Guest article from Jim Davidson…
People have been anticipating it for some time. Now one can see it happening. And it looks like it is going to get worse.
Entering the financial crisis in 2009, the Federal Reserve began creating money like nobody’s business. The graph above illustrates three separate policy efforts to dramatically increase the “monetary base.” (Not shown is the liquidity measure L which was turned dark at the end of the last millennium, nor the broader monetary measure, M3 money supply, which was turned dark in 2006 – because the Fed only lies about transparency.)
You can see where entering 2008, the amount of money counted as “monetary base” was around $800 billion. Then it goes vertical for a while, reaching values substantially above $1.6 trillion. So the Federal Reserve more than doubled the monetary base. I think they may even have called that one, “quantitative easing.” We used to call it “debasing the currency” or “debasement.”
The next phase of activity was a reversal of policy, to cut back to about $1.6 trillion. You can see the graph goes jittery as the amount of the monetary base is increased or decreased.
Then the increase begins again in earnest. Monetary base is extended well past $2 trillion near the beginning of 2010. The figure runs up to $2.183 trillion, which is revealed in the data they show for the graph, in a separate file. That was 24 February 2010. And, again, things squiggle for a while.
The third increase began very recently, with a series of increases from January to April 2011 that didn’t show any signs of the gas pedal being released until 4 May 2011. But then the throttle was pushed again until 29 June 2011 when there was a tiny bit of backing off, totally reversed the next period reported, 13 July 2011, and then some. So we are watching, actually, while the talk appears to be about “whether” there is a third phase of “easing” or QE3, at least in the lamestream news media, there is actually a rampant third phase of “easing” or “inflation” or “berserk printing” going on, right now.
Now, you might ask yourself, why is the Federal Reserve doing this thing? And the answer is fairly complicated, but it goes back, I believe, to something that Andrew Dickson White wrote about the fiat money inflation of revolutionary France. Which is to say, a long time ago.
“The first result of this issue was apparently all that the most sanguine could desire: the treasury was at once greatly relieved; a portion of the public debt was paid; creditors were encouraged; credit revived; ordinary expenses were met, and, a considerable part of this paper money having thus been passed from the government into the hands of the people, trade increased and all difficulties seemed to vanish. The anxieties …the prophecies…seemed proven utterly futile. And, indeed, it is quite possible that, if the national authorities had stopped with this issue, few of the financial evils which afterwards arose would have been severely felt….But soon there came another result: times grew less easy; by the end of September, within five months after the issue of the …asignats, the government had spent them and was again in distress. The old remedy immediately and naturally recurred to the minds of men.. Throughout the country began a cry for another issue of paper; thoughtful men then began to recall what their fathers had told them about the seductive path of paper-money issues in John Law’s time, and to remember the prophecies that they themselves had heard in the debate on the first issue of assignats less than six months before.” (White, Andrew Dickson, Fiat Money Inflation in France, April 1876)
There was no turning back for the national assembly in France. It issued assignats until they became worthless. The assembly was replaced by the directorate, which began slaughtering in earnest, mostly merchants who sold bread for more than the “law of the maximum” decreed. The directorate took the assignat away and replaced it with the mandat, and inflated further. The streets ran red with blood. The people were impoverished. And Napoleon rode in on a white horse to slaughter even more people all over Europe with his lust for power.
I suppose there is some historical irony in the fact that I’m writing this essay two days after the national celebration of the French revolution, 14 July, or “Bastille day” as it is known to Americans. Of course, I don’t wish to denigrate the importance of the French people rising against their oppressors, marching on the prison-fortress of the Bastille, freeing the slaves and political prisoners held captive there on orders of the monarchy and the nobility (and the occasional magistrate, from time to time) generally without due process.
Americans could do the same. Millions of Americans are held for non-violent non-crimes. Thousands of Americans and foreign nationals are held without charges, detained endlessly by the tyrannical political system of dictator Obama. The dictatorial mass murdering filth, Obama, has authorised the execution of American citizens without trial. He rules by decree and lives in luxury while 44.5 million Americans are on food stamps, and millions more who cannot qualify for relief are suffering.
But past efforts to smash the state have always failed. They have always been replaced by yet another man on a white horse, another dictator. So why bother?
Some people think they want the order the state provides. When they see attacks on the state, efforts to smash it, they see those as reasons to strengthen the state. So smashing at the state often makes things worse.
Efforts to smash the state don’t often succeed—the number of failed rebellions in history far outnumbers the number of successful revolutions. But suppose you do succeed? Meet the new boss, same as the old boss.
