Economic Regulation Means Government Picks Winners and Losers
Economic Regulation Means Government Picks Winners and Losers
There is severe confusion about the meaning of economic growth. Many seem to mistakenly think that it has to do with GDP or producing stuff. It does not. Economic growth means that an economy's ability to satisfy people's wants, whatever they are—that is, to produce well-being—increases.
GDP is a rather terrible way of capturing this using (public) statistics and is corrupted by those benefitting from corrupting such figures. GDP is not growth.
Likewise, having more stuff in stores isn't growth. Producing increasing quantities of stuff that nobody is willing to buy is the very opposite of economic growth: it is wasting our limited productive capacity. But note the word “willing.” Well-being is not about (objective) needs, but about being able to escape felt uneasiness. It can turn out to be right or wrong, but that’s beside the point.
Economic growth is the increased ability to satisfy whatever wants people have, for whatever reasons they may have. Examples of economic growth aren't the newest iPhone or plastic toy made in China as much as it’s the availability of quality housing, food and nourishment, and the ability to treat disease. One obvious example of economic growth since the days of Malthus is the enormous increase in our ability to produce food. The quantity and quality have increased immensely. We use less resources to satisfy more wants—that's the meaning of economic growth.
“Economic” means simply economizing or finding the better use of scarce resources (not only natural ones). Economic growth is thus better economizing. It means that we have the ability, which means we can afford, to satisfy more wants than just the basic needs.
The beautiful thing with economic growth is that it applies to society overall as well as to all individuals: increased productive capacity means more ways of satisfying wants but also cheaper ways of doing so. But this does not, of course, imply that the distribution of access and ability to consume is equal and instantaneous. It spreads in stepwise fashion and will reach everyone.
Increased productivity increases the purchasing power of all money, including (and most importantly) low wages, thus making it much more affordable to satisfy one's needs and wants. But the distribution of such prosperity cannot be equal or instantaneous: any new innovation, new good, new service, etc. will be created somewhere, by someone—it cannot be created for 7 billion plus people instantaneously.
So anything new, including new jobs and new productive abilities, has to spread, as ripples, across the economy. As new things are created all the time, this means that we'll never actually get to a point where everyone enjoys exactly the same standard of living. It cannot be any other way, because economic growth, and the well-being it generates through the ability to satisfy wants, is a process.
Perfect equality is possible only by not having growth: to pull the brakes, not increase well-being. In other words, to not increase convenience and living standards, not figure out how to treat diseases that we would otherwise soon be able to cure. Those are our options, not the fairytale of "equal access to the outcome of growth."
This doesn't mean, of course, that we should be satisfied with inequalities. It only means that we should recognize that some inequality is inescapable if we want everyone to enjoy higher living standards. But we should also recognize that much of the inequality we are seeing today is not of this “natural” kind: it's inequality of political rather than economic origin. This comes in two forms: inherited from privileges enjoyed by a few in the past, reinforced by contemporary political and social structures, and privileges created today through policies creating winners (cronyism, favoritism, rent seeking, etc.).
From the point of view of economic growth as an economic phenomenon, policy-originated inequality has effects on both the creation and distribution of prosperity. First, policy creates winners by (a) protecting some from the competition of new entrants and future winners and (b) restricting (monopolizing) the use of new technologies, thereby propping up incumbents. Second, policy creates losers by redistributing value and economic capabilities to those favored politically. This means that policy has two primary effects on economic growth: it limits the creation of value and distorts its distribution.
Needless to say, this inequality is not beneficial for society overall, but only for those who are favored. It is the creation of winners by creating losers. This is not economic growth, which is accomplished by better economizing—increased ability to satisfy wants.
In a sense, political favoritism and the inequality it causes are the opposite of economic growth, since it creates winners (rich) at the expense of others (generally spread out across a larger population). It's just a redistribution of value already created by introducing inefficiencies into the system: productive capabilities are not allocated based on the creation of well-being but based on political clout. Over time, the economy is actually worse off because of this, so the process of economic growth suffers.
It is important to keep these two “sides” of the inequality coin in mind when discussing the problem. Simply pushing the stop button on economic growth will only accomplish politics’ increased influence over economizing. That's hardly beneficial, at least not for those other than the political class and insiders of the corporatist system. Rather, a solution would be to get rid of politically created and reinforced privilege and allow economic processes to readjust to reality: to target production of well-being instead of favors and influence. This will not do away with inequality as such, but will significantly decrease it and will do away with most of its harmful effects. It would mean an economy where entrepreneurs and workers alike would benefit from producing value for others. In other words, economic growth and higher living standards.
