Monday, February 13, 2012

“Just War” and Debt Becomes Just War and Debt

A just war, in Murray Rothbard’s view, “exists when a people tries to ward off the threat of coercive domination by another people, or to overthrow an already-existing domination.”  Like all wars, a just war is laced with dangers beyond the inferno of the battles, especially if war funding relies to a significant degree on the printing press.  The American Revolution is a case in point. 

On June 22, 1775 the colonial delegates assembled in Philadelphia, under the inspiration of Gouverneur Morris [1], decided to print $2 million in “bills of credit” called Continentals.  The plan was to begin redeeming them in 1779, not with hard coin, but by levying taxes in the Continentals themselves, which would then be retired.  So appealing was the idea of printing money that by 1779 a total of $227 million had been issued.  The bills were everywhere, and everywhere despised.  In a letter to John Jay, president of the Continental Congress, George Washington complained that “a wagon load of money will scarcely purchase a wagon load of provisions."  By December 1779 the Continental had fallen to 42-1 against specie, and by spring of 1781 the currency was virtually worthless.

Individual states were also printing money to finance the war, and the British too adopted the printing press as a war strategy, printing Continentals and using Tories known as “shovers” to shove the imitations into circulation and thus accelerate the currency’s depreciation.

Inflationists in Congress accepted the depreciation as a clever way to impose the necessary taxes to pay for the war, though Gouverneur Morris thought it was too bad that Washington’s soldiers would suffer the most from this tactic.  As the value of the currency rapidly approached zero, the Continental army turned to direct theft (“impressment”) to acquire their provisions when merchants balked at trading goods for something worthless.

The Continental was allowed to die without redeeming it, but in 1779 Congress began emitting “loan certificates” that were also used as money.  A big chunk of this money hung around after the war as a peacetime public debt.  Robert Morris, the leader of the nationalist faction, pushed for its redemption at par in specie as a means of stuffing the pockets of associates who had purchased the certificates at highly depreciated prices.

Redemption was also a way of rallying support for taxing power in Congress.  Under the Articles of Confederation and perpetual Union, which was ratified on March 1, 1781, the United States of America was considered a “league of friendship” rather than a central government, with each state retaining “its sovereignty, freedom, and independence.”  Although the Articles recognized the obligation of Congress to pay all debts incurred before ratification, the Articles did not give Congress the authority to coerce such payments from the states.

To the nationalists, the lack of taxing power and other alleged deficiencies made the Confederation government “the laughing stock of the Atlantic world,” as historian Leonard L. Richards notes in his masterpiece, Shays’s Rebellion: The American Revolution’s Final Battle.  [2]  Throughout the 1780s, they tried fruitlessly to get enough of them together to replace the Articles.  In modern parlance, what they needed was a “New Pearl Harbor,” a major crisis that could be propagandized for political ends.  In 1786, Shays’s Rebellion provided the break they needed.

Shays’s Regulators

As the official story is told, indigent farmers in western Massachusetts were unable to pay their taxes, so the courts were sending them to jail and seizing their farms.  To avoid the penalties for defaulting on their debts, the story continues, Daniel Shays and a few other “wretched officers” from the Revolution led backcountry rabble to shut down the courts. 

Massachusetts Governor James Bowdoin called out the militia to put a stop to the uprising.  When most of them sided with the rebels, he turned to wealthy Bostonians to fund a temporary army.  Led by General Benjamin Lincoln, the army prevented the insurgents from seizing the federal arsenal at Springfield in late January 1787, then crushed the rebellion permanently a week later in a surprise attack at Petersham.  Though the top rebel leaders fled to other states, most of the others eventually returned to their farms.  Bowdoin agreed to pardon the rebels if they signed an oath of allegiance to the state, which the vast majority did.

As Richards argues compellingly, the standard story of Shays’s Rebellion as an uprising of debtor farmers does not wash.  Richards had discovered by accident that the Massachusetts archives had microfilmed the signatures of the 4,000 men who signed the state’s oath of allegiance.  Since many of the insurgents also included their occupations and hometowns, he was able to gather more information about them with the help of town archivists and historians.  For example:
  •  At the time of the rebellion Daniel Shays owed money to at least 10 men.  Of those 10, three were rebel leaders.  For every rebel who went to court as a debtor, another went as a creditor.
  •  Colrain, the most rebellious town, had 12 families involved in debt suits during 1785 and 1786.  Yet only four of these families provided men to the town’s total of 156 rebels.  Their leader, James White, who led the assault against the Springfield arsenal, was convicted of high treason.  He was also one of Colrain’s creditors.
  •  In 1786 creditors in Connecticut took over 20 percent of the state’s taxpayers to court.  Yet there was no comparable revolt in Connecticut.
It wasn’t debt that triggered the rebellion, Richards concludes, it was the new state government and its attempt to enrich the few at the expense of the backcountry. 

