Trust in Government at Historic Lows

Trust in Government at Historic Lows

10/26/2018Ryan McMaken

As an addendum to yesterday's post in civility in government, and the Era of Consensus, take a look at new data released from Pew on faith in government .

The percentage of those polled who say they trust the government in Washington hasn't exceeded 25 percent in ten years.

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On the other hand, the amount of trust in government as shown in the 50s and early 60s is astounding. According to this data, at least, nearly 80 percent of the population said it trusted the government in Washington.

It's little wonder then, that the US government had a free hand to carry out thinks like The Great Society, the Vietnam War, price controls, and a variety of massive spending programs. And all the while, the population droned on with "we're the greatest country in the world!"

Conversely, its unclear how long a regime can continue when only one-fifth of the population says it trusts the national government.

But, it's also clear that the government doesn't like it. This is why politicians so regularly lecture the population to vote, and tell us that "cynicism" about the government is a terrible thing — as Obama insisted the other day .

What the regime wants is enthusiastic support, and political participation — i.e., voting and little else — that can be used to claim various "mandates" for more government action.

Naturally, what the regime wants is a repeat of the 50s and early 60s, when a supermajority of the population trusted DC. The pretended posturing toward radicalism is really just a get-out-the-vote strategy. No one in DC wants turbulence. The want to re-create the calm and deferential trust Americans had in the mid-20th century.

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The Fed’s Annual Audit Is a Long Way from Real Transparency

03/30/2021Robert Aro

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.

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Are Police Departments Really Hiring White Supremacists?

03/30/2021Nick Hankoff

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.

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MMT for Conservatives

03/30/2021David Gordon

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.

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A Review of the Fed’s Financial Statements (with Screenshots)

03/30/2021Robert Aro

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:

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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):

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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.

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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:

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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.

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Toshio Murata, R.I.P.

03/27/2021David Gordon

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.

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How I Learned to Start Worrying and Hate the Bombing

03/27/2021Jason Morgan

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.

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The Lack of a Principled Immigration Policy in the 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.

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Want a Job? Get a Shot!

03/23/2021Ron Paul

Mask tyranny reached a new low recently when a family was kicked off a Spirit Airlines flight because their four-year-old autistic son was not wearing a mask. The family was removed from the plane even though the boy’s doctor had decided the boy should be exempted from mask mandates because the boy panics and engages in behavior that could pose a danger to himself when wearing a mask.

Besides, four-year-olds do not present much risk of spreading or contracting coronavirus. Even if masks did prevent infections among adults, there would be no reason to force children to wear masks.

Mask mandates have as much to do with healthcare as Transportation Security Administration (TSA) screenings have to do with stopping terrorism. Masks and TSA screenings are “security theater” done to reassure those frightened by government and media propaganda regarding coronavirus and terrorism that the government is protecting them.

Covid oppression will worsen if vaccine passports become more widely required. Vaccine passports are digital or physical proof a person has taken a coronavirus vaccine. New York is already requiring that individuals produce digital proof of taking a coronavirus vaccine before being admitted to sporting events.

Imagine if the zealous enforcers of mask mandates had the power to deny you access to public places because you have not “gotten your shot.” Even worse, what if a potential employer had to ensure you were “properly” vaccinated before hiring you? This could come to pass if proponents of mandatory E-Verify have their way.

E-Verify requires employers to submit personal identifying information — such as a social security numbers and biometric data — to a government database to ensure job applicants have federal permission to hold jobs.

Currently, E-Verify is only used to assure a job applicant is a citizen or legal resident. However, its use could be expanded to advancing other purposes, such as ensuring a potential new hire has taken all the recommended vaccines.

E-Verify could even be used to check if a job applicant has ever expressed, or associated with someone who has expressed, “hate speech,” “conspiracy theories,” or “Russian disinformation,” which is code for facts embarrassing to the political class.

