Why Presidents Want You Scared

Why Presidents Want You Scared

10/31/2018James Bovard

The media is railing about Trump for fearmongering ahead of the midterm elections.  Like this never happened before?  Like this is not the job description of modern politicians? Like Obama, George W. Bush, and Clinton did not fearmonger whenever they could profit by spooking Americans?  Trump is continuing a tradition that was firmly established by Woodrow Wilson.  Fearmongering is simply another proof of the rascality of the political class – and another reason why their power should be minimized. Here’s a 2011 piece I wrote on the topic, excerpted in part from Attention Deficit Democracy.

Fear-Mongering and Servitude

In his 1776 essay, “Thoughts on Government,” John Adams observed, “Fear is the foundation of most governments; but it is so sordid and brutal a passion, and renders men in whose breasts it predominates so stupid and miserable, that Americans will not be likely to approve of any political institution which is founded on it.” The Founding Fathers hoped the American people would possess the virtues and strength to perpetuate liberty. Unfortunately, politicians over the past century have used trick after trick to send Americans scurrying to politicians to protect them.

President Woodrow Wilson pulled America into World War I based on bogus idealism and real fear-mongering. Evocations of fighting for universal freedom were quickly followed by bans on sauerkraut, beer, and teaching German in government schools. H. L. Mencken observed in 1918: “The whole aim of practical politics is to keep the populace alarmed and hence, clamorous to be led to safety—by menacing it with an endless series of hobgoblins, all of them imaginary.” In Mencken’s time he was often considered cynical. Subsequent developments have proven Mencken to be a prophet.

The Democratic Party relied heavily on the fear card in the 1920 presidential race. On the eve of the November vote that year Democratic presidential candidate James Cox declared: “Every traitor in America will vote tomorrow for Warren G. Harding!” Cox’s warning sought to stir memories of the “red raids” conducted in 1919 and 1920 by Attorney General A. Mitchell Palmer, during which thousands of anarchists, communists, and suspect foreigners were summarily jailed and in many cases deported. The American people rejected Cox and embraced Warren Harding’s promise of a “return to normalcy.”

President Franklin Roosevelt put “freedom from fear” atop the American political agenda in his 1941 State of the Union address. But FDR’s political legacy—especially Social Security—has institutionalized fear-mongering in presidential and congressional races. Democrats perennially portray Republicans as planning to yank life support from struggling seniors.

For almost 50 years American politicians have used television ads to spur dread, most famously in the 1964 “Daisy” ad for Lyndon Johnson’s campaign. The ad showed a young girl, in the words of Jim Rutenberg in the New York Times, “picking the petals off a daisy before the screen was overwhelmed by a nuclear explosion and then a mushroom cloud and Mr. Johnson declared, ‘These are the stakes.’” The ad did not specifically claim that Barry Goldwater, the Republican nominee, would annihilate the human race, but the subtle hint wafted through. Though this ad only aired once, it instantly became a legend.

Whipping up fear was the flipside of President Bill Clinton’s “feeling your pain” political style. Clinton fanned people’s fear of guns, militias, and life without medical insurance. At the same time, the Clinton administration stretched the power of government on all fronts—from concocting new prerogatives to confiscate private property to championing FBI agents’ right to shoot innocent Americans to bankrolling the militarization of local police forces. Clinton was the Nanny State champion incarnate, teaching Americans to look to government for relief from every peril of daily life—from unpasteurized cider to leaky basements. As long as the President seemed to care about average Americans, his abuses were largely forgotten. (The 1996 Republican presidential candidate, Sen. Bob Dole, also promised to provide voters with “freedom from fear” via untying “the hands of the police.”)

Fear and Bush

The 2004 race was the most fear-mongering presidential campaign in modern American history. In his acceptance speech at the Republican National Convention, George W. Bush referred to terror or terrorism 16 times. Bush reelection campaign television ads showed firemen carrying a flag-draped corpse from the rubble at Ground Zero in New York and a pack of wolves coming to attack home viewers as an announcer warned that “weakness attracts those who are waiting to do America harm.” (One commentator suggested that the ad’s message was that voters would be eaten by wolves if John Kerry won.) Just before Election Day a senior GOP strategist told the New York Daily News that “anything that makes people nervous about their personal safety helps Bush.” People who saw terrorism as the biggest issue in the 2004 election voted for Bush by a 6 to 1 margin. Moises Naim, editor of Foreign Policy, observed that the Bush campaign was “using the fear factor almost exclusively. This is a highly researched decision with all the tools of public opinion management. It’s nothing but a reflection that it works.”

Bogus terror alerts might have made the difference in the 2004 election. Robb Willer of the Sociology and Small Groups Laboratory at Cornell University examined the relationship between 26 government-issued terror warnings reported in the Washington Post and Bush’s approval ratings. “Each terror warning from the previous week corresponded to a 2.75 point increase in the percentage of Americans expressing approval for President Bush,” Willer concluded. Bush beat Kerry by 2.4 percentage points in the popular vote. Former Homeland Security chief Tom Ridge later admitted that many of the 2004 alerts were unjustified. The Cornell study also found a “halo effect”: Americans’ approval of Bush’s handling of the economy also rose immediately after the announcement of new terror warnings, Willer reported. Apparently the more terrorists were allegedly poised to attack America, the better job Bush was doing.

