Power & Market
The problem of "development" continues to be a topic that draws the attention of academics and is also becoming more and more the concern of every person. This is especially seen when government policies, such as those made in relation to the spread of covid-19, present clear cases which directly affect the lives and well-being of individual citizens.
For the Austro-libertarian, the definition of sustainable development by the Brundtland Commission back in 1987 carries several questionable implications, as argued by Morgan Poliquin. Nowadays, however, development studies as a practice has evolved to include other ideas in the attempt to see different and multifaceted understandings of development.
In online lectures by Jeffrey Sachs based on his book The Age of Sustainable Development, he notes that development has evolved into a more practical and holistic approach composed of three pillars: economic development, environmental sustainability, and social inclusion. Despite the broader definition, it is important to remain critical, so for this article, we shall critique of these aspects to see what could be usefully applied in practice.
Traditionally, the first pillar of economic development has been measured using gross domestic product, or GDP for short. Asim Hussain argued that GDP cannot measure the quality of life, and Frank Shostak outlined how GDP growth doesn’t necessarily indicate true economic growth. This single number, often used by governments to report to citizens how well or poorly their country is doing economically, has been lauded as the main economic indicator for a long time, and questioning it has been long overdue.
Even Jeffrey Sachs acknowledges that GDP has limitations, which is why he posits that other measures of development are also important for a more complete picture of development. These can range from metrics that consider and aggregate other aspects of development, like the Human Development Index, or metrics that try to measure subjective happiness, such as the Cantril ladder.
Such approaches are at least better in that the human factor is given more emphasis, but as with any mathematical model made in an attempt to aggregate human experiences, we should always remain skeptical, and as with GDP, understand and be wary of their limitations. In this way, policies enacted to reach such measures of economic ends should rightly be scrutinized.
The next pillar that needs to be examined is that which ties development to the state of the environment. However, this leads to several problems regarding how to approach growing the economy, especially when this always seems to be at odds with the usage of resources and the environment. The Austro-libertarian perspective favors a movement toward innovation, which will manage, at its own accord, without further prodding, to create the goods and services that we need for our day and age, and not only in an environmental sense.
Tyler Watts wrote a critical argument about how concepts of environmental sustainability are at odds with economics. Among the ideas discussed was the power of innovation: in a free market economy, innovation would happen more naturally. The creation of cheaper, more efficient—and, by extension, cleaner and less wasteful—products and services is bound to happen as a consequence of progress and functional prices, due to the enabling of entrepreneurs to create competitive goods in the economy.
The idea that innovation pushed by economic freedom in the market is inherently reckless certainly needs to be examined. As Gary Galles contends, it is not a zero-sum game, for society as a whole prospers through innovation. The betterment of the world can come from allowing entrepreneurs to thrive.
Finally, the more human elements of development can be addressed in the last pillar, which is about humanity itself. Development should never be seen independently of the context of the people who make up society, and it is a valid human desire to be part of a society wherein they feel enabled to participate.
There are, of course, various ways to include people in society, and this continues to be a subject of debate and scrutiny. Nevertheless, there are humanity-centered approaches to development that can further the position of an Austro-libertarian—such as the human security approach or the capabilities approach—but one of them stands out in particular: the rights-based approach.
An inclusive society through the rights-based approach means that all persons should be able to live with their fundamental rights intact, and where they are not oppressed, but rather empowered. This should include the ability of individuals to participate fully in the economy and to have their personal liberties protected. To be able to live in a free society that honors these rights is a goal for social inclusion, and a desirable end for the Austro-libertarian.
The other approaches, such as the human security approach, which can be used to promote the value of peace and denounce the horrors and ultimate costs of war, or the capabilities approach, which can highlight the importance of realizing individual freedom, could also be looked into for similar valuable insights. War and slavery are, after all, unwelcome in an inclusive and free society.
Contemporary approaches and theories in sustainable development expand the definition of its study to consider perspectives beyond the original definition of the Brundtland Commission. These are perspectives that can be compatible with the Austro-libertarian perspective. The need to critically examine these emerging ideas, to lobby for the values of the free market and of personal liberty, and to hold governments accountable for desirable ideas of development, continues to be as relevant and important as before.
Rush Limbaugh has died at age seventy.
Whether or not one agreed with him, Limbaugh was long unavoidable for those who had any interest in political commentary—especially during the 1990s. Limbaugh had a very long career, but his peak in terms of talent and relevance was likely during the Clinton years.
In his early years, I didn't even know Limbaugh had a radio show, because I was in school when his show aired on the radio. Like many people, I only became aware of him when his syndicated television show premiered in 1992. For many of us who fancied ourselves opponents of "big government," Limbaugh seemed like a voice of consistent dissent in the early years of the Clinton administration.
Limbaugh was relentless in his mockery of Clinton and in contradicting the administration's message. Limbaugh would even hilariously impersonate Clinton with a mock Clinton voice.
Because he was criticizing the administration in power, Limbaugh appeared to be a true dissenter. He seemed to oppose everything the federal government was doing. He was even seemingly good on foreign policy, questioning the Clinton administration's policies in Bosnia and Iraq. In late 1993, National Review labeled Limbaugh as "the leader of the opposition." This seemed appropriate and true.
