Power & Market

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, which 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’ preexisting 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 relearning. 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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Schumer to America: Help Is on the Way!

03/19/2021Robert Aro

Last week, Senator Chuck Schumer reassured us eight times that “help is on the way.” Madame Vice-President and Speaker Nancy Pelosi both reiterated this stance. This should be cause for celebration! As Schumer said:

You will receive your $1,400 checks in a few weeks. Help is on the way. People are being vaccinated more quickly and more effectively than we ever imagined. Help is on the way.

The senator took things one step further, adding:

Half the children in America will no longer be in poverty. And help is on the way.

This was not the first time they’ve suggested poverty almost being irradicated, thanks to the economic jab of the government.

The day prior, during President Biden’s much anticipated address, where he announced the signing of the American Rescue plan, he told the nation:

It extends unemployment benefits. It helps small businesses. It lowers health care premiums for many. It provides food and nutrition, keeps families in their homes, and it will cut child poverty in this country in half, according to the experts.

The experts weren’t named. Perhaps they mean former head of the Fed Janet Yellen, now US Treasury Secretary, considered one of the greatest economic experts of our time. In regards to the stimulus package, she said:

We think it’s very important to have a big package [that] addresses the pain this has caused – 15 million Americans behind on their rent, 24 million adults and 12 million children who don’t have enough to eat, small businesses failing…

Sounds horrible, but she continues:

I think these checks really will provide relief and they’ll help jump-start our economy, giving people money to spend when we can get out again and go back to our former lives.

As for the Fed’s stance? We’ll have to wait, as they remain on media blackout until this Wednesday’s conclusion of the March committee meeting.

Unfortunately, when elected officials resort to claiming help is on the way, they really mean more government intervention and debt creation. The worse things get, the more “help” we apparently require. Unfortunately, the more help the State provides, the worse things inevitably get, in a perpetually vicious cycle.

Yellen provides several figures to show that many American’s are struggling, but nowhere does she show the source, and most assuredly, no one ever accuses the government or central bankers for being the cause.

One would think the monetary experts, who employ countless economists across the nation, would know these checks won’t “jumpstart our economy,” anymore than any other nation has found in increasing its money supply to create economic prosperity, whether it’s Zimbabwe or Japan.

For a very long time we have been indoctrinated into believing that giving money to the people does wonders for the economy, the $1,400 check being the latest in this perpetual train of thought. But it will not be the last. With $1,400, those in need can pay rent, or presumably eat. But they could also use it to buy stocks or cryptocurrency…. Of course, few people ask where this money comes from, what would happen if America’s central bank stopped buying America’s debt, or any other negative consequence of these inflationist policies.

If help is on the way, rest assured, it will not come from the government nor the Federal Reserve. It can only come from social cooperation, individual and voluntary interactions. The problem is that government and central banks represent the exact opposite of social cooperation. Should this be the help society is seeking, then “no,” help is not on the way. And when things inevitably get worse, we’ll be offered even more help.

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Sarah Everard's Murder Exposes a Big Problem with British Policing

In the wake of the brutal murder of Sarah Everard, Boris Johnson’s government has fallen into the twin perils of modern conservatism in relation to policing: heavy-handed police tactics and promises of further spending. With the prime suspect being a police officer in the murder, UK confidence in state policing looks to drop even further than its current low standing.

The first response of the UK government was through the Metropolitan Police to attempt to stop the vigil that had been planned in remembrance of Sarah Everard. Under the guise of covid restrictions, the Met decided to ban even a socially distanced vigil.

When the vigil went ahead anyway, the Met decided to drag mourners away who were trying to place candles. This has caused an unfathomable outrage among ordinary people in the UK, with people at the vigil chanting “arrest your own.”

The government then played a game of pass the parcel, with Cassandra Dick (chief of the London police) saying she would have an inquiry, Priti Patel (the minister responsible for policing across the UK) saying she would look into it and the prime minister adding not much more to the proceedings.

However, it has now come out that the government’s real response is to have more police officers and have them in even more places. Therefore, not only does this serve as a massive insult to the memory of Sarah Everard, but at the same time it curbs civil liberties, increases the police force and places them in an increased position of power after a policeman was shown to have abused this power.

