Power & Market
Thosten Polleit, a frequent author at mises.org, and an active part of Ludwig von Mises Institut Deutschland, has completed a new introductory text on Mises and his work: Ludwig von Mises für jedermann: Der kompromisslose Liberale (Ökonomen für Jedermann). It is available both at Amazon.de and Amazon.com. And best of all, it's priced at an affordable price, and is not one of those 90-dollar books that academic publishers often turn out.
Elizabeth Warren’s 2020 presidential aspirations may have ended before they began this week thanks to her team’s bizarre decision to proudly broadcast the results of a DNA test that shows she may have had a relative 10 generations removed that was of indigenous American heritage. As Senator Warren was once promoted as “Harvard Law School's...first woman of color,” the results seem to only confirm that she misrepresented her ancestry in her past career as a law professor.
Not only has the decision been met with a blistering condemnation from the Cherokee Nation, but it has once again made her the butt of President Trump’s jokes.
Lost in the laughing at Warren’s expense however, is a larger issue exists over how American politicians continue to treat tribal sovereignty.
After all, if Warren had used her position as senator to serve as an advocate for the Cherokee Nation’s right to self-determination, her history of misrepresenting her genetic connection to the tribe would perhaps be more excusable. Say what you will about Rachel Dolezal, she at least cared enough to be an advocate for the African American community. Instead, Warren’s political record is one that has regularly promoted the continued imperial rule of Washington on land that is tribal in name only.
Though never officially serving as the head of the Consumer Financial Protection Bureau, Warren has been widely credited as being the guiding force behind the creation of the agency. The CFPB was created as part of the Obama Administration’s response to the financial crisis, a powerful financial regulator that lacks the traditional checks of other executive agencies. Under the lead of former director Richard Cordray, the CFPB went to work becoming a heavy handed regulator in its fight against "unfair, deceptive and abusive” practices.
Soon, various tribal financial services businesses found themselves in the cross hairs of the enthusiastic CFPB. The result is that the agency has been described by Dr. Gavin Clarkson, a tribal finance expert, as “the most hostile federal agency towards Indian tribes since Indian Affairs was in the War Department.”
One example is a variety of short-term lending operations that various tribes started up to try to capitalize on the growth of e-commerce. In theory, tribal sovereignty should have given these ventures a competitive advantage over other US lenders who had to deal with the Washington red tape. Unfortunately Obama’s Justice Department decided these operations represented a “national security risk” and worked with the CFPB to shut them down as part of Operation Choke Point – in spite of pleas from tribal advocates that doing so would be economically devastating.
While it would be unfair to blame Elizabeth Warren for any and all actions taken by the CFPB and DOJ, she served as a primary defender of Operation Choke Point when legislative pressure mounted to end it.
Similarly, she has been the chief voice in the Senate attacking the pay day lending industry, which became a point of particular emphasis under the Cordray CFPB. This has put the Warren-Cordray camp into ongoing legal conflict with various tribes over whether federal financial regulation should apply to tribal land, leading the CFPB to sue various tribal lenders.
While the Supreme Court refused to take up the case, which could have provided a legal precedent in favor of tribal sovereignty, the suit was eventually dropped earlier this year after Mick Mulvaney took over as the CFPB’s acting head. Warren wrote a letter to Mulvaney criticizing the decision.
Warren’s indifference to the cause of tribal sovereignty appeared again this year with a vote on the Tribal Labor Sovereignty Act.
The issue here was whether tribal-owned businesses should be forced to follow federal labor laws on collective bargaining. The issue has been a major one for a number of American tribes, upset that tribal governments are subjected to labor laws that state and federal governments are exempt from.
As Jefferson Keel, the President of the National Congress of American Indians, wrote in The Hill:
Sovereignty means tribes should be allowed to make their own decisions about their own workforce policies. The truth is that many tribal nations openly welcome labor unions into the businesses that they own; others choose not to. And a growing number have designed and enforce their own labor regulations. But the NLRB ignores all of this and, instead, forces tribal governments to adhere to the NLRA. Just us. No one else. This is a plain violation of our inherent rights as sovereign nations and governments.
Unfortunately Senator Warren’s loyalty lay with labor unions over tribal sovereignty, and she joined with 41 other Senators to successfully kill a vote on the bill.
While Warren has made it easy to laugh at about “fauxocahontas” and 1/1024th memes, her political contempt for tribal self-sovereignty is what should make her false claims to Cherokee heritage truly insulting.