By the late nineties, I was listening to a fair amount of Limbaugh's radio show, largely because I worked as a contractor in janitorial and landscaping services. That meant a lot of driving around in my pickup truck. And that meant a lot of AM radio.
As a clueless teenager, and later as a clueless college student, I thought that those people who opposed the regime and its schemes would always do so, regardless of who was in power. As the Clinton years ended and the Bush years began, I would learn the error of my ways.
As the Bush years began, Limbaugh suddenly took on a different tone. He was supportive of the administration's plans and programs, even when they were very similar to those of the Clinton years. Things became far worse after 9/11. At that point, Limbaugh became a full-throated defender of the administration, pushing for every scheme the White House was pushing, and advocating for a full-blown GOP-controlled police state.
In other words, Limbaugh became insufferable. He was no longer funny or biting. He was just another shill for the regime, with a small token bit of skepticism thrown in to maintain some semblance of independence from the official messages coming out of the White House.
Buy then, of course, I had learned my lesson. Having first begun to participate in political debates during the Clinton years, I thought that those who criticized the administration's abusive and overreaching policies did so out of some sort of principled ideological view. I thought these people agreed with me that it was important to not turn around and take the opposite positions just because "our guy" is in the White House. Thanks to Limbaugh, I learned what a hopelessly naïve position that was.
It turns out that opposition to the regime among many of these people only matters when "their guy" is the president. The rest of the time, we're supposed to just do as we're told and push the official position, because if we don't, then we might as well be pushing for the bad guy.
At least, that's the message that was received from Limbaugh's complete about-face in 2001, and the lesson always stuck with me.
I never bothered to tune back in during the Obama years to see what Limbaugh was up to. I suspect he was back to pretending to be a dissenter as during the 1990s.
To his credit, in recent years, Limbaugh showed signs of figuring out—finally—that the "deep state" is not the good guys and that all those CIA and Pentagon officials he'd been cheering for all those years were maybe not the selfless patriots he apparently long assumed them to be. He seems to have figured out that the Dick Cheneys of the world are maybe not friends of the American people.
But for the most part, his legacy was one of being proregime when the GOP is in and being antiregime when the GOP is out. Given that he was an entertainer, of course, it's hard to fault Limbaugh too much for this. He was just giving his audience what it wanted. And what his audience wanted was a simplistic yet incoherent idea which maintained that things are mostly fine when Republicans are in office, but that the world is mess when Democrats win the White House. He was clearly very successful at delivering the message.
Liberals rarely defend the property rights of corporations, so it is quite amusing that scores of them are arguing that social media companies have the right to deplatform rogue actors. Unfortunately, by making free speech the crux of the argument libertarians have ceded the debate to liberals. Instead, we should be asking ourselves if companies can arbitrarily violate contractual agreements. When the average person signs up to become a member of Twitter, he does not view his actions as constituting a contract, but nonetheless, a binding agreement exists.
If the contract is breached by either party, then the aggrieved party is entitled to remedies. Although the terms of service agreement created by Twitter allows the platform to expel users for engaging in unlawful conduct or harassing others, it also explicitly notes that Twitter will not be responsible for tweets that offend viewers: “ You understand that by using the Services, you may be exposed to Content that might be offensive, harmful, inaccurate or otherwise inappropriate, or in some cases, postings that have been mislabeled or are otherwise deceptive.” By joining Twitter, one consents to peruse hostile content. Twitter is not obliged to protect users from controversial ideas. Using Twitter, like navigating life in general is risky. As such, people assuming that Twitter ought to be a safe place should just exit the platform.1
Twitter is a social media platform enabling different groups to share a wide variety of experiences. It does not exist to solely promote the viewpoints of liberals. Eccentric characters are free to express inaccurate positions—they may even spread dubious conspiracy theories—none of these actions are impermissible under their contract with Twitter. One expects users to exercise judgement when consuming information. Therefore, they must hold themselves accountable for failing to properly assess posts on the platform. Based on its terms of service Twitter cannot be held liable if users fail to exert due diligence. Here is an excerpt: “All Content is the sole responsibility of the person who originated such Content. We may not monitor or control the Content posted via the Services and, we cannot take responsibility for such Content.”
By genuflecting to the liberal mob, Twitter is violating agreements with conservative users, when they are expelled for not conforming to the worldview of liberals. Obviously, we can understand Twitter removing a Neo-Nazi with a criminal history from the platform, if he wants to use it as a base to organize a violent rally. But to cancel an account because the user has espoused opinions that some liberals deem to be incendiary is downright unjust. The truth is that Twitter must be sued for violating its contractual obligations to defenestrated users.
Unsurprisingly, the latest victim of Twitter is Donald Trump. Although Twitter can make an account redundant, if the user willfully advocates violence, but this does not apply to Trump. His critics clearly lack an understanding of metaphors. Many on the left have argued that Trump’s invocation of the word “fight” reflects incitement. A close reading of the text, however, indicates that his language is metaphorical: “Republicans are constantly fighting like a boxer with his hands tied behind his back. It's like a boxer. And we want to be so nice. We want to be so respectful of everybody, including bad people. And we're going to have to fight much harder. And Mike Pence is going to have to come through for us. And if he doesn't, that will be a sad day for our country because you're sworn to uphold our constitution…if you don't fight like hell, you're not going to have a country anymore.”
