Power & Market
A recent post by Francis P. Sempa on the University Bookman site offers valuable information on the genesis of James Burnham’s Cold War global crusading. Burnham, who worked after World War II as a CIA agent, was the dominant intellectual influence behind William Buckley’s efforts at National Review to purge Old Right advocates of a noninterventionist foreign policy from American conservatism. Sempa points out that during his Marxist period, Burnham saw the world as a struggle among rival imperialist powers.
“In a February 1938 piece in Socialist Appeal, [a Trotskyist publication] Burnham analyzed the geopolitical evolution of U.S. foreign policy…. And in Franklin Roosevelt the U.S. as it approached a world war had ‘the most daring and brilliant politician whom this country has yet produced.’ Burnham called FDR a ‘close and critical student of international politics.’ Roosevelt, Burnham continued, was a bold and imperious leader who was ‘extraordinarily sensitive to the moods of the masses, and unscrupulous to the last degree in exploiting those moods.’
Roosevelt recognized that ‘modern capitalism can work only with the extension of the function of the state into wider and wider spheres.’ The New Deal was an ‘ideology’ used “to convince the masses that the government … is their government.’ Moreover, FDR had implemented policies ‘deliberately and consciously set toward war, and toward the creation of the most favorable circumstances for the conduct of war.’ In fact, Burnham opined, ‘war is Roosevelt’s solution for the economic crisis.’ In other words, war was part of the New Deal. It would save capitalism and serve Roosevelt’s political interests. In later columns, Burnham called it the ‘War Deal,’ and called Roosevelt ‘the chief War-Monger.’
The coming world war, Burnham wrote in Socialist Appeal, will be ‘a new world struggle for the re-partition of the world among the major imperialist rivals.’ ‘All the fine moral ideals,’ he wrote, ‘from democracy to religion to national independence, are, for the imperialists, only so much grist to the mills that turn out the cynical demagogy whereby they hope once more to delude the people.’”
It would appear, though the conclusion is mine and not Sempa’s, that after World War II, Burnham decided to join the imperialists rather than continue to oppose them.
Listen to the Audio Mises Wire version of this article.
It could take several years. But “Fedcoin'' is on its way and soon will be our reality. The question is: Will Fedcoin make our lives easier or just the Fed’s?
The Federal Reserve Bank of Boston is currently working with Massachusetts Institute of Technology (MIT) on the project, with the first step expected to be revealed for the fall, as explained in the Wall Street Journal on Wednesday. We’ve been offered some details as to the direction it seems to be aiming, drawing similarities to private cryptocurrencies without the mining costs:
The Fed staffers say their efforts are mindful of private offerings but don’t seek to replicate them. For instance, the creation of Fed digital dollars wouldn’t mimic the energy intensive mining system seen in some private offerings …
Should Fedcoin require no mining, create faster transmission, have less expensive transaction fees and provide more security over existing USD, it will quickly gain widespread acceptance.
If mandated by Congress, the Fed could substantially replace most US dollars with the new digital dollar. After accounting for US government debt levels, a large percentage held by government entities and the Fed itself, the Fed could hold the supply of all Fedcoins constant, indefinitely. A new “gold standard” would be achieved, one requiring no gold.
As Rothbard said, there is no “gold fetish.” The purpose of the gold standard was not to get rich from an appreciation in price; rather, the idea was to ensure money could not be created without substantive backing.
Of course, the idea of a return to a gold standard sounds nothing short of science fiction anyway. Instead, this is what we are to expect, as another Wall Street Journal article explains:
These Fed “digital dollar” accounts would be set up as a way to speed payments to households that need support.
This was supported by an economics professor from Dartmouth, Andrew Levin, who said:
Fed accounts “would be a very significant improvement” in getting money speedily to those who need it most …
Unfortunately, from the early looks of it, Fedcoins will be used for fast expansionary capabilities, to give to those who are deemed worthy of government support.
If the USD was held at a constant supply, there would be no risk of hyperinflation, no boom and busts. There would be far less malinvestments, such as trillions spent on companies buying back their own shares. As for “the people,” rather than watch their purchasing power erode year after year, the cost of living would go down. They could actually accumulate savings.