Like other states, Massachusetts had issued notes to help fund the Revolutionary War.  Immediately upon issue they depreciated to about one-fourth par, and later declined to about one-fortieth of their face value.  Many soldiers were paid in these notes, then later unloaded them to speculators at high discounts.  Speculators bought roughly 80 percent of the notes, of which half were owned by just 35 men.  Every one of these 35 had served in the state house during the 1780s or had a close relative who did. 

The legislature voted to consolidate its war notes at face value and praised the speculators as “worthy patriots” who had come to the state’s aid in its time of need.  But these men did not buy the notes directly from the government; they bought them for a song from farmers and soldiers, who were now being taxed to redeem them at full value.  The speculators, most of whom had stayed home during the war, were seeking to benefit at the expense of veterans.

Poll and property taxes were to account for 90 percent of all taxes.  The poll tax placed a fine on every male 16 years or older.  Thus, a regressive tax ensured a wealth transfer from farm families with grown sons to the pockets of Boston speculators.

Nationalist versions of the insurgency spread throughout the states and upset many elites, including George Washington, who was enjoying a peaceful retirement at Mount Vernon.  According to Washington’s trusted friend and former artillery commander General Henry Knox, who was planning to build a four-story summer home on one of his Maine properties, the insurgents wanted to seize the property of the rich and redistribute it to the poor and desperate.  David Humphreys, one of Washington’s former aides living in New Haven, told him the uprising was due to a “‘licentious spirit among the people,’” whom he characterized as “levelers” determined “’to annihilate all debts public & private.’”

The “rebels,” for their part, saw themselves from the very beginning as Regulators whose purpose was “the suppressing of tyrannical government in the Massachusetts State.”  The Shays Regulators drew upon the success story of Vermont in the 1770s in which Bennington farmers, in a dispute with New York land speculators, had stopped courts from sitting and terrorized surveyors sent on behalf of the speculators.

On March 19, 1787 Knox wrote Washington hinting that he would be given the president’s chair at the Philadelphia convention in May.  Knox stressed that Washington would not be presiding over some middling conference of tinkerers amending a defective document but instead would be leading a prestigious body of men as they created a more “energetic and judicious system.”

Nationalists at the Constitutional Convention that spring wanted a stronger central government - an elective monarchy, in Alexander Hamilton’s view.  Though they didn’t get the results they pushed for, the nationalists and their intellectual heirs of today have shown that their lust for a more “energetic” government will not be thwarted by words on paper. 

Hamilton’s Funding Proposals

As Rothbard notes, there were two ways to fund the debt:  One way that was compatible with the decentralized nature of the union under the Articles was to apportion the Congressional debt among the states and let them raise taxes to pay their share.  The other way was crucial to “the cherished principles of national aggrandizement”:  Give Congress the power to tax so it can do the funding.  [3]  Article I, Section 8, Clause 1 secured this power.

In January 1790 the 34-year-old Hamilton, as Treasury Secretary, presented his plan to Congress for retiring the Revolutionary War debt.  The $54 million federal debt would be funded at par and the federal government would assume responsibility for the states’ $25 million war debts.  The plan called for converting federal debt into bonds that would mature after an assigned period of time, paying 4 percent interest on long term bonds and 6 percent interest on those of shorter duration.  The new government would pay the principal on the debt from a sinking fund established through the post office.  Revenue for the fund would come from an import tariff and an excise tax on what Hamilton labeled “pernicious luxuries” that included whiskey.  His plan was not to pay off the debt, but to recycle it.  When bonds came due he would have new bonds issued to replace them.  As long as interest payments on the debt could be paid, the government’s credit was assured.

Among those opposing his plan was Hamilton’s former Federalist Papers ally, James Madison, who argued that repaying the debt at par to current bearers was stiffing war veterans and farmers for the benefit of wealthy “stockjobbers.”  He favored a plan of discrimination, wherein the government would pay the original bearers the face value of the certificates and the current bearers the highest market value plus interest. 