Remember that Boris was once hailed as a libertarian, but piece by piece, from military spending to what people eat, he has eroded this image to show us that he is nothing more than the same old authoritarian politician we have had for years. 

If there was a true libertarian in No 10 Downing Street, their response would be something more like the following: 

Firstly, the vigil should have been allowed to proceed as normal. Not curbing civil liberties at such a sensitive time, for such a small amount of people, would have been the sensible thing to do. 

Secondly, in the wake of this murder, increased rigor in selecting police officers should have been introduced. As one of the most important jobs in any community, it’s essential that we have the best and brightest applicants on the force.

Thirdly, the ridiculous laws governing equipment for personal protection should be relaxed, and if the government wanted to spend money, maybe community-supported self-defence classes for young women would have been more appropriate than dragging innocent people off the street

Women (and men) in the UK at the moment are in a precarious and dangerous position; few crimes are dealt with to the satisfaction of the victims but no real solution is ever posited. As I have discussed before, deregulation is now necessary to deal with this epidemic of crime.

The UK government needs to wake up to the fact that they are barely dealing with 10 percent of all reported crimes and that serious crimes are on the rise. The state-enforced lockdown has exacerbated this situation and ordinary working- and middle-class people are suffering daily because of it. 

This needs to change and fast so that people can feel confident in the police force and safe on their streets and in their homes.

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State Legislators Are Considering a Host of New Sound-Money Reforms

02/08/2021Jp Cortez

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.

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Social Media Is an Obstacle to Civilization

02/04/2021Nicholas Baum

On January 5, Variety published an article about an interview between Rowan Atkinson, the actor behind the “Mr. Bean” character, and the British outlet Radio Times. In the midst of the lengthy interview, which saw Atkinson discuss a host of different topics pertaining to his role, a brief and personal opinion was given about the dangers to free discussion and civil discourse that social media may induce:

“The problem we have online is that an algorithm decides what we want to see, which ends up creating a simplistic, binary view of society. It becomes a case of either you’re with us or against us. And if you’re against us, you deserve to be ‘canceled.’”

As expected, of all the substantive topics that Atkinson would go on to discuss in greater detail, it would be this relatively short dialogue that grasped the attention of many on social media. In fact, the tweet from Variety advertising the article received over a thousand replies. Responses ranged from stating that social media provides a justice-driven “accountability culture,” to people downplaying it as a myth, to some saying that social media profiles are exposed to a wide range of opinions, but that “most of those opinions suck.”

The truth, however, is far from the contradicting excuses offered by the masses of Twitter; and the implications of this truth are dangerous to the notion of free speech and the necessity it poses.

The Problem with Social Media

Firstly, it is true that every social media platform utilizes an algorithm to customize the user’s “feed” with content they enjoy. The problem with this lies in not necessarily that the social media platform may be biased, but that the math employed in every user’s experience delivers solely content they agree with, whether it be the profiles and accounts they follow or the recommended posts that meet the standards of the user’s liking.

From the “explore” page of Instagram to the recommended videos on YouTube, the services we’re increasingly using in our daily lives are solely reaffirming our beliefs while actively preventing opposing ones from coming to our attention. By only being exposed to one viewpoint, the effects of free discussion’s absence are evident: the allowance of misinformation, the incentives for intolerance, and the suspension of progress.

The Growth of Misinformation

By allowing opinions to go uncontested and incontrovertible, being welcomed by a presupposed audience that already agrees with it, there’s no source of pushback that may debunk or at least challenge such a claim.

Given that the opinion is received by a group of users already in agreement with it, it’s most likely that such an audience won’t commit to the same intellectual rigor of its certification if it were to be received by a group in disagreement with it. The audience will want to accept it as truth, and do so.

Every ideology and school of thought has a means through which the world is viewed and events are judged. The adherence to solely one likely negates important viewpoints in others. If only one is consulted, an almost certainly misleading or downright fallacious opinion is engendered. Without any opposition, this incorrect view persists unchallenged, and as we’ll see later, grows into resentment. In the absence of free exchange and a diversity of thought, flawed and defective opinions may be pushed which are otherwise easily refutable or debunkable by opposing ideologies. As John Stuart Mill writes:

“There is the greatest difference between presuming an opinion to be true, because, with every opportunity for contesting it, it has not been refuted, and assuming its truth for the purpose of not permitting its refutation.”