Voters in 2004 could choose whether they would be killed by terrorists if they voted for Kerry or whether they would be left destitute and tossed out in the street if they voted for Bush. Boston University professor Tobe Berkovitz commented to the Washington Post: “It’s not surprising that both campaigns are looking for the leverage point: scaring the hell out of the American public about what would happen if the other guy wins.” But the more an election is about fear, the more the winner will presume to be entitled to all the power he claims to need to combat the threat.


In his 2005 State of the Union address Bush declared: “We will pass along to our children all the freedoms we enjoy. And chief among them is freedom from fear.” The Founding Fathers would have derided the notion of politicians giving citizens “freedom from fear.” And they would have denounced the notion that this new-fangled freedom is superior to the freedoms the U.S. government had pledged to respect for more than 200 years.

After promising freedom from fear, a politician can always invoke polls showing widespread fears to justify seizing new power. The natural result of making freedom from fear the highest freedom is that any policy that reduces fear can be portrayed as pro-freedom. Bush claimed that to keep Americans safe he had to suspend habeas corpus and detain any suspected terrorist in perpetuity based solely on his unproven assertions. Bush authorized the CIA to use waterboarding and other methods of torture on detainees. He ordered the National Security Agency to launch a massive illegal wiretapping program that eavesdropped on thousands of Americans’ phone calls and emails without warrants. Yet Bush remained a great champion of freedom—at least in the eyes of his supporters.

The political mass production of insecurity is a dominant trait of our age. The easiest way for rulers to destroy the leashes the Constitution imposed on them is to make voters think they must choose: “We can obey the Constitution or we can prevent you from all being killed. What is it going to be?”

Rising fear can also undermine the freedom of speech that is a bulwark against government abuse. To the extent people desperately cling to faith in the leader to save them from all perils, they develop an intolerance to anyone who points out government follies or falsehoods. The Bush 2004 reelection campaign did all it could to fan such intolerance. Stumping around the nation for Bush, former New York City police commissioner Bernie Kerik told audiences in the final months of the campaign: “Political criticism is our enemy’s best friend.” As criticism is suppressed government becomes more incorrigible. Eventually the mistakes that could have been corrected cheaply early on become catastrophic national failures.

Fear and Obama

President Obama has picked up the fear-mongering relay baton with his attempts to frighten Americans about health care, global warming, economic collapse, and government shutdowns. Obama has also invoked the fear card to sanctify bombing bad guys anywhere and everywhere.

Government fear-mongering creates a downward politico-psychological spiral. The more fearful people become, the more gullible they will be. British philosopher John Stuart Mill warned in 1842: “Persons of timid character are the more predisposed to believe any statement, the more it is calculated to alarm them.” It is almost irrelevant whether 10 or 20 or 30 percent of the citizenry can see through government’s fraudulent warnings. In a democracy, as long as enough people can be frightened, all people can be ruled.

In the same way that some battered wives cling to their abusive husbands, the more debacles the government causes, the more some voters cling to rulers. The craving for a protector drops an iron curtain around the mind, preventing a person from accepting evidence that would shred his political security blanket. In the days after the 9/11 attacks polls showed a doubling in the number of people who trusted government to “do the right thing.” The media fanned this blind faith—as if trust in government was the high road to public safety. The Bush administration exploited the trust to unleash itself at home and abroad, and the nation is still paying the costs of its post-9/11 infatuation with government.

Bogus fears can produce real servitude. The Founding Fathers expected the American people to bravely stand up for their rights if their rulers trampled the law. Citizens cannot cower on cue without forfeiting any possibility of keeping government on a leash. If America is to have a rebirth of liberty, it must begin with a rebirth of courage.

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The Paycheck Protection Program: Abuse and Misuse

There are few examples to showcase the absurdity of the current political climate during the Covid pandemic such as the paycheck protection program (PPP). Put in place by the Trump administration and now continued under the Biden administration, the PPP has become the poster child for government programs rampant with fraud and mismanagement. Indeed, in a recent report, the Office of the Inspector General (OIG) has repeatedly warned about the lack of program oversight and controls. However, government officials continued on with the program despite the OIG’s warnings.

What is the PPP?

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The intent of the CARES act was to provide short term relief for small businesses, individuals and nonprofit organizations that were negatively affected by the shutting down of the economy to slow down the spread of the coronavirus. The CARES act appropriated first $349 billion for the SBA Paycheck Protection Program (PPP) in April 2020, later in April, Congress appropriated an additional $321 billion for a total of $670 billion. Affected businesses can apply for a forgivable loan to cover operating costs and lost revenue. From 2000 to 2019, the SBA made about 1.2 million loans totaling $333 billion. Under the CARES act, the SBA processed 5.2 million loans in six months which was far more than all of SBA’s combined lending from 1990 to 2019. 

Six months into the program, on October 16 2020, the office of the inspector general (OIG) released the first in a series of reports. In top management and performance challenges facing the small business administration (SBA) in the fiscal year 2021 by the OIG provides a good sense of the chaos when the headline reads “SBA’s economic relief programs are susceptible to significant fraud risk and vulnerabilities”. Anyone who has critically examined the government response to the Covid pandemic should not be surprised by the fact that the paycheck protection program (PPP) is a recipe for disaster. 

In October, the inspector general already sounded the alarm bell:

SBA moved quickly to establish the new nationwide program but eased controls required in its lending program to do so, increasing the risk of rampant fraud. Our preliminary investigative oversight revealed strong indicators of widespread potential abuse and fraud in the PPP.

In its preliminary report the OIG found systemic issues with the PPP. OIG found indications of deficiencies with internal controls related to eligibility of borrowers. 