Aside from the near impossibility of finding the original bearers, Hamilton opposed discrimination on the grounds that it amounted to a “breach of contract” if the government did not pay to the bearer on demand the full value of their certificates.  How else would the government “justify and preserve their confidence”?  The buyer of a depreciated security, Hamilton argued,
is not even chargeable with having taken an undue advantage. He paid what the commodity was worth in the market, and took the risks of reimbursement upon himself. He of course gave a fair equivalent, and ought to reap the benefit of his hazard; a hazard which was far from inconsiderable, and which, perhaps, turned on little less than a revolution in government. . . .
In funding wealthy speculators in this manner, Hamilton was well aware this would concentrate investment capital in relatively few hands and would encourage them to make further investments in the federal government.  This was a critical part of his agenda: to strengthen the union at the expense of the individual states.

Senator William Maclay, one of Hamilton’s most vocal critics, brought the public into the debate with a scathing article he wrote for a Philadelphia newspaper in February, 1790.   Assumption, he argued, was a means of reducing state governments to insignificance and of establishing a “pompous Court,” by which he meant an arrogant and powerful central government.  “The people will be meddling with serious matters unless you amuse them with trifles,” he said caustically.  A pompous Court in partnership with a pliant press would keep the people amused as it goes about its task of having the citizenry subsidize New York’s monied class.  The Treasury will grow in influence, and thus
shall the capital of the United States [New York] in a few years equal London or Paris in population, extent, expense and dissipation, while for the aggrandizement of one spot, and one set of men, the national debt shall tower aloft to hundreds of millions.
As the debate raged throughout the spring and early summer, Hamilton, sensing defeat, turned to Secretary of State Thomas Jefferson for help.  Jefferson invited Madison and Hamilton over for supper and together they cut a deal.  In exchange for the needed votes, Hamilton would agree to relocate the nation’s capital from New York to Philadelphia for 10 years, then finally to a place on the Potomac, where it would be next door to Virginia, more accessible to the South generally, and removed from Hamilton’s power base.  The arrangement was consummated when the Residence Act narrowly passed both houses in early July, and the Funding Bill became law on August 4 by a slim margin. 

Still, the issue did not die.  On December 16, a date immortalized by the Boston Tea Party in 1773, Virginia’s General Assembly issued a formal protest.  Unlike many heavily-indebted northern states, Virginia had already imposed taxes to redeem a large part of its debt and had expected the balance to be extinguished in the near future.  Hamilton’s plan of assumption would benefit the more profligate states while imposing heavy taxes on Virginians for which the Assembly had no way of providing relief.  Furthermore, since no clause of the Constitution gave Congress the authority to assume the debts of the states, and given that obedience to the law of land was held as a “hallowed maxim,” Virginia could not “acquiesce in a measure” that was clearly unconstitutional.  As the perpetuation of debt in England has threatened everything that relates to English liberty, the Assembly noted, the same can be expected in the United States if assumption is not repealed.

It wasn’t.

The eight Massachusetts men in the House had been badly split on many issues regarding the new government, but on assumption they were united, since the debt would be funded by means other than direct taxes.  According to Governor John Hancock, the consolidated debt of Massachusetts was $5,276,955, of which $5,055,451 ended up in Hamilton’s program.  Institutions claimed $347,097 of this amount, while the remaining part belonged to 1,480 individual citizens.  Included in this group were speculators living in or near Boston who would be awarded almost 80 percent of the monetary total.  [4]

State leaders in Massachusetts had tried to pay off the state’s war debts by 1790, and for this they had imposed an onerous tax scheme borne mostly by farmers in the west.  Hamilton’s plan removed this burden.  Since many of them were subsistence farmers, rarely buying anything from the outside world, the new taxes amounted to almost no tax at all.  The federal debt thus had little effect on their everyday lives. The taxes that drove them to shut down the courts in 1786 were gone.

Conclusion

Hamilton’s funding proposals were step one in a fiscal policy that later included a rudimentary central bank and a proposal to protect favored American industries from foreign competition.  By hijacking the legal system Hamilton did indeed manufacture a “revolution in government,” one that overturned the revolution of 1776.   Though ostensibly constrained by the new constitution, he reinterpreted key clauses in such a way that the government could do almost anything, as long as it was declared to be in “the public interest.”