Contrast this to the worldwide hyperinflation we’ve seen, yet ignored, for generations. Consider the status quo America, where government proposes trillion-dollar stimulus bills every other month, phrases like “debt doesn’t matter” have been normalized, all endorsed by the Federal Reserve System, which spends billions of dollars in salaries for economic planning with ideas ranging from antiquated to flat out “half-truths,” for perpetual balance sheet expansion.
The launch of a new currency gives us an opportunity to start over, to a certain degree, where we can learn from the past to build a better future.
True, the notion of holding the money supply constant is a foreign concept to most. That’s only because we’ve lost a fair bit of knowledge and economic history over the years. But just because the gold standard is not widely understood does not mean it’s not a viable solution.
If Fedcoin offers a choice between inevitable destruction (from exponential increases to the money supply) versus an unknown future under honest money, the choice shouldn't be difficult. Sadly, it seems nearly impossible to convince central planners that sound money is a better path forward. Unless there is a dramatic shift in society and the Fed’s expansionary monetary policies are reigned in, the digital dollar will be destined to expand simultaneously, if not at a quicker pace than the existing US dollar; and the opportunity for real societal change will be lost.
Listen to the Audio Mises Wire version of this article.
Today is the eighty-eighth anniversary of Executive Order 6102, signed by President Franklin Delano Roosevelt, "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States." The order was one of the several disastrous responses to the Great Depression that succeeded in escalating the financial crisis. Later in the year, the US Congress would pass a resolution retroactively supporting the legislation; however, it was the determined autocratic leadership of FDR that made way for these unprecedented measures. It would be a crime for Americans to hold gold for over forty years, until President Gerald Ford reversed the order in 1974.
This episode has several lessons for the current financial environment, particularly given the acceleration of tyranny-by-expert rule that has taken over much of the worst this past year.
The underlying legislation that evoked by FDR’s executive order was the Trading with the Enemy Act of 1917—a by-product of World War I—despite the fact that the US was in no way in a period of war in 1932. Similarly, we have seen war on terror–inspired financial legislation increasingly used against American citizens. For example, in the name of “fighting terrorism” the US PATRIOT Act significantly increased know-your-customer laws, empowering federal regulators to use the traditional banking system to better track the economic behavior of American citizens.
In the eyes of the federal government, “antiterrorism” legislation was quickly expanded to include additional missions—such as stopping money laundering and drug crimes. Increasingly, these bogeymen have been used by policymakers around the world to erode financial privacy assets—such as cash and secret Swiss bank accounts.
On the domestic side, we have increasingly seen US corporate actors demonstrate their loyalty to the progressive political zeitgeist by proactively cracking down on various dissident political figures and conservative action groups. Bank of America, for example, has debanked various gun manufacturers and also turned over client data following the January 6 protests at the US Capitol. These moves could prove useful if BoA needs another federal bailout from a Biden-Harris administration, but highlights the degree to which the modern financial system can be weaponized against a state’s political enemies.
The same playbook is being increasingly used to target bitcoin and other cryptocurrencies that are beyond the reach of the state.
Earlier this year, Treasury secretary Janet Yellen indicated that cryptocurrencies are in her crosshairs, telling an industry roundtable that
[t]he misuse of cryptocurrencies and virtual assets is a growing problem…. I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they've been a tool to finance terrorism.
European Central Bank president Christine Lagarde has also called for global regulation of cryptocurrencies, responding to increased interest in these alternative assets. Of course, the increased interest in assets like bitcoin is itself a direct response to the monetary policy of the Federal Reserve, ECB, and other global central banks responding to government-caused economic shutdowns in 2020.
While central bankers often publicly dismiss the role of nonpoliticized assets like gold and bitcoin in financial markets, in their own circles they understand the dangers that exist in allowing the public the option of opting out of their financial schemes.
For example, at an annual Federal Reserve conference in 2016, the late Marvin Goodfriend noted the role that cash played in limiting what antisaving policies a central bank could pursue. He advocated the abolishment of cash in return, and drew comparisons to the elimination of the gold standard. In 2018, an IMF report warned that cryptocurrencies could reduce demand in fiat money, and recommended “rigorously applying measures to prevent money laundering and the financing of terrorism” in an attempt to undermine this consumer behavior.
In addition, central banks have sought to compete with the convenience of digital currency by developing their own versions. China—whose central bank has been one of the most aggressive in credit expansion since 2008—has recently released a “digital yuan,” while the ECB is working on a “digital euro.”
