The Coal Industry's Ongoing Demise Is Helped Along by Federal Regulators

The Coal Industry's Ongoing Demise Is Helped Along by Federal Regulators

02/25/2020Mike Holly

US policymakers are spurning free competitive markets for government-created energy monopolies and oligopolies, and the picking of winners and losers among fuel types. The preference for monopolies that block innovation, along with favoritism for oil and natural gas, as well as wind and solar, increases the risks of economic and environmental crises, and even war.

Monopolies Favored Over Competition

US politicians favor the Organization of the Petroleum Exporting Countries (OPEC) with immunity from antitrust law. OPEC comprises fourteen member nations, mostly located in the unstable Middle East and having authoritarian governments with nationalized oil monopolies. The oil cartel has the world’s lowest-cost oil reserves and provides 60 percent of global oil exports. OPEC has caused volatility in oil prices by limiting production for price gouging and overproducing (by increasing or maintaining production) to lower prices and wipe out competitors with predatory pricing.

US politicians also favor domestic big oil and gas oligopolies, such as Exxon Mobil and Chevron. Their costs have been reduced by preferential access to government-owned natural resources, land at no charge or below fair market rate, tax shelters, and environmental exemptions. In 2005, President and former oil man George W. Bush favored fracking for oil and by-product natural gas by leading legislation granting immunity from key provisions of the Safe Drinking Water Act. Regardless of whether or not one supports the Safe Drinking Water Act, the fact remains that by granting exemptions to some firms regulators are granting them monopolistic advantages. Half of US oil and two-thirds of natural gas is now produced using fracking.

US politicians have granted monopoly franchises to natural gas and electricity distribution utilities controlling gas pipelines and electricity grids, respectively. In regulated states, others are not even allowed to use the pipelines and grids for sales to customers unless permitted by the utility and regulators. Even in the few states where potential competitors are now allowed to use utility pipelines and grids, so-called deregulation rules first strengthened monopolies and then allowed manipulation by market participants. Monopolies were strengthened by allowing the utilities to spin off their power plants to affiliates and cronies for pennies on the dollar. Markets were manipulated with preferential and complicated rules and regulations. In addition, states allow utility monopolies to block direct sales of heat and electricity to large customers by lowering their rates while raising prices on smaller customers. Some states require the monopolies to conduct so-called competitive bidding for natural gas and electricity, but they commonly just select bids from themselves and cronies.

Oil and Natural Gas Favored Over Coal

Oil and gas account for 67 percent of total US energy use, compared to 13 percent from coal, the next highest source. US energy policies favor the use of oil and natural gas for all three major energy applications:

(a) Over 90 percent of transportation fuels are made from oil.

(b) Nearly 90 percent of heating comes from fossil fuels, mostly natural gas.

(c) Over 60 percent of electricity comes from fossil fuels, mostly natural gas, followed by declining coal use.

Each of these uses accounts for nearly a third of greenhouse gas emissions. Yet, recent environmental regulations have mainly affected the electricity sector and increased the market share of natural gas at the expense of coal. The US fuel mix is often compared to that of Germany, which has used renewable energy to reduce the use of fossil fuels to less than half of electricity consumption. However, Germany prefers coal to natural gas, as fracking is banned for environmental reasons.

US politicians, especially Republicans, favor oil and gas, even though the US is among the world’s highest-cost oil producers. Since 2015, fracking for oil and natural gas has failed to attract much investment even at oil prices of about $60 a barrel. World markets appear to be headed again toward increased reliance on oil exports from OPEC. This will increase the possibility of oil and natural gas price spikes, especially if global demand continues to increase. This could change with economic recession, however, as oil price spikes have preceded ten of the last eleven recessions. Moreover, the Middle East continues to host the world’s major war zones, and even more risk is posed by Trump’s baiting of Iran and abandonment of Syria to Russia.

Meanwhile, US politicians disfavor coal burning. Coal was often a more economic fuel than natural gas for power generation before the US passed new environmental regulations against it and, unlike with fracking, strictly enforced them. The US is also disfavoring coal by favoring wind and solar energy, since natural gas power plants can more economically provide complementary power (load following) for the fluctuating output from the renewables. The loss of coal markets has impoverished many local mining communities.

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Time to Go Back to That 70s Show

3 hours agoFran Rodriguez

Unless you are living under a rock, you know by now that current times are nowhere near economic stability. In fact, there has not been such “stability” (regardless of what politicians and central bankers say) since the ending of the Bretton Woods agreement in 1971. What did ending the Bretton Woods agreement mean to the world? Since I am no expert on the topic, I suggest reading this article by the CATO Institute. According to historical data and using the year 1913 as the base year, we find out that the total rise in prices is roughly 2920 percent ($1 in 1913 needs $29.20 today to buy the same). From 1913 to 1971, the index grew by 400 percent or 4 points, meaning prices multiplied by 4 in 58 years. Now, comparing from 1971 to 2019 we see that the index rose 21.73 points or 2173 percent in a similar year span. It is almost a 6-time difference.

Many Keynesian economists (and some “free-marketer” monetarists) argue that it is thanks to inflation -as Austrian thinkers, we refer to inflation as the increase in monetary supply, but for easier-reading-and-writing purposes, the general conception of inflation is the general rise in prices will be used- that wages grow with it. But is this true? In 1971, according to the SSA, the average wage index was $6,497.08, while in 2019 it was $54,099.99, a 732.68 percent increase. Yes, wages grow, but 3 times less than prices do, which turns into much lower purchasing power. According to the same data from the SSA, the average wage in 1951 was $2,799.16, which means wages grew 132.11 percent from that year until 1971. How much did prices grow? 55.77 percent, meaning workers acquired more than 2 times more purchasing power, a big difference compared to what happened after abandoning the imperfect sound money system we had. The average inflation rate during that time was 2.24 percent, while from 1971 until 2019 it was 3.91 percent.