Somehow, ordinary Americans found themselves to be the public whose interests required subordination to the decrees of the government.  The Whiskey Rebellion of 1794, in which Hamilton joined President Washington and 13,000 conscripts and officers from the creditor aristocracy of the eastern seaboard to crush penny-ante tax protestors in western Pennsylvania, dramatized this point.  So did the War to Prevent Southern Independence and every war or crisis since.  So did the Sixteenth Amendment, the Seventeenth Amendment, the Federal Reserve Act, the Current Tax Payment Act of 1943 (Withholding), the Patriot Act, the National Defense Authorization Act . . . I leave it to the reader to fill in the rest.  Today, with Hamilton’s “implied powers” interpretation of the Constitution deeply ingrained in public rhetoric, a major political figure like Nancy Pelosi can respond contemptuously to a question about ObamaCare’s constitutionality without fearing congressional censure.

As the U.S. national debt continues its ascent to the heavens with the blessings of leading economists, the massive tower of IOUs sways to and fro at the mercy of political currents.  Will Asians continue to buy the debt?  Will the Fed be pressured to monetize more of it?  Will the Fed say “Enough!” and let interest rates soar?  Will the government, with its dedication to endless war and cheap money, take over the task of obliterating the dollar so it can fulfill the grandiose dreams of the political class?

Or will people finally say “Enough!” and remove the government from monetary affairs altogether?

George F. Smith is the author of The Flight of the Barbarous Relic, a novel about a renegade Fed chairman, Eyes of Fire: Thomas Paine and the American Revolution, a script about Paine's impact on the early stages of the Revolution, and The Jolly Roger Dollar: An Introduction to Monetary Piracy.  Visit his website. Send him mail.


References:

1.  Conceived in Liberty, Volume IV, Murray Rothbard, Mises Institute, Auburn, AL, 1999, p. 379

2. Shays’s Rebellion: The American Revolution’s Final Battle, Leonard L. Richards, University of Pennsylvania Press, 2003, p. 25

3. Conceived in Liberty, pp. 394-395

4. Shays’s, p. 157

Monday, February 6, 2012

Who's the real winner?

The Washington Post ran an article that all but concedes the GOP nomination to Mitt following his big win in Nevada, his second consecutive victory. 
the former Massachusetts governor’s win here, coupled with his enormous Florida victory just days ago, proved Republicans have begun to coalesce around his candidacy in earnest. He swept nearly every voting group in Nevada including those that have been slow to come aboard, such as tea party activists and voters who describe themselves as extremely conservative.
But who is really winning here, and who is losing?

Those who are “extremely conservative” apparently find nothing objectionable to the existence of the IRS or the Federal Reserve System, or to the Department of Education that grinds out an increasingly groupthink, uncompetitive population of Americans.  But, you say, conservative Republicans have been trying to get rid of the DoED since Carter created it, except for the neoconservative Bush II who expanded it with No Child Left Behind (NCLB).  The governor has had glowing words for NCLB, which is not to say he will keep it.  His rhetoric of late has had a Tea Party flavor, so there’s no telling what he really believes.  Any man who receives the support of over 100 registered lobbyists is up for grabs.  Any candidate whose biggest supporters are the biggest banks will not suddenly turn Austrian when the next crisis hits.  Can you see Romney standing triumphantly over the dead carcass of the Fed, his biggest donors’ best friend?  Neither can I. 

But these are technicalities.  The extremely conservative conservatives know a global superpower needs staggering amounts of revenue, so there’s no need to disturb the flow of wealth from their paychecks and pockets to military contractors.  Many of them probably are military contractors.

The real issue is not whether Romney (or Gingrich or whoever, except Paul) calls for the abolition of the income tax or the Department of Education.  They could conceivably make a powerful speech calling for their elimination - during the campaign.  They will say whatever the voters’ ears are expecting because the campaign is for the voters.  They like to believe they’re in control.  For the voters, the post-election period is the morning after.