As I noted in 2017, this could set up a “next generation” of global currency war between private crypto and state digital currency. Since it is the nature of a state to defend its power, we should expect to see regulators and central bankers around the world escalate regulatory and legal pressure against financial assets beyond their control.
As FDR’s gold crackdown showed, tyrants know the importance of controlling money in a time of crisis.
Thankfully, so far bitcoin has demonstrated resilience against the most forceful of state actions. For example, in countries like Morocco—which has banned bitcoin entirely—peer-to-peer trading of bitcoin has skyrocketed.
What will be interesting to see is whether countries that are suspicious of international governing organizations—such as the IMF, EU, and UN—recognize the political value of private money as a check against globalist political hegemony.
We’ve seen Russia recognize the value of gold as a check against the weaponization of the dollar. Could bitcoin be next?
The notion of “Auditing the Fed'' has been around for awhile. Technically, the Federal Reserve is audited. On Tuesday, with little to no fanfare nor media coverage, there was a press release announcing the completion of the 2020 Audited Financial Statements. Digging deeper, each of the 12 Reserve Banks received their own independent audit. But the most important one is the “Combined Federal Reserve Banks'' financial statement; a consolidated statement of the entire Federal Reserve System.
The Federal Reserve’s audit is held to the same standard as a publicly traded company. Per the American Institute of Certified Public Accountants (AICPA):
The audit is the highest level of assurance service that a CPA performs and is intended to provide a user comfort on the accuracy of financial statements. The CPA performs procedures in order to obtain “reasonable assurance” (defined as a high but not absolute level of assurance) about whether the financial statements are free from material misstatement.
This does not mean the statements are free of errors, nor every single transaction was checked for 100% accuracy. Rather, “the audit” is the standard in which the biggest companies in the world rely, giving a high degree of assurance.
The Certified Public Accountant (CPA) in this case would be KPMG LLP, one of the largest accounting firms in the world. Per the standards:
The CPA will issue a formal report that expresses an opinion on whether the financial statements are presented fairly, in all material aspects, in accordance with the applicable financial reporting framework.
So how did the Fed do this year? As the Independent Auditor Report says, (page 1):
In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Reserve Banks as of December 31, 2020...
Seems fine. Of course, this is the Federal Reserve. It never is quite easy.
The auditor report also states, as described in Note 3, that the combined financial statements were prepared:
in conformity with the accounting principles established by the Board of Governors of the Federal Reserve System, as set forth in the Financial Accounting Manual for Federal Reserve Banks, which is a basis of accounting other than U.S. generally accepted accounting principles.
It’s called the “Financial Accounting Manual for Federal Reserve Banks.” The 227-page manual describes the Fed’s very own special accounting methods, as established by the Board of Governors of the Fed…
This is not to say the statements are inherently wrong, or misleading. But it claims the statements appear to be “okay,” based on the standards established by the very entity being audited. This is definitely different from normal audit practices. But, to be fair, there is no other entity which can legally create trillions of dollars and buy assets either.
The press release also notes:
The public accounting firm also conducts audits of internal controls over financial reporting for the 12 individual Federal Reserve Banks and the Board of Governors.
If the idea is to “Audit the Fed,” it must be explained that the Fed is actually audited.
However, the “Audit the Fed” movement aims to achieve more than just an audit. Those pushing for it strive for transparency, specifically, the list of banks/entities who comprise its list of stockholders. Additional concerns include those who have dealings with the Fed in other matters. And finally, they wish to have all of the Fed’s coveted “data” used to best plan their policy, released for the public to review.
Unfortunately, none of this is disclosed in the financial statements.
Instead of looking for new ways to audit the Fed, with one simple act of congress, they could remove any protections against the Fed’s privacy or even ensure the Fed cannot refuse requests for information from the public. This would effectively put an end to all clandestine workings of one of the most opaque organizations in the country. In this regard, congress could make the Fed completely transparent, and the people, aided by the court of public opinion could conduct the audit, saving both money and time, while finding the answers we so desperately deserve.
Bureaucracies always benefit from political hysterias. A big one today is that police forces are being infiltrated by white supremacists. Pursuing this bogeyman will fill bureaucratic coffers, while public security services get worse and more expensive.
It’s a cliche now that big government never lets a crisis go to waste, but the same dynamic often holds at the bureaucratic level with regard to public manias. These crises and manias are not uncommonly caused by the very institutions claiming to be the only ones capable of solving the matter.