This itself should serve as enough proof to go back to a commodity-backed system, but more facts can be brought up to make the argument even more solid. According to Fed data, median home prices have risen from $25,800 in the last quarter before leaving Bretton Woods to $327,100 in 2019, a 1167.83 percent increase (1561.63 percent until 2022), with growth in wages sitting far behind. Cars cost an average of $2,700 in 1971, and we got the news that the average price now sits at around $47,000, or 1640.74 percent, and again, wages far behind prices. It is not only the rise in prices that matters. US federal debt was 35 percent of the GDP in 1971 and never went above 90 percent with the WWII (including post-war) exception, and since 1950 it never surpassed 74 percent, again being an exception and following a downtrend until 1971. Debt has been above 100 percent for 8 years and will continue to do so for at least a few more since it’s sitting at almost 125 percent currently. This table shows perfectly the trend before and after 1971.

Now the economic and historical case has been made, we need to focus on the philosophical case. There are four main points for libertarians to be against a central bank or any similar institution and not in favor of sound money. First, ever since 1971, central banking gained tremendous power, and with it, so did the government. We know that economic power will always be abused. We are opposed to the government having more power than it should, so we cannot be in favor of a central bank. Second, the central bank sets interest rates, which is a form of central planning, and we believe it only brings misery, and therefore we favor market-driven rates, which instead bring prosperity and growth since they follow a non-artificial, imposed rate, and today is proof of it. Third, we know thanks to Murray Rothbard’s perfect explanation in his classic, America’s Great Depression, that printing money and expanding artificial credit to enterprises leads to what is known as the business cycle theory, which always ends up in recessions as we have seen in the past. And fourth, we believe in a free market, and most of the economic interventions are used to bail out banks, which was seen in 2008. This goes against the principle of free competition in a non-regulated market.

Academic papers can -and will soon- be written on the topic, but this overall, non-technical and easy-to-understand analysis and these arguments will serve as a good basis to be against the current power-abusing, out-of-control system we live in and favor a commodity-based one. It will be with commodity-backed money that we will have a true free-market economy and we will prosper. Until then, we will continue to go downhill and we will see prices rise 3 times, or even faster than wages do, making us poorer and more dependent on the government every day.

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The Goldback: An Alt-Currency That Combines Sound Money with Modern Technology

05/17/2022Samuel Peterson

Sound money is now more portable than ever! Paper banknotes were originally created and issued by private banks as receipts for their depositor’s gold. Said receipts were then used by the customers as currency, being traded between themselves and businesses to avoid the burden of transporting gold. Over time, these privately issued notes were eventually replaced by the Federal Reserve’s own paper bills. Dollar bills were entirely severed from their gold backing when the Nixon Administration decided to go off the gold standard. Now, however, technology has advanced to the point that allows gold to be transported more easily than ever before, even in a wallet. While some may be thinking that this advancement comes in the form of coin minting, as it turns out the market’s answer to solving gold’s transportability issues lies in between two thin sheets of plastic.

Enter the Goldback.

Created in 2019, Goldbacks are privately funded currency notes with gold embedded in the note. Resembling Federal Reserve issued currency, the Goldback has various designs, serial numbers, and denominations. These denominations range from 1/1000th to 1/20th of a Troy ounce of gold. Currently, the States of New Hampshire, Nevada, and Utah all have privately issued sets printed and available on the market for purchase. Goldbacks combine sound money with modern technology through a process called vacuum deposition. Goldback’s company website describes this process:

“The designs are printed on a sheet of polymer that is then bombarded with the correct amount of atomized gold particles in a vacuum chamber. This gold is then sealed inside by a second protective barrier of polymer, thus creating a beautiful negative image.”

The company that manufactures Goldbacks, Valaurum, has also produced gold-embedded-bills for the Republic of Ghana, the Republic of Cameroon, and various private organizations.

The drawbacks of the Goldback are very apparent. Namely, they’re spotting at more than double the current price of gold. This high premium is a result of its expensive crafting and limited supply. Both factors create difficulties in the currency becoming a widely accepted medium of exchange at this time.

Despite these drawbacks, the future holds great potential for the goldback. As technology develops, competing producers could have a Goldback-like product manufactured more efficiently, increasing the supply and thus lowering the cost to consumers. This is the beauty of the market. As time progresses, profit incentives draw in entrepreneurs who create higher quality products at lower costs. The computer serves as a great example. In an article published by The American Enterprise Institute, Mark Perry explores the market development of the computer:

 “Compared to today’s desktops, mainframe computers were 128 times slower, more than 8,000 [times] as expensive, and were more than 1 million times as expensive in terms of cost per MHz.”

Logically, the same principle would apply to Goldbacks, especially when more competitors join the market. The process of having less expensive gold-embedded bills on the market could be expedited further if larger banks decide to print their own Goldback-like currency. However, this is highly unlikely to happen in the foreseeable future due to the Federal Reserve’s policy of easy money that benefits its member banks.

Today, individuals face soaring prices at the gas pump and grocery store. Due to the Federal Reserve creating trillions and trillions of dollars since the beginning of the Covid-19 Pandemic, inflation is causing devastating pain all throughout the market. Because of this, finding hedges against inflation, such as precious metals, is more important than ever before. If the dollar ever reaches a point of Weimar or Venezuela-style hyperinflation, low income and fixed income households, savers, and retirees will be the most harmed. Luckily, this is an area where the Goldback can potentially ease the pain of inflation. Rather than needing large amounts of capital to purchase gold, a Goldback can be bought for less than the cost of a typical lunch. This is an especially promising development for teenagers and college students, like myself, who do not have the capital to buy large quantities of gold.

Ludwig von Mises famously remarked, “[The] first precondition of any monetary reform is to halt the printing press.” If stopping the Fed from printing more money is not an option (which seems to be the case), then arguably the next best step for monetary reform is to divest from state-provided currency and invest in private alternatives. The Goldback is one such option. Although it is unlikely that this currency will be accepted in your grocery store anytime soon, the technology behind it certainly makes for a hopeful future where individuals can use privately provided sound money in the form of gold, rather than the State’s unstable, debased fiat currency.