  • Tens of thousands of approved and disbursed loans were made to borrowers for amounts that exceeded the maximum allowed based on the number of employees and compensation rates as defined in the CARES Act.
  • Tens of thousands of loans that matched a Do Not Pay data source record indicating potential loan ineligibility.
  • Hundreds of businesses that exceeded the greater of 500 employees or the SBA size standard for number of employees in the industry obtained PPP loans that may have been erroneously approved.
  • We found thousands of businesses obtained PPP loans with Tax Identification Numbers (TINs) that were not registered until after that date indicating the business was created after the fact.

Even more troublesome is the fact that OIG found the data SBA publicly reported as well as the loan-level PPP data was inaccurate and incomplete concluding:

Without accurate and complete data, SBA cannot reliably and accurately inform SBA management and Congress about program effectiveness and measures needed to inform program decisions.

What is even more concerning is the fact that despite this early warning signs the SBA continued with the program without many changes to curb the widespread abuse of the program.

On January 11 2021, the OIG published a Management Alert Paycheck Protection Program Loan Recipients on the Department of Treasury’s Do Not Pay List:

Our review of Treasury’s analysis showed approximately $3.6 billion in PPP loans to potentially ineligible recipients.

In January 14 2021, the OIG published another report entitled Inspection of SBA's Implementation of the Paycheck Protection Program which can be summarized:

SBA’s efforts to hurry capital to businesses were at the expense of controls that could have reduced the likelihood of ineligible or fraudulent business obtaining a PPP loan. As a result, there is limited assurance that loans went to only eligible recipients. …We also found SBA’s PPP publicly reported and loan-level data was inaccurate and incomplete…

On March 15 2021, just one week before the senate past the extension, the OIG published a flash report entitled Duplicate Loans Made Under the Paycheck Protection Program:

We determined SBA did not always have sufficient controls in place to detect and prevent duplicate PPP loans. As a result, lenders made more than one PPP loan disbursement to 4,260 borrowers with the same tax identification number and borrowers with the same business name and address. These disbursements totaled about $692 million for PPP loans approved from April 3 through August 9, 2020.

Did Congress stop the program or demand more oversight? No. Congress extended the PPP. One can only conclude with the words of Hoppe again. Government has the ability to be the savior twice over: the rescuer of a rescuer in distress. Use of the covid pandemic to severely limit the economy to “rescue” us from Covid, and then “rescue” us again from the economic free fall by compensating for the losses incurred by simply creating state paper money from nothing at zero expense. Government is the rescuer twice over, but government has the ability to socialize costs to the public while making the government look like the “blessed savior”. Rescue packages, however well intentioned, are not, and never are, free of charge.

The only thing missing from the Covid-Ponzi scheme is for government to take the rampant misuse and abuse in the PPP to grab as much power as possible by creating more rules and regulations for businesses in the name of Covid. Readers of Robert Higgs’s book Against Leviathan: Government Power and Free Society  know that government bureaucrats have the tendency to take advantage of “emergencies”, like the COVID-19 pandemic, to consolidate and grab even more power. Let’s hope that this will not become true or happen.

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George Floyd and Generalized Justice

04/21/2021Jeff Deist

Minneapolis police officer Derek Chauvin was tried for the crime of second-degree unintentional murder under Minnesota law. The essential questions of fact for the jury were whether Chauvin actually caused George Floyd's death, and whether he did so while committing a felony offense with force. Quoted below is the relevant Minnesota criminal statute:

609.19 MURDER IN THE SECOND DEGREE. 

Subd. 2.Unintentional murders.

Whoever does either of the following is guilty of unintentional murder in the second degree and may be sentenced to imprisonment for not more than 40 years:

(1) causes the death of a human being, without intent to effect the death of any person, while committing or attempting to commit a felony offense other than criminal sexual conduct in the first or second degree with force or violence or a drive-by shooting; or

(2) causes the death of a human being without intent to effect the death of any person, while intentionally inflicting or attempting to inflict bodily harm upon the victim, when the perpetrator is restrained under an order for protection and the victim is a person designated to receive protection under the order. As used in this clause, "order for protection" includes an order for protection issued under chapter 518B; a harassment restraining order issued under section 609.748; a court order setting conditions of pretrial release or conditions of a criminal sentence or juvenile court disposition; a restraining order issued in a marriage dissolution action; and any order issued by a court of another state or of the United States that is similar to any of these orders.

The media's insatiable drive to portray Floyd's death as proof of a deeply racist society was both decidedly wrong and enormously harmful. Public statements outrageously made before the verdict by the Minneapolis mayor, several members of Congress, and even President Joe Biden fall into the same category. Was the verdict just, given the facts, or was the jury influenced by the threat of a conflagration across American cities had they acquitted? We may never know. But we do know the one thing that might actually have produced some good—a sober examination into Minneapolis police practices—was utterly subsumed by atavistic journalists hell bent on turning a local story into a national one. That story tells us more about their perceptions and biases than it does about racism in America.

In stark contrast, the trial of abortionist Kermit Gosnell in Philadelphia received scant national media coverage. That was a "local matter." It's not hard to understand why. Narratives rule our lives, and they have little to do with justice.

As usual, Americans were watching at least two different movies. One features a beleaguered police officer dealing with a recalcitrant suspect who was resisting arrest. The suspect had titanic levels of the opioid fentanyl in his system, perhaps enough to kill him. And he was no choir boy, having participated in a gang robbery of a pregnant woman at gunpoint. So even if the cop went too far and it's unfortunate the perp died, it wasn't murder—and Floyd probably was a rotten criminal anyway.