In this context, fight does not represent a physical battle, Trump is merely instructing his supporters to protest a perceived injustice. For example, they may challenge what right wingers refer to as the “deep state” by filing lawsuits to contest the election results. Trump had no intention to encourage violence even in his speech he implores his supporters to oppose the political establishment peacefully: “I know that everyone here will soon be marching over to the Capitol building to peacefully and patriotically make your voices heard.”
Trump is a tainted character, so liberals often use his clumsy speeches as an opportunity to guilt people into accepting their sentiments. Defending Trump automatically makes one a deplorable personality. Since most people fear social stigma, they often agree with liberals out of desperation. Though the decision to ban Trump is widely celebrated, Twitter is guilty of misconduct. As we have shown Twitter has no authority to deplatform Trump based on his speech. This entire fiasco reveals Twitter’s contempt for contractual agreements. Politically correct libertarians who argue that the First Amendment only protects citizens from the power of government are missing the point. At the heart of the saga is Big Tech’s disdain for contractual rights when users who do not subscribe to a liberal outlook are removed from social media. Libertarians must never allow their hatred for Trump to prevent them from defending the cause of liberty.
Twitter’s rules against hateful conduct are quite specific. Tweets can be removed for expressing statements construed as dehumanizing individuals based on race, ethnicity, gender, religion, national origin etc. If this threshold is not met then Twitter is in violation of its policy. It must also be stated that although such tweets may provide justification for removal, Twitter does not clearly state that users will be expelled for espousing said views. Furthermore, Twitter’s policy on misinformation addresses specific issues pertaining to misleading statements that seek to cause harm. However, if an opinion is perceived as misleading, but the evidence indicates that it is true, then twitter has no authority to deplatform users and doing otherwise would be an arbitrary violation of contractual rights.
- 1. Twitter’s rules against hateful conduct are quite specific. Tweets can be removed for expressing statements construed as dehumanizing individuals based on race, ethnicity, gender, religion, national origin etc. If this threshold is not met then Twitter is in violation of its policy. It must also be stated that although such tweets may provide justification for removal, Twitter does not clearly state that users will be expelled for espousing said views. Furthermore, Twitter’s policy on misinformation addresses specific issues pertaining to misleading statements that seek to cause harm. However, if an opinion is perceived as misleading, but the evidence indicates that it is true, then twitter has no authority to deplatform users and doing otherwise would be an arbitrary violation of contractual rights.
The writer of a recent Forbes article doesn’t want consumers making their own choices about what to buy and how much to buy. Instead, he provides a plan for consumers to avoid what he calls excess consumerism. In other words, what the writer suggests is essentially that "excessive consumption" is terrible for you and everyone else.
To put the matter mildly, the concept of "excessive consumption" has no basis in how flesh and blood people operate in the real world. This view of excessive consumption does not account for the fact that people’s goals are not focused on buying stuff. They are making individual choices using their own income and making their own decisions to fulfill their own needs and wants. They are not seeking the judgment or moral approval of Forbes writers.
One thing is for sure, and that is people prefer to obtain what they want now rather than later. Real people have time preferences—this statement is far from new. Each of us has time preferences, and we express these preferences in the market, where we make decisions on how we spend our time and income. For example, if I asked you to choose between taking $50.00 today or $50.00 in two years, which option would you choose? If you had the option to purchase bread for $1.50 today, would you buy the same loaf of bread tomorrow for $3.00? These examples clearly show that people make their choices to satisfy their want satisfaction under personal time preferences. Unfortunately, the idea of consumerism, or excessive consumption, posed by the recent Forbes article clearly shows a widespread misunderstanding of how real people operate in the marketplace.
The Consumer Confidence Report finds consumer confidence has improved since December 2020, including a reported an uptick in January 2021, and stated that "Consumers' expectations for the economy and jobs … advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future." This is good news for consumers and producers. Consumers are confident in the market conditions for consumption, and guess what—the customer still rules!
Let us face it, the idea of excessive consumption in the aggregate is all wrong. Those who support the notion of excessive consumption do not see human behavior as it is but rather how they think it should be. What is essential for a functioning Marketplace is not buying more than a Forbes writer believes that one may need, but how people choose to buy more or less of what they want. The market process is about consumers making personal choices using their own time and income to buy what makes them happy and is useful toward their goals. What is wrong with that? I love coffee, and I tend to buy coffee from different places, and I buy beans to make at home. Should a coffee shop owner tell me that I can only buy one bag of coffee because three bags of coffee is excessive? This is true of most things like shoes, streaming movies, exercise downloads. What may be more for one person can very well be less for someone else.
You see, when it comes to consumption, people tend to pick and choose for themselves what is excessive and what is not. The Forbes writer’s proposition is: what is excessive to me should be excessive to everyone else in the world. However, excessive consumption cannot go beyond what is produced—as we all know, there is scarcity.
Like most people, I want to buy what I deem useful, necessary and has value. For one thing, consumers are not bumbling idiots—they have goals in mind as they shop for items. Consumers are attentive to prices, needs, timing, and market conditions related to their situation. As long as excessive buying does not harm others or is illegal, they should enjoy an economic system that produces material goods for consumers' purposes and enjoyment. My enjoyment is a hot cup of joe, and you enjoy power tools or clothes. We can enjoy these things because we earn income to buy them, and they bring joy.