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$30 Trillion Debt Matters

05/16/2022Robert Aro

With the Federal Funds Target rate set between 0.75% and 1.0%, and the Fed’s promise to increase rates and reduce asset purchases in the coming months, some consideration should be paid to servicing the USA’s $30.5 trillion debt.

To get a better sense of the interest expense, TreasuryDirect provides the average interest rate, as of April of last month, being 1.659%. See below:

Borrowing $30 trillion at less than 1.659% may not seem all that bad; but because something works today, doesn’t mean it will continue working tomorrow. Notice on the chart, total marketable securities are borrowed at 1.528% and non-marketable securities at 2.123%. Marketable securities are more widely recognizable as they include treasury bills, notes and bonds traded in the secondary market. As of last month, approximately $23.3 trillion in debt was marketable, while only $7.1 trillion was non-marketable, per below.

The trouble ahead is easier to spot when the New York Fed explains the mechanism at which the Fed can buy or sell US debt:

The New York Fed's Open Market Trading Desk (the Desk) purchases Treasury securities in the secondary market and rolls over maturing Treasury security holdings…

Should all go as planned, next month it will be in the secondary market where the Fed will really show its influence again, this time reducing the number of treasuries holdings by up to $47.5 billion a month.

Unless other entities step up purchases to fill the void left by the Fed, it's expected rates will continue increasing. Maybe we’ll see wild fluctuations in interest rates in the not too distant future.

How high rates will go is anyone’s guess. But clearly there must be an interest rate that is simply too high. Carrying $30 trillion becomes progressively difficult when rates are rising, as each 1% increase in the average interest rate adds $300 billion more of an annual interest expense.

Maybe that’s why CNBC noted:

Federal Reserve Chairman Jerome Powell acknowledged that increasing interest rates will “include some pain,” but added that a far worse outcome would be for prices to continue spiking.

Chair Powell sees raising rates as the cure for increasing prices. We shall see how effective this strategy is in due time. But, no one has provided the strategy to cure our high debt level. Even at an average interest rate of 3 to 5%, normal, if not low, by historical standards, the interest payment on US debt seems crippling. And if the US government is borrowing at 3-5%, one can hardly imagine what the average consumer would borrow on a mortgage, or corporation on a bond.

Of course, there is one way to ensure rates stay lower for longer which involves the Fed purchasing more debt and increasing the money supply. Don’t ever discount this as a viable option according to the Fed; undoubtedly, no matter what the next crisis is, even if it’s rising prices or a collapsing currency, balance sheet expansion will be put forth as the solution. They’ll say it worked in the past, so it should work in the future.

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Entrepreneurial Doctors Work around Government Medical Controls

05/16/2022James Anthony

Governments have long had tight links to many lines of work including many businesses, law, and medicine.

The key way to delink from existing entanglements is to invent bypasses: new businesses like Federal Express, new products like cellular networks and private arbitration. In all cases, to make new alternatives available to customers.

Delinking from governments couldn’t be needed more than in medicine. Crony-socialist covid treatment, pharma, and public health have been leaving many dead and even more injured and susceptible to further disease and early death.

But out of these ashes, a new way is coming to life.

Dr. Richard Urso tells this story in an EpochTV American Thought Leaders interview with Jan Jekielek that was posted in two parts on April 21 and April 23.

Dr. Urso is an expert clinician with extensive experience developing treatments, and an accomplished entrepreneur. He was trained in ophthalmology, became chief of orbital oncology at MD Anderson Cancer Center, and left and developed a 750-employee ophthalmology practice.

The Remnant Is Forged

On March 10, 2020, one of Dr. Urso’s best friends from medical school called him and said, “I know you’ve been looking at this and I trust you. I’m not going to the hospital because I’ve already seen what happens overseas.” Dr. Urso treated him with vitamin D, hydroxychloroquine, erythromycin, aspirin, and steroids. He took these and got better quickly.

Dr. Urso was told to not use masks that were needed for emergency personnel, and if he did he would be criminally liable. He decided to not wear masks.

He was told to not work. He and some colleagues decided to keep seeing emergency patients. They started losing money but were able to keep their doors open and keep 300 of their 750 employees working.

He told his patients that if they got covid symptoms they should first call their regular doctor but then if their regular doctor wouldn’t help them and didn’t refer them to someone else, they should call him.

So far he has treated 1,800 covid patients.

As he and others wrote with Dr. Peter McCullough, best clinical treatment starts as early as possible with a sequential multi-drug cocktail. The antivirals ivermectin and hydroxychloroquine and the anti-inflammatory prednisone are crucial drugs. Other antivirals can be used in place of ivermectin and hydroxychloroquine, but it’s hard to have success without any anti-inflammatory prednisone.

Over time, he and others have gone strongly towards mast cell stabilizers and H1 or H2 immune-response blockers. Cyproheptadine blocks H1 like Claritin does but more strongly, and also blocks serotonins that are manufactured in the lungs and create a huge inflammatory response. The stomach-acid medicine Pepcid blocks H2. So does the asthma medicine Singulair. Almost every one of these drugs also has a small antiviral action.

They also use the cholesterol-lowering drug fenofibrate. They can use the transplant antirejection drug cyclosporin. They also can use JAK inhibitors.

In long covid, they’re seeing reactivation of the Epstein-Barr mononucleosis virus and the herpes virus family. Here, they use the supplement lysine, which inhibits these viruses’ replication.

In general, he always supplements vitamin D. He long ago learned that this helps the body’s tumor recognition, and he found that nearly all his cancer patients were vitamin-D deficient. Vitamin D reduces cancer risk by 30% to 40%, reduces stroke and heart attack risk by 50%, reduces bone-fracture risk by 83%, helps with flu and allergies, and makes you better looking. It also helps prevent and fight covid.