The alternatives are rather easy to understand, yet what's commonly on the agenda of pundits and political commentators is made-up alternatives, often ignorant utopias, that distort the meaning of both privilege and economic growth. The alternatives we have are the ones stated above, nothing else. Make your pick. Striving to realize impossible fairy tales is a waste of time, effort, and resources. That's not how we increase well-being and raise the standard of living. To me, the solution is quite obvious. Most people seem to pick the fairy tale.
[This article is an adaptation of a Twitter thread.]
The American Right is the New Target of Washington's "War on Terror"
The security walls around the US Capitol may be removed, but the federal response to the January 6 protests has only just begun. The Democrats in Washington are determined to treat the incident as on par with the events of September 11, which may explain a troubling report about the potential use of the famed No Fly List.
Yesterday Nick Fuentes, a right-wing social media pundit who attended the January 6 protests in the capital, alleged that he has been placed on the federal no-fly list, preventing him from traveling to Florida for a political rally. While Mr. Fuentes shared on social media audio of an airline employee suggesting that his flying restriction did come from the Transportation Security Administration (TSA), later that night Tucker Carlson informed his audience that his staff could neither confirm nor deny the report. While critics pointed to previous social media posts which documented his being removed from a plane for failing to comply with mask policies, Fuentes has noted that he had no problem flying to Washington in January.
It is unclear whether federal authorities will be in any rush to clarify the situation, but there is no reason not to assume that federal authorities would attempt to use this war on terror tool against political opponents. From its inception, what originally began as sixteen names federal authorities had connected to potential future terrorist attacks quickly grew to over 1 million. As is the case with other surveillance tools handed over to the deep state, there is very little oversight or due process involved in how federal authorities handle potential “terrorist threats.”
Since January there has been a concerted effort by Democrat leaders, former deep state officials, and America’s most despicable neoconservatives to push the Biden administration to utilize the power of the federal government against the supporters of Donald Trump. While the incidents at the Capitol on January 6 are used to justify these calls, the weaponization of federal power against political opponents goes back almost as long as the federal government itself. In more recent years, President Biden’s previous service in the White House saw a Democrat administration that used both the IRS and Department of Homeland Security to target conservatives.
Another reason to expect escalation from the Biden administration against vocal figures like Fuentes is the unique critique of the current regime from the right. The majority of Republican voters do not simply oppose President Biden due to politics, but flatly reject his democratic legitimacy.
As Murray Rothbard explained, it is precisely this sort of attack that the state fears most:
The increasing use of scientific jargon has permitted the State's intellectuals to weave obscurantist apologia for State rule that would have only met with derision by the populace of a simpler age. A robber who justified his theft by saying that he really helped his victims, by his spending giving a boost to retail trade, would find few converts; but when this theory is clothed in Keynesian equations and impressive references to the "multiplier effect," it unfortunately carries more conviction. And so the assault on common sense proceeds, each age performing the task in its own ways.
Thus, ideological support being vital to the State, it must unceasingly try to impress the public with its "legitimacy," to distinguish its activities from those of mere brigands….
The gravest crimes in the State's lexicon are almost invariably not invasions of private person or property, but dangers to its own contentment, for example, treason, desertion of a soldier to the enemy, failure to register for the draft, subversion and subversive conspiracy, assassination of rulers and such economic crimes against the State as counterfeiting its money or evasion of its income tax. Or compare the degree of zeal devoted to pursuing the man who assaults a policeman, with the attention that the State pays to the assault of an ordinary citizen. Yet, curiously, the State's openly assigned priority to its own defense against the public strikes few people as inconsistent with its presumed raison d'être.
This perspective explains the disproportionate treatment that mostly peaceful protesters at the Capitol in January have received in contrast to those arrested during riots in American cities throughout the past year. The state will always treat those who seriously threaten its perceived legitimacy with greater zeal than those guilty of simply destroying the livelihoods of its citizens.
This also highlights the self-defeating nature of the modern American conservative movement.
For decades now, the same political party that often gives lip service to “federalism” has often been the party directly responsible for the growth of federal power. As noted earlier, it took exactly one administration before the Department of Homeland Security, created by the Bush administration, began to target the very voters who elected him to office. It was just two election cycles before the PATRIOT Act was used to target a Republican presidential campaign.
The biggest question that now lies in American politics is whether conservatives are capable of learning from these examples. If the American right is capable of fully absorbing the reality that the greatest threat to their lives, liberty, and prosperity lies domestically—and not abroad—perhaps there is potential for a political rollback of the American empire.
If not, American conservatives will come to understand how little constitutional rights truly mean in the face of a hostile state.
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"Transitory Inflation" Is the New Buzz Phrase at the Fed
With April’s Federal Open Market Committee (FOMC) and Wednesday’s press conference to follow, we can anticipate some of the key words we will hear from the Fed. The first, gaining in popularity, is “transitory inflation,” or the idea some price increases are only temporary in nature…
Last month the word came up after the March FOMC meeting. On Friday CNBC wrote about the impermanence of inflation, anticipating:
the Fed is expected to defend its policy of letting inflation run hot, while assuring markets it sees the pick-up in prices as only temporary.