White supremacist infiltration of police forces is one of the latest national hysterias. There’s almost no evidence to show it’s happening at all, but the media, political leaders, and their bureaucratic allies keep stoking up the general accusations, especially following the January 6 US Capitol protest and riot.
Facts that disprove this myth are easily outweighed by bureaucrats’ sense of opportunity to garner more taxpayer money and prestige if they pretend it is a systemic problem.
This then foments resentment among people, particularly white people but also anyone predisposed to skepticism of race-baiting. White folks who too loudly voice their opposition to these witch hunts can be more easily labeled white supremacists.
Could that be the whole point of fear mongering campaigns like this one? To create a self-fulfilling prophecy? Perhaps what’s a more likely explanation is that spawning hobgoblins can serve as a distraction from real issues that can potentially threaten the bureaucracy’s power.
Again, there is almost no evidence to support any claim of white supremacists infiltrating the police.
Earlier this month, the Office of the Director of National Intelligence released a report entitled “Domestic Violent Extremism Poses Heightened Threat in 2021.”
In it, the only mention of law enforcement was that they, along with government personnel and facilities, are typical targets of militia violent extremists. The report also assessed the threats posed by racially or ethnically motivated violent extremists, but there was no mention of them attempting to take over police departments or even get a job in one.
Going back to October 2006, an FBI intelligence assessment titled “White Supremacist Infiltration of Law Enforcement” found “little corroborated reporting on current strategic attempts by white supremacist groups to infiltrate law enforcement communities.”
The FBI gave itself an out, however, saying, “the possibility that infiltration has gone undetected is of great concern.”
Apparently, anything’s possible it seems if it warrants a budget increase.
What about the protest and riot at the US Capitol though? That must’ve revealed some hidden ties of white power extremism and the police. Let’s glance at the numbers there.
Of those 324 arrested in connection to January 6, USA Today found four off-duty police officers and three former officers. That’s two percent of all those arrested. And those officers’ “ties” to white supremacy? USA Today didn’t say, despite its article running under the headline: “‘A nightmare scenario’: Extremists in police ranks spark growing concern after Capitol riot.”
A “scenario”...sparks growing concern. This is not real news. It’s fake, or if that’s too disrespectful to the pride of journalists, call it incendiary. The sub-headline partially read: “Now, charges against officers in the Capitol riot inflame fears of extremists infiltrating law.”
Fears are certainly being inflamed. But is it the charges against officers doing that?
USA Today reports that two of the off-duty officers were subsequently fired after their social media posts were liberally interpreted to be pro-insurrection. Another officer resigned, and the fourth one was suspended without pay.
Supposedly the white supremacism connection is that these officers marched alongside members of the Oath Keepers and Proud Boys, groups which by some number of degrees are related to white supremacists. It’s a fool’s errand trying to pin down this gelatinous allegation, but most readers will assume the connection to be real and substantial, because why else would it be getting so much media attention?
What’s getting less media and political attention is the national murder rate in 2020 representing the biggest one-year increase in history, adding 20,000 more murders than in 2019, according to FBI statistics.
Obviously, there is a national policing problem. There are many policing problems. They are more tied to bureaucratism than supremacism, however. Bureaucratic supremacists are infiltrating the institutions of law and order!
The problem with government bureaucracy is its inability to precisely account for how best to deliver the goods to its consumers. In the case of policing, federal politicians and bureaucrats skew the priorities for local police, directing them to combat the War on Drugs and other such schemes.
There is no profit-loss mechanism at work with police today. The best short to medium term goal would be to localize and maximize the local community’s power as opposed to the state or federal bureaucracies.
They have proven themselves unfit to serve, and as Ludwig von Mises put it, “he who is unfit to serve his fellow citizens wants to rule them.”
Long term goals are just as important though, and in the case of policing, they may carry just as much urgency. The total demonopolization of police must take place as soon as feasible. The infringements on individuals and their communities to organize for security as they see fit must be eliminated.
Only then will the problems of costs, lack of responsiveness, brutality, and other deficiencies be handily dealt with. The fear mongers will gin up anything they can to prevent even an inclination toward this solution, but if enough people in one area can overcome them, then these bugaboo stories might finally stop having their intended effect.