Dr. Urso and others have followed in the tradition of doctors like the legendary heart surgeons Michael DeBakey and Denton Cooley and trauma surgeon Red Duke. They didn’t take days off. They had their labs close by, and they would fly on the helicopter to treat trauma. They had dedication and intellect and charisma. These doctors were the factor that established their medical system’s brand.

Through the 90s, hospitals became stronger, offsetting the power of the insurance companies. But as the hospitals became stronger, doctors became marginalized. They became employees.

As employees during covid, doctors became reluctant to speak out. For people taken care of outside of hospitals, who collectively numbered in the millions of patients, the whole United States of America wound up being treated by about 400 doctors, with nurse practitioners also chipping in.

Now, such capability just needs to be reinforced and built upon.

The Next Steps Are in Progress

First, for messaging, Dr. Urso, Robert Malone, John Littell, Heather Gessling, Brian Tyson, Ryan Cold, and Mark McDonald started the International Alliance of Physicians and Medical Scientists, a worldwide group numbering 18,000 professionals. This group’s Global Covid Summit prepared a declaration resolving that healthy children shall not be subjected to forced vaccination, that naturally-immune persons recovered from SARS-CoV-2 shall not be subject to any restrictions or mask mandates, and that all health agencies and institutions shall cease interfering with physicians treating individual patients.

To improve the messaging, this group has partnered with a group that has the required infrastructure built already. Given their grounding in preeminent clinical practice and their demonstrated excellence, they will be much better than Medscape, which is basically drug company information, and WebMD, which also is drug company information.

Second, they’re going to create a national telehealth plan. This is relatively easy to do.

Third, they’re going to create clinics, maybe by a franchise model, to cover some administrative costs and unify their marketing.

Fourth, on surgery centers, Dr. Urso has already been involved in building three surgery centers, and many other doctors know how to do this too.

Fifth, on hospitals, it’s more complicated. Some really-great administrators want to work with them. The biggest complexity will be integrating the information technology to create the whole business structure.

The goal is to restore doctor-patient centered care, obviously also including nursing.

Dr. Urso would assume that this organization he and others are developing will grow in power and influence, and at some point, in some ways, will itself become corrupted. This is just a natural thing that has to happen. Things build, forests grow, fires tear them down, and they regrow again.

Right now, 900,000 people have died because the State decided we wouldn’t have early treatment.

That’s absurd. There’s always a treatment for every disorder.

Dr. Urso and others are reinventing our medical system.

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The Fed: Just Doing My Job

05/13/2022Robert Aro

Last week Federal Reserve Governor Christopher J. Waller wrote: Reflections on Monetary Policy in 2021, where he discussed whether or not the Fed fell behind the curve. In Fedspeak, the Fed did not raise rates fast enough to “fight inflation.”

With April’s producer price index announcement of 11%, it’s likely someone at the Fed thought it best to give the public an explanation. The Governor begins by preparing listeners for the excuses to follow:

First, the Fed was not alone in underestimating the strength of inflation that revealed itself in late 2021. 

Then he explains that policy errors might not actually be policy errors:

…setting policy in real time can create what appear to be policy errors after the fact due to data revisions.

When referring to the dual mandate of maximum employment and price stability, he notes that:

Whether you believe this is the appropriate mandate or not, it is the law of the land, and it is our job to pursue both objectives.

Unfortunately, history is rife with instances where regular people were just doing their jobs, leading to countless atrocities.

Not only is the Governor just doing his job, but he doesn’t act alone. In a nation of over 300 million people, he explains:

…policy is set by a large committee of up to 12 voting members and a total of 19 participants in our discussions.

As per recent decisions made by the committee, on December 2020:

We said that we would "aim to achieve inflation moderately above 2 percent for some time"…

Meaning, the Fed wanted to increase the rate at which our currency debases year over year.

It’s also alarming when those in charge, whose job it is to make predictions about the future, always seem so wildly inaccurate. In the case of the 19 participants who weigh in on the fate of the US dollar:

With regard to future inflation, 13 participants projected inflation in 2022 would be at or below our 2 percent target. In the March 2021 SEP, no Committee member expected inflation to be over 3 percent for 2021.

This gets excused by claiming the Fed’s forecast was “consistent with private-sector economic forecasts.”

He concludes with questioning whether the central bank fell behind the curve and if they should have hiked rates sooner. However:

Even though we did not actually move the policy rate in 2021, we used forward guidance to start raising market rates…

Since the 2-year Treasury yield went from 25 basis points in September to 75 basis points by December 2021, then:

That is the equivalent, in my mind, of two 25 basis point policy rate hikes for impacting the financial markets.

Concluding:

That is the equivalent, in my mind, of two 25 basis point policy rate hikes for impacting the financial markets. When looked at this way, how far behind the curve could we have possibly been if, using forward guidance, one views rate hikes effectively beginning in September 2021?

One must wonder what exactly the 19 Federal Reserve participants do for a living. If rates can rise without the Fed, and if the private sector can forecast without the Fed, then the necessity of having the Fed should be questioned. Yet, according to the Governor, it really doesn’t matter what anyone thinks, or how detrimental the outcomes of the Fed become, as explained: “it is the law of the land,” and he’s just doing his job.

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Blame the FDA

One of the biggest issues this last week is countless parents struggling to find formula for their infants. The blame game started and the fingers are pointing. People are slinging accusations at everything from mothers who are not nursing to Biden feeding illegal immigrant infants before united states children.

But what is the real issue? The FDA!

In mid-February the FDA shutdown Abbott Laboratories (Which also happens to be the company’s largest U.S. formula manufacturing plant) due to fears of it being the source of a bacterial infection that killed two infants. However, these fears were unfounded and the factory was cleared of any wrongdoing. Yet, almost three months later the plant is still shut down. Why? That answer isn’t as clear from the FDA.