If inflation calculations show increases in the foreseeable future (or if more people become aware of their loss in purchasing power and increases to cost of living), talk of the temporariness of inflation may continue. The only way temporary “across the board” price increases make sense is if they are followed by a period of “transitory deflation,” reversing prices. If prices spike up, then quickly spike down, price increases were, in fact, temporary in nature; however, given the Fed’s aversion to deflation and proclivity for the printing press, it’s safe to say price decreases are not to what they are referring.
Without price reductions, the word “permanent” would better suffice. Instead, what the Fed could mean is that we’ll learn to live with (permanent) price increases, possibly aided by the highly nebulous: “wages will adjust” idea.
Consider the scenario of widespread price increases for just one year. For each subsequent year, even if prices don’t increase much, there still exists a compounding effect of the initial price inflation, which would be anything but temporary. To illustrate, if the price of lumber increases by 300% in year one, then only increases at a rate of 1% a year the following five years, lumber is still 300% higher than it was at the start of the first year, even if we call the inflation transient.
CNBC continues:
Powell is also expected to once more explain that the Fed will let inflation rise above its 2% target for a period of time before it raises rates so that the economy can have more time to heal.
Long has existed an idea about how the Fed controls inflation. In this instance, their power lets inflation rise above its 2% target so the economy can somehow strengthen. However, it leads to another word to watch for: this idea of “tightening” monetary policy.
As the Wall Street Journal said on Sunday:
The process of ending the Fed’s giant bond-buying program, and subsequently raising interest rates, will take years unless inflation unexpectedly surges.
Undoubtedly, talk of the Fed’s unwinding balance sheet should continue to be a discussion point as it nears ever closer to $8 trillion, persistent all-time highs. Putting together the idea of inflation and tightening, we are taken to a world difficult to imagine.
It is only after prices increase at a pace which has not been seen in decades, the Fed will look to raise interest rates and reduce buying of government debt. Unless the Fed’s reduction in government debt buying is taken up by private investors, we can expect further increases to interest rates. As for the $28 trillion government debt, all-time high in the stock market, and the heating up of the real-estate market, perhaps, like inflation, those too will be transient in nature… unless wages really do adjust?
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Your Check Is In the Mail: How "Stimulus" Checks Are Spent
More than $379 billion has been sent out across the country in the form of stimulus checks over the last two months. CNBC reported on Thursday:
A sixth batch of $1,400 stimulus checks has gone out, bringing the total number of payments sent to date to about 161 million.
One report, by the Peter G. Peterson Foundation noted that if we combine the last three stimulus bills:
The federal government has provided over $850 billion of direct payments to taxpayers.
It raises an interesting question: What did everyone do with their stimulus money?
NBC attempted to answer this question. Yet, in doing so illustrated the problem with the question and policy itself, finding:
the majority of that money continues to be spent on groceries, rent and other monthly bills…
Vague. So here are more details:
nonessential spending (13 percent), paying down debt (32 percent) and investing (11 percent) since January, the number one reason for stimulus spending among all income brackets is monthly bills (45 percent).
It’s curious to see what spending is considered essential and which is not. Still, the bigger issue is the idea spending can be adequately tracked in order to illustrate where the stimulus checks have gone.
But there’s an interesting thing about money: once received or added to one’s existing supply of savings (or credit), how can one allocate where the newly received money goes afterwards? Does it matter if the person has savings or not? Consider two scenarios:
Someone with $5,000 in their checking account receives a $1,400 stimulus check. They immediately purchase a hunting rifle for $1,400 then invest $1,400 in the stock market. After receipt of the check and the two purchases, they now have $3,600 in their account. Was the stimulus check used for savings, as it was saved in the checking account first? Did it go to the firearm as it was the first purchase made after receipt of funds? Or was it used to invest in the stock market?
And what if someone is in a debt position? Consider the same scenario above, except they had $5,000 balance owing on their line of credit, and stocks and the rifle are bought in the reverse order. Do we say the stimulus check went to pay down the line of credit (debt), the stocks (investing), or the rifle (nonessential or essential spending)?
There are various combinations which involved the timing of payments and whether the check contributed to existing savings or reduction of debt; but it illustrates the difficulty in allocating the whereabouts of the stimulus checks.
In addition to being unable to allocate the funds, we cannot prove the checks were a “good idea,” for the country. Any such criteria would be arbitrarily based on the value judgments of the decider. Nor can we say nearly $1 trillion in stimulus payment to households was “the correct” amount, as it could have easily been $500 million or $2 trillion. Since stimulus checks are devoid of economic calculation, any stimulus amount is equally as valid as any other.