Elizabeth Warren and her fellow progressives believe Native Americans are better off following her rules, rather than granting tribes the political self-determination to make such decisions for themselves. It’s a form of ideological imperialism, driven by their own belief in their moral superiority and the belief on “the right side of history.” The progressive person's burden is to use to the power of the state to impose social justice, regulate “fairness” in the market, and impose egalitarian social norms.
This is precisely why it’s important for those who recognize the dangers of federal overreach and political centralization should take the issue of tribal sovereignty so seriously. The goal for a more civil and free society should not be the aim of some grand universal political order, but a respect for political self-determination. To that end, a respect for tribal rights is just as important as any other fight in favor of political decentralization.
Aram Roston reports on how Mideast dictatorships now hire former US military personnel to form what are essentially death squads designed to eliminate the regimes' enemies:
The revelations that a Middle East monarchy [UAE] hired Americans to carry out assassinations comes at a moment when the world is focused on the alleged murder of dissident journalist Jamal Khashoggi by Saudi Arabia, an autocratic regime that has close ties to both the US and the UAE. (The Saudi Embassy in the US did not respond to a request for comment. Riyadh has denied it killed Khashoggi, though news reports suggest it is considering blaming his death on a botched interrogation.)
Golan said that during his company’s months-long engagement in Yemen, his team was responsible for a number of the war’s high-profile assassinations, though he declined to specify which ones.
Where do these kill teams come from and where do they get their training and experience? They get it from the US military and the US taxpayer.
Last month, I wrote on how the US military is becoming increasingly reliant on mercenaries to staff military operations. This makes it easier for the Pentagon to ratchet up military conflicts while still claiming that it is reducing boots on the ground. It can do this because the Pentagon doesn't report details on how many mercenaries it's using or where they are. Essentially, mercenary forces are a sort of human slush fund which allows the Defense Department more leeway in doing whatever it wants, while sharing precious little information about it with Congress or the taxpayers.
Thus, the US treasury subsidizes the creation of these mercenary forces that then become adjuncts of foreign governments. Roston concludes:
The long US wars in Afghanistan and Iraq have relied heavily on elite special forces, producing tens of thousands of highly trained American commandos who can demand high private-sector salaries for defense contracting or outright mercenary work.
He's right about that, but then makes a rookie mistake: he refers to the movement toward mercenaries as a "privatization" of war, saying, "War has become increasingly privatized, with many nations outsourcing most military support services to private contractors, leaving frontline combat as virtually the only function that the US and many other militaries have not contracted out to for-profit ventures."
I see this mistake made over and over, and everyone needs to stop calling this sort of thing "privatization." When the government hires a construction firm to build a government highway, is that "privatization" of the highway system? No one thinks that, and for good reason. Similarly, it is not privatization when a state — whether its the US government or the UAE — hires a private firm to execute some aspects of the government's wars. These wars are state-on-state wars. There may be some truly private organization at play, but they're on the receiving end of the mercenaries' violence.
Historically, we call private military forces "irregulars" or "guerrilla" forces. There's gray area there, but, broadly speaking, truly private military forces don't have a legally enforceable contract with an officially-recognized regime. They're often not loyal to any extant state, and they often don't even get paid by any organization recognized as a state. Clearly, this doesn't describe these American mercenaries who likely have a signed contract with the UAE dictators, and money is paid in return for certain killings.
This is government money, spend on a private firm to carry out a government agenda. This is not privatization.
As the number of experienced American mercenaries continues to grow — thanks to 18 years of non-stop American wars, it will be interesting to see how many Americans military contractors have their hands in various assassinations, bombings, and other killings carried out on enemies of far off regimes.
Back in the ancient news cycle of August 6, 2018, Alex Jones, host of The Alex Jones Show and curator of Infowars.com, was deplatformed in a coordinated effort by multiple social media and content streaming services. The list of companies, whose simultaneity was surely a coincidence, is quite impressive: Facebook, Apple, YouTube, Spotify, Vimeo, Pinterest, MailChimp, and LinkedIn. The debate on free speech versus hate speech raged on for the customary week or two as the news cycle dictated, with many libertarians and conservatives willing to leave Jones to the proverbial wolves. Perhaps Alex Jones wasn’t an attractive enough martyr for the cause. But to those who stood on principle against these social media giants, this was a sign of things to come. Editors for the Free Thought Project spoke out against such censorship on the grounds that it may only be Alex Jones today, but FTP would be next.
How right they were.