Like any “good” government agency, the FDA put the blame back on the manufacturer: “That plant needed to be shut down,” Former FDA Associate Commissioner Peter Pitts said on Thursday.
Despite this statement and not finding any wrongdoing, he doesn’t go into details about why it needed to be shut down and why it has taken three months to get it back up and running, nor was any warning about massive future shortages given to parents.

So tough luck the FDA says for mothers who can’t nurse, single fathers, infants with allergies, gastrointestinal issues, or metabolic disorders. As parents franticly search for food for their infants and search hours online for other solutions.

Just like their covid strategy, the FDA didn’t have one here. leading to countless stressed-out parents struggling to once again feed their children.
As Tho Bishop points out:

“The costs of the FDA bureaucracy is a far greater public health risk than any of the advantages that it claims to provide. It’s past time to scrap the agency altogether.”

Indeed. Just another fine example of what happens when the government intervenes in the market. It’s time to abolish the FDA and sow salt the earth where all the buildings stood.

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Will Abortion Rights Lead to Secession in the USA?

05/12/2022Peyton Gouzien

After the leaking of a draft opinion from the Supreme Court on “Dobbs v. Jackson Women’s Health Organization,” it seems clear that the precedent set in Roe v. Wade and upheld by Planned Parenthood v. Casey is being overturned. In the document, confirmed by Chief Justice Roberts, Justice Alito plainly says that the majority opinion is “that Roe and Casey must be overruled,” and that “It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.”. 

So, what does this mean for Abortion “rights”? Despite what liberal pundits' hysteria makes it look like, this does not mean that abortion is now banned in the entire United States. What it does mean is that the decision on whether it is banned is determined by each state’s government. 

Essentially, the power to legislate abortion has been handed from the federal government down to the states in a rare victory for states’ rights. Particularly on an issue that divides Americans more than nearly any other issue. 

Forty-nine percent of Americans identify as Pro-Choice and forty-seven percent as Pro-Life. Overall as well, thirty-two percent support abortion being legal in all cases and nineteen percent support abortion being illegal in all cases. Support or lack of it seems correlated to the region the state is in, as Pro-Life states tend to be in the South or Midwest, while pro-choice heavy states are in the Northeast and West coast. 

Twenty-three states already have laws that would trigger if the decision is made final that either impose restrictions on abortion they could not previously impose or an outright ban of abortion, all in either the South or Midwest. Conversely, sixteen states have laws that protect the “abortion rights” which are all on the Northeast and West coasts. 

The pre-existing divide between more rural, Southern, and Midwestern states and more urban, Northeastern, and West coast states is going to be furthered. The difference in policy, even among states that are generally pro-life or pro-choice, will create a new incentive for people in choosing where they live. One based around a moral issue. 

While what set of morals one wants to live under somewhat exists between the states in the varied cultures between them, abortion being a state issue gives an easy signaling device for them. It is a safe assumption that “what is their abortion policy” is a question people will ask when considering where to move.

This is a continuation of the trend of people moving from state to state concentrating certain states on one ideology and culture that is becoming increasingly opposed to other ones. The obvious question that comes from observing this trend is, “Are we going to see secession from this?”

The answer to that question cannot be definitively answered till something happens, but we can draw parallels to the last time the U.S. saw States secede in the Civil War. Historian Alan Taylor describes the U.S. up to 1850 as “built on an unstable foundation of rival regions and an ambiguous Constitution”. 

There were many conflicts between the states before the Civil War and even full-on rebellions such as the Whiskey or Shay’s Rebellion. The States only continued the trend of division among themselves leading up to the Civil War culturally, economically, and politically. 

Slavery would become the issue that is credited with causing the Civil War, but, while playing a part, was not the only reason, nor does it explain all of the divides between the states. In some states like North Carolina, it was never clear whether the general population even cared about the issue as it was a relatively small slave population state. 

Additionally, several Union states kept slavery throughout the war, even after the emancipation proclamation, till it was outlawed by the 13th amendment. Although slavery was not the sole cause of the Civil War, it did become the issue that served as the face of the divide.

Similar conditions do exist today as leading up to the Civil War if you replace the issue of Slavery with the issue of abortion. States before this decision had already been engaged in legal fights with the federal government over abortion. Not only this, several states have made laws to re-enforce “abortion rights” and provide greater access to it. 

It is clear that before and now after the leak states are dividing along this line and it is coming to the forefront of the differences between them. Though we can see that many other divides exist between the states that are only being exacerbated, such as COVID 19-policies and approach to the economy. 

This provides quite substantial evidence for some kind of situation similar to the Civil War secession or a softer secession such as the USSR. One can only wait, but regardless if such a scenario happens Abortion will be at the forefront of the divide between states for the foreseeable future. 

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PPI Inflation Is Over 10% Yet Again, Suggesting More CPI Growth in Coming Months

05/12/2022Ryan McMaken

The Us Bureau of Labor Statistics released new producer price index (PPI) data today, and it’s not good news for consumers.

The PPI is a measure of prices at the production phase of goods and services, and is often an indicator of where consumer prices are headed. Prior to 1978, the index was known as the wholesale price index.

For April this year, year-over-year growth in the PPI came in at over 10 percent for the fifth month in a row, reaching 11 percent. This was a small drop from March’s year-over-year rate of 11.5 percent, but continues to suggest ongoing upward pressure in prices. Ther month-over-month change for April was 0.5 percent, which was a sizable pullback from March’s 1.6 percent month-over-month change, but movement remains upward and from a very elevated base.

Year-over-year changes in the PPI have been over 7 percent for 11 months.

ppi

As with the CPI index, the narrative among optimistic analysists was that PPI measures would moderate significantly in April and signal a downward turn. That does not appear to be the case so far. As the AP reports today:

The report included some signs that price increases are moderating, but at a painfully high level … prices are still rising at a historically rapid clip. Food costs rose 1.5% just in April from March, while shipping and warehousing prices leapt 3.6%. New car prices rose 0.8%.