One might prefer if exactly zero dollars of stimulus money was given. That would have saved another $1 trillion off the national debt and reduced future interest expenses. It would also mean less unpredictable price distortion in the market as the 161 million recipients would not have to decide whether they should spend or save this newly created money.
But what does it matter anyway? Per NBC:
There may be hope on the horizon for the millions who continue to struggle financially: Almost two dozen senators have urged the Biden administration to include recurring relief payments…
Unfortunately, when it comes to economic policy matters, it seems economics continues to take a back seat to policy matters.
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A Rights- and Logic-Based Approach to Pandemics
We all are too familiar with the approach to pandemics taken by governments at all levels in the US. In the name of "public safety" governments assumed "emergency powers" to restrict the citizens' right to peaceful assembly (a violation of the First Amendment to the Constitution) and to deprive citizens of property without due process of law (a violation of the Fifth Amendment to the Constitution). The Fourteenth Amendment applies these protections to the states, too. I will not repeat all the justifications that emanated from government that supposedly negated these constitutional protections. Instead I will concentrate on whether they are defensible logically, using government's own criteria as the judge. The individual will be the subject of our inquiry, not the group.
Claim No. 1: Peaceful Assembly Threatens Your Health and the Health of Others
Let's assume that government is right. If individuals assemble, they threaten one another's health in some way. But why should government make the decision about what constitutes a threat to health? What is its criteria? What is the threshold? Some individual in government makes this decision, but why should his level of acceptable risk be the group standard? Can't each individual decide how much risk he willingly assumes? Furthermore, if a person decides to assemble with like-minded individuals, what risk is that to those who do not wish to assemble? You've willingly quarantined yourself, as governments recommended. Your risk is not affected by those who do not wish to quarantine themselves. They assume more risk; yours remains the same. Even if the pandemic spreads more rapidly, it does so only among those who took the risk in the first place, not you. Again, you have not been subjected to any additional risk. This is the reasoning behind the actions of many hypocritical politicians who ignored their own orders to their constituents. They merely decided that they were willing to take additional risk, and no one suggested that they were threatening others who remained in quarantine. So, logically, the government-imposed quarantine, a.k.a. restricting the citizens' right to peaceful assembly, makes no sense.
Claim No. 2: "Nonessential" Businesses Threaten Your Health and the Health of Others
The same logic can be applied to governments' decisions to lock down "nonessential" businesses. (All businesses are essential, so that qualification is nonsense.) Government used the same rationale; i.e., that mingling with one's fellow citizens in places of business threatened the individual himself and others. But these "minglers" assumed the risk and threatened no one who did not "mingle."
The big question becomes this: Why do those who quarantine themselves insist upon forcing quarantines on others? Certainly, businesses that choose to close may do so voluntarily. Why should they be concerned over those who do not choose to close? (Actually, I am not aware of any business that voluntarily closed due to risk intolerance. But maybe such a business does exist.) Businesses can adapt their premises to allay the fears of potential customers. This seems to be happening voluntarily for those "essential businesses" that were permitted to remain open. Why should government dictate business practices to those who remain open? This is a decision for individual businesses alone. If such businesses adopt too stringent entry requirements, patronage will flow to more friendly competitors. If such businesses adopt too lenient entry requirements, the same thing will happen. There is no objective guideline for determining entry practices. In fact, the same kind of businesses may be more or less stringent, attracting more or less risk-averse clientele.
Let Perfect Freedom Prevail
Each individual has the right to "perfect freedom" in deciding for himself how much risk he is willing to assume from any of thousands of daily risks. We practice perfect freedom every day without even thinking about it as we go about our daily lives. Each individual may choose his own risk tolerance, because his decision cannot affect those who wish to take less or even more risk. Risk-averse individuals protect themselves. Likewise, each individual business decides what is best for itself and its customers, ranging from closing down to taking no additional risk-mitigating measures at all. If customers decide that the business is not taking appropriate measures, they can stay home and/or patronize other businesses with risk-mitigating measures more attuned to their liking. In other words, there is no logical reason that our constitutionally guaranteed rights of peaceful assembly and to protection of our property need be violated in order to protect "society." Society is composed of millions upon millions of individuals, all with different risk profiles. Let perfect freedom prevail.
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The Paycheck Protection Program: Abuse and Misuse
There are few examples to showcase the absurdity of the current political climate during the covid pandemic such as the Paycheck Protection Program (PPP). Put in place by the Trump administration and now continued under the Biden administration, the PPP has become the poster child for government programs rampant with fraud and mismanagement. Indeed, in a recent report, the Office of the Inspector General (OIG) repeatedly warned about the lack of program oversight and controls. However, government officials continued on with the program despite the OIG’s warnings.