At thefreethoughtproject.com, Matt Agorist wrote, “What makes this recent purge from Facebook and Twitter so egregious is that the pages like the Free Thought Project, the Anti-Media, Press for Truth, and dozens of others, did not fit the hate speech narrative these same companies used to wipe out Alex Jones. Instead, these pages were dedicated to spreading peace, bridging the divide, bringing humanity together and holding government accountable.”
It’s true that Jones has made more than his share of controversial statements, including claiming that the Sandy Hook Elementary School shooting in 2012 was a hoax, but this kind of controversy does not follow sites such as the Free Thought Project; Facebook even admitted they were not targeted for promoting violence or spreading “fake news.”
So what were the determining factors that led to this round of deplatformings? According to a statement co-authored by Facebook’s Head of Cybersecurity Nathaniel Gleicher, the 559 pages and 251 accounts purged had, “consistently broken our rules against spam and coordinated inauthentic behavior.” The statement continues, “This inauthentic behavior consists of sensational political content, regardless of its political slant, to build an audience and drive traffic to their websites…posting in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites.”
As Caitlin Johnstone wrote at Medium.com, Nathaniel Gleicher is also the former White House National Security Council Director of Cybersecurity Policy.
What a small world!
Is there any truth to Facebook’s claims about “inauthentic activity”? It’s easy to become instantly enraged by the censorship, considering that it appears to be punishing alternative media groups for “driving traffic to their websites.”
This hardly seems like an egregious sin. And if consistently applied, would this standard not also include major news outlets such as CNN, MSNBC, and Fox News?
Additionally, the deplatformings seem conspicuously coordinated, as a number of affected organizations found their accounts suspended all at once, one the same day, on multiple social media sites.
There is some logic to Gleicher’s explanation, but Facebook’s application of its rules has been wildly inconsistent. People rushed to share tales of the purge, showing account holder screenshots with multiple banned pages and profiles. Unfortunately, it’s the operation of so many pages and accounts by the same individuals that possibly got them caught in this little sting operation. When users were identified as sharing their clickbait in “dozens of groups, hundreds of times over a short period,” they were attempting to game the system by boosting likes and shares in an attempt to drive themselves higher in news feeds. An issue with consistency notwithstanding, this sort of activity is considered spam and inauthentic behavior by Facebook. They are hardly the first to adhere to such a policy. Reddit.com bans users who are found to operate multiple accounts in order to up-vote the submissions by their primary account.
To be clear, I am not criticizing indie media for doing everything they can to spread their message. Those of us in the liberty community will remember Congressman Ron Paul and his foreign policy warnings against “blowback,” — the CIA-coined term for the unintended retaliation for U.S. foreign interventions. But blowback is not limited to the world of foreign policy; it’s also a social phenomenon. When Facebook made drastic changes to its algorithm crippling the reach of alternative media and independent content creators, it prompted these same creators to find ways to circumvent the algorithms. This kind of “throttling” is nothing new. The Gold Standard with Alan Mosley once enjoyed a reach of over 70,000 for its updates and episodes, even without any budget for Facebook Ads. These numbers were common as recently as May, but even with the purchase of Facebook Ads, results have been catastrophically lower since June. Now The Gold Standard is fortunate to receive a quarter of the reach, even though it sports all-time highs in likes and follows.
So what will the community-at-large do in response to this latest social media purge?
Sure, there were some that rushed to defend Alex Jones, but many more decided to put their momentary e-safety far above the principle of defending free speech. But those of us who believe in the free market should put our money where our mouths are. There is more than just circumstantial evidence to suggest that many of the major media outlets are coordinated, both with each other and Big Brother, to silence dissenting voices. When you read an article, listen to a podcast, or watch a video, make sure to like/share/subscribe to the original feed in order to keep them in the public view despite the reproach of the elite. Better yet, follow these content creators to their new destinations, and prepare to unplug from outlets that don’t respect your freedom to choose what information to consume.
September marked a decade since the bursting of the housing bubble, which was followed by the stock market meltdown and the government bailout of the big banks and Wall Street. Last week’s frantic stock market sell-off indicates the failure to learn the lesson of 2008 makes another meltdown inevitable.
In 2001-2002 the Federal Reserve responded to the economic downturn caused by the bursting of the technology bubble by pumping money into the economy. This new money ended up in the housing market. This was because the so-called conservative Bush administration, like the “liberal” Clinton administration before it, was using the Community Reinvestment Act and government-sponsored enterprises Fannie Mae and Freddie Mac to make mortgages available to anyone who wanted one — regardless of income or credit history.