An opinion is true if it withstands every challenge or refutation made to it. In an online setting where users can limit their audience, block accounts, and protect comment sections, which extends to most platforms, the marketplace of ideas where truth is determined is substituted for the enclosed rally of participants around an opinion treated dogmatically.

The Grounds for Intolerance

In the absence of the exposure to a given opinion, a resentment of such an opinion or its author may grow. If the only sources consulted and ideas entertained are the ones that are already agreed with, sheer ignorance conflicts with the reality of the opposition.

Discussion only amongst those in agreement has an inherent tendency to corrupt. Devoid of any challenge, such opinions held in unanimity will be treated as a dogma, an irrefutable idea whose deviation from is intolerable. This is far more likely to occur than many are willing to recognize. When the people you surround yourself with are all passionately ascertained with a given idea, such an environment necessarily grows a prejudice for those who disagree.

Worse yet, the homogenous dialogue of a particular idea may be symptomatic of the first issue, if the ideas of the opposition were to be mistaken by the group. This “straw man,” unable to be corrected, could easily lead to passionate disdain if misinterpreted to a certain extreme.

Regardless, if much of one’s daily or online exposure is exclusively to a group of people with a set of common opinions, people without such opinions may be seen as mysterious and threatful, with a lack of subjection to them or their opinions undermining their entitlement to one.

This is what Atkinson alludes to when saying, “It becomes a case of either you’re with us or against us. And if you’re against us, you deserve to be ‘canceled.” Social media allows us to surround ourselves with agreement, which further alienates those who disagree. Without anyone representing the opposite opinion to defend themselves, a single point of view is compounded, and as it further summates without any refutation, those who may disagree appear to be much more villainous and impersonal than they likely are. The more passionate or ubiquitous an opinion is, the less likely that those that adhere to their own beliefs and happen to disagree are tolerated. It’s a matter of human nature.

The Obstruction of Progress

Alongside the free discussion of differing ideas, no matter how popular or unpopular these given ideas may be, the end product is ultimately progress. This is because as different conceptions and opinions are exchanged and debated, it’s more often than not that the truer ones are uncovered.

This is similar to the first consequence, in that misinformation grows. Whereas fallacies emerge when only a single idea is preached, the truth emerges when many ideas are debated. This is no accident. Recall that an opinion is true if it withstands every counterargument and refutation; in fact, it’s the only way of certifying its truth. Therefore, the only way to determine what is objectively true in any number of issues is to allow the freedom of discussion and debate in the first place.

Furthermore, the “truth” doesn’t have to be some scientific fact or physical observation that we normally associate with the word. In this regard, it more often than not means a “moral truth,” a notion or belief that society rigorously holds on to. Some of the most unpopular opinions of their times would become these moral truths. The notions of classical liberalism; ideals we now think of as necessities such as liberty, equality, and democracy, were considered radical and saw little support for most of mankind’s history.

The free market economy, and along with it the principles of voluntary cooperation and free trade, found its roots in the mightily unpopular movements of peasants to cities, ditching the centuries-long order of feudalism. Society progresses when these would-be moral truths are granted the environment to be debated. Over time, unpopular opinions are tested and, if they prove applicable to the state of man or society, and if they withstand every challenge to it, are embraced.

If we consider progress as the discovery of truth, then it can only be through the tolerance of many viewpoints and exchange of many ideas that such progress can be obtained.

The Threats of Social Media

The culture and way of life enabled by social media platforms has come into direct conflict with the principles of free discussion, embarking on a path of dogmatic ideals and misinformed users.

Algorithms are coded that effectuate an echo chamber of unfollowed posts and users nevertheless in agreement with the profile, enabling hours in content of further reaffirmation. The user holds the ability to restrict who sees their profile, content, and is allowed to respond to it, creating the aforementioned homogeneous discussions and communities multifariously adorning platforms.

Other users can be blocked; blotted out of existence with their content and beliefs, and along with it their access to the blocker’s content and beliefs, restricted from sight, sparring any inconvenience found in viewing such content. What these tools of social media enable is a culture where the user is constantly right and the opposition constantly wrong. Where every tap, click, and like validates what’s already believed in while ostracizing what’s already refuted.