In other words, there are still no indications that inflationary pressures are about to disappear. Moreover, from a policy standpoint, neither the Biden administration nor the central bank have signaled they will be taking any steps that could reliably reverse this trend.

The Biden administration has repeatedly taken a stance in favor of greater regulation which only curtails production, further constraining supply and pushing up prices.

Meanwhile, the Federal Reserve—which has been the primary source of inflation due to its ongoing financial repression policies—continues to embrace nothing more than the most tepid steps toward reining in monetary inflation.

As I wrote here last week, after nearly than a year of very elevated inflation rates, the Fed has said it will not begin reducing its portfolio—thus reducing the money supply—until June. And even then, the scale of the reductions will be miniscule. Moreover, the Fed’s planned increases to interest rates will only raise the target federal funds rate to around two percent, assuming all goes as planned.

These are tiny interventions which will do little to reduce inflation unless they trigger a recession—and then we’ll have both inflation and high unemployment.

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This Colorado Cop Is Learning a Lesson about Proportionality

05/10/2022Ryan McMaken

Loveland, Colorado police officer Austin Hopp was sentenced this week to prison time for attacking an elderly woman with dementia in June 2020. After pleading guilty to second-degree assault and other crimes, Hopp reached a plea agreement with the county and was sentenced to five years in prison plus three years probation.

Hopp was “enforcing the law” when he threw victim Karen Garner to the ground, broke her arm, and dislocated her shoulder. The 80-pound, 73-year-old woman had allegedly attempted to walk out of a local Walmart with $13.88 worth of merchandise. When confronted, Garner left the merchandise in the store and walked home.

Hopp and his partner, Officer Daria Jalali, quickly caught up with Garner, who was picking wildflowers along the road. Hopp proceeded to assault Garner with the help of Jalali. [See video.] Hopp’s manhandling of the tiny woman was so aggressive that a local bystander even stopped—thinking Hopp was abusing a small child—and asked “do you have to use that much aggression?”

The sergeant on site, Philip Metzler, was quick to dismiss the bystanders’ concerns and shouted down the citizen, declaring Hopp “didn’t do anything wrong.” Metzler also invented a false narrative about how Garner “ran from the store” and “resisted arrest.”

Soon thereafter, Garner was taken to the local lockup where she was refused medical attention, even though she had a broken arm. While Garner while crying in pain in her holding cell, Hopp, Jalali, and Community Service Officer Tyler Blackett viewed the body cam footage from the incident. Video from the police station shows the three officers laughing and joking about Garner’s arrest and her broken arm. Hopp announced that he was “proud” and “super excited” that he had the opportunity to use hobble restraints on the elderly woman. Jalali and Hopp shared a fist bump over the arrest with Hopp declaring that the arrest “went great” and “we crushed it.”

But then nothing happened. As is so often the case with police assaults on members of the public, the leadership in the police department took no exception to Hopp’s assault or the fact that Garner was denied medical attention. The laugh-fest following Garner’s arrest was not seen as anything to worry about. Loveland's assistant chief of police Ray Butler, after viewing Hopp's video, concluded Hopp's felony assault was "necessary, reasonable, and within policy." 

It was only in April of the following year that Garner’s daughter was finally able to get information on her mother’s violent arrest. Thanks to their skilled attorney, bodycam videos of the incident were made public, as was the video from the police station. Only after a public outcry over the contents of the video did the police department’s leadership take any significant action. Hopp, Jalali, and Metzler were given paid vacations—also known as “administrative leave”—pending investigation.

Hopp, Jalali, and Blackett finally resigned—i.e., were not fired—in late April. It was not until more than a year after the incident, in September 2021, that Metzler resigned. Metzler, of course, had signed off on Hopp’s report, and—according to Garner’s attorney—deliberately mislabeled his own bodycam files so as to hide evidence. The other sergeant that  approved Hopp’s report, Sergeant Antolina Hill, remains employed by the department.

Now, nearly two years later—and certainly no thanks to the police department that employed and protected him—Austin Hopp is in prison. His partner Jalali is awaiting trial in June.

Do Police Understand the Concept of Proportionality? 

But this leaves us with an important question: what sort of thinking convinces a police officer to conclude it is laudable, or even acceptable, to rough up an old lady in this manner?

We can already guess the narrative that the police were telling themselves, given the words of Metzler: in their minds, Garner was apparently a “criminal” who resisted arrest and ran from the scene of a crime. Perhaps in their minds, this exaggerated version of events justified breaking an old woman’s arm and throwing her in a jail cell.

Most reasonable people, however, understand there is a problem of proportionality here. Garner didn’t actually steal anything, but even if she had stolen something, was the proper response to beat her up? Moreover, in Garner’s case, the value of the goods she had in hand amounted to under 14 dollars. This must all be viewed in light of the basic premise of proportionality which is that “[T]here should be a proportion between the severity of the crime and the severity of the punishment.”

So, here we have a woman who had not actually stolen anything, but police were acting as if she were a hardened criminal, deserving of harsh treatment. Moreover, as Murray Rothbard was always careful to note, when a suspect is in the process of being apprehended, guilt has not even been determined yet. In other words, all force taken against a suspect may ultimately prove to be against a party who is completely innocent.

Thus, in the Garner case, we witness police breaking an old woman’s arm in a case where:

  • Guilt has not been established.
  • The suspect has not actually stolen anything.
  • The suspect is a small elderly person and presents no threat to the community.

The public, on some level, understood all of this, which is likely why the public’s reaction to the police in Garner’s case was one of near-universal revulsion. Had Hopp arrested the local 200-pound ne’er-do-well in a similar fashion for stealing a pack of cigarettes, Hopp would almost certainly not be in prison today.

Reasonable people understand that not all cases of theft (or attempted theft) are created equal and do not call for the same response. Indeed, in many cases, proportionality and basic decency suggest no arrest at all is the most prudent course of action. Garner’s case is just such a case.