What is the PPP?
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The intent of the CARES Act was to provide short-term relief for small businesses, individuals, and nonprofit organizations that were negatively affected by the shutting down of the economy to slow the spread of the coronavirus. The CARES Act appropriated first $349 billion for the Small Business Administration (SBA) Paycheck Protection Program in April 2020. Later in April, Congress appropriated an additional $321 billion for a total of $670 billion. Affected businesses can apply for a forgivable loan to cover operating costs and lost revenue. From 2000 to 2019, the SBA made about 1.2 million loans totaling $333 billion. Under the CARES Act, the SBA processed 5.2 million loans in six months, which was far more than all of SBA’s combined lending from 1990 to 2019.
Six months into the program, on October 16, 2020, the OIG released the first in a series of reports. In Top Management and Performance Challenges Facing the Small Business Administration in Fiscal Year 2021, the OIG provides a good sense of the chaos with section title “SBA’s Economic Relief Programs Are Susceptible to Significant Fraud Risk and Vulnerabilities.” Anyone who has critically examined the government response to the covid pandemic should not be surprised by the fact that the PPP is a recipe for disaster.
In October, the inspector general already sounded the alarm bell:
SBA moved quickly to establish the new nationwide program but eased controls required in its lending program to do so, increasing the risk of rampant fraud. Our preliminary investigative oversight revealed strong indicators of widespread potential abuse and fraud in the PPP.
In its preliminary report, the OIG found systemic issues with the PPP. OIG found indications of deficiencies with internal controls related to the eligibility of borrowers.
- Tens of thousands of approved and disbursed loans were made to borrowers for amounts that exceeded the maximum allowed based on the number of employees and compensation rates as defined in the CARES Act.
- Tens of thousands of loans that matched a Do Not Pay data source record indicating potential loan ineligibility.
- Hundreds of businesses that exceeded the greater of 500 employees or the SBA size standard for number of employees in the industry obtained PPP loans that may have been erroneously approved.
- We found thousands of businesses obtained PPP loans with Tax Identification Numbers (TINs) that were not registered until after that date indicating the business was created after the fact.
Even more troublesome is the fact that OIG found that the data the SBA publicly reported as well as the loan-level PPP data was inaccurate and incomplete, concluding:
Without accurate and complete data, SBA cannot reliably and accurately inform SBA management and Congress about program effectiveness and measures needed to inform program decisions.
What is even more concerning is the fact that despite these early warning signs the SBA continued with the program without many changes to curb the widespread abuse of the program.
On January 11, 2021, the OIG published Management Alert Paycheck Protection Program Loan Recipients on the Department of Treasury’s Do Not Pay List:
Our review of Treasury’s analysis showed approximately $3.6 billion in PPP loans to potentially ineligible recipients.
In January 14, 2021, the OIG published another report entitled Inspection of SBA's Implementation of the Paycheck Protection Program, which can be summarized in the following quote:
SBA’s efforts to hurry capital to businesses were at the expense of controls that could have reduced the likelihood of ineligible or fraudulent business obtaining a PPP loan. As a result, there is limited assurance that loans went to only eligible recipients….We also found SBA’s PPP publicly reported and loan-level data was inaccurate and incomplete.
On March 15, 2021, just one week before the Senate passed the extension, the OIG published a flash report entitled Duplicate Loans Made under the Paycheck Protection Program:
We determined SBA did not always have sufficient controls in place to detect and prevent duplicate PPP loans. As a result, lenders made more than one PPP loan disbursement to 4,260 borrowers with the same tax identification number and borrowers with the same business name and address. These disbursements totaled about $692 million for PPP loans approved from April 3 through August 9, 2020.
Did Congress stop the program or demand more oversight? No. Congress extended the PPP. One can only conclude with the words of Hoppe again. “Government has the ability to be the savior twice over: the rescuer of a rescuer in distress.” It “rescued” us from the covid pandemic by severely limiting the economy, and then “rescued” us again from the economic free fall by compensating for the losses incurred by simply creating state paper money from nothing at zero expense. Government is the rescuer twice over, but government has the ability to socialize costs to the public while making itself look like the “blessed savior.” Rescue packages, however well intentioned, are not, and never are, free of charge.
The only thing missing from the covid Ponzi scheme is for government to take the rampant misuse and abuse in the PPP to grab as much power as possible by creating more rules and regulations for businesses in the name of covid. Readers of Robert Higgs’s book Against Leviathan: Government Power and a Free Society. know that government bureaucrats have a tendency to take advantage of “emergencies,” like the covid-19 pandemic, to consolidate and grab even more power. Let’s hope that this will not become true or happen.