Let us get to the point; consumers who "buy excessively" are, in reality, exercising their freedom in the Marketplace. Consumers can determine on their own to either buy fewer or more significant amounts of bread; however, if they buy fewer amounts of bread, they will cause the incomes of wheat producers to fall. On the other hand, consumers who purchase more video game downloads raise the incomes of people employed in that industry. Moreover, the opposite effect happens when consumers are told not to make their own choices in the Marketplace. Do not buy more than two cups of coffee a day as that is excessive. Ha!
We must remember that production takes time. Rome was not built overnight, and neither were the items bought in person or online by millions of people every day. That means if less is purchased, less will be produced in the future.
Producers and manufacturers determine what to make more or less of based on market demand. Demand begets production. The market provides for those willing to buy, and people who are not willing to buy do not stimulate production. Producers accommodate mass demand with scarce resources. Consumption is a balance of scarcity and abundance, and the outcome creates more choices for consumers. You see, economic thriving does not revolve around buying stuff, it is the outcome of consumer choice.
On the whole, excessive consumption may not fulfill a Forbes writer’s desires, but it may bring true happiness for some people. People who buy—whether excessively or not—fulfill their economic role of supporting business owners and their local community. To assert that consumers should stop "excessively" buying products assumes away the prospect that people do not change shopping patterns or increase family sizes over time. I was always told that you do not bite the hand that feeds you. The market is the only social place where the coordination between consumers and producers can facilitate goals and mutually beneficial choices for everyone involved via the buying process. These "excessive" purchases fuel the economy, which helps all people flourish and live their best lives.
It has now become commonplace to accuse anyone who opposes covid lockdowns of being “antiscience.” This sort of treatment persists even when published scientific studies suggest the usual prolockdown narrative is wrong. support the antilockdown position.
There are sociological, economic, and cultural reasons why experts will take the politically popular position, even when the actual scientific evidence is weak or nonexistent.
Experts Are Biased and Are Self-Interested like Everyone Else
Though we are often encouraged to listen to experts because of their intelligence and expertise, there is a strong case for us to be skeptical of their pronouncements.
Beliefs serve a social function by indicating one’s position in society. Hence to preserve their status in elite circles, highly educated experts may subscribe to incorrect positions, since doing do so can confer benefits. Refusing to hold a politically popular viewpoint could damage one’s career. And since upper-class professionals are more invested in acquiring status than working people, we should not expect them to jettison incorrect beliefs in the name of pursuing truth. Cancel culture has taught us that promoting the world view of the elite is more important than truth to decision makers.
So why should we listen to experts when they give greater primacy to appeasing elites than solving national problems? In contrast to what some would want you to believe—revolting against experts is not an attack on science, considering that little evidence suggests that they care about scientific truth. Let us not fool ourselves. People occupying powerful offices are uninterested in being toppled from positions of influence, and as such, they will seek to minimize views that threaten their professional or intellectual authority. As a result, expecting influential bureaucrats to value truth is unwise. Truth to a bureaucrat is merely the consensus of the intelligentsia at any given time.
Of note is also the lesser ability of intelligent people to identify their own bias. Stemming from their greater levels of cognitive development, it is easier for intelligent people to rationalize nonsense. Justifying extreme assumptions requires a lot of brainpower, so this could possibly explain why highly intelligent people—specifically, people “higher in verbal ability”—are inclined to express more extreme opinions. Our culture has immense faith in expert opinion, although the evidence indicates that such confidence must be tempered by skepticism. Intelligent people, whether they be experts or politicians, do not have a monopoly on rationality.
Admittedly, intelligence may act as a barrier to objective thinking. Brilliant people are adept at forming arguments, therefore even when confronted with compelling data, they are still able to offer equally riveting counterpoints. Smart people can engage opponents without resorting to a bevy of studies to buttress their conclusions. Thus, clearly, the proposals of experts ought to be held to a higher standard primarily because they are smarter than average.
The capacity of an intelligent person to provide coherent arguments in favor of his ideas can be impressive, and may only serve to solidify him or her in his or her conclusions. For instance, in the arena of climate change experts have recommended policies that are consistent with data on nothing but the claim that a consensus supports such proposals. Promoting the wide-scale use of renewables, for example, is usually touted as a sustainable climate strategy despite the fact that studies argue the reverse.
Counter to the rantings of the intelligentsia, we should implore more people to express skepticism of experts. Due to their high intelligence, experts tend to be more inflexible and partisan than other people. This is solid justification for ordinary people to be skeptical of the intellectuals in charge of national affairs. Unlike wealthy bureaucrats, who are insulated from the economic fallout of their bad ideas, the poor usually bear the burden.
Keep the definition of “maximum employment,” as explained by the Federal Reserve, forever in mind; and remember it every time an economist or central planner uses it to justify their interventions in your life:
Maximum employment is the highest level of employment or lowest level of unemployment that the economy can sustain while maintaining a stable inflation rate.
However, the Fed cannot reach this lofty goal, as they are unable to articulate exactly what the goal is. This is concerning. Maximum employment is one of the primary mandates of the Federal Reserve. However, they make no apologies. They explicitly state that the Fed
seeks to judge how far the economy is from maximum employment, the Fed will assess a wide range of information on the labor market and not rely too much on any single estimate of a sustainable longer-run unemployment rate.