The "Arrest and Jail" Model for Minor Infractions Is a Modern, State-Centered Invention

“Law and order” types, however, often have problems understanding proportionality and the fact that arresting people is not necessarily the solution to every legal infraction. For many olaw-and-order advocates, even very minor infractions require forceful intervention, jailing, and arrest. Those suspects who don’t immediately and docilely submit to arrest? Those people—regardless of their alleged infraction—are “resisting arrest” and therefore must be made to comply by any means necessary

As the Garner case has demonstrated, however, this is a ghoulish position and out of touch with the real world.

For example, in the case of Garner, how might the situation have been handled differently? It was apparent to any decent person—i.e., not the personnel of the Loveland Police Department—that it is would not have been appropriate to use violence against someone in Garner’s situation. For one, the supermarket could protect itself from Garner in the future by simply banning her from the premises. This is common in the case of shoplifters. If the police were hell bent on establishing Garner’s identity—and if she refused to provide a name—they could simply have followed her the additional half mile home. Then they could have issued a summons to appear in court.

This almost certainly would have been less time-consuming and costly than arresting the woman and putting her in jail. The summons approach definitely would have been less costly than the $3 million settlement paid out to the victim’s family in the Garner case.

Yet, we continue to hear from the “always comply” crowd that any minor infraction requires a response of overwhelming force followed by violent escalation. But what if Garner had somehow managed to get free of the police officer and was able to run away? If we believe that compliance is of paramount importance, then we must conclude that it would be justifiable to use all types of force, up and including deadly force, on people in Garner's situation. In other words, we end up supporting the idea that death is somehow a proportional "punishment" for petty (attempted) theft.  Cleary, there is something very wrong with this position. 

Moreover, from a public-policy view, police resources are wasted on cases such as these. If Loveland is like most communities of its size and demographics, there are many unsolved, never-prosecuted car thefts, assaults, and burglaries. Anyone who has been a victim of a burglary, for example, knows that the police do next to nothing in terms of finding stolen property. Police often lie that they "must enforce every law" but this is obviously not the case. Police choose each and every day how to distribute police resources and what crimes to investigate and address. This is reflected in the fact that police devote very few resources to homicides, but large amounts of resources to more lucrative and easy investigations of illegal drugs

So why did two police officers and their sergeant decide to double down on arresting Karen Garner? Because it was the easy thing to do. Also, Garner presented no threat whatsoever to the personal safety of police officers. This made her an even easier target. Tracking down dangerous criminals, on the other hand, requires actual work and risk.

In the end, it would have been best to do nothing from the standpoint of police. If Walmart wanted to insist on punishing Garner somehow for her petty non-theft, Walmart could sue her in court. This, of course, would be the course of action recommended by Rothbard in his chapter on proportionality in The Ethics of Liberty. But even then, the penalty inflicted on Garner would still have to be proportional, since, as Rothbard notes

The victim [i.e., Walmart], then, has the right to exact punishment up to the proportional amount as determined by the extent of the crime, but he is also free either to allow the aggressor to buy his way out of punishment, or to forgive the aggressor partially or altogether. The proportionate level of punishment sets the right of the victim, the permissible upper bound of punishment; but how much or whether the victim decides to exercise that right is up to him.

In Garner's case, Walmart could pursue maybe 20 bucks for restitution for the time spent by store employees on reclaiming property from Garner. Or Walmart could simply decide it's not worth the trouble. Anything more than a few bucks restitution in this case is disproportional to the severity of the crime.  A broken arm is beyond the pale of reasonable responses. On the other hand, a doctrinaire commitment to police-enforced “law and order” simply depends on an imaginary version of reality in which every minor infraction can be addressed through government intervention. 

Such thinking is purely modern. Historically, prosecution for such offenses has generally been a matter of private civil law. The idea that police ought to be sent out to round up every low-grade thief is a product of big-government twentieth-century thinking, and it leads to a “cure worse than the disease.” 

That was clearly the case in the Garner situation. Fortunately, the court recognized this, and Hopp will have a few years in a prison cell to help him understand. Let's hope his partner Jalali will soon have the same opportunity. 

Image source:
Larimer County Sheriff's Office
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Taxes: The Barbarous Relic of the 21st Century

05/09/2022Andrew Packer

Ah, spring. That magical time of year when every productive American’s fancy turns to thoughts of how to legally reduce their income tax obligations.

This year, filing an extension and waiting to pay as long as possible has been the ideal tax strategy, thanks in part to the official inflation rate that just hit 8.9%.1

But while trading tax tips is useful (at least in March and into early April), the real key observation \is that taxes have become the true “barbarous relic” of our time.

That’s right, taxes, particularly income taxes, are simply not needed anymore!

That’s just in time too, given the rising complexity of the tax code. Systems that get as complex as the tax code tend to end up collapsing. Barbarous relic, indeed!

That term first originated by economist John Maynard Keynes, in reference to the use of gold as money. 98 years ago, he stated, “In truth, gold is already a barbarous relic.”

Keynes, as usual, was wrong.2

That’s because the decision to use gold as money was determined by many objective measures through centuries of use. Gold has durability, divisibility, and portability, among other qualities.

And it was only found in small proportions globally, at least in terms of what’s been easy and inexpensive to mine given the technology of the time.

As Ludwig von Mises details in Human Action:

“Men have chosen the precious metals gold and silver for the money service on account of their mineralogical, physical, and chemical features. The use of money in a market economy is a praxeologically necessary fact. That gold — and not something else — is used as money is merely a historical fact and as such cannot be conceived by catallactics.”3

In short, people chose gold.

Governments didn’t. But they did create a monopoly on determining weights and measures, the creation of coinage, and through centuries of beguilement, managed to weaken the global gold standard until a fully-fiat regime was born with the US closed the “gold window” in 1971.

But having replaced gold with a fiat currency, governments also found that they can “progress” in other areas as well.

