the federal government the right to form a central bank authorized to purchase federal debt for the purpose of manipulating interest rates. Since under the Tenth Amendment, the people of the states retain all powers not delegated in the Constitution, the Federal Reserve has no right to exist. The Founding Fathers, particularly the Jeffersonians, limited the monetary powers of the federal government for two reasons. First, because they knew that central banking led to inflation and financial panics, as they experienced firsthand from the Bank of North America during the War for American Independence. Second, and more importantly, was because they feared that a central bank would tempt the federal government with tyrannical power, undermining its constitutional limitations and risking the loss of life and liberty. To the Founders, central banking came at a cost to prosperity and liberty, and was thus an evil to be resisted. If Andrew Jackson could marshal the courage to overthrow the Second Bank of the United States (a prototype of today's Federal Reserve) when he was up for reelection in 1832, surely the Republicans can do better than call for an audit and more Congressional hearings.

7) In housing, "enforcing non-discrimination laws and assisting low-income families" and addressing the "demand for apartments"

After the federal government artificially stimulated demand for houses by subsidizing mortgages and fronting down payments for low-income home-buyers (the American Dream Act), forced banks to make subprime under penalty of legal harassment to suspension of their federal charter (the Community Reinvestment Act), enabled subprime lending through government-sponsored enterprises which provided Wall Street with a convenient place to offload risky mortgage securities (Fannie Mae and Freddie Mac), fueled it all with a prolonged credit expansion from Federal Reserve (Alan Greenspan), and ultimately created an enormous bubble in housing which ended in a crash of titanic proportions, the last thing the real-estate market needs is further government stimulus. The latest boom-bust cycle - a housing bubble - from which the economy is still in shock, should be testament to the folly of federal meddling in markets, but it is in the nature of politicians to seek new parasites to whom they can pander and promise special privileges. Apparently, aspiring apartment owners are an overlooked class.

As far as non-discrimination laws go, "discrimination" should not be criminalized. People, including banks - which are, after all, ultimately owned by shareholders, all of whom are people - should be free to manage their property in their best interests. For a bank to deny someone a loan, regardless of its reasons, is not a crime, for the denied loan applicant is not entitled to the bank's money, or anyone else's money for that matter. Besides, the fear that banks will discriminate against potential borrowers based on race is absurd. A bank is interested in making money, not in keeping the black man down, and will lend to anyone whom it believes will be able to repay the principal with interest. A correlation between denied mortgages and black applicants would prove nothing, for correlation does not equal causation. The more likely explanation would be that blacks, statistically speaking, suffer from lower income, lower education, and higher incarceration rates - all government-created problems, by the way - and so are more likely to be rejected as an excessively risky proposition. Nothing personal, just business. Poor, uneducated, criminal whites are denied mortgages for the same reason, while wealthy, educated, law-abiding blacks are granted mortgages for the opposite reason. A correlation between denied mortgages and race is purely coincidental. Non-discrimination laws amount to the prosecution of banks for discriminating against risky borrowers, and cause more problems than they solve.

8) The imposition of "countervailing duties" to punish China for its currency practices, and encouraging "victimized firms" to "raise claims" in the bureaucracies which regulate international trade.

Republicans and Democrats alike enjoy donning the armor of protectionism and beating their chests over China's supposedly "abusive" currency manipulation. First of all, any government with a fiat currency is a currency manipulator. The whole point of a fiat currency is for the government to have the power to manipulate the currency by printing money and expanding credit. By definition, a fiat currency is a manipulated currency. In fact, "monetary policy" is nothing more than fancy economic jargon for currency manipulation. Since the Republicans have planted themselves squarely in favor of central banking, outrage over currency manipulation is a bit rich. Nevertheless, the way in which China manipulates its currency is by purchasing U.S. Treasuries - through its central bank and large trade surplus - propping up demand for the otherwise worthless dollar, making the yuan more affordable in dollar terms (because the dollar has risen in value relative to the yuan), and thus lowering the price of Chinese-manufactured exports. By bankrolling the fiscally incontinent federal government, China provides lower-priced goods to American consumers, heightening their standard of living. One would think that the government would be in favor of this arrangement, since it provides a free boost to the U.S. economy and a ensures a stable source of borrowers of federal debt. The federal government complains, however, that this currency manipulation costs American jobs.