Jerome Powell told the Economic Club of New York on Wednesday:
maximum employment will require more than supportive monetary policy….It will require a society-wide commitment, with contributions from across government and the private sector.
For us to attain this goal, supposedly, we need more than “supportive monetary policy” (from the Fed). Therefore, it will require more threats of violence, theft, and coercion by the government. Although Powell did not explicitly state these methods, there is no other way to implement a national policy other than with a certain degree of force.
It seems odd to build a society around such vague ideas. But this is the society we live in. It comes as no surprise that Powell’s speech includes a subtitle called: "The Broad Responsibility for Achieving Maximum Employment." He refers to the wake of World War II, seventy-five years ago:
Congress's response was the Employment Act of 1946, which states that "it is the continuing policy and responsibility of the federal government to use all practicable means…to promote maximum employment." As later amended in the Humphrey-Hawkins Act, this provision formed the basis of the employment side of the Fed's dual mandate.
Alarmingly, he is suggesting the quest to attain maximum employment will require sacrifices not seen since World War II! Of course, anytime someone refers to the wartime era as an economic model, we must also consider that higher taxes, tariffs, subsidies, grants, loan programs and even make-work programs will soon follow.
It was Powell who first invoked wartime economics, and he even finished his speech with a national appeal, saying:
I am confident that with our collective efforts across the government and the private sector, our nation will make sustained progress toward our national goal of maximum employment.
While on the subject, it would be a disservice to ignore the central planning schemes of other countries during that time, as dutifully noted by the BBC:
Hitler aimed for full employment and by 1939 there was virtually no official unemployment in Germany.
Unfortunately, even the BBC succumbs to shining a positive light on collectivism:
Despite the loss of freedom, some aspects life improved in Germany for many ordinary people if they were prepared to conform in order to have a job and a wage.
We already see Biden and Yellen working tirelessly on a $1.9 trillion stimulus plan, while the Fed is now aiming for an “inflation at the rate of over 2 percent over the long run.” The Fed continues to increase the money supply, adding over $100 billion of new money to the system with each passing month, while the question of “asset bubbles” continues to be on everyone’s radar except our central bank's. It becomes difficult to imagine just how many more sacrifices society must make for something scarcely articulated.
Last week, Thomas Jordan, the chairman of the Swiss National Bank (SNB) appeared on national television, stating:
The SNB still regards both foreign currency interventions and negative interest rates as vital to stem appreciation pressure on the Swiss franc…
The significance of these policies may be lost on many. Other than the US Treasury labeling Switzerland as a currency manipulator, no one at any level of government nor any prominent economist seems to have spoken out against the SNB. Luckily, several news articles explain the problem.
On February 2, Reuters released the following statement regarding negative interest rates:
The benefits of negative Swiss rates outweigh the disadvantages, Swiss National Bank policymaker Andrea Maechler said on Tuesday.
She told a panel discussion sponsored by the NZZ newspaper that the safe-haven Swiss franc’s strength would put Switzerland in a much worse position if not for negative rates.
This policymaker's statements cannot constitute “economics.” To claim things would be worse if not for negative interest rates in no way can be proven. Like the US dollar, the Swiss franc is highly sought. But unlike the Americans, the Swiss have been managing their currency for a very long time. Forgetting that negative rates defy logic, we find this notion of the Swiss franc acting as a “safe-haven” to be a problem the SNB decided to tackle. As Chairman Jordan claims:
If the SNB were to raise its policy rate from the current level of minus 0.75%, the franc would rise massively in value and the Swiss economy would be crippled.
The bank has somehow determined a strong currency is bad and that therefore negative rates help keep currency weaker, as to not “cripple” the economy with strong purchasing power and low prices. While negative rates punish savers in Switzerland, the continuation of these market interventions eventually impacts America and explains the vast holdings of US equities.
Another Reuters article on January 29 gets to why currency intervention is problematic:
The SNB makes a profit from its vast holdings of foreign currency investments built up during its long campaign to slow the rise of the safe-haven Swiss franc.
The SNB claims the objective is to devalue its currency, therefore, like the Federal Reserve, it expands its balance sheet (i.e., creates money). This newly created money is exchanged for US dollars then US equities are purchased. The countless dividends and billions in capital gains received is nothing more than a by-product of being compelled to devalue the Swiss franc.
By year-end 2020, their ongoing currency management had incidentally led to ownership of a $140.7 billion US equity portfolio. This is a $13 billion gain from last quarter. Given how lucrative foreign equity purchases can be, why every other central bank in the world doesn’t jump into the stock market remains a mystery. As reported:
The Swiss National Bank has agreed to a new deal with the Swiss government which could see the central bank increase its annual payments to Bern and the country’s local governments to 6 billion Swiss francs ($6.7 billion).
This makes for an increase of 2 billion from the previous year, which seems reasonable as:
The SNB said earlier this month it expected to make a profit of around 21 billion francs for 2020 as soaring gold and stock markets boosted the value of its foreign currency assets.
Also keep in mind that from Q1 to Q3 of 2020 the bank increased the size of its currency intervention total
to just over 100 billion francs, well above the 13.2 billion francs it spent for all of 2019 to buy foreign currency.
The curious case of the currency too strong for its own good is one to watch in 2021. If we look beyond the vague belief about how to best manage a currency or find an ideal exchange rate, there really is no mystery.