The highlight reel playing across town, however, shows a different tale. A bigoted cop jammed his knee into the neck of a handcuffed black man, killing him with impunity in a gross display of everything wrong with racist American justice. White supremacist America still can't come to terms with equality, and thus we still have indiscriminate police killings of unarmed black men.

Both of these narratives rely on generalized or cosmic justice rather than specifics on the ground. Chauvin was not tried for racism, slavery, Jim Crow, or some vague notion of America's racial sins. America was not on trial, white people were not on trial. Spinning the story into a broader general narrative to fuel race obsession was hardly designed to alleviate racial problems. It was designed to inflame them.

Justice is specific, not general. It is individual, not cosmic. In its best form, however imperfect, it is localized, temporal, dispassionate, and rooted in particularized restitution rather than punishment. It is impartial, hence Lady Justice's blindfold. All of this used to be broadly understood as basic and essential to a liberal justice system. Injustice happens to people, in terms of their physical bodies and property—not to groups or society. Even Rawls, no libertarian, differentiated between what he saw as justice for institutions and justice for particular justice relating to particular individual actions.

But justice requires some sense of shared understanding among people, some recognition of agreed-upon values. What are those values in America today? What will replace Christian notions of morality and justice in secular America? The Left's answer is egalitarianism, aggressively managed by the state. The Right's answer is AWOL. The better answer is social cooperation through markets and civil society, coupled with a common law system of evolving harms and remedies. Mises said, "The notion of justice makes sense only when referring to a definite system of norms which in itself is assumed to be uncontested and safe against any criticism." Justice, unlike economics, requires normative prescriptions to produce more cooperation and less harm. Yet our political and media class seems determined to destroy any sense of commonality or even objective reality.

There is no social justice, racial justice, or justice for historical deeds. The hard fact for race-obsessed progressives is this: egalitarianism is incompatible with justice precisely because it requires unequal treatment and a slippery slope of generalized context for specific injuries. Applying group identity in the courtroom will lead to disastrous consequences for America, and one wonders whether those consequences are actually the goal of our sick politicians and journalists.

Image source:
Jo Zimny via Flickr
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Supreme Court Reforms? Ask America’s First Homegrown Legal Philosopher

04/21/2021Gary Galles

President Biden has just appointed a commission to study Supreme Court reform. However, I noticed that no one seems to be talking about reform to mean “re-form to better reflect the Constitution than under current precedents and interpretation,” reflected in the notable paucity of defenders of the Constitution as understood at the time it was adopted. That is why the commission could use some guidance from James Wilson for insight.

James Wilson signed both the Declaration of Independence and The Constitution. Earlier, his Considerations on the Nature and Extent of the Legislative Authority of the British Parliament argued that it had no authority to legislate for the colonies. At the Continental Congress, he was a member of the Committee on Detail, that produced the first draft of the Constitution. He also argued forcefully for ratification of the final version in Pennsylvania. In fact, his October 6, 1787, Ratification Speech before the Pennsylvania Legislature received more coverage than The Federalist.

George Washington appointed Wilson to the first Supreme Court in 1789. Then, in a set of law lectures beginning in 1790, he became America’s first homegrown legal philosopher,” spelling out the thinking behind the Constitution and early Supreme Court decisions. He articulated the purpose of government as to secure citizens’ pre-existing rights and that the Constitution was crafted to create such a government. Remembering those ideas, now seriously compromised and threatened with further erosion, would be a reform actually likely to benefit Americans.

Wilson clarified our founders’ understanding of law: “The defense of one’s self, justly called the primary law of nature, is not, nor can it be, abrogated by any regulation.” What does each individual’s self-ownership, and right of self-defense that derives from it, mean for government? “All men are by nature equal and free. No one has a right to any authority over another without his consent.”

Wilson spelled out the implications of government consistent with that understanding of law: “The liberty of every member is increased…each gains more by the limitation of the freedom of every other member, than he loses by the limitation of his own. The result is that civil government is necessary to the perfection and happiness of man.” In consequence, government “should be formed to secure and enlarge the exercise of the natural rights of its members; and every government which has not this in view as its principal object is not a government of the legitimate kind.”

Since all must be better protected to expand everyone’s rights and liberties, law had to treat everyone equally. “In the enjoyment of their persons and of their property, the common law protects all.” No one’s liberty could be invaded; no one’s property could be violated. Instead, “private property and personal liberty…will be guarded with firmness and watchfulness.” This is what led America’s founders to agree with Wilson that “without a good government, liberty cannot exist.”

Because good government was considered central to liberty, “A good constitution is the greatest blessing which a society can enjoy.” And because “in this government, liberty shall reign triumphant,” Americans were bequeathed “that system of government which would best promote their freedom and happiness.”

Because some would override our free choices with their dictates, an important consequence follows: “Among the virtues necessary to merit and preserve the advantages of good government [are] a warm and uniform attachment to liberty and to the Constitution,” because “enemies of liberty are artful and insidious...Against these enemies... the patriot citizen will keep a watchful guard.”

James Wilson was a great American statesman whose words reveal what was truly revolutionary about our experiment in liberty. His discussion of “those principles upon which we ourselves have thought and acted,” which echoed John Locke’s recognition that just government exists for the good of its people, not the other way around, is worth re-learning. And just as for other Americans, the Supreme Court Reform Commission would benefit from proposals that recognize, with Wilson, that “without liberty, law loses its nature and its name, and becomes oppression,” because our liberties have grown far scarcer than the Constitution was designed to provide.