Many employers will be reluctant to hire such an employee for fear their businesses will become the next targets of “cancel culture.” Those who doubt this should consider how many businesses have folded under pressure from the cultural Marxists and fired someone for expressing an “unapproved” thought.

Politicians and bureaucrats have used overblown fear of coronavirus to justify the largest infringement of individual liberty in modern times. Covid tyranny has been aided by many Americans who are not just willing to sacrifice their liberty for phony security, but who help government take away liberty from their fellow citizens.

The good news is that, as it becomes increasingly clear that there was no need to shut down the economy, throw millions out of work, subject children to the fraud of “virtual” learning, and force everyone to wear a mask, more people are turning against the politicians and “experts” behind the lockdowns and mandates. Hopefully, these Americans will realize that, in addition to coronavirus lockdowns and mandates, the entire welfare-warfare-fiat money system is built on a foundation of lies.

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Are the Fed’s Economic Projections Any Good?

03/23/2021Robert Aro

The Federal Reserve is barely challenged in the court of public opinion. The latest Summary of Economic Projections, which the Federal Reserve Board members as well as the bank presidents, published last week, illustrates how a handful of central planners influence the world. They start by defining “appropriate monetary policy,” in the absence of further shocks to the economy, as:

the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability.

Each participant is said to look at various data points, considering a wide variety of information, to arrive at their projections used to shape monetary policy. The specific details of their data are not disclosed to the public.

Here’s a snippet of Table 1 which shows the median figure of various predictions between 2021 to 2023, as well as the “long run,” which is not defined in the report.

aro1

The list of variables used by the Fed can be refuted in countless articles published by the Mises Institute. Just a few weeks ago, Frank Shostak wrote What Does GDP Really Tell Us?. The Unemployment Rate is a 2 min video that Mark Thornton made several years prior, still relevant as ever. Both discuss how government statisticians “concretize” a fiction into economic policy. The other two variables in the table above, the PCE and Core PCE inflation, fall under the dubious 2% inflation target, of which its origins and rationale have yet to be explained by the Fed.

Looking below at Figure 2, we find one of the most famous economic projections in the world, known as the “Dot Plot.” It illustrates the same time frame as Table 1, except it allows participants to visually plot where they expect the Federal Funds to be in the future. Here we can visualize the efforts of the Fed, specifically how they have no real accountability. If all members were to plot their dots in the long run at 4% or 0%, it will have just as little meaning as plotting between 2% and 3%, as they do below.

aro

The last page of the report, under Forecast Uncertainty, explains how these projections aid the public on their understanding of policy actions, yet also notes:

Considerable uncertainty attends these projections… The economic and statistical models and relationships used to help produce economic forecasts are necessarily imperfect descriptions of the real world, and the future path of the economy can be affected by myriad unforeseen developments and events.

The projections, like the methodology itself, are prone to bias, error, and fallacious reasoning, ultimately amounting to nothing more than guesses. Yet it’s believed this is all part of the planning process. It would be easy to reject the Dot Plot as an inconsequential forecast. But it goes much deeper and not worthy of dismissal.

These economic projections represent the work of just over a dozen bureaucrats, the vast majority of whom can hardly be identified. These unelected officials make predictions that are often wildly off. But the consequence of error, or “bad policy,” is not paid by those who are wrong.

As for the “long run,” it can be likened to a carrot on a stick, having an objective never meant to be achieved. In the absence of further shocks, we are told, rates will go up to around 2.5%, sometime after 2023. We must be cautiously incredulous as to the likelihood of achieving this.

Consider, we are now in 2021; the money supply, Fed’s balance sheet, stock market, national debt, and arguably the cost of living are all at all-time highs. Rates at 2.5% today would be unfathomable. How then do we confront the absurdity, and possible blatant lie by the Fed, that by 2024, or some time after, rates will be higher once again?

Maybe that’s why they caveat predictions with: “in the absence of further shocks.” As long as there is an ever-looming crisis, and the world remains on the edge of bankruptcy, rates can remain low, therefore the Fed can stay relevant.