Whatever you build that is strong enough to destroy the state that oppresses you is going to be stronger than that state. And therefore it is going to be desirable to those who seek to oppress others, either the old crowd using new phrases to hide their views, or a new crowd. Time and again through history we see people building up something strong enough to resist tyranny and finding it perverted, sooner or later, into something even worse.
The Greeks formed leagues to resist Xerxes and tore their society apart a few decades later in the Peloponnesian wars. The same leagues they formed mutated into tyranny over their city states.
The Americans formed a continental government to overthrow Britain. It was mutated into the constitution which has authorised all the tyranny we now suffer, or was powerless to prevent any of it. (I think it is the former, and by design.)
If we are going to avoid the same mistakes, over and over and over and over, it is important to understand what has gone before. That’s why it is so important to read works of literature, philosophy, and practical politics in their original. You can’t understand things by reading some other person’s interpretation of ideas—what was interpreted ten minutes ago for someone else isn’t going to match your situation right now.
Raise up free markets. Raise up the spontaneous order of the market. Raise up the agora. Not to smash the state, but to obviate it. Not to make it the victim, and encourage its supporters to give it more power, but to make it the bully. Show the surplus order of the state for what it is, so that people choose to abandon it.
What do I mean by surplus order? I mean exactly what Alvin and Heidi Toffler meant in 1990’s Powershift: Wealth, Knowledge, and Violence on the edge of the 21st Century. They meant to distinguish between the order that ordinary people want—to be able to walk down the street without being attacked by riot police, to cross a border without being beaten and arrested, to enter a shop without being raped, to operate a shop without endless shop lifting. That sort of basic order is the order of the free market, and widely available.
Surplus order imposes riot police wherever there are protesters, border police at every border crossing, a security camera in every bathroom, a surveillance net for every phone call. Surplus order is when the state revokes passports, sets up a barricade at every airport and train station, kicks in doors at 3 a.m., and drags parents away from their screaming children. Such surplus order does nothing for the people living in communities. It serves only those who control the state.
Withdrawing: Epic Win
In 1999, the IRS was called on the carpet by Congress. During Congressional hearings on brutality and abuses of power, the IRS was asked to justify their vicious attacks on individuals and private property.
One of the answers they gave was that, in their view, about sixty million Americans who “ought” to be filing tax papers every year do not. At the time, I think there were about 280 million Americans as far as the government was concerned, and perhaps 220 million of those were adults. Figure that 20 million were not expected to file for various reasons, like being elderly or in hospitals or in prisons or such. That leaves 200 million expected tax filers, of whom 30% were not filing.
The figures today are, if anything, more weighted toward non-compliance. The last figure on complying adults I saw was for April 2010, and was 127 million Americans filing tax papers, including extensions. That leaves182 million not filing, including children under 18, some of whom don’t have jobs.
Then we come to voting. In November 2010 only about 86.8 million Americans voted. Those results are summarised here: http://en.wikipedia.org/wiki/United_States_House_of_Representatives_elections,_2010#Results
Note that the votes counted may not be the votes actually cast, because of widespread corruption in nearly every county in the uSA as far as vote counting goes. However, we can assume that the number of votes counted includes a variety of votes made up out of whole cloth by the aforementioned scum bag corrupt venal vicious hateful brutal tax parasitical county government authorities. So if they deleted about as many votes as they made up, the net total might be fairly close.
Please note several things from that chart. First, the Libertarian Party, even with its inept Florida chapter unable to get a single candidate for house of representatives in Congress on the ballot as a Libertarian party (they got on the ballot for uSA senate, somehow – the Whigs and the Tea Party got on the ballot in Florida, but not the LP), is the single largest vote gaining party outside the two parts of the “boot on your neck party” as my old friend Kerry Pearson (Lex Lucre) may he rest in peace used to call it. Notice they got over a million votes, and more than twice as many as the next identifiable party. The candidates called “independent” don’t represent one party, but many points of view.
Second, please note that there were over 3.3 million votes cast for write-in candidates, LP candidates, and other third party candidates. About 4% of those who bother to vote don’t think the two major parties represent their interests adequately.
Third, while recalling that every seat in the national house of representatives was up for grabs in November 2010, please note that only 86.8 million votes were cast. Which means that only about 28% of the human population of the uSA voted in November 2010. Now, sure, 75 million were children under 18 who were not qualified by age due to the vicious age discrimination policies of the government. And another million or so were currently incarcerated for felony conviction. Most of those formerly convicted of a felony are actually able to vote, but many of them do not. That figure may be as high as 30 million adults, by the way – the under class created by the war on drugs and the war on “crime” so-called.