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Don’t Blame the J&J Vaccine Pause for a Loss in Public Trust

04/20/2021Alice Salles

The US task force and vaccines are poised to suffer a loss in public confidence. Most people blame the pausing of distribution of the Johnson & Johnson covid-19 vaccine. But the public trust was inevitably going to falter regardless.

Instead of falling for the establishment narrative that points the finger at the J&J mishap, consider the root of the issue. That is the public-private nexus at the center of the country’s antivirus campaign, particularly Dr. Anthony Fauci himself and other well-connected big businesses.

Corporations amiable to government have long been the key to carrying out grand visions of the state. Justin Raimondo warned in 2013 of the dangers of pretending that these collaborations aren’t to the detriment of us all.

Giant multinational corporations, and their economic satellites, in alliance with governments and the big banks, are in the process of extending their influence on a global scale: they dream of a world central bank, global planning, and an international welfare state, with American troops policing the world to guarantee their profit margins.

Any crisis can become the health of the state, as Robert Higgs famously showed. It is precisely in times of crisis that the well-connected benefit from state measures. 

This arrangement of government and select private powers inescapably raises reasonable suspicion that corruption is afoot, or at the very least a conflict of interests. The fact there are basically now only two major vaccines in the game only exemplifies this reality further. 

Now that the J&J vaccine pause has hit everyone’s newsfeed, is that event in itself to blame for any dip in the public trust of vaccines or the experts? Blood clots in a half dozen women out of millions of people vaccinated with the J&J version was all it took?

Perhaps there’s something else going on that would cause people to doubt the covid regime’s legitimacy.

Is it not reasonable to wonder if allergy expert Fauci gains anything by this newly heightened scrutiny against J&J?

Big Money, Crony Shots 

The J&J covid-19 vaccine is the only option available in the US not produced using the novel mRNA technology. It was pulled from the US vaccination program after the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) raised concerns regarding rare instances of blood clots. The move was defended by none other than Fauci, who stated that the blood clots patients experienced post J&J vaccination had “strong similarities” with the blood clots reported by European patients post–AstraZeneca vaccination. And that, he said, should concern Americans. But when asked if people should be hesitant to take the Moderna or Pfizer shots, he insisted the mRNA vaccines were safe.

“The question that is often asked, does this have anything to do with the other vaccines, the mRNAs, from Moderna and from Pfizer? You know, absolutely not. Only 6.85 million of those were J&J. The rest were Moderna and Pfizer, and there's no negative or adverse or red flag signal coming from any of those vaccines, which is very good news. In other words, they are very safe.”

While journalist Alex Berenson would probably disagree with Fauci’s claim given the numbers of adverse reactions provided by the CDC reportedly show that you are more likely to die after getting a covid vaccine than a flu vaccine, the fact the health czar is reluctant to even recognize the reports provided by the CDC is telling. 

Fauci is the director of the National Institute for Allergy and Infectious Disease (NIAID), a branch of the National Institutes of Health (NIH) federal agency, and has occupied the same position since 1984. In a NIAID entry from March 2020 that has since been deleted, the agency stated that its researchers had begun working on the clinical trial for Moderna’s covid-19 vaccine. In addition, it stated that the project was being funded by NIAID and that NIAID scientists were developing the serum at Moderna. 

Fauci was even quoted in the post, saying that “finding a safe and effective vaccine to prevent infection with SARS-CoV-2 is an urgent public health priority.”

J&J’s vaccine is produced by the firm’s Janssen Pharmaceuticals and funded by the J&J group in addition to grants from the US government’s Biomedical Advanced Research and Development Authority, a US Department of Health and Human Services agency. Moderna’s vaccine, however, appears to have been produced with funding allocated by the federal government under the command of an agency run by Fauci himself. 

But what about Pfizer?

Following the Johnson & Johnson vaccine news, European officials rushed to increase the number of orders from Pfizer’s BioNTech-produced covid-19 vaccine. 

While not incriminating, one of the CDC’s top donors (yes, the country’s national public health agency takes private donations!) has directly invested in BioNTech. As a matter of fact, this same donor is portrayed by the legacy media as a friend and trusty ally of NIAID and Fauci. His name is Bill Gates. 

Did Gates directly fund Pfizer’s BioNTech-produced vaccines? We don’t know. Did he invest big money in BioNTech just months before the coronavirus pandemic broke out? Yes. Does his charitable foundation have a partnership with NIH (Fauci’s long-term employer) that involves the rollout of vaccines abroad? Yes. Did Gates openly favor the mRNA vaccine produced by the German lab, going as far as betting it would be the leader in the market? He sure did. Could this combination of factors lead one to guess that, perhaps, the US government as well as Fauci, would be happy to reward Gates by trying to boost the vaccine’s appeal? Why not? 

As the US marches through 2021 forcing us all to bear the costs of this seemingly never-ending covid-19 debacle, Americans remain impoverished. In the meantime, the legacy media urges us to celebrate the ones benefiting from the panic all the while ignoring the real story behind the J&J debacle.