It’s a culture of self-affirmation and vindication, of an insulated access to the wide array of intellectual opinions for the sake of the amplification of clung-to beliefs. To the detriment of the occupants of such insulated spaces, those in outspoken disagreement must be careful or else they’ll be “cancelled,” the consequence of negating one of the occupants’ many dogmatic and irrevocable ideals.

There’s an unprecedented supply of misinformation; no one is there to refute it. There’s been scarce a time of greater polarization and divisiveness; the direct result of people choosing to expose themselves only to the conveniences found in agreement. Society seems to be regressing, not improving; because opinions go unchallenged, with divisiveness around different truths replacing unity around fundamental beliefs.

Although not much can be done to assuage this societal retroversion, the largest impact must come individually. For the sake of the furtherance of truth, tolerance, and progress; have a discussion with that friend or family member you disagree with. Read a post or article about the other side of the issue. Choose to respectfully engage the opposing viewpoint that may be nagging you. Most importantly, use sparingly the many tools social media offers to limit free expression.

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Snowden and Assange: There Is Still Time for Trump to Do the Right Thing

It is amazing to me that President Trump has pardoned some people whom he considered heroic while continuing to leave Julian Assange and Edward Snowden, two genuine heroes, in the lurch. Assange, of course, is getting the worst of it, given the brutal conditions under which US and British officials have incarcerated him in England. But it still can’t be a bundle of joy for Snowden to be living in Russia, given the societal jail-like environment that comes with living under the Russian regime.

Consider Trump’s pardons of two former Border Patrol agents, Ignacio Ramos and José Compeán. They were chasing an undocumented immigrant who was fleeing back to Mexico. The best account of what happened was detailed in a Texas Monthly article entitled “Badges of Dishonor.”

When the immigrant, Osvaldo Aldrete Dávila, held his hands up and tried to surrender, Compeán swung at him with the butt of his gun. Aldrete Dávila then ran and both agents began firing at him. A bullet hit him in the buttock but he was able to make it back to Mexico.

The two agents then did their best to cover up their actions. They retrieved their shell casings and threw them into a ditch. When later investigated, they said that they had seen a shiny object in the victim’s hand and thought it was a gun. In their later criminal prosecution for assault, a federal jury concluded they were lying and convicted them.

One of the first things I learned as a kid from watching westerns on television was that you never shoot someone in the back. Doing that is about as cowardly and shameful as you can get.

But not according to Trump as well as a coterie of his conservative cohorts, They consider Ramos and Compeán to be real heroes for “defending our border.” They point out that Aldrete Dávila’s vehicle contained seven hundred pounds of marijuana, as if furnishing pot to Americans who wish to smoke it is some sort of horrible offense. Never mind, also, that at the time they were firing their guns at Aldrete Dávila’s back they didn’t know about the pot.

Trump also pardoned another former Border Patrol agent, a man named Gary Brugman. He got convicted for brutally assaulting undocumented immigrants after they were already in captivity and behaving peacefully.

Trump also pardoned Joe Arpaio, the anti-immigrant, crusading former Arizona sheriff who was convicted of contempt for refusing to comply with a court order to cease racial profiling.

He also pardoned Blackwater personnel who were convicted of killing innocent Iraqis.

Now compare those people to Assange and Snowden, two men who have risked their lives, liberty, and well-being to disclose the truth about evil and immoral actions of the US national security establishment. That’s why the Pentagon, the CIA, and the NSA are going after them with vengeance—because they told the truth about the US government.

Will Trump pardon these two genuine heroes? He might yet surprise me, but I doubt it because we can see from the people he has already pardoned that his values are warped and perverted. But he still has two weeks in which to do one right thing before he exits the White House.

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Swiss National Bank Q3 2020: $128 Billion in US Equities

12/09/2020Robert Aro

Will Switzerland become the next country to be labeled a currency manipulator?

The definition of “currency manipulator” has been laid out by the Treasury and explained by the Council on Foreign Relations (CFR) below. It requires the following three criteria to be met:

  • a trade surplus with the United States of more than $20 billion
  • a current account surplus (the current account is a broader measure of trade that includes foreign debt payments and investment income but is usually close to a country’s overall trade balance) of more than 2 percent of the economy’s gross domestic product (GDP)
  • intervention—government purchases of dollars in the foreign exchange market—of over 2 percent of the economy’s GDP, with purchases of foreign exchange in six of the last twelve months

A driving factor behind this designation is to crack down on those nations that supposedly get an unfair trade advantage through currency devaluation, the belief being that a weaker currency is good for exports.