Barack Obama campaigned on “change” in 2008.  We got more stimulus, more debt, more war - in most respects, Bush III.  George W. Bush called for smaller government in his run for the presidency in 2000.  Once elected federal spending mushroomed with wars, subsidies, police state measures, and a massive new entitlement.  Ronald Reagan said government was the problem not the solution.  He gave us more of the problem.  In 1940 Franklin Roosevelt promised not to send our boys overseas to fight in the European war, all the while working covertly to get the country into war.  In some respects the Democratic Party platform of 1932 sounded almost laissez-faire.
The Democratic Party solemnly promises by appropriate action to put into effect the principles, policies, and reforms herein advocated, and to eradicate the policies, methods, and practices herein condemned. We advocate an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance to accomplish a saving of not less than twenty-five per cent in the cost of the Federal Government. . . . {emphasis added]
Keep in mind that back then government was a midget compared to today.
We favor maintenance of the national credit by a federal budget annually balanced . . . .
We advocate a sound currency to be preserved at all hazards . . . .
You might say the New Deal was not in keeping with these “solemn promises.”

Then there was Woodrow Wilson.  He was re-elected in 1916 for keeping us out of the war, then by May the following year was instituting a draft to ship Americans to France to join the carnage.  Wilson knew what his overseas crusade would turn out to be.  During the night of April 2, only hours before asking Congress for a declaration of war, Wilson spoke privately to Frank Cobb, editor of the New York World, a Progressive newspaper with strong ties to the Democratic Party.  Lamenting a decision he regarded as necessary, he told Cobb that once war was declared, people will
forget there ever was such a thing as tolerance.  To fight you must be brutal and ruthless, and the spirit of ruthless brutality will enter into the very fibre of our national life, infecting Congress, the courts, the policeman on the beat, the man in the street.
According to Cobb, Wilson also said “the Constitution would not survive” the war, and that “free speech and the right of assembly would go.”  He made sure that happened.  Nor did he let these considerations prevent him from addressing Congress.

Like today’s war hawks, he didn’t let financial considerations bother him, either.  In 1913, state worship had given birth to the twin indispensables of tyranny, the income tax and the federal reserve system.  As Ralph Raico tells us,
Taxes for the lowest bracket tripled, from 2 to 6 percent, while for the highest bracket they went from a maximum of 13 percent to 77 percent. In 1916, less than half a million tax returns had been filed; in 1917, the number was nearly three and half million, a figure which doubled by 1920. . . .

Through the recently-established Federal Reserve System, the government created new money to finance its stunning deficits, which by 1918 reached a billion dollars a month⎯more than the total annual federal budget before the war.
The consequences of Wilson’s decision?  Sheldon Richman: “Communism in Russia (and everywhere else it later reverberated), Nazism in Germany, the Great Depression, the New Deal, and World War II (not to mention the Cold War and the growth of the American leviathan).”

War and the growth of the state - they’re inseparable.

This is why presidential candidates, with one conspicuous exception, can be counted on not to remove or lessen the power of any of the state’s vital organs, such as the income tax, the central bank, or the Department of Education.  They might be replaced or altered but not at the expense of state power or revenue. 

This is also why Ron Paul wants to eviscerate the state.  A government unrestrained by law is an individual’s worst enemy.  For Paul it’s not a "policy position," it’s a conviction.  He’s been fighting to remove legal coercion from our lives since his first day in Congress, in 1976.  Got room in your hip pocket?  He wants to downsize it until it fits - government, that is.  A vote for Ron Paul, then, is a vote for honest, responsible, peace-loving people.  If that means you, then a vote for Paul is a vote for yourself.  A vote for any of the others is a vote for lobbyists, bankers, and warmongers - people who most definitely don’t have your welfare in mind.

In this light, who really wins when Mitt, Newt, or Rick is declared victorious?

Friday, February 3, 2012

The Heist Known as Fed Accommodation

Fed Chairmen often speak of "accommodation" as if it's the magic needed to solve economic problems.  But what happens when the Fed “accommodates” us by increasing the stock of money?

First, it reduces the value of the dollar.  More dollars means each one buys less, putting upward pressure on prices.  Technology and improvements in production tend to push prices downward, but because of inflation fewer people can afford admission to the market’s bounty.

As a rough idea of how far the dollar has plummeted, $5,000 in 1913 had greater buying power than $110,000 in 2011. [BLS inflation calculator]

Second, a depreciating dollar discourages savings.  Why put money away if it’s going to lose value?  Instead, millions of investment neophytes put their funds in the stock market in an attempt to protect themselves against Fed printers.  Has this been a successful hedge?