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George Floyd and Generalized Justice
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Supreme Court Reforms? Ask America’s First Homegrown Legal Philosopher
President Biden has just appointed a commission to study Supreme Court reform. However, I noticed that no one seems to be talking about reform to mean “re-form to better reflect the Constitution than under current precedents and interpretation,” reflected in the notable paucity of defenders of the Constitution as understood at the time it was adopted. That is why the commission could use some guidance from James Wilson for insight.
James Wilson signed both the Declaration of Independence and the Constitution. Earlier, his Considerations on the Nature and Extent of the Legislative Authority of the British Parliament argued that it had no authority to legislate for the colonies. At the Continental Congress, he was a member of the Committee on Detail, which produced the first draft of the Constitution. He also argued forcefully for ratification of the final version in Pennsylvania. In fact, his October 6, 1787, ratification speech before the Pennsylvania legislature received more coverage than The Federalist.
George Washington appointed Wilson to the first Supreme Court in 1789. Then, in a set of law lectures beginning in 1790, he became America’s first homegrown legal philosopher, spelling out the thinking behind the Constitution and early Supreme Court decisions. He articulated the purpose of government as to secure citizens’ preexisting rights and that the Constitution was crafted to create such a government. Remembering those ideas, now seriously compromised and threatened with further erosion, would be a reform actually likely to benefit Americans.
Wilson clarified our founders’ understanding of law: “The defense of one’s self, justly called the primary law of nature, is not, nor can it be, abrogated by any regulation.” What does each individual’s self-ownership, and right of self-defense that derives from it, mean for government? “All men are by nature equal and free. No one has a right to any authority over another without his consent.”
Wilson spelled out the implications of government consistent with that understanding of law: “The liberty of every member is increased … each gains more by the limitation of the freedom of every other member, than he loses by the limitation of his own. The result is that civil government is necessary to the perfection and happiness of man.” In consequence, government “should be formed to secure and enlarge the exercise of the natural rights of its members; and every government which has not this in view as its principal object is not a government of the legitimate kind.”
Since all must be better protected to expand everyone’s rights and liberties, law had to treat everyone equally. “In the enjoyment of their persons and of their property, the common law protects all.” No one’s liberty could be invaded; no one’s property could be violated. Instead, “private property and personal liberty … will be guarded with firmness and watchfulness.” This is what led America’s founders to agree with Wilson that “without a good government, liberty cannot exist.”
Because good government was considered central to liberty, “A good constitution is the greatest blessing which a society can enjoy.” And because “in this government, liberty shall reign triumphant,” Americans were bequeathed “that system of government which would best promote their freedom and happiness.”
Because some would override our free choices with their dictates, an important consequence follows: “Among the virtues necessary to merit and preserve the advantages of good government [are] a warm and uniform attachment to liberty and to the Constitution,” because “enemies of liberty are artful and insidious…. Against these enemies … the patriot citizen will keep a watchful guard.”
James Wilson was a great American statesman whose words reveal what was truly revolutionary about our experiment in liberty. His discussion of “those principles upon which we ourselves have thought and acted,” which echoed John Locke’s recognition that just government exists for the good of its people, not the other way around, is worth relearning. And just as for other Americans, the Supreme Court Reform Commission would benefit from proposals that recognize, with Wilson, that “without liberty, law loses its nature and its name, and becomes oppression,” because our liberties have grown far scarcer than the Constitution was designed to provide.
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Don’t Blame the J&J Vaccine Pause for a Loss in Public Trust
The US task force and vaccines are poised to suffer a loss in public confidence. Most people blame the pausing of distribution of the Johnson & Johnson covid-19 vaccine. But the public trust was inevitably going to falter regardless.
Instead of falling for the establishment narrative that points the finger at the J&J mishap, consider the root of the issue. That is the public-private nexus at the center of the country’s antivirus campaign, particularly Dr. Anthony Fauci himself and other well-connected big businesses.
Corporations amiable to government have long been the key to carrying out grand visions of the state. Justin Raimondo warned in 2013 of the dangers of pretending that these collaborations aren’t to the detriment of us all.
Giant multinational corporations, and their economic satellites, in alliance with governments and the big banks, are in the process of extending their influence on a global scale: they dream of a world central bank, global planning, and an international welfare state, with American troops policing the world to guarantee their profit margins.
Any crisis can become the health of the state, as Robert Higgs famously showed. It is precisely in times of crisis that the well-connected benefit from state measures.
This arrangement of government and select private powers inescapably raises reasonable suspicion that corruption is afoot, or at the very least a conflict of interests. The fact there are basically now only two major vaccines in the game only exemplifies this reality further.
Now that the J&J vaccine pause has hit everyone’s newsfeed, is that event in itself to blame for any dip in the public trust of vaccines or the experts? Blood clots in a half dozen women out of millions of people vaccinated with the J&J version was all it took?