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At the Fed, It's "A Tale of Two Diversities"

04/20/2021Robert Aro

We often hear of this word “diversity.” In 2021, it seems this word is more important than ever when electing cabinet positions, bureaucratic appointments, or other facets of organizational structures throughout the country. Merriam-Webster defines diversity as:

the condition of having or being composed of differing elements : VARIETY

The ironic thing about diversity is it appears to create two “divergent” paths in which it can be obtained. Just last week, the Brookings Institution appeared to inadvertently fall into a “diversity trap” of sorts, when it published the article, "Diversity within the Federal Reserve System." It begins with:

A growing chorus has called on the Fed to diversify its ranks at all levels to reflect better the heterogeneity of the United States. So far most of these efforts speak to the diversity of the Fed’s principals, namely, the members of the Fed’s Board of Governors and the presidents of the twelve Federal Reserve Banks. 

This is the first, more common usage of diversity. The goal is to ensure a variety of races, genders, or other minority groups are represented. True to definition, by having various physical features, variety could be achieved. Brookings looked at the directors of the Federal Reserve banks as they are the ones responsible for choosing the president of the twelve banks across the country.

To little surprise:

We find a staggering homogeneity among them, with only recent signs of diversification. They are overwhelmingly white, overwhelmingly male, and overwhelmingly drawn from the business communities within their districts, with little participation from minorities, women …

They mention other areas of the economy such as “labor, nonprofits, the academy” with the routine push for diversity requiring more minority representation, based on physical features of the candidates.

To provide better context to the reader, as an author and a black male, I understand “diversity” from my own life experiences; however, it is important we don’t fall into such a diversity trap. While having more people of color, females, or even transgendered would bring a different physical look to the Fed, there remains the unseen and overlooked area of diversity, i.e., “intellectual diversity.” This form of diversity appears to have been ignored entirely, supplanted for aesthetic traits.

Last year, I wrote several articles about Judy Shelton, including "Why the MSM Hates Judy Shelton." While her potential appointment was the responsibility of Congress, one could suggest she may not have gotten nominated to the Fed board because she is a woman. However, studying her history such as questioning the manipulation of interest rates by the Fed, and other such ideas which go against the current mainstream economic dogma, one could argue her rejection by Congress could largely be attributed to her economic views of the free market.

While a racial/gender diverse Federal Reserve might mark a lot of societal checkboxes, and even be inspirational for those in marginalized groups, we should focus on intellectual diversity and how much it appears to be lacking in the Federal Reserve system. Whether the Fed is run by all white males or a mix of males, females and a multitude of races means absolutely nothing as long as the ideas of liberty, freedom, and Austrian economics are excluded from diversity inclusion.

We must ask ourselves: Would you feel better if your oppressor was the same race and gender identification as you? We are told diversity at the Fed is an issue that should be addressed, but it’s superficial, meant to appease popular opinion under the guise that forced inclusion matters. Nowhere are we discussing the diversity of opinions, economic understanding, or beliefs in a free society. Until a high-ranking Fed official speaks out against the Fed proposing ways to wind down its power, it doesn’t really matter who sits atop the Fed’s ivory tower, and diversity is nothing but a ruse.

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Now You Can Join the Fed's Community Advisory Council

04/20/2021Robert Aro

There could be a real opportunity to get on “the inside” of the Federal Reserve. Last Monday it was announced:

Federal Reserve Board accepting applications for its Community Advisory Council

Known as the CAC, the Advisory Council:

advises the Board on issues affecting consumers and communities and complements two of the Board's other advisory councils whose members represent depository institutions—the Federal Advisory Council and the Community Depository Institutions Advisory Council.

Think of the CAC as an advisory board which advises the (Federal Reserve’s) board… which helps to advise other boards. The CAC meets in Washington, DC to:

provide a range of perspectives on the economic circumstances and financial services needs of consumers and communities, with a particular focus on the concerns of low- and moderate-income consumers and communities.

Looking back at the last CAC meeting minutes on October 1, 2020 provides an idea of the scope of economic questions the board asks itself:

To what extent are Council members seeing the effects of COVID-19 on small businesses in their communities?

Are permanent closures threatening the entrepreneurial ecosystems of their communities?

What tools or policies can help mitigate these effects?

The minutes seem quite long, having many stats, various ideas and even anecdotal evidence. For the questions above they mention difficulties lower income communities, women, and minorities are all facing, as well as the usage of Paycheck Protection Program (PPP) loans. They even mention:

Another round of PPP is critical to helping save these smaller businesses…

Speaking of which, the PPP weekly report noted that as of April 11, 2021, the $755 billion to date has been approved, as seen below:

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This is the liquidity facility which provides forgivable loans. It will continue to be of interest as to how this will end, considering only $64 billion is listed on the Fed’s balance sheet, or just under 10% of all forgivable loans. Whether the loans will be paid or forgiven remains to be seen…

Recommendations, such as “another round of PPP” are the type of work the CAC is encouraged to put forward to the Federal Reserve. Of all the questions the CAC was asked, nothing regarding the sustainability of programs such as the PPP, debt or money supply concerns, the economic impact nor morality of nearly $1 trillion in forgivable loans was ever mentioned.

Unfortunately, billions of dollars are at stake here, requiring “experts” in various fields to recommend how to distribute these dollars; no economic calculations necessary. Perhaps that’s why the application calls for qualifications such as:

knowledge of fields such as affordable housing, community and economic development, employment and labor, financial services and technology, small business, and asset and wealth building, with a particular focus on the concerns of low- and moderate-income consumers and communities. Candidates do not have to be experts on all topics related to consumer financial services or community development...