During the biggest bull market in history – 1984 to 2001 – the S&P rose 14.5 percent a year.  But frequent trading by fund managers and high fees reduced the average rate of return to 4.2 percent annually.  According to Vanguard group founder John Bogle, if you include the results of 2002, the average return from equities was under 3 percent per year – less than the inflation rate. [Bonner and Wiggin, p. 245]

Third,  new injections of money spur a tinsel prosperity, and the Fed keeps injecting new money to feed the boom.  With so much borrowing and spending, prices may rise even faster than the rate of currency inflation.

As the public broods over higher prices, a semantic shift takes place.  Inflation comes to mean not an increase in the money supply, but the rise in prices itself. [Sennholz, p. 69]  Thus, businesses that charge higher prices become the villains, while government officials  that threaten price controls are the avenging angels.  Most people have no idea what the Fed does, so government can scapegoat business and appear to be defenders of the public weal.  Nor do most people understand that price ceilings create shortages, by encouraging consumption and retarding production.  Shortages, in turn, bring on government-imposed quotas, which foster corruption, black markets, and violent crime.

Fourth, as the influx of dollars drives prices higher some industries find themselves at a disadvantage with foreign competitors, tempting them to lobby Washington for protection from imports.  Protective tariffs and quotas, of course, push prices up further, while sometimes sparking trade wars as other countries retaliate on American exports.  And trade wars can lead to shooting wars.

On June 17, 1930, with the economy fighting the recession brought on by Fed monetary policies, President Hoover signed the Smoot-Hawley Tariff Act, raising tariffs on over 20,000 imported goods to unprecedented levels.  Other countries immediately retaliated, markets shut down, and economic conditions worsened worldwide.

Fifth, inflation raises nominal incomes, pushing people into higher tax brackets, which increases government tax revenue.  As people’s wealth goes out the window in depreciating dollars, taxes consume more of what remains.

Sixth, inflation shifts wealth from people who can’t or don’t know how to defend themselves from monetary destruction to those who can.  As a simple example, a person living on a fixed income may find his buying power so depleted he sells a family heirloom to pay for an unanticipated expense.  Or a bank that was part of the lending spree that helped drive prices skyward may foreclose on the homes of some of its borrowers, whose incomes were ravaged by monetary debauchery.

Seventh, the Fed’s “accommodative” measures keep people working much later in their careers because they cannot afford to live off their deteriorating pensions.  Dollar depreciation is a huge reason why both husband and wife work in many families.  

Eighth, because government often gets the new money first, it can fund controversial measures such as war and bailouts without drawing taxpayer ire.  Government simply puts the funding on its charge card, prompting the alchemy of Fed debt monetization.  We get the bill, of course, but this way it’s spread over everything else we buy, so we never see it itemized. 

Ninth, because inflation has an uneven affect on prices, raising some faster or sooner than others, people have a hard time distinguishing illusion from reality.  As cheap credit abounds, business people, investors, and cube dwellers hear the siren call of can’t-miss profit opportunities.  Fortunes are made then lost, and companies that lose money find it harder to keep employees.

Tenth, government may pose as the savior of a group of voters they’ve impoverished, such as the elderly, by subsidizing their medical expenses.  New entitlements create the need for more revenue, which fuels more inflation, pushing the dollar closer to a complete collapse.

Eleventh, as Ludwig von Mises observed, “under inflationary conditions, people acquire the habit of looking upon the government as an institution with limitless means at its disposal: the state, the government, can do anything.” [Mises, p. 66]  Through deficit spending the state will devour limited resources trying to maintain this illusion.

If gold is the barbarous relic its many detractors claim it is, we might expect the Fed’s fiat currency to be a better deal.   But even former Fed Chairman Greenspan admits that it isn’t, telling a New York audience in 2002 that prices soared in the decades following the gold heist of 1933.

Lord Keynes, the 20th century’s guru of deficit spending, never spelled out how deficits should be financed, admitting only that increased taxation was not the answer. [Hazlitt, 1982]  Perhaps he had pangs of conscience about calling for inflation outright, since he knew it would destroy society in a manner that “not one man in a million“ could diagnose. [Keynes, 1919, Ch. 6]

Political issues dominate the news, but how little we hear about the policies nurturing those issues, one of which is government’s power to confiscate wealth with the Fed’s invisible hand.

The foregoing is an excerpt from my book, The Jolly Roger Dollar: An Introduction to Monetary Piracy.