Jobs are a means to producing goods/services that consumers demand, and are not ends in themselves. Simply "creating or saving" jobs is not necessarily a positive phenomenon, especially if the created/saved jobs fail to produce something of value. Unemployment in a firm, industry, or even entire economy is a signal from consumers to businesses that they are not producing products which consumers demand. Interfering with that signal leads to the production of goods/services which consumers do not value, and thus amounts to a waste of scarce resources since the factors of production are employed in unproductive pursuits. Protecting American jobs at the expense of the American standard of living is to put the cart before the horse. Hilariously, the federal government appears oblivious to the extent that it is dependent on China's currency manipulation, not only because it entails the purchase of federal debt, but because it props up the devalued dollar from completely crashing and plunging the U.S. and perhaps the world into another depression. If any currency has been manipulated, it is the dollar, kept artificially overvalued by the Chinese, despite the best efforts of the Federal Reserve at devaluation.

Romney himself as accused China of "stealing our jobs" - as if making something more affordable is a crime, and that jobs are something that a country can own - and has vowed to "stand up to China." The Republicans think that the way to punish China for its supposed sins is to levy tariffs on Chinese imports, despite the fact that tariffs will negatively impact American consumers by forcing them to purchase overtaxed foreign goods or overpriced domestic goods. In the antebellum U.S., the North instituted the same policies against the South, levying federal protective tariffs upon foreign manufactures, forcing Southerners to make a lose-lose choice between enriching the federal government or Northern industrial monopolies. American consumers will probably not secede from the Union for freedom from economic exploitation, but will simply suffer in silence from a lower standard of living.

In its platform, the Republican Party has firmly entrenched itself in the pre-Obama status quo. Republicans have settled for the low-hanging fruit of unimaginatively rolling back the Obama agenda, but are otherwise committed to protecting the federal welfare/warfare state from real reform. Greater transparency in the way the Federal Reserve administers central banking, lower rates of income taxation, and reforming federal entitlements - although merely marginal improvements at best - may be better than nothing, but still amount to a consolidation rather than challenge of federal power. Judging from their platform, Republicans do not want to abolish the welfare/welfare state, but simply run it more efficiently. Yes, Obama is certainly an awful president, even an apocalyptic one. Yes, Obama's victories have been terrible defeats for freedom, and must be repealed by future Congresses and presidencies, or better yet nullified by the people of the states. The roots of U.S.' afflictions, however, stretch far deeper than Obama, the Bushes, Bill Clinton, or Ronald Reagan. Obama is merely the fruit of seeds that were planted long ago, before any generation alive today was born. To truly restore peace, prosperity, and liberty to the U.S., the tall trees of Hamilton, Lincoln, Wilson, Roosevelt - the pantheon of presidential history - must be uprooted, hewn, and tossed into the fires of revolution. Until the ideas for which Obama stands are overthrown, men and women just like Obama will continue to slither into power, and the U.S. will never, ever be free.

"My Body, My Choice, Your Money"

Currently, the Democratic National Convention is taking place in Charlotte, North Carolina. The Democrats, however, despite their glorious roots as 19th-century libertarians rooted in the South, no longer even pretend to care about life or liberty, and are merely obsessed with empowering the government and enriching its crony-parasites. The transformation of the Democratic Party from libertarian to statist began in the late 19th century and early 20th century with the advent of Populism and Progressivism, and was consummated in the statist regimes of Woodrow Wilson (the progressive Princeton president) and Franklin Delano Roosevelt (the duly elected dictator). Today, the transformation now fused to the core, Democrats are so beyond hope that they are barely worthy of dignifying with criticism. Republicans, God help them, at least pay lip service to liberty - even if their actions do betray their words - but Democrats make no bones about their lust for money and power. Suffice to say, three events from the DNC illustrate the creepy totalitarianism on display in Charlotte.

The first event was a video which claimed that "government is the only thing to which we all belong." Like statists in both parties, the Democrats view people not as freeborn individuals with rights to life, liberty, and the pursuit of happiness, but as enslaved property, resources to be exploited, and statistics to be measured. The federal government showed in the War of Northern Aggression that the so-called Union is not based on the consent of the governed, but force of arms. Secession may be out of the question, but the federal government is now trying to restrict expatriation as well. When Eduardo Saverin, the Brazilian-born co-founder of Facebook announced that he was expatriating from Florida to Singapore, Democrats were up in arms over the loss of the potential tax revenue to which they believed they were entitled. In the wake of Saverin's departure, Democrats condemned expatriation as "unpatriotic," and called for legislation that would punitively tax U.S. citizens who dared seek freedom on foreign shores. That sinister truth, that the government considers the people over whom it rules its property, is the dark underbelly of citizenship.