Applications due by June 11. Should you win the position as CAC member you’ll be able to meet in Washington, on a semi-annual basis, normally for a two-day meeting. If you think you have what it takes to best plan communities across the country, then feel free to apply and good luck.

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The Left Understands Taxation Is Theft, That's Why They Support It

04/16/2021Peter St. Onge

On March 18, Joe Wiesenthal of Bloomberg Markets had MMT economist Stephanie Kelton on the show. If you’re not familiar with MMT, they think governments should print more money because deficits aren’t a big deal. At one point in the show, Wiesenthal asked, “If we don’t need to worry about deficits, why do we have taxes?” Kelton’s response was illuminating.

Now, the traditional excuse for taxes is, paraphrasing Oliver Wendell Holmes, that they are the “price of civilization.” Skeptics point out that historically societies with very low taxes were often far more civilized—think the Dutch Golden AgeIslamic Golden AgeVictorian England, the pejoratively named “Gilded Age” in American history—that thirty-year golden age when almost everything useful was invented. And yet throughout that latter period federal receipts were one-fifth what they are today.

Why so much civilization? Because much of what governments do today was done by charities or businesses competing for customer dollars instead of seizing their budgets in taxes. When doctors, firefighters, and schools have to satisfy customers, things get quite civilized.

Still, even if we accept a “night-watchman state” argument for, say, national defense or salaries for Supreme Court justices, it gets tricky if government can simply print up the fresh money to pay for all that civilization.

Kelton’s answer? Taxes would still be needed, because they make us poor. And because they can punish people she doesn’t like.

Specifically, Kelton likes that taxes “remove dollars from our hands, so we can’t spend them,” leaving more purchasing power for the government. So taxes make the people poor, and that’s a selling point to her, presumably because she thinks governments are really good at lifting people out of poverty. Anybody who’s spent time in America’s inner cities, where government money is pretty much the only money, might disagree.

Ah, but it’s not just about spending our money more wisely than we ever could. Kelton adds two secondary reasons she loves taxes: to punish particular people by redistributing their money, and to punish people for doing things she doesn’t like. Such as failing to buy energy-efficient appliances (no, really). In other words, social engineering with carrots for your friends, sticks for your not-so-friends.

I should add that libertarians completely agree with Kelton here—taxes are indeed for spreading poverty and for punishing people you don’t like. That’s why libertarians, being kind and generous, oppose taxes.

Meanwhile, it’s nice to know we all agree that taxes have nothing to do with civilization; they are for destroying with a side of discriminatory punishment.

Image source:
Flickr | Images Money | https://www.flickr.com/photos/59937401@N07/5856708903
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The Fed Does 60 Minutes ... Again

04/15/2021Robert Aro

Almost one year ago today, Federal Reserve Chair Jerome Powell appeared on 60 Minutes explaining to the world that as a Central Bank, they have the ability to “create money digitally.” Sadly, it seems the only change since then has been the size of Fed’s balance sheet. Over the weekend, Powell reunited with 60 Minutes where he shared his views and developments of the economy in the face of COVID.

Powell said many contentious claims in the interview. Calling the CARES Act “heroic” is one example. Another:

Congress, in effect, replaced people's income, kept incomes, kept them in their homes, kept them solvent, kept their lives together…

He discussed the usual fare such as the importance of maximum employment, inflation targets, the Fed’s work on the digital dollar, and vaccinations, of which Powell said he received two doses already. By far, the most interesting was when the question of the 2% inflation target came up:

SCOTT PELLEY: Getting back to your inflation target, why 2%? Why is that the magic number?

In a previous article, I wrote about the Origins of the 2% Inflation Target, how it came about arbitrarily then popularized across the world. Unfortunately, it’s a goal made with absolutely no merit or basis. Nonetheless, everyone is entitled to their opinion. Here is the one given by one of the most powerful men in the world:

JEROME POWELL: Two percent is what central banks around the world came to, you know, over the last really 40 years. It is the standard that all banks target. And you may really be asking, "Why not zero?" And the reason is that interest rates--every interest rate-- includes an estimate of future inflation. So if you're lending money, you're going to get paid for future inflation. You're also going to have a real return. And if inflation were to be zero rather than 2%, then interest rates would be 2% lower, by definition. And what that would mean is that central banks, including the Fed, we have much less room to cut rates and support the economy-- when the economy turns down.

He notes 2% is the standard, and “all banks” target 2%, but doesn’t explain why... Powell quickly changes the question to “why not zero?” then answers his own question by claiming “every interest rate includes an estimate of future inflation,” of course, purposely vague, given inflation isn’t identified. There are other concerns, such as how the Fed sets its interest rates to account for future inflation, what causes said inflation, why not 3% inflation, etc., to make a list of the follow-up questions Scott Pelley should have inquired.

After a few more explanations, Powell settles on the idea that a 2% inflation rate influences interest rates, which should be somewhat high so interest rates can be cut in the future, “when the economy turns down.”

Unfortunately, the problem with this type of interview is that it doesn’t get to the heart of the matter. When asked about why 2% inflation, there was no follow up to challenge Powell. Other than trying to explain the 2% target, very little was said that didn’t echo Powell’s normal stance when addressing the public.

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Does the FOMC Even Believe What It's Saying?

04/15/2021Robert Aro

The latest Federal Open Market Committee (FOMC) meeting minutes shows a series of questionable ideas. Other than the people in the closed door meeting, it’s difficult to know whether they believe what they discuss, or just go through the motions, attempting to stave off economic collapse for as long as possible.