Perhaps there’s something else going on that would cause people to doubt the covid regime’s legitimacy.
Is it not reasonable to wonder if allergy expert Fauci gains anything by this newly heightened scrutiny against J&J?
Big Money, Crony Shots
The J&J covid-19 vaccine is the only option available in the US not produced using the novel mRNA technology. It was pulled from the US vaccination program after the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) raised concerns regarding rare instances of blood clots. The move was defended by none other than Fauci, who stated that the blood clots patients experienced post J&J vaccination had “strong similarities” with the blood clots reported by European patients post–AstraZeneca vaccination. And that, he said, should concern Americans. But when asked if people should be hesitant to take the Moderna or Pfizer shots, he insisted the mRNA vaccines were safe.
“The question that is often asked, does this have anything to do with the other vaccines, the mRNAs, from Moderna and from Pfizer? You know, absolutely not. Only 6.85 million of those were J&J. The rest were Moderna and Pfizer, and there's no negative or adverse or red flag signal coming from any of those vaccines, which is very good news. In other words, they are very safe.”
While journalist Alex Berenson would probably disagree with Fauci’s claim given the numbers of adverse reactions provided by the CDC reportedly show that you are more likely to die after getting a covid vaccine than a flu vaccine, the fact the health czar is reluctant to even recognize the reports provided by the CDC is telling.
Fauci is the director of the National Institute for Allergy and Infectious Disease (NIAID), a branch of the National Institutes of Health (NIH) federal agency, and has occupied the same position since 1984. In a NIAID entry from March 2020 that has since been deleted, the agency stated that its researchers had begun working on the clinical trial for Moderna’s covid-19 vaccine. In addition, it stated that the project was being funded by NIAID and that NIAID scientists were developing the serum at Moderna.
Fauci was even quoted in the post, saying that “finding a safe and effective vaccine to prevent infection with SARS-CoV-2 is an urgent public health priority.”
J&J’s vaccine is produced by the firm’s Janssen Pharmaceuticals and funded by the J&J group in addition to grants from the US government’s Biomedical Advanced Research and Development Authority, a US Department of Health and Human Services agency. Moderna’s vaccine, however, appears to have been produced with funding allocated by the federal government under the command of an agency run by Fauci himself.
But what about Pfizer?
Following the Johnson & Johnson vaccine news, European officials rushed to increase the number of orders from Pfizer’s BioNTech-produced covid-19 vaccine.
While not incriminating, one of the CDC’s top donors (yes, the country’s national public health agency takes private donations!) has directly invested in BioNTech. As a matter of fact, this same donor is portrayed by the legacy media as a friend and trusty ally of NIAID and Fauci. His name is Bill Gates.
Did Gates directly fund Pfizer’s BioNTech-produced vaccines? We don’t know. Did he invest big money in BioNTech just months before the coronavirus pandemic broke out? Yes. Does his charitable foundation have a partnership with NIH (Fauci’s long-term employer) that involves the rollout of vaccines abroad? Yes. Did Gates openly favor the mRNA vaccine produced by the German lab, going as far as betting it would be the leader in the market? He sure did. Could this combination of factors lead one to guess that, perhaps, the US government as well as Fauci, would be happy to reward Gates by trying to boost the vaccine’s appeal? Why not?
As the US marches through 2021 forcing us all to bear the costs of this seemingly never-ending covid-19 debacle, Americans remain impoverished. In the meantime, the legacy media urges us to celebrate the ones benefiting from the panic all the while ignoring the real story behind the J&J debacle.
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At the Fed, It's "A Tale of Two Diversities"
We often hear of this word “diversity.” In 2021, it seems this word is more important than ever when electing cabinet positions, bureaucratic appointments, or other facets of organizational structures throughout the country. Merriam-Webster defines diversity as:
the condition of having or being composed of differing elements : VARIETY
The ironic thing about diversity is it appears to create two “divergent” paths in which it can be obtained. Just last week, the Brookings Institution appeared to inadvertently fall into a “diversity trap” of sorts, when it published the article, "Diversity within the Federal Reserve System." It begins with:
A growing chorus has called on the Fed to diversify its ranks at all levels to reflect better the heterogeneity of the United States. So far most of these efforts speak to the diversity of the Fed’s principals, namely, the members of the Fed’s Board of Governors and the presidents of the twelve Federal Reserve Banks.
This is the first, more common usage of diversity. The goal is to ensure a variety of races, genders, or other minority groups are represented. True to definition, by having various physical features, variety could be achieved. Brookings looked at the directors of the Federal Reserve banks as they are the ones responsible for choosing the president of the twelve banks across the country.