Unfortunately, taxation is one such area.

Individual human beings have entered into governments for a number of purposes, notably collective self-defense and for the ability to redress differences through agreed-upon arbiters.

The use of taxation has historically been to support and pay for government services. However, government has, unlike the gold standard, often had far more flexibility in how taxes are raised.

In the United States, tax revenue was often generated through tariffs. Only during the “emergency” of the Civil War was the first attempt made to tax the income of American citizens. And taxation was limited because the amount of money in the system was limited by the amount of gold in circulation.

While initially struck down as unconstitutional, those who supported the early income tax did something that would be unthinkable today: They changed the Constitution.

This provision came at the end of the gold standard era, and conveniently, at the same time of the third central bank in US history, the Federal Reserve. One can’t help but wonder if the two events are intertwined.

The end of the gold standard led to a substantial rise in incomes, at least measured in fiat, non-gold-backed dollars. As income rose, more and more found themselves trapped into having to pay an income tax, as well as the less-discussed payroll tax.

Thus, what was initially proposed as an income tax on only the wealthiest Americans became an annual financial exam that nearly all have to complete today – even if it’s only to get a refund for overpayment.

Given the proliferation of taxes, it’s clear that the abandonment of the gold standard account the world has contributed to making taxation a barbarous relic today. As the monetary unit is further debased, “cost of living” rises in wages lead to higher tax burdens, which don’t change as often in nominal terms.

But it doesn’t have to be this way. Governments can now simply create as much of their preferred monetary unit as needed.

That’s because the monetary alternative to the gold standard, a fiat system, is known for its elasticity. Or, in other terms, the ability by governments to print as much of the monetary unit with only political restrictions (if any) to consider.

Or, in meme speak, “money printer go brrr.”

The Covid 19 pandemic was a golden age for printing money hand over fist. In the US alone, 80% of all dollars in existence were created, going from $4 trillion in January 2020 to over $20 trillion in late 2021.4

But if the government can print money to hand out in “stimulus payments,” or in forgivable loan programs to businesses, the real question is, why make anyone pay taxes at all?

Why even worry about issuing more government debt, if the money can simply be printed instead? Why should the government issue a bond that it has to repay, when it can simply print cash?

All told, it’s clear that taxes are a barbarous relic in our modern age, especially given the money printing of the past two years and its inflationary effects.

Even holding off on collecting taxes for a few years wouldn’t permanently make anyone whole for the destroyed purchasing power of their currency through inflation, but it would go a long way.

But, there’s still more reasons why taxes are truly barbarous. That’s because there’s more than just a monetary cost to paying taxes.

The IRS estimates that it takes around 15 hours5 to prepare their return. Again, taxpayers receive no compensation for their time, so that’s lost economic value creation by millions of man hours per year.

The tax code is complicated. How complicated? People can’t even agree on how long the tax code is.

One estimate is as little as 2,600 pages. Or as high as 75,000 pages.6 That’s a sizeable discrepancy. It’s also going to add a lot to your tax prep time to read and understand it all first.

And even with a written code, many provisions are open to interpretation. Asking 100 different IRS agents to review your tax returns will likely come up with at least 100 different solutions.

Simply put, the US income tax is a series of rules, exceptions to rules, and an overall structure that creates one of the most complex systems in human history.

However, for all the complexity of the tax code, studies have shown that the US has been pretty consistent about collecting 15-20% of GDP through taxes since the end of World War II.7

In other words, it doesn’t matter what the top rate is. It doesn’t matter what exceptions or carve-outs are made. Those who have proposed a “flat tax” that strips out the complexity of the tax code are on to something, and can point to the relative consistency of how much is collected.

But, again, the world has changed. Perhaps tax policy should too. If the government has been pretty good about collecting 15-20% of GDP every year via taxes, they could just scrap taxes and print the money instead.

The best benefit of this policy is that it would greatly slow down the money creation of the past two years!

To some extent, the notion of taxes being outdated is hardly new. Nor unique to the Austrian school.

According to the “modern monetary theory” or MMT, we now live in a more enlightened world. It’s one where monetary policy has become a magical wand capable of addressing things as previously un-economic as systemic racism8 and climate change.9

Given that we now live in a world where all problems can be solved by simply printing money, why not print what’s needed and save taxpayers 15 hours of prep time per year?

More importantly, by printing the money needed for taxes, former taxpayers would suddenly have more money on hand.

That would certainly come in hand to offset the inflation of pure money printing, but every new economic omelet has to break a few eggs.

But MMT is so far into printing money to solve problems that it, sadly, makes paying taxes look responsible.

There’s only so much in taxes that people will want to pay before a taxpayer revolt. It’s hardly a gold standard, which offers limited increases based on mining, but it’s at least a limit.

However, by the time inflation shifted to hyperinflation, MMT would implode too late to stave off a general collapse. Or it would simply encourage its proponents to simply try on a bigger scale next time.10

So with this tax season now behind us (unless you filed an extension) … it’s time to think about how to best scrap the outdated, barbaric system we’re in.

Beyond the complexity, limited effectiveness, and frustrations of the current tax regime, it still doesn’t meet the needs of today’s “do everything” state.

Alternatively, the economy should fare better by rapidly scaling back the amount of taxes collected, while also decreasing the size and scope of government by an even greater amount.

And, by removing a government-backed central bank diluting the currency either “quickly or less quickly,” we could have a more stable monetary unit and a better and more accurate measure of real economic growth as a result.

But such a discussion will likely leave the one proposing those changes as the one advocating for barbarous relics like gold as a standard of value.11

With the status quo being questioned in so many ways right now, it’s time to consider how to best shift the world towards a more reasonable way of taxing its citizens, combined with a discussion of how much government is really needed in their lives.

In truth, taxation is already a barbarous relic. As is the fiat currency regime that’s allowed it to spiral into a complicated morass sucking time and talent out of the productive, real economy.

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