Banks and other lenders eagerly embraced this “ownership society”’ agenda with a “lend first, ask questions when foreclosing” policy. The result was the growth of subprime mortgages, the rush to invest in housing, and millions of Americans finding themselves in homes they could not afford.
When the housing bubble burst, the government should have let the downturn run its course in order to correct the malinvestments made during the phony, Fed-created boom. This may have caused some short-term pain, but it would have ensured the recovery would be based on a solid foundation rather than a bubble of fiat currency.
Of course Congress did exactly the opposite, bailing out Wall Street and the big banks. The Federal Reserve cut interest rates to historic lows and embarked on a desperate attempt to inflate the economy via QE 1, 2, and 3.
Low interest rates and quantitative easing have left the Fed with a dilemma. In order to avoid a return to 1970s-era inflation — or worse, it must raise interest rates and draw down its balance sheet. However, raising rates too much risks popping what financial writer Graham Summers calls the “everything bubble.”
Today credit card debt is over a trillion dollars, student loan debt is at 1.5 trillion dollars, there is a bubble in auto loans, and there is even a new housing bubble. But the biggest part of the everything bubble is the government bubble. Federal debt is over 21 trillion dollars and expanding by tens of thousands of dollars per second.
The Fed is unlikely to significantly raise interest rates because doing so would cause large increases in federal government debt interest payments. Instead, the Fed will continue making small Increases while moving slowly to unwind its balance sheet, hoping to gradually return to a “normal” monetary policy without bursting the “everything bubble.”
The Fed will be unsuccessful in keeping the everything bubble from exploding. When the bubble bursts, America will experience an economic crisis much greater than the 2008 meltdown or the Great Depression.
This crisis is rooted in the failure to learn the lessons of 2008 and of every other recession since the Fed’s creation: A secretive central bank should not be allowed to manipulate interest rates and distort economic signals regarding market conditions. Such action leads to malinvestment and an explosion of individual, business, and government debt. This may cause a temporary boom, but the boom soon will be followed by a bust. The only way this cycle can be broken without a major crisis is for Congress both to restore people’s right to use the currency of their choice and to audit and then end the Fed.
Democratic socialists in America are trying to introduce their ideology as something new, when in fact, they are only retreading old-fashioned ideas that history has already disproven. They are ideas that have led to the economic devastation of every country in which they have been implemented.
Having seen the effects of this ideology on our home communities in Venezuela, we feel compelled to warn Americans that if they allow socialism to spread in the United States — as it has done in Venezuela — they will condemn their country to a future of misery.
We know that young people, sometimes, grow enamored with utopian ideals. The movements that cater to them are often labeled as many different movements, whether “social democrats,” “ social Christians ,” or “progressives.” These movements work hard to address their speeches and campaigns to the youth.
There’s nothing new about this. Even Friedrich Hayek admitted he believed once in this system as a young man, noting “Socialism promised to fulfill our hopes for a more rational, more just world… we have been looking for improvement in the wrong direction.”
Now young Americans are hearing and believing in promises similar to what Venezuelans did in the 50’s, and well into the period of Chavismo, that began in 1998 . The promises include “free healthcare,” “free education,” “a right to a job,” “free housing,” “gun control,” and, of course, that old-fashioned socialist motto “a state that works for you” (which really means, “ supports you”)
It is evident that a new generation of politicians want to be elected on this basis, and they have found a way to win by mobilizing people who agree with their ideas. So, they will continue promoting a climate of confrontation and division because they have no interest in convincing others who do not already think like them.
As with Hugo Chávez in his moment , this new generation of American politicians has the support of almost all mainstream media, some economic elite, and the academic world. They have been invited to appear on many of the most important TV shows, which gives them an excellent platform and increase their media presence, and generally they are treated with a soft and delicate indulgence. While other politicians have to fight for open their own spaces in the media and handle rude and non-friendly interviewers, these socialism-friendly politicians have had everything, as we say in Venezuela “served on a silver platter.” It is a true that second-hand dealers of ideas still do their work, as Hayek stated.
Finally, Americans have to be sure of something. The devastation that comes with a socialist political victory will not occur immediately. In our country, 40 years of progressive eradication of our economic freedom — before the Chavismo — were needed to reverse the great economic success of the “Economic Miracle” we enjoyed from 1950 to 1958. The problem is that the groundwork of this movement in the United States is sowing the seeds of a cultural and educational change — as was done from 1958 to 1998 in Venezuela. It won’t happen immediately, but eventually, the idea of getting something for nothing could come to dominate and in that moment — as is currently in Venezuela — it will be almost impossible to recover the freedom through a democratic system. At that point, it would become necessary replicate the Singapore experience.