Jonathan Culbreath, posting on the American Conservative web page (March 24, 2021), urges his fellow conservatives to adopt a fashionable leftist bromide, modern monetary theory (MMT). Mr. Culbreath relies for his account of MMT on the popular book by Stephanie Kelton, The Deficit Myth, which I reviewed here. According to MMT, a government that controls its own currency never has to worry about deficit spending, because it can always print more money to pay its bills. The only thing holding it back is the danger of inflation, and this can always be averted by withdrawing money from the economy through taxation. Besides, inflation cannot occur to a damaging degree unless there is full employment. Mr. Culbreath evidently has not heard of “stagflation.” He forgets that inflation can quickly spiral out of control. There is no magic by which bookkeeping entries can erase debts without bad consequences. If something sounds too good to be true, it almost always is.
After discussing the nature of the Fed’s annual audit in my previous article, I will now share the highlights of the 2020 audited financial statements. Starting with one, if not the largest, balance sheets on the planet:
As of December 31, 2020 year-end, the Fed had $7.3 trillion worth of assets, not bad for an entity who creates digital money out of thin air to buy real assets. The brunt of the balance sheet is due to nearly $5 trillion in Treasury securities and $2 trillion for mortgage-backed securities (MBS).
The nearly $7 trillion of securities stands as an account receivable balance, an asset for the Fed; this means somewhere in the world, there are entities, who effectively owe $7 trillion to the Federal Reserve. Until this $7 trillion is paid, the Fed will continue to earn interest income on this balance. Also note, despite the mortgage crisis ending over a decade ago, we find the Fed still unable to exit the mortgage market.
It’s also easy to forget there exists a liability side to the balance sheet, as seen below, (similar to above table, the left data column is 2020 and the right column is 2019):
When the Fed creates money to buy assets, assets increase (e.g., MBS) to account for the purchases made, while on the liability side, there exists a corresponding change to actual money supply. Per above, $2.0 trillion Federal Reserve notes are outstanding, nearly $3 trillion deposits held at the Fed, (owned by the banks), as well as $1.7 trillion of Treasury’s deposits held at the Fed. To simplify, there are $2 trillion of dollar bills in circulation and $5 trillion sitting on deposit at the Fed (mostly in digital form).
The $2 trillion of Federal Reserve notes sounds reasonable as the Fed charts Currency in Circulation, which is currently at $2.1 trillion. This is concerning when contrasted against the M2 Money Supply of nearly $20 trillion; the reason why bank runs are an ever-present threat and why central planners might favor digital currency…
The money the Fed makes is nothing short of fantastic. For the year, they made interest income of $101 billion, paying interest expenses (money on deposits/ liabilities) of just under $8 trillion.
The interest income society pays is just one cost of having a central bank. But what of the actual operating expenses? What are the “brick and mortar” costs of running the Fed?
The answer: Around $8 billion annually.
Imagine: $3.5 billion on salaries and benefits, plus another $662 million on pension costs. This is the cost required to pay economic experts who find creative ways to manage our economy as they see fit.
However, the most concerning item on the entire financial statements is the $1.778 billion to the “Board of Governors operating expenses and currency costs.” Unfortunately, there is absolutely no disclosure as to where this money is really going, other than the Board of Governors spent it in some way. The $517 million paid to the “Bureau of Consumer Financial Protection” is just another large payment to a similarly little understood government agency.
Lastly, there is the dividend of $386 million on over 600 million shares, per page 5:
Understand, the Federal Reserve has a regulation component to it. Unlike “routine” regulation, the entity forced to be regulated normally pays the government, quasi-government or self-funded entity for regulatory services. This is not the case here. Instead of the regulated entities, i.e., banks, paying the Fed for services, the banks are obligated to buy shares of the Fed, essentially “funding the Fed,” except with the added benefit that those shares have been paying out handsome dividends for over 100 years….
Even though remittances to treasury are many, multiple times larger than the dividend paid to banks, the dividend is so integral to the banks, that if the Fed doesn’t make enough money to pay its dividend, the US Treasury will not be paid!
As explained under NOTE 3) q, (page 18):
If earnings during the year are not sufficient to provide for the costs of operations, payment of dividends, and maintaining surplus at an amount equal to the aggregate surplus limitation, remittances to the Treasury are suspended.