To little surprise:
We find a staggering homogeneity among them, with only recent signs of diversification. They are overwhelmingly white, overwhelmingly male, and overwhelmingly drawn from the business communities within their districts, with little participation from minorities, women …
They mention other areas of the economy such as “labor, nonprofits, the academy” with the routine push for diversity requiring more minority representation, based on physical features of the candidates.
To provide better context to the reader, as an author and a black male, I understand “diversity” from my own life experiences; however, it is important we don’t fall into such a diversity trap. While having more people of color, females, or even transgendered would bring a different physical look to the Fed, there remains the unseen and overlooked area of diversity, i.e., “intellectual diversity.” This form of diversity appears to have been ignored entirely, supplanted for aesthetic traits.
Last year, I wrote several articles about Judy Shelton, including "Why the MSM Hates Judy Shelton." While her potential appointment was the responsibility of Congress, one could suggest she may not have gotten nominated to the Fed board because she is a woman. However, studying her history such as questioning the manipulation of interest rates by the Fed, and other such ideas which go against the current mainstream economic dogma, one could argue her rejection by Congress could largely be attributed to her economic views of the free market.
While a racial/gender diverse Federal Reserve might mark a lot of societal checkboxes, and even be inspirational for those in marginalized groups, we should focus on intellectual diversity and how much it appears to be lacking in the Federal Reserve system. Whether the Fed is run by all white males or a mix of males, females and a multitude of races means absolutely nothing as long as the ideas of liberty, freedom, and Austrian economics are excluded from diversity inclusion.
We must ask ourselves: Would you feel better if your oppressor was the same race and gender identification as you? We are told diversity at the Fed is an issue that should be addressed, but it’s superficial, meant to appease popular opinion under the guise that forced inclusion matters. Nowhere are we discussing the diversity of opinions, economic understanding, or beliefs in a free society. Until a high-ranking Fed official speaks out against the Fed proposing ways to wind down its power, it doesn’t really matter who sits atop the Fed’s ivory tower, and diversity is nothing but a ruse.
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Now You Can Join the Fed's Community Advisory Council
There could be a real opportunity to get on “the inside” of the Federal Reserve. Last Monday it was announced:
Federal Reserve Board accepting applications for its Community Advisory Council
Known as the CAC, the Advisory Council:
advises the Board on issues affecting consumers and communities and complements two of the Board's other advisory councils whose members represent depository institutions—the Federal Advisory Council and the Community Depository Institutions Advisory Council.
Think of the CAC as an advisory board which advises the (Federal Reserve’s) board… which helps to advise other boards. The CAC meets in Washington, DC to:
provide a range of perspectives on the economic circumstances and financial services needs of consumers and communities, with a particular focus on the concerns of low- and moderate-income consumers and communities.
Looking back at the last CAC meeting minutes on October 1, 2020 provides an idea of the scope of economic questions the board asks itself:
To what extent are Council members seeing the effects of COVID-19 on small businesses in their communities?
Are permanent closures threatening the entrepreneurial ecosystems of their communities?
What tools or policies can help mitigate these effects?
The minutes seem quite long, having many stats, various ideas and even anecdotal evidence. For the questions above they mention difficulties lower income communities, women, and minorities are all facing, as well as the usage of Paycheck Protection Program (PPP) loans. They even mention:
Another round of PPP is critical to helping save these smaller businesses…
Speaking of which, the PPP weekly report noted that as of April 11, 2021, the $755 billion to date has been approved, as seen below:
This is the liquidity facility which provides forgivable loans. It will continue to be of interest as to how this will end, considering only $64 billion is listed on the Fed’s balance sheet, or just under 10% of all forgivable loans. Whether the loans will be paid or forgiven remains to be seen…
Recommendations, such as “another round of PPP” are the type of work the CAC is encouraged to put forward to the Federal Reserve. Of all the questions the CAC was asked, nothing regarding the sustainability of programs such as the PPP, debt or money supply concerns, the economic impact nor morality of nearly $1 trillion in forgivable loans was ever mentioned.
Unfortunately, billions of dollars are at stake here, requiring “experts” in various fields to recommend how to distribute these dollars; no economic calculations necessary. Perhaps that’s why the application calls for qualifications such as:
knowledge of fields such as affordable housing, community and economic development, employment and labor, financial services and technology, small business, and asset and wealth building, with a particular focus on the concerns of low- and moderate-income consumers and communities. Candidates do not have to be experts on all topics related to consumer financial services or community development...
Applications due by June 11. Should you win the position as CAC member you’ll be able to meet in Washington, on a semi-annual basis, normally for a two-day meeting. If you think you have what it takes to best plan communities across the country, then feel free to apply and good luck.
When commenting, please post a concise, civil, and informative comment. Full comment policy here
When commenting, please post a concise, civil, and informative comment. Full comment policy here