With just a few quotes, the direction the Fed/US Government is taking us becomes clear:

Alongside the rise in U.S. yields, broad U.S. equity price indexes increased moderately, with the largest gains in cyclically sensitive sectors.

GDP also looks to be on the rise:

The information available at the time of the March 16–17 meeting suggested that U.S. real gross domestic product (GDP) was expanding in the first quarter of 2021…

In the first quarter of 2021:

Consumer spending appeared to be increasing in the first quarter at a pace considerably faster, on balance, than in the fourth quarter of last year.

But not only is spending on the rise:

In addition, the personal saving rate jumped to an even higher level in January, and ongoing gains in labor earnings along with further fiscal support pointed to additional increases in accumulated household savings.

Per inflation calculations:

Real PCE expanded strongly in January after declining over the preceding two months, with spending likely boosted by federal stimulus payments sent out in early January.

Yields, GDP, the stock market, spending, savings, inflation, on the rise; overall debt levels, the money supply, and the Fed’s balance sheet are also on the rise. But we should pay attention to federal stimulus payments as well as central bank accommodation, which, you guessed it, are on the rise.

It’s strange that for all the central bank and government inflationary schemes, the Fed will still make claims such as:

Improved U.S. economic growth prospects and optimism about the eventual lifting of social-distancing and related restrictions globally were major drivers of asset prices abroad, spurring sizable increases in sovereign yields in advanced foreign economies.

For some peculiar reason it seems to be everything except the increase in money supply, debt levels, and currency debasement as the cause for asset prices abroad.

Naturally, other central banks reacted to this:

In response to rising yields, the Reserve Bank of Australia increased its bond purchases, and the European Central Bank indicated it would increase the pace of its bond purchases going forward.

It’s not just in America. The same interventions are being played out the world over under the guise of economic policy aimed to help the economy, or worse, achieve arbitrary employment and inflation targets. The notion that governments and central banks can spend to prosperity is highly regarded as economic dogma.

Of all the people in the meeting, with the years of experience and credentials between them, surely at least one of them would question the sustainability of an economy where everything rises due to central banks and government increasing the money supply, while simultaneously taking on debt, for no clear purpose other than obtaining stimulated economic effects.

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The Benefits of Being Politically Correct

04/13/2021Lipton Matthews

Stories depicting the savagery of cancel culture are becoming increasingly popular. As expected, many invoke political correctness as the genesis of this development. But rather than looking for simple explanations, we must ponder why people conform to politically correct opinions. In truth, conformity has a biological basis. Humans are social creatures who thrive on intimate connections. Hence conforming to social conventions by expressing politically correct assumptions is one way to signal membership in a community. As such, conformity protects people from the emotional scars of rejection.

Indeed, conforming to social norms like respecting property rights and being polite yields favorable results. Without a doubt, positive conformity is crucial to the success of our species. Yet retrograde conformity, indicated by the fame of ideas like white privilege and systemic racism, can foster destructive results. Preventing the growth of retrograde conformity is challenging, because the success of an idea is not hinged on intellectual rigor.

Like biological organisms, an idea's receptivity is linked to its capacity to increase social fitness. People imitate each other, so ideas are reproduced mimetically. Therefore, the prosperity of an idea is driven by conformity bias. As a result, heterodox ideas even if they are rigorous cannot compete with mainstream views. Moreover, researcher Robert Henderson points out that the ability of socially accepted beliefs to increase social bonds explains the appeal of cancel culture: “Cancel culture strengthens social bonds…. People enjoy uniting around a common purpose. They derive satisfaction from coming together against a perpetrator. They enjoy the solidarity it provides.”

Further, sanctions are created to stifle controversial claims and are reinforced by institutional protectionism. When journals and newspapers retract articles for failing to affirm orthodox beliefs, this is emblematic of institutional protectionism. Unfortunately, such actors may think that they are acting morally by shielding the public from offensive views. Similarly, like conforming, we are biologically predisposed to acting morally. So, gatekeepers may contend that allowing the free flow of ideas could act as an incentive for their appropriation by rogue actors.

However, this contention is misguided. In the absence of a robust market for debate, society suffers from intellectual stagnation and citizens are forced to substitute rhetoric for evidence. For instance, if researchers could study racial differences without backlash, we would be in a better position to cater to the diverse needs of the population. This sentiment was articulated in a 2002 paper published in the Journal of the National Medical Association: “There is good evidence to show that therapeutic substitution of drugs within the same class places minority patients at greater risk. This is because effectiveness and toxicity can vary among racial and ethnic groups.”

Another reason for the success of politically correct beliefs is that they confer psychological benefits. By promoting the rightness of mainstream narratives, elites can present themselves as morally superior and cement their influence in society. Economist Jennifer Roback refers to this phenomenon as “psychic rent-seeking.” Because of the social rewards derived from institutional protectionism, elites are unlikely to tolerate intellectual innovations, since they can undermine institutional authority.

But the cure for political correctness is to be found in a free market for ideas. Economic historian Joel Mokyr rightly contends that the free market for ideas led to the discoveries nurtured by the Enlightenment: “European political fragmentation created the environment in which dissident and heterodox opinions could be put forward with increasing impunity. Had a single, centralized government been in charge of defending the status quo, many of the new ideas that eventually led to the Enlightenment would have either been suppressed or possibly never even proposed.” Only a free market for ideas can solve the problem of political correctness and prevent its pernicious effects.

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