The Swiss National Bank’s (SNB) Q&A on asset management states:

In order to implement its monetary policy, the SNB carries out monetary policy operations which affect the size and composition of its balance sheet. The assets side of the SNB's balance sheet is primarily composed of the currency reserves….The foreign exchange reserves consist of bonds, equities and investments at central banks.

On Friday, Reuters said that the US will report on currency manipulation in the coming weeks. Switzerland could now be classified as a currency manipulator due to finally meeting the “2% of GDP of net FX purchases” requirement. If so, it could face retaliatory intervention by the US such as import tariffs, as China experienced when it was labeled a currency manipulator. Per the news release, the SNB defends itself citing:

Officials have said in the past that interventions are aimed at limiting the appreciation of an “overvalued” currency, rather than at deliberate devaluation to help exporters.

The Swiss steadfastly maintain that their currency intervention has nothing to do with trying to get an unfair trade advantage. Rather, it’s to help manage the exchange rate of the Swiss franc as part of their monetary policies. Of course, what the “correct” value of the franc should be and what the purpose of wanting to devalue a currency, if not for a trade advantage, remains unclear.

Even if the SNB is not trying to devalue the currency for an export advantage, but because they truly believe the currency is overvalued, they might try to hold the franc down this way, also explained by the CFR:

They do this by selling their own currencies and purchasing dollar bonds or other foreign assets. The result is large holdings of foreign assets in central banks or sovereign wealth funds (SWFs). 

The issue becomes what to do with all those dollars. Perhaps the SNB can engage in various currency trades or simply hold US dollars. But why hold billions of dollars at today’s low rates when a central bank could put that money to work?

In the case of Switzerland’s central bank, their latest quarterly 13F filing showed a market value of nearly $128 billion in US equities, an increase of $10 billion from the previous quarter. Their largest holding remains Apple, in which the foreign central bank owns an astounding $7.8 billion worth of stock! Having one of the largest portfolios on the planet is an impressive feat. And while having this large an equity holding doesn’t qualify the SNB as a currency manipulator, are its assets not the result of a currency manipulation?

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Special Double QJAE Issue on Entrepreneurship Now Available

12/08/2020Mises Institute

The new special double issue on entrepreneurship is here!

Guest edited by Per Bylund, this issue suggests directions for future research and collaboration within Austrian economics and in the scholarship of entrepreneurship. Contributions offer a multitude of perspectives on a broad set of entrepreneurship-related issues. From Dr. Bylund’s introduction, “The articles… address directions for further expansion beyond the present boundaries of Austrian economics and entrepreneurship theory. This… issue includes articles that open new lines of thinking for Austrian economists with an interest in entrepreneurship as well as for entrepreneurship scholars with an interest in Austrian economics.”

Four book reviews close out this rich issue. Books reviewed include The Puzzle of Prison Order by David Skarbek, From the War on Poverty to the War on Crime: The Making of Mass Incarceration in America by Elizabeth Hinton, Escaping Paternalism by Mario Rizzo and Glen Whitman, and The Skyscraper Curse by Mark Thornton.

Working on your own contribution to Austrian economics? Submit your paper to the QJAE.

Click here for the new QJAE

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Schools Are at the Core of the Left's Hegemony

12/03/2020Trevor Daher

Ryan McMaken wrote an excellent piece recently, explaining “3 Reasons the Left Keeps Winning.” The article was short and sweet, but its points were profound and insightful. The first two reasons McMaken gave for the victory of the Left are, one could say, fraternal twins: “The Left Understands the Importance of Ideas and Ideologies” and “The Left Takes a Long-Term View.” In the article, McMaken made numerous references to education, i.e. the inculcation of ideas in the minds of children; the dissemination of ideas through school teachers and college professors to subsequent generations of youth. One thinks these ideas merit some further consideration, in light of the mess that we find ourselves in presently. McMaken has hit the nail on the head.