Just in time for midterms, Facebook has removed 559 pages and 251 accounts they claim have been spreading misinformation and spam. Several of the pages however - some with millions of followers, were pro-Trump conservatives who had spent years cultivating their followings.
Caitlin Johnstone explains a bit more:
Facebook has purged more dissident political media pages today, this time under the pretense of protecting its users from “inauthentic activity”. In a statement co-authored by Facebook Head of Cybersecurity Nathaniel Gleicher (who also happens to be the former White House National Security Council Director of Cybersecurity Policy), the massive social media platform explained that it has removed “559 Pages and 251 accounts that have consistently broken our rules against spam and coordinated inauthentic behavior.”
This “inauthentic behavior”, according to Facebook, consists of using “sensational political content — regardless of its political slant — to build an audience and drive traffic to their websites,” which is the same as saying they write about controversial things, and posting those political articles “in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites.”
In other words, the pages were removed for publishing controversial political content and trying to get people to read it. Not for writing “fake news”, but for doing what they could to get legitimate indie media news stories viewed by people who might want to view it. The practice of sharing your material around in Facebook groups is common practice for most independent media content creators; I did it myself a lot in late 2016 and early 2017, and pretty much all my indie media peers at the time did too.
Among the sites banned are government accountability sites, as explained by Radley Balko:
As part of its purge, Facebook has removed the pages of several police accountability/watchdog/critic groups, including Cop Block, the Free Thought Project, and Police the Police. They've also apparently severely restricted activity for the Photography Is Not a Crime page.
The purge has clearly been coordinated between both Facebook and Twitter, which have banned many of the same sites at the same time.
Notable this time, however, many of the sites being banned are left-wing sites devoted to anti-war causes, or in calling the government out on abuses of power. In this purge and in previous purges, however, many of the banned sites, whether right or left have one thing in common: they are anti-establishment.
So, media outlets that call for the mass murder or Yemenis or Syrians or Iranians, or which look the other way as domestic agencies violate the civil rights of Americans, will be perfectly find. But if you draw attention to these abuses of power? Then, it's "propaganda" and must be banned.
It's impossible to predict who the next purge will target, but now is a good time to remind everyone that the best way to ensure you receive mises.org's content every day is to sign up for our daily email. Simply click on the "subscribe" button on the main page.
As we've noted here in the past, the Federal reserve in recent months has begun publishing its " Underlying Inflation Gauge " which takes into account a broader measure of inflation than the more-often used CPI measure.
When we say "inflation" in this context, of course, we mean price inflation, and not money-supply inflation. And it may prove to be a useful measure when comparing if we wish to compare price-inflation growth to wage or income growth.
After all, if incomes and wages aren't keeping up with price growth, then it may be that the cost of living is outpacing incomes — and thus real incomes are going down.
One simple way of looking at this is simply to compare growth rates in price-inflation measures against average hourly earnings.
Using the BLS's measure of " Average Hourly Earnings of Production and Nonsupervisory Employees " we can compare the year-over-year growth in earnings to the year-over-year growth in the CPI and the UIG:
In this case, we see that earnings in recent months have tended to outpace the CPI, but have not outpaced the UIG measure.
In fact, in the last 24 months, the CPI has outpaced earnings growth in only 5 months out of the 24. Thus, by t his measure, at least, it looks like real wages are growing.
However, if we compare earnings growth to the UIG measure, we find that price inflation as measured by the UIG has outpaced earnings growth in 16 out of the last 24 months.
Indeed, since 2011, the UIG has either been equal to or higher than earnings growth nearly half the time (in 42 out of 89 months).
In this graph, any time the green line is below zero, that's a month in which UIG price inflation was higher than earnings growth:
Using this measure, we could conclude that earnings aren't keeping up with price inflation a significant share of the time. Naturally, if wages aren't keeping up with inflation, this would point to declining real wages.
Most of the time, however, we adjust income and wage data to the CPI only — and in that case, incomes tends to grow faster than price inflation more often.
In the last two years, we've finally begun to see income and wage growth climb above the old 2007-2008 peak levels. But that's using CPI numbers. Wage growth may not stack up nearly as well if other, broader measures of price inflation are used.