Between earning interest on deposits, borrowing at favorable rates, receiving odd bailouts from time-to-time, along with other moral hazards the Fed creates, the dividend paid to banks is just one of the many perks banks receive from the central bank. Sounds like a pretty steep price the public must pay in order to achieve that elusive 2% inflation and full employment target.
Professor Toshio Murata of the Yokohama College of Commerce died on March 12, 2021, at the venerable age of ninety-seven. During World War II, he was a staff officer responsible for economic planning in Shanghai, under the Japanese occupation. He soon found out that central planning in a city of that size did not work, and, when his opinions become known to the central authorities, he was removed from his post. After the war, an American student sent him a copy of Human Action, and he was immediately convinced by Mises’s free market views. Through the assistance of a Japanese businessman who was a member of the Mont Pelerin Society, he was able to secure a one-year fellowship in the Graduate School of Business Administration at NYU from the William Volker Fund, and he attended Mises’s Seminar in 1959 and 1960. Upon his return to Japan, he became a leading proponent of Mises’s thought and translated Human Action and The Ultimate Foundation of Economic Science into Japanese. He was also an authority on real estate marketing. Younger Japanese scholars interested in Austrian economics viewed him as a father figure.
It was about this time in March 2003 that the bombs began to fall on Baghdad. I remember it well. I watched with a bit of trepidation as the TV news carried image after image of phosphorescent flashes lighting up the black desert night sky. I wondered what would happen to American society as we entered what looked to be a long season of war.
The bombing was riveting to behold. Tomahawks hit their targets dead center and the night vision cameras painted the scene in a ghoulish, somehow satisfying green. During the daytime bombing, daisy cutters and MOABs bent the air and the surrounding built environment around them as they exploded, sucking in a little dust and mirage before bellowing out in a giant display of American military ingenuity.
As the bombs kept falling, my trepidation wore off. It was undeniable that the United States was dominating the battlefield with dazzling pyrotechnics. I began to enjoy watching the bombs fall. The bombing was keeping us safe—I nodded in agreement as cable pundits wrung every last drop of ratings out of the patriotic gore. The sorties and the strikes and the urban areas pitted and cratered by strafings from A-10 Warthogs—what a wonderful show. I was proud to be an American. The flags on the flagpoles outside the library and courthouse and grade school in the sleepy town I lived in seemed to snap in salute to the exploits of war fighters in the Middle East. Bombs solve our problems! Bombs bring freedom and democracy! Bombs keep bigger wars at bay! Long live the bombing of Iraq, and let’s think about expanding the bombing to Iran and beyond—for the sake of peace and the USA!
The subsequent two decades dampened my enthusiasm for bombing considerably. I read Rothbard—that was huge. I read Smedley Butler and Albert Jay Nock. I read Lysander Spooner. I began to read books in Japanese by people who had seen American bombing from the ground, not from the air, and who had, for that very reason, a decidedly different view of what the exercise meant. I visited Vietnam and realized, as a novelist acquaintance mentioned in passing recently, that bombs were never going to break the spirit of the Vietnamese. I started to wonder why we had tried breaking anyone’s spirit in the first place. I couldn’t help but think that maybe we had no business in Southeast Asia at all. What if LBJ really had been a baby killer?
What I had argued for during the Bush years—that bombing kept war away from the homeland and always on the doorstep of some other schmucks (and better them than us)—gradually came to seem rather facile. And dangerous. There was, after all, no guarantee that the people doing the bombing would also make such neat distinctions between near and abroad. This was borne out by meeting veterans of foreign wars. The men I met were often on edge, unable to sleep. They brought the war home with them in their nightmares, an interior uniform they could never fold up and put away. War coarsened American society. War made us think that war was who we were, that war was the best we could do for ourselves and for other countries. War began to seep back into the country from abroad. It wasn’t as easy to keep the war over there as I had thought.
And yet, I still had faith in the American form of government. I thought that the Constitution, although honored largely in the breach, would keep the American homeland sitting pretty in civil liberties no matter how much the American military carpet-bombed Syria or pointed batteries of missiles at Vladimir Putin. That was all somewhere else. I read about the history of the CIA and learned that it was basically an international criminal cartel with diplomatic immunity provided by Washington, DC. But never mind about that. The CIA was off causing mischief in Niger or Pakistan, was busy terrorizing the residents of Yemen and Guatemala and Chad. But we still had the FBI in the States, the organization tasked with keeping law and order and busting up Al Qaeda cells before they could blow up our buildings again.