One could look to the arts and the culture as a source of corruption in the minds of our youth, of course. This has been a great pastime on the right since at least the 1960s. One could attempt to lay the blame at the feet of media pundits and journalists, too, if it weren’t for that devil of a problem that many young people don’t read news articles or watch news broadcasts. Maybe the drugs have crept into our neighborhoods and into the hands of our youth; the ghost of Timothy Leary is urging them to “turn on, tune in, drop out.” This is possible. However, there does seem to be one problem—more obvious and troublesome—which stands tall above the rest. Namely, that many of our children spend their waking hours, and at least a dozen years—their formative years—in the charge and care of radical socialist, collectivist, and fanatically atheist teachers.

For how long have we known that the avowed enemies of our civilization have been running our educational institutions? For how long have we known that our schools, from primary and secondary schools, to colleges and universities, were indoctrinating our children in Marxism, collectivism, fanatical atheism, and all manner of ideologies which, just a few generations ago, would have been identifiably inimical to the values and ideas of American society and culture?

In classes, at least those dealing with the study of man, such as history, it seems plausible that little more has been produced than a profound hatred and disassociation on the part of the students. Innocent babes have been devoured by wolves; their hearts, minds and souls formed in an environment in which they are taught to memorize the loathsome lessons of a collection of cruel and hateful ideologies.

Many of them listen and obey, as they are instructed to do by their teachers, and as they are encouraged to do by their parents—to the extent that they have parents who take an interest in their education. The others, those children who are fortunate enough not to pay much attention in class, do not seem to emerge from the experience any happier or any less angry than the rest. Though they may not all complete their homework, the schools nevertheless pressure children to take their lessons home with them and continue their studies in the evenings and on the weekends, lest they find something more stimulating to do in their free time.

For twelve years, many of these children are subjected to this malformation and indoctrination. All the while, many of them are encouraged by teachers and parents to commit themselves to their studies and excel. Many students, especially those of exceptional intelligence or diligence, are encouraged to continue their studies for a period of years in undergraduate school and, possibly, in graduate school. The cost to them is not just that of tuition and fees, room and board, but the forgone opportunities to begin their lives, to begin their work, to start a family, or otherwise to pursue their own ends.

How often, and how readily, do we shake our heads and look down our noses at these youth? How could they emerge, after all of this, and yet suffer from a deadly combination of ignorance, hatefulness, and ingratitude? How, indeed.

Let us consider a hypothetical situation, a mental exercise, if you would. Imagine approaching some of your libertarian, free market, conservative or religious friends and confiding in them one of your most embarrassing secrets: that you are considering a career as a schoolteacher, an educator of children. One suspects that many of them would call you a fool; according to dictionary.com, a silly or stupid person; a person who lacks judgement or sense. You would willingly endure the indignity and the tedium of attempting to teach hopeless children in exchange for a meager wage? Good Lord, and their parents, they must be insufferable! Meanwhile, the collectivists, many of whom hate mankind, recognize teaching as among the noblest of pursuits, the noblest of professions. Teachers are heroes and saints to the Left.

In all fairness, your more conservative friends do have a point. There are obstacles. The tides are against you. The state will require licensing, which means pedagogy, examination, and scrutiny. The state will also require your school to meet certain “standards,” which will mean state-sanctioned curricula. Plus, how are you going to get past HR (human resources), DIE (diversity, inclusion, and equity), and all of the rest of the alphabet soup? The hiring committee? The department head? The principal? The parents?

Mercifully, though, there are some good options. There are private schools—Christian schools, chief among them. There are also secular private schools dedicated to providing children with a classical education, such as those which were founded by the Mises Institute’s own Robert Luddy. The Great Ron Paul has his homeschool program. There are even some public charter schools that have sprung up out of the ground, dedicated to the same—the Barney Charter School network that is affiliated with Hillsdale College, and the Great Hearts network, to name just a few.

Beyond the simple recognition that there are serious problems in our educational institutions, perhaps more of us ought to get serious about seeking out those schools and institutions which remain, in the old form, dedicated to the inculcation of knowledge and the cultivation of virtue. More of us, this author included, ought to utilize and support them—perhaps we ought to thank them for their service! One of the silver linings to this year’s lockdowns and cultural revolution, as many commentators here and elsewhere have pointed out, is that many parents are finally waking up to the reality of our educational institutions and doing just that.