However they are counted, 147 million Americans did not vote in November 2010. Which means that the system already includes a great many who have withdrawn, who do not feel the system represents them, who don’t think that voting would do any good.
I think this non-participation and non-compliance is likely to get larger as time goes on. The advantages of complying seem to be very few, and the punishment for making even trivial mistakes on tax forms is hell itself. As more people conclude that they would rather be private contractors than employees, and as more businesses agree to reduce their paperwork by engaging contractors rather than hiring (and also reduce their payroll tax obligations and many other costs) there is going to be a dwindling minority involved in “the system” as compliant individuals.
True, the vast majority of these people don’t really care what Voltairine de Cleyre wrote, nor ever read a single word by her. But, so what?
If you want to have a civilisation, you ought to start building one, now. Or, as Gandhi said, when asked what he thought of Western civilisation, “It would be a good idea.”
I’ve been thinking over something that I saw recently, attributed to Benjamin Tucker, as I recall. It said that the wealth stolen out of the mouth of labour has mostly been stolen by usurers. And I’ve been thinking about how that’s basically true, though considerable wealth has also been stolen out of the mouth of capital, that way, too. Labour and capital are restricted to certain markets, certain sources of financing.
Why is there a New York Stock Exchange and not an Atlanta Stock Exchange? Why isn’t there a stock exchange in every town and village? Why isn’t there a proliferation of free market monetary systems and free market banking services?
The answer is that the monopolists use the power of the state to attack and destroy anyone like Dr. Doug Jackson, MD, or Bernard von NotHaus, or many others I could name, for daring to challenge the state’s monopoly on the issue power of money, or dare to challenge the state’s licensing of certain corrupt banking enterprises.
The way to reduce the toll of usury is not to attack it and ban it—that never works. The answer is to eliminate the privileges for it, make it prevalent, and have competition reduce the value of financial services to a market clearing price. Given how many people can do arithmetic, that should be a very low price.
There are many ways to withdraw support. One is to stop supporting the very businesses and industries, such as banking, such as the airlines, that have corrupted the government to monopolise their line of work. Take your money out of the banks, buy gold and silver instead. Stop using credit cards and checkbook money, and operate on cash, or barter for commodity money whenever possible. Stop traveling by airline—if you have time to spare, go by air. You can still fly, but use a private plane, or hire a private pilot, privately.
Entrepreneurs, bless them, keep developing new alternatives to the government’s issue power over money. Many of these are available, today. Some work with very effective encryption software—and if you are going to avoid answering difficult questions, you really ought to learn to keep your financial affairs private.
Don’t like the choices on offer? Come up with your own. Ithaca hours, Berk-shares, and other local currencies have been invented by various people to serve different needs.
The last thing you want is to find one answer to fit everyone, because that creates a centralisation problem. If you don’t think centralising is a bad idea, look at how much gold and silver were stolen from e-gold and Liberty Dollar in 2007 and get back to me about that.
Where else can you withdraw? Incandescent light bulbs have been made with many different materials since 1804. The technologies involved include glass blowing and soldering. Not exactly complex stuff. Maybe someone in your neighborhood can help you with light bulbs that don’t benefit General Electric, one of the biggest and nastiest of the defense contractors (aka death merchants).
Electricity can be made many ways. Why are you on the grid? You are on the grid because it is cheap and easy to be on the grid, for now. But consider supplementing with other sources—diesel generator, solar cells, windmill, a wood burning steam engine. Being dependent on a government granted monopoly with a bureaucracy and a few big power plants might not be the best way to survive. You probably already have emergency supplies for lighting and heating if the system falters during an ice storm or some other disaster. Keep going that way toward having independence from the monopolists.
Everyone has choices to take. You don’t have to get off the power grid, and you may have excellent reasons not to. You don’t have to get out of the banking system, and you might have great ideas about what to do with it. But the more you work at withdrawing your support for the licensees and the people who get the benefit of corruptly allocated government contracts and special laws to raise up barriers to entering certain markets, the better.
Agorism is a market based philosophy—from the Greek word “agora” meaning market. Some weeks back, I came up with a backronym to emphasise certain parts of the philosophy: Avoiding Government and Operating Realistic Individualistic Sensible Markets. AGORISM.
Consider an encrypted root laptop for your business records. Consider a virtual privacy network for your web surfing. Consider encrypting e-mails, especially about business decisions. Consider being your own boss. Think about ways to get off the grid, avoid using your identity papers, work with people who know you and trust you and don’t need to have you fill out a W4 or make a copy of your identity papers.
The life you save may be your own. The civilisation you help build may be worth living in.