It’s one thing for a central bank to hold its own interest rates negative, but quite another to create digital francs, exchange them for digital dollars, then buy US stocks at virtually zero cost; all for the stated purpose of weakening the franc. But let’s be honest, if you owned your very own central bank, wouldn’t you do exactly what Switzerland is doing?
Listen to the Audio Mises Wire version of this article.
Dallas Mavericks owner Mark Cuban is under fire for neglecting to play the national anthem (i.e., "The Star-Spangled Banner") at his team's home games. According to NBC News:
The anthem has not been played at any of the 13 preseason and regular season games played so far at American Airlines Center at the direction of Mavs owner Mark Cuban….
Cuban confirmed to The Athletic and ESPN that he had altered the pregame ritual, but declined to explain further.
In response, the NBA quickly issued an edict that all NBA teams must play the anthem before every game.
Ridiculously, the Mavericks organization was forced to clarify that "the decision to not play the anthem before games wasn't because the franchise lacks love for the United States."
This is a song and dance we Americans should be accustomed to by now. During the early twentieth and late nineteenth centuries, Americans adopted a variety of new progovernment rituals designed to inculcate an ideological preference for political unity, uniformity, and obeisance to the regime. Most notable among these was the introduction of the "Pledge of Allegiance," written by a socialist and designed to inculcate into Americans the idea that the United State was forever "indivisible." (It was also part of a business scheme to sell American flags.)
By the 1920s, the national anthem was growing in popularity as well.
This was all in contradiction to earlier nineteenth-century values of Jacksonian republicanism, which valued localism and a suspicion of national rituals. Andrew Jackson, for example, had refused to go along with the customary political declarations of days of prayer and "Thanksgiving." The Jacksonian view was that Americans can manage their own cultural affairs at the local level without any need for quasi-religious national rituals of "unity."
Thanks to the Civil War and the First World War, though, local cultural autonomy gave way to new cultural expectations that Americans stand around pledging allegiance to the state and singing secular hymns extolling the wonders of "the land of the free." Any dissent from these "traditions" was to be condemned as acts of "hating America."
This politicization of pro sports has continued to today, even if it has taken a bit of a left-wing turn in recent years.
The Rise of the Sports-Anthem Connection
The fact that participation in these rituals at sports games has become almost mandatory—at the risk of being punched in the nose by some red-faced "patriot"—would have struck most nineteenth-century Americans as rather odd.
Indeed, the connection between the national anthem and professional sports games appears to have not begun until the end of the First World War. Before the First World War, playing the national anthem at sporting events was quite rare. No one expected it to be done, and hiring a band was expensive.
According to mlb.com, the most conspicuous early use of the national anthem was at game 1 of the 1918 World Series during World War I. Unexpectedly, during the seventh-inning stretch, a military band played the national anthem in an effort to liven up a reportedly surly and war-wearied group of spectators.
Use of the anthem spread from there. The anthem's use expanded even more during the Second World War, as Matt Soniak notes:
During World War II, baseball games again became venues for large-scale displays of patriotism, and technological advances in public address systems allowed songs to be played without a band. "The Star-Spangled Banner" was played before games throughout the course of the war, and by the time the war was over, the pregame singing of the national anthem had become cemented as a baseball ritual, after which it spread to other sports.
But even after the war, the habit of playing the anthem at every game was not firmly in place until the Vietnam War.
It was during the Vietnam War, however, that the spread of the national anthem's use finally met with some resistance. Historian Marc Ferris, in his book Star Spangled Banner, notes that similar protests took place in the NFL during the late 1960s and early 1970s. Ferris recounts how "[r]esponding to [protests during the playing of the anthem at the 1968 Olympics,] the league's commissioner, Pete Rozelle, required players to hold their helmets in their left hands and salute the flag during the anthem." But, This was not without its detractors within the NFL, and, Ferris notes, "Anthem controversies [during the 1970s] helped institute and increased analysis of sports, which turned into the primary battleground over the beleaguered national anthem and its meaning."
By the Obama era, however, not even this grassroots spread of the anthem was sufficient for the federal government.
By 2009, the Pentagon was actively using taxpayer money to pay the National Football League to expand "patriotic" displays:
In 2009, Barack Obama's Department of Defense began paying hundreds of thousands towards teams in a marketing strategy designed to show support for the troops and increase recruitments. The NFL then required all players and personnel to be on the sidelines during the national anthem, in exchange for taxpayers dollars. Prior, the national anthem was played in the stadium but players had the option of staying in the locker room before heading out to the field.
Furthermore, teams that showed "Veteran's Salutes" during games were paid upwards of $5.1 million dollars.
In total, $6.8 million in taxpayer money was doled out to sports teams—mostly NFL teams—for so-called paid patriotism.
A Marketing Gimmick
In most cases, the use of the anthem was not directly subsidized, however. Usually, team owners quite voluntarily employed the anthem as a marketing gimmick. In times of war, team owners were happy to use the anthem as a type of advertising to make an emotional connection between the customers—i.e., the spectators—and the team's product. Wrapping a commercial product in the flag and apple pie to increase sales is hardly unique to professional sports. But pro sports may have used this tactic more successfully than any other industry.