The second event was a speech from Sandra Fluke, a thirty-something woman adrift in the shoals of graduate school, who sparked a controversy earlier in the year when she testified to Congress in support of the ObamaCare-based federal mandate for health insurers to offer coverage for contraceptives. That is, Fluke appeared in Congress to lobby for her right to force other policyholders to subsidize her sexual activities, for the socialization of contraceptive coverage. The Democratic Party saw fit to bestow the honor of a speaking position on Fluke, who warned of a "War on Women," bizarre feminist fear-mongering in which the deprivation of taxpayer-funded goods/services like contraceptives and abortion is considered a violation of women's rights. Actually, the real war is on the taxpayers from whom the money to pay for these goods/services was expropriated in the first place. Women have no right to the confiscated property of others, even if that property is providing the public service of preventing these leeches from spawning more of their kind. Human beings have a right to self-ownership, and by extension, ownership of property, but that is all. Any supposed right that amounts to a duty on someone else is no right at all, but merely glorified parasitism and legalized looting.

The third event was a speech from Cory Booker, the mayor of Newark, in which he declared that, "Being asked to pay your fair share isn't about class warfare. It's about patriotism." A convenient argument for beneficiaries of confiscated taxpayer property to make, to say the least. Booker, along with most other Democrats, either is not aware or simply does not care that according to the federal government's own IRS data, the rich, by any measure, already  pay an overwhelming share of federal taxes. For example, according to the IRS, the top 1% of federal taxpayers, despite only earning 25% of income, paid 40% of federal taxes. By contrast, the bottom 95% of federal taxpayers paid 39% of federal taxes - less than the 1%. So, yes, by any rational measure of equity, federal taxation is extremely unfair - though against the rich, not the poor. More importantly, however, submission to the confiscation of one's property, to the systematization of plunder, is not patriotism - far from it. In fact, a true American patriot, in the noble tradition of his Revolutionary and Confederate ancestors, would resist the oppression of taxation. Ron Paul phrased it best when he said,
"Patriotism, to me, is to always support the cause of liberty, and it turns out that governments over the ages have notoriously been the chief abusers of liberty. The original American patriots declared independence from an abusive government."
Indeed, the U.S. was founded on rebellion against taxation, which the colonists viewed as a violation of their natural rights to life, liberty, and property. When English Loyalists commanded American Revolutionaries like Samuel Adams and Patrick Henry to do their "patriotic duty" as Englishmen and pay taxes to the Crown, the Revolutionaries responded with the Boston Tea Party and Declaration of Independence. Resistance to government in general and taxation in particular is a defining aspect of the American heritage, and is as patriotic as mama and apple pie.

Of course, Obama took to the stage to ply the politician's trade - demagoguery and deception - making all the predictable excuses of a man who staked his presidency on leading an economic recovery, and then heaped crushing new fiscal, monetary, and regulatory burdens upon the economy. Obama cannot win on the merits of these dubious accomplishments, so he has already begun to demagogue Romney as a vulture capitalist gnawing on the carcass of the middle-class, and to deceive people into believing that his failures have actually been successes, with tall tales about how "it would have been worse" and specious numbers about "created-or-saved jobs."


Neither convention, Republican or Democratic, was encouraging. In fact, both were downright depressing. Despite the disparity in rhetoric between Republicans and Democrats, at the end of the day both have more in common than they do in contention. Republicans swore to restore the U.S. to the declining, debt-ridden country it was before Obama occupied the White House. Democrats pledged to march forward in the war against life and liberty, calling themselves progressive for inventing new rights that come at the expense of the rights of others, and compassionate for spending taxpayers' stolen money. Republicans and Democrats, whether consolidating or expanding federal power, have declared war on life, liberty, and the pursuit of happiness. To add insult to injury, Republicans and Democrats, despite possessing war chests of hundreds of millions of dollars from private contributors, looted $136 million from taxpayers to pay for these monstrous spectacles.

Such brazen tyranny cannot stand in the land of the free and home of the brave. When voting this November, remember the wisdom of V: "People should not be afraid of their governments. Governments should be afraid of their people."