But then I began to study the court cases emerging from the “war on terror” and I couldn’t shake a rising suspicion that it was all a sham. The FBI was perhaps the worst organization in the federal behemoth. These were the guys supposedly keeping us safe and free? Setups of hapless teenagers, infiltrations of patriotic groups, and—what’s this, the history of Ruby Ridge and of Waco and of Elián González is the opposite of what I was told on CBS? And the FBI was spying on peaceful Japanese Americans before World War II, and the FBI was now undermining—with all the fake search warrants and the “FISA” chicanery of the “war on terror” years—the very Constitution it was charged with upholding? Uh oh. Maybe our Plan B—let the CIA assassinate foreign despots, but let the FBI act as constitutional referee back home—was not such a great plan, after all.
The final straw came in the summer of 2016, when James Comey, the FBI director, exonerated—in a one-man speech, on the basis of no delegated authority whatsoever, and in contradiction to the preponderance of the evidence—his preferred presidential candidate, Hillary Clinton. Clinton had been running one of the biggest embezzling operations in the world. But things tend to go very well for someone whose husband makes personal visits to the business jet of the Attorney General of the United States. Amazing how that works.
We later learned that Comey and his G-men were also spying on Trump and his associates, using a two-bit procedural scheme cooked up by deep state paramours who had decided that elections were too important to leave to the American people. It turned out that the FBI was just the CIA on the home front. Even worse, in many ways. The FBI was running a “Clowns in Action” show, but the consequences were taking a toll domestically. And the whole thing was connected in a sleazy political economy of grift, cover-ups, payoffs, “unfortunate accidents,” and the relentless hounding of anyone, even a president, who stood in the way of ever-increasing power.
It was in January of this year, nearly eighteen years since the invasion of Iraq, that it all hit home. Literally, I guess you could say. There was the National Guard, in Washington. They were there to keep American citizens away from the “people’s house.” It was like a bad movie from the 1980s. Would a flinty-eyed Steven Seagal be walking down some marble steps somewhere, a look of supreme put-out-ness on his grimacing face, to take back control of rogue units and end the domestic terrorism by our own armed forces? But, no, no Seagal in sight. Only a decrepit, senile statist, flanked by partisan toadies, washed up athletes, and lounge singers, barely getting through a few pages of boilerplate before being whisked back to an undisclosed basement location to “govern” the country.
The National Guard remained even after the decrepit statist and his hangers-on had gone back to their usual corruption. Apparently there was some “white supremacy” brewing and the National Guard had to be on hand for a pitched battle with the Klan. Or with Q. Or with the Proud Boys or Martha Stewart or something. None of that ever happened, even remotely. And then it all made sense. It wasn’t the military that kept us safe. It was the military that was always our greatest threat.
This is why the founders wanted well-regulated militias, and not a standing army. Standing armies are what our homegrown Kim Il-Sung, Abraham Lincoln, always craved. Ever since the hijacking of Washington by Lincoln’s progressives in 1860, it has been a steady march from republic to police state. We told ourselves that the standing armies were probably OK, as long as they were standing (or bombing, or whatever) somewhere else. Now, we discover that from the perspective of the deep state, we are all a standing army. Bombing is all the state can do. It’s how it solves every problem, with a war—on poverty, on drugs, on women, on Christmas, on childhood obesity. Now we’re on a war footing against an enemy measured in nanometers. The only way to kill this enemy is apparently to destroy small businesses and turn the economy into an alliance between Big Tech and the printing presses of the Federal Reserve. Line up for your checks, citizens. Take the king’s shilling and form ranks to await orders from the kindly commander in chief. Hail to him. Hail to him or else.
I thought, in my youth, that we were attacking Iraq because of 9/11. Now it’s obvious: there was 9/11 because we had been attacking Iraq. The military didn’t protect us, it implicated us in its terror campaigns against unarmed civilians—the same campaigns it’s been waging since Vicksburg and Wounded Knee. And that has utterly destroyed the United States as a free and prosperous country. The military has turned us all into slaves.
Tucker Carlson pointed last week out that flight suits for pregnant women was a very creepy idea. A military man responded by saying that they had gotten top-flight medical advice so that pregnant women could be more “lethal” in combat. Jacking up the lethality of pregnant women—sounds like something a war state would do. And that’s just what we’ve become.