Prior to its use in sporting events, the national anthem had been cunningly used by Vaudeville acts "when the management would bring out the flag to win applause for a poor act." This fact, related by Baltimore Orioles general manager—and World War I veteran—Arthur Ehlers was presented as a reason why Ehlers opposed playing the national anthem at every game. Ehlers felt that overuse of the anthem could be done cynically and would "cheapen" the song.
Ehlers, it turns out, remembered things correctly. In an article in Collier's magazine in 1914, the amused author notes the widespread use of the anthem to elicit a positive response from audiences at performances:
[N]othing is more destructive to gravity than to watch a small oppressed poodle dog walking a tight wire in a vaudeville show with the United States flag hanging from his mouth, while the orchestra plays "The Star-Spangled Banner" and some stout, earnest woman, standing in solitary grandeur in the middle of the house, glares at the sodden mass of humanity which declines to do reverence to the anthem or the flag or the dog….If encouraged in this sort of business, some clog dancer may yet do the Doxology in ragtime while the audience stands with bowed and contrite heads.1
Apparently, by 1914, it had already become fashionable to use the anthem to browbeat spectators into assigning deep meaning to what was clearly—like NBA basketball—never anything more than trivial lowbrow entertainment. The author, with his sarcastic reference to the anthem as a doxology knew when he was being manipulated.
Decades after the Collier's writer observed the anthem's value as a commercial strategy, Ehlers, it seems, was attempting to actually preserve some dignity for the anthem.
Everything Is Political
The NBA's new mandate that every team must play the anthem is the sort of thing we've come to expect from organizations like the NBA and the NFL. Although the NBA has spent much of its time in recent years trying to appeal to Chinese nationals, it has apparently decided that it's still in the game of pandering to Americans, with gimmicky displays of "patriotism" on the one hand and "Black Lives Matter" slogans on the other. Of course, pro sports organizations could have elected to simply not have any political content in their games at all. That would have been the smart thing to do. Instead, organizations like the NBA and the NFL have spent the last few decades relying on the national anthem as a cynical ploy. Employing "antiracism" and BLM politics is just the natural evolution of this. The NBA's latest turn toward supporting use of the national anthem shouldn't be read as any sort of move toward right-wing politics. It just a signal that the NBA continues to believe it can easily manipulate its audience with slogans and displays of jingoism. The NBA is probably right.
- 1. "We Shy at Vaudeville Patriotism," Collier's, Mar. 14, 1914.
The move to impeach an ex-president is no longer about Donald Trump.
The Democrats’ coming lawless impeachment trial violates the Constitution and libertarian tradition. The Constitution states impeachment can only be used against federal officials, that it doesn’t apply to private citizens. Article II, Section 4, states who can be impeached. “The president, vice president and all civil officers of the United States, shall be removed from Office on Impeachment for, and Convictions of Treason, Bribery and other High Crimes and Misdemeanors.” It doesn’t cover postoffice careers.
So Congress, despite the insistence of Trump’s opponents, lacks the power to impeach someone who is no longer a federal official. And the Constitution also prohibits Congress from enacting “ex post facto law.”
But the law, and even its recent impeachment precedents, the Democratic leadership is saying, doesn’t matter. They are basing their argument on a tenuous report of the Congressional Research Service (CRS) that says ex-officials can possibly be impeached. But, in the case of a president, it has never happened.
Indeed, the report, The Impeachment and Trial of a Former President, does say that “there are textual arguments against Congress’s authority to apply impeachment proceedings against former officials.” Even in arguing that some legal scholars say this unprecedented impeachment is possible, the report must hedge the point.
Still, it says that “the plain text of the Constitution states that ‘the President, Vice President and all Civil Officers of the United States, shall be removed from Office on Impeachment…and Conviction,’ could be read to support the requirement that the process only applies to officials who are holding office during impeachment proceedings.”
The CRS report only cites a nineteenth-century secretary of war who was impeached after he left office. But he was exonerated in the impeachment trial partly because several senators said former officials couldn’t be impeached. And this argument is affirmed by US Supreme Court justice Joseph Story in his Commentaries on the Constitution of the United States.
An irony of this lawlessness is that Democrats are violating their own recent precedents. In their 2020 Trump impeachment they targeted a sitting president. They produced substantial evidence in the House. The trial in the Senate was presided over by the chief justice, as required by the Constitution.
But in this second impeachment, in the one-day snap impeachment in the House, Democrats never produced evidence. They only produced rhetoric.
Comparing this to a trial, one in which evidence is examined and testimony is taken, is a judicial joke. US Supreme Court chief justice John Roberts will not be part of this second impeachment. Instead, this trial will be presided over by one of Trump’s senatorial critics. In a Kafkaesque twist, Senator Patrick Leahy presides but also votes!
The Democrats’ rationale in this unprecedented impeachment of a private citizen is that Trump must not escape criminal penalties for his alleged plotting in the Capitol attack. Without impeachment, Senator Chuck Schumer says, Trump will have “gotten a get out of jail free card.” However, the logic is flawed.
Private citizens, including ex-presidents, are subject to criminal law. Otherwise, why did President Nixon, charged in the Watergate crimes, accept a pardon after leaving office? But these Democrats are setting a precedent that could destroy our nation.