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Parents Search for Alternatives as Public Schooling Withers

The current debate on whether schools should be reopened or not is not just a debate on the safety of children. It should also be a debate on how much freedom we want to give to parents to pick a school best fitted to their children’s needs. The idea of school choice, that parents should have a choice on where to send their children to school, coupled with a voucher program, is paramount in taking back education from the bureaucrats in state capitals and in Washington, DC, which has become dependent upon the approval of the powerful teachers' union.

The covid pandemic has further exasperated the undue influence of the teachers' union on how education is to proceed in the near future. Parents of school-aged children have in most cases few choices when deciding on proper schooling for their kids. A growing trend among concerned parents is homeschooling (see a recent Mises Wire article by Joanna Miller). Homeschooling is the type of individual instruction envisioned by Murray N. Rothbard in Education: Free and Compulsory. Homeschooling may be the answer for some, but many families cannot afford homeschooling or simply feel not comfortable or prepared to homeschool. In the absence of individual instruction, schools developed to alleviate the cost of individual tutoring. The next best alternative option is private schools. Private schools in a free market will develop different types of schools for each type of demand.

Since the pandemic, private schools have seen an increase in applications across the country. However, the economic cost of homeschooling or private schools can be prohibitive. One issue with homeschooling and private schools is the issue of property taxes paid for services not taken. Property taxes have to be paid whether or not children attend the local school and many parents do not have the financial resources to double pay for education. As a consequence of the pandemic, private schools have become more attractive for rich parents across the country in trying to avoid school shutdowns.

The next-best solution is the expansion of school choice. First, school choice or a school voucher program would take back the power from the school administrators and teachers' union by forcing school administrators to have “more skin in the game,” as Hoppe recently pointed out in a Mises Wire article on the lockdown. Currently, teachers’ and school administrators’ salaries are funded through compulsory taxes that are secured in the short and medium term. Relying on compulsory taxes frees schools from the consequences of their actions like closing schools due to the perceived danger of the virus. School funding through property taxes, which, unlike income and sales taxes, vary with the economy, provides school districts with a more recession-proof source of funding. In a pandemic with government shutdowns that cripple the economy with often devastating effects on local public finances, school districts are much more immune to the consequences. This lack of a direct link between school performance and funding does not encourage a responsive educational system. As a result, teachers and school administrators have fewer incentives to open up schools. In addition, public choice theory says that the competition among local government units will limit local government power; however, school districts, and in particular large consolidated school districts, do not have much competition. The previous successful consolidation in effect removed the competition, allowing many school districts monopoly power.

Parents, in turn, may have only one choice, move to another school district that is more favorable, but such a move will come with a steep price in the form of social costs (losing friendships, etc.) and transaction costs (real estate commissions and transfer taxes). In addition, in large urban consolidated school districts the choices of competitive school districts may be relatively small or requiring a further move outside the school district’s boundaries. Nowhere is this more evident than in school districts in large urban centers with a consolidated school district, such as Chicago and Los Angeles, which have resisted the longest in opening schools. Parents should demand an expansion of school choice, which would make school administrators more responsive to the needs of parents and children.

A second advantage of an expansion of school choice is better matching of needs. School choice would allow parents and teachers to be better matched in terms of intelligence, aptitudes, and interests as well as modes of teaching in the current pandemic. Concerned parents and teachers can be matched in a purely online school, while parents and teachers having seen the statistics and reports by the CDC that face-to-face education does not pose a threat will be able to be matched for in-person education. An expansion of school choice would give parents more power to ensure a high level of education that meets their needs. School choice levels the playing field between parents and school administrators and teachers' unions in incentivizing a more student-centered approach to school opening.

In summary, the covid pandemic makes it even clearer that we need more school choice. In the absence of the ability to provide individual instruction and of more private schools, school choice is the second-best option in the current system. In the long run, more private schools would solve the problem, but for now, it is time to take back education and have the ballot of the market determine who have best served the needs of our children.

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