The case could be made that much of what ails the human mind, the human heart and the human soul are the results of ignorance, miseducation, and malformation. Though not the sole cause, certainly many of the troubles and evils in our hearts, in our homes, in our communities, and in our country can be traced back to their roots in the schools and institutions of higher learning, and the damage which they have wrought upon the minds, hearts and souls of so many.

One need not embrace the ignorant, hateful, and ungrateful thugs and criminals who have so plagued our streets and darkened our living rooms of late. One must recognize, though, that man does not emerge from the womb with a hammer in the one hand and a sickle in the other; nor a dogged hatred for mankind in his mind and in his heart.

Perhaps it is time that we set about to fix the problem which so many of us have, for so long, left alone. Someone must tend to the flock, though it is a dirty, difficult, and lonely task—nor are there fortunes to be made as a shepherd. Yet, someone must shield the babes against the wolves in sheep’s clothing. After all, those poor old liberal arts aren’t going to teach themselves.

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SCOTUS May Be Setting the Stage for a Challenge to Qualified Immunity

On November 2, the United States Supreme Court ruled in the case Taylor v. Rojas. The petitioner in this case was Trent Taylor—an inmate in the Texas criminal justice system. Mr. Taylor alleges that in September of 2013 he was placed in a cell covered in human feces and left there for six days before being moved into a cell that was “freezing” for another four days. Mr. Taylor sued the corrections officers who were responsible for placing him in the cells, claiming that they violated his Eighth Amendment right not to be subjected to cruel and unusual punishment. The corrections officers involved in this case argued that they cannot be held liable for violating Mr. Taylor's Eighth Amendment rights because they have qualified immunity—a legal doctrine that grants sweeping immunity to government officials who engage in egregious violation of rights. The district court and the Fifth Circuit Court of Appeals ruled in favor of the correction officers.

Mr. Taylor then appealed to the United States Supreme Court. The court invalidated The Fifth Circuit Court’s decision, claiming that Mr. Taylor’s rights had been violated and that the corrections officers should not receive qualified immunity because “no reasonable correctional officer could have concluded that, under the extreme circumstances of this case, it was constitutionally permissible to house Taylor in such deplorably unsanitary conditions for such an extended period of time.” The case was decided by a 7-to-1 vote with a sole dissent from Justice Clarence Thomas.

As Justice Samuel Alito points out in his concurring opinion, the United States Supreme Court typically avoids hearing cases where there is not an underlying question of how a doctrine or statute should be interpreted. This case did not involve a challenge to qualified immunity itself, but rather challenged the lower court’s application of the doctrine. Typically, the Supreme Court would avoid hearing cases of this type. However, the court decided to rule on this case. This leaves us with a large question: Why did the court feel it was necessary to weigh in on this case?

One possible explanation for their actions is that the court simply saw the facts of this case and decided that they were extreme enough to warrant an intervention. This seems unlikely considering the multitude of cases with similarly horrific fact patterns where the court has refused to grant cert. Such cases include incidents where officers shot a kid lying on the ground while aiming at a family dog, were accused of stealing $225,000, and told a police dog to attack a suspect on his knees with his hands behind his head. When you consider the fact that the court refused to rule on these cases, this interpretation of their actions in Taylor seems unlikely.

Another possible interpretation is that the court was attempting to fix a past mistake in the application of the doctrine. In the past, the court has ruled broadly on the question of qualified immunity. They have granted qualified immunity in many cases where it seems clear they should not have. This sends a message to the lower courts that they are to interpret qualified immunity broadly. It is possible that the court wished to fix this problem by giving an example where qualified immunity does not apply.

While both of these interpretations are possible, it seems more likely that the court is trying to set the stage for a challenge to the doctrine itself. The court recently granted cert in the case Brownback v. King. This case contains a direct challenge to the qualified immunity doctrine and has a horrendous fact pattern. If the court wants to reevaluate qualified immunity in a meaningful way, it would be helpful to have a more carefully defined standard for when it ought to be applied. Taylor might be the court’s attempt at clarifying this standard for this exact reason.

Whatever the reason for the court’s ruling might have been, Taylor got justice. Additionally, the fact that the court ruled against the state in this case should give us hope for future cases. Should they decide to rethink the qualified immunity doctrine this case would be a great place to start.

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