I’ve learned to start worrying and hate the bombing. But it’s probably too late. The DC war machine has come home, and now they are training their cross hairs on us.
To date, no major political party in the United States has issued a coherent, principled policy on immigration. Without a principled policy, political jockeying has been the rule of the day.
The Libertarian Party advocates a veritable open border policy on the grounds of laissez-faire. The LP likens the movement of people across borders to the movement of capital and goods: “To promote economic freedom, they demand the unrestricted movement of humans as well as financial capital across national borders.” While this may strike some libertarians as self-consistent, the platform prong is nevertheless ill conceived. As demonstrated by Lew Rockwell—following the analyses of Hans-Hermann Hoppe and Murray Rothbard—for several reasons, immigration cannot be equated with international trade. In short, despite the murkiness of the concept of “public property,” unvetted immigration infringes the property rights of citizens.
President Donald Trump’s immigration policy was instituted as part of the “America First” platform. Although it may be understood in terms of the property rights of US citizens, it was never justified on these grounds. The result was that Democrats and the media could claim that the policy was racist rather than principled.
Now that the Left has secured complete control of the federal government, the lack of principle is resulting in a humanitarian crisis under the banner of humanitarianism, mostly for political gain.
Immediately upon taking office, Biden signed a welter of executive orders and presidential proclamations, issued on “humanitarian” grounds. Full of bromides about human dignity and fairness, the humanitarianism of Biden’s declarations is belied by the infringement of the prerogatives and property rights of US citizens, as well as the apparent endangerment of their health and general welfare. Although the covid crisis is grossly overstated, the hypocrisy of the Left is on full display as mask-less immigrants pour into the country without covid precautions while many Americans remain masked and partially locked down.
This policy, if it can be called a policy, is utterly unprincipled—unless the unstated principle is to systematically reduce the wealth and threaten the welfare of the majority of US citizens, or to provide cheap labor while laying most of the burden for immigrant support on taxpayers, or to swell the voting base of the Democratic Party, or all of the above. Other than Democratic politicians, few citizens gain anything from such unvetted immigration. Most stand to lose. (Perhaps those whose windows are adorned with signs bearing slogans like All Welcome, Love Is Love, and No Human Is Illegal will volunteer to provide immigrants free room and board.)
Biden’s plan is shaping up into a total disaster. One hundred thousand migrants crossed the southern border in February alone. Some migrant facilities reached over 700 percent of capacity, leading the administration to announce that it will house migrants in hotels for extended stays of six months or longer, at taxpayer expense. Meanwhile, the administration will not or cannot answer questions about the humanitarian impact of the immigrant surfeit—for example, how the administration’s treatment of detained children differs from their treatment under Trump, or, for that matter, under the Obama-Biden administration—other than by being worse.
But the politics of welcoming this wave of new immigrants is more significant than even its cultural, social, and economic impact. If the Senate filibuster is repealed, the voting “reform” legislation passed by the House of Representatives (HR 1) would gain a simple majority in the Senate. The Democrats’ voting “reform” legislation would allow virtually anyone to vote by mail—without signature or any other kind of verification—before, during, and after official election days. Democrats could then count on these and other new immigrants to repay their largesse with votes. Biden’s immigration gambit could usher in single-party (Democratic) rule in the United States, for the foreseeable future.
Even if this political legerdemain succeeds, opposition should begin by focusing on a principled response.
The first step is to define “public property” as citizen owned. But in addition to the question of access to “public property” is the more vexing one about just what “public property” is at stake. Immigration affects different regions differently. The majority of illegal immigration filters into six states: California, Texas, Florida, New York, New Jersey, and Illinois. While over 2 million unauthorized immigrants live in California, for now at least, eight states are “home” to fewer than five thousand unauthorized immigrants.
As such, a uniform national immigration policy makes little sense. (Nor, for that matter, does a lot of national policy, especially given the growing disparity between states on many supposedly national issues.) At the very least, cities, counties, and states should be able to make their own immigration policies, guided by the cultural, economic, and political impact of newly arriving immigrants on local inhabitants.
The proverbial can has been kicked down the road for so long that Democrats have seized upon the confusion and used it for sheer political purposes, at the expense of the majority. A clear, regionalized set of policies based on the principle of property rights is long overdue.