If a Democratic government can impeach a former Republican president, then why can’t a succeeding Republican government impeach a former Democratic government? How about former president Bill Clinton? Could he be impeached? Why not? But this is what Democrats want.
The charges brought by Democrats in a highly charged ex post facto impeachment trial would not be the same as in a regular criminal court. In the latter Trump would face a jury of his peers instead of a congressional jury of mostly people who hate his guts.
The criminal justice process as guaranteed by the Bill of Rights is not the formula most of the congressional Democrats want. This is one reason they prefer to impeach Trump in a political environment and not let him be tried in a criminal court. Courts must have nonbiased jurors and judges.
The Democrats don’t seem to care about constitutional safeguards that extend to everyone, even the most unpopular, controversial of people in a free society. That’s not surprising, since many radical Democrats have already suggested that various parts of the Constitution, such as those guaranteeing free speech and the right to arms, be scrapped.
But are these Democrats, who are forcing us down a constitutional hole that will destroy the law, aware that their malevolent actions could turn on them as well as their opponents?
“He who fights with monsters should be careful lest he thereby becomes a monster,” Nietzsche writes in Beyond Good and Evil.
And, Nietzsche continues, “if thou gaze into an abyss, the abyss will also gaze into thee.”
If the Democrats win, if they distort the Constitution to their political will, we’ll be deep in a constitutional abyss from which we will likely never emerge.
Listen to the Audio Mises Wire version of this article.
More state lawmakers than ever are introducing sound money legislation in the opening days of the 2021 legislative session.
Several states will consider measures to remove sales or general excise taxes on the purchase of gold, silver, and other precious metals.
Many other states will weigh bills to eliminate income taxes on gold and silver.
Still others will decide whether state funds can be held in physical gold and silver—and may even consider establishing a state-chartered bullion depository.
With debt-funded spending and money printing in our nation’s capital at breakneck speed, will states see the wisdom of enacting measures to counteract these policies of currency debasement?
Here’s a rundown of the newly introduced state legislation:
In Mississippi, House Bill 375, sponsored by Representatives Henry Zuber and Brady Williamson, and House Bill 978, sponsored by Representative Joel Bomgar, include language to exempt precious metals from sales taxes.
Two of Mississippi’s neighbors, Alabama and Louisiana, have already exempted precious metals from sales taxes—so the Magnolia State will continue to be at a competitive disadvantage if it maintains its current policy of taxing real money.
South Carolina’s representative Stewart Jones just introduced three sound-money measures. House Bill 3378 excludes from gross income any net capital gain derived from the exchange of precious metal bullion. And Jones’s House Joint Resolution 3379 would create a committee to explore the feasibility of a state-chartered metals depository. Finally, Jones has put forward House Bill 3377, which reaffirms that gold and silver are money.
Building on prior efforts to make precious metals purchases tax-free, Tennessee senator Rusty Crowe introduced Senate Bill 251. Meanwhile, Tennessee representative Bud Hulsey and Senator Paul Rose introduced House Bill 353 and Senate Bill 279, respectively. These bills would create a study commission regarding a gold depository for the Volunteer State and a report of findings to the state senate and house of representatives.
In Arkansas, a measure that would eliminate the sales tax on precious metals purchases has been submitted for introduction by Representative Delia Haak, Representative Robin Lundstrum, and Senator Mark Johnson. Senator Johnson introduced a similar measure in 2019.
In Alabama, Representative Andrew Sorrell will reintroduce a measure to remove income taxes from gold and silver. While Alabama enacted a precious metals sales tax exemption in 2018, the original bill sponsor, Senator Tim Melson, plans to introduce a bill this year to clear up some ambiguity in the 2018 language and to push out a sunset provision for another five years.
Way to the west, Representatives Val Okimoto and Dale Kobayashi in Hawaii have introduced House Bill 1184, a measure to exempt precious metals from Hawaii’s general excise tax.
And Idaho representative Ron Nate and Senator Steven Vick have put forward House Bill 7 to permit the state treasurer to hold a portion of state funds in physical gold and silver. Idaho hopes to join Ohio and Texas as one of the few states to make such a move to secure state assets against the risks of inflation and financial turmoil and/or to achieve capital gains as measured in Federal Reserve notes.
Washington State removed sales taxes against sound money decades ago, but a lawmaker hopes to take it a step further. House Bill 1417, introduced by Representative Rob Chase and cosponsored by Representative Bob McCaslin, seeks to eliminate all Evergreen State taxes on the only form of money mentioned in the US Constitution.
Sound money forces could face some defensive battles in 2021 as well.
Fortunately, there are now thirty-nine states that have removed some or all sales taxes on precious metals. But during the shortened 2020 session, revenue-hungry politicians in Maryland, Pennsylvania, and Washington State tried to buck the trend and repeal those sales tax exemptions.
All three of these recent attempts to reinstate taxes on the monetary metals have been defeated, but taxpayers should be wary of their return.
By communicating with lawmakers, providing testimony, and igniting a vocal grassroots response, the Sound Money Defense League and its allies continue to make the case for sound money and to defend the existence of current sound-money policies.
Massive debt-financed government spending in response to covid-19 has reemphasized the importance of sound money.
As state legislatures and Congress consider actions in the face of a global pandemic and an unprecedented economic meltdown, they would be wise to remove the disincentives that stand in the way of protecting citizens and their states with sound, constitutional money.