The Centenary of the Cartel’s Charter

The Centenary of the Cartel’s Charter.

So it’s the 100 year anniversary of the creation, by legislation, of the Federal Reserve. How appropriate that not more than two weeks ago I picked up a used (but basically new) copy of G. Edward Griffin’s The Creature from Jekyll Island? I’ve always wanted this book, but given opportunity cost, I tended to put off going out of my way to buy it. Finding a recent (perhaps the latest) edition at a bargain center for less than $2.00, however, proved irresistible. I think maybe I should start it tonight in honor of this day. Or at least give this another listen:

End the Fed!!!

What Ails You, Economy?

What Ails You, Economy?

The Keynesian is ever mistaking economic activity for economic growth, credit expansion for wealth creation, profligacy for progress. Growth, wealth, progress. He uses his own definitions of each to reinforce his definitions of the others. And they are all fallacious.

When the Austrian tells the Keynesian that the printing and spending of mere pieces of paper cannot lead to more wealth in society, the Keynesian retorts that it is undeniable that credit expansion and stimulus lead to more economic activity. In this he is technically correct. Printing more dollars and handing them out to those who would consume and invest them, does indeed lead to “activity,” even more perhaps than there otherwise would have been.

But our Keynesian assumes, or assumes that his audience will assume, that mere economic activity is growth, is wealth, is progress. Presumably this includes even that activity which our Austrian rightly considers overinvestment (more properly, malinvestment), overconsumption, and/or the proverbial breaking of windows, each of these a common side-effect of the Keynesian witchdoctor’s remedies (often intended to cure ailments caused by earlier interventions, some Keynesian, some not).

If the Keynesian’s definition of economic activity doesn’t (oh, but it does!) include these things then the burden of proof is on him to show that his prescriptions lead to more real growth than would their absence on an unhampered market. And that his incantations lead, on the whole, to economic health rather than disease. A free market is largely unencumbered by the ailments mentioned above so in order to do this it would need to be shown that the sicknesses that do affect it are somehow worse than those caused by intervention.

And to be sure, pure economic freedom isn’t perfect. It has its own share of maladies. But these are all coughs and sneezes by comparison. Cures, if they are needed at all, come from the market itself. The economic meddlers and potion peddlers only serve to make things worse.

We must admit that not even on the most unfettered of markets does all economic activity lead to growth. For human actors err, and the market punishes their errors. How much more is all this the case under a centrally-planned expansionary-monetary/stimulatory-fiscal regime?  And how much more severe will be the punishment?

Standard Oil, Like a Phoenix Rising from the Ashes (Bust the Trusts! The Right Way for Once!)

Standard Oil, Like a Phoenix Rising from the Ashes (Bust the Trusts! The Right Way for Once!).

What is it with me and bashing evil corporations of late (not necessarily on this blog, though I’m sure if you look through the archives…)? I hope it’s not habit-forming.

Well, could be that some of them, at least at some point in their history, became what they are with special thanks to the government. Could also be that some of them have been grandfathered in and are protected from competition from those who haven’t been grandfathered in. Might also have a little something to do with the fact that some of them have benefitted from foreign policy meddling and institutionalized theft committed by the state. But other than that, I have few complaints. Here’s a comment I left (since edited) at the end of a survey that sparked this article:

“I like surveys that have political and societal relevance. I believe in the desirability and functionality of free markets. And Exxon Mobil is a great company all things considered. However, they could not have gotten to where they are today without a little outside help. Some of this came from the consumer, to be sure. But some of it came from the state through the virtual cartel status granted to all major [US, Dutch, and British, at least] oil companies going back at least to the 1953 [CIA instigated] Iranian Coup… [This] greatly benefitted the Seven Sisters oil companies (a number of which [were Standard Oil descendants that later] merged to become Exxon Mobil) and is one of the main causes of unease in the Middle East and around the world today. They, like all oil companies, great and small, foreign and domestic, have also benefitted from oil’s status as de facto commodity backing for the US dollar. The world reserve currency known as the Federal Reserve Note is denominated in crude oil. The oil companies have a vested interest in maintaining this corrupt arrangement.”

Federal Reserve Octopus

What say you? Are some/most/all big corporations what they are today more thanks to competition or more thanks to monopoly? Here’s one for extra points: what about “small business,”? Aren’t they also protected from competition, in certain industries more than others, by regulations that keep newcomers out and by subsidies that keep competing technologies down?

For the record, anti-trust legislation actually has the effect of restraining competition, thereby securing monopoly, so when I say “bust the trusts” I don’t advocate anti-trust legislation, I simply want to let free market competition give some of these bigger guys a run for “their” money! The burden of proof is on them to show that they would really be as big as they are today were they under a system of laissez-faire capitalism. I guess you could say I’m with the left-libertarians on this one (except for the fact that I dared to use the word “capitalism”).

Standard Oil Octopus

Also, Brandon and I had our little chat on conspiracy theories. The collusion of big businesses (usually involving the state at some level) to form cartels (take note that Standard Oil, known to us today as Exxon Mobil and Chevron, was owned by John D. Rockefeller, who also had a hand in creating the Federal Reserve; I wouldn’t say everything that has happened in regards to these two was meticulously plotted, but I wouldn’t call it mere coincidence, either) happens to be one of the ones that I subscribe to. I think Adam Smith can back me up on this one. And unlike some who use the quote to support anti-trust legislation, I’ll give you more than just the first two sentences in order to show why such laws are not the best conclusion:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Monopoly Octopus

Hating Energy Dependence, Not Loving Energy Independence

Hating Energy Dependence, Not Loving Energy Independence.

I worked on this piece on and off from November 30th to January 21st. I wrote the bulk of it on the first day, and most of the editing since then had been cosmetic. It is somewhat related to a project I was helping a friend with, although that is not the reason I wrote it. This piece originally appeared on January 21st at Notes on Liberty, where it was my first for that blog.

WHAT’S SO BAD ABOUT ENERGY DEPENDENCE?

Contrary to what one might be led to think, energy independence need not be the opposite of energy (inter)dependence. Likewise, contrary to what many advocates of free markets and free trade will say, energy dependence (perhaps not their choice of words), is not a good thing. Energy interdependence certainly can be a good thing, but in today’s world I can’t agree that every instance of it always is. Continue reading

One Year Later at PTPOL

One Year Later at PTPOL.

Well, this blog has been registered at WordPress.com for one year now. It took a while to get it off the ground, but it hit the ground running. (How’s that for a mixed – and contradictory – metaphor, by the way?) Click here to learn more about the blog, and here to learn a little bit about it’s author.

140 posts, 6,602 views, 482 comments, 200 WordPress likes, 192 Facebook likes, 54 followers on WordPress, 1150 followers on Twitter.

Not bad for an amateur one-man team, right? Well, its the readers that are more to thank. Without them there really is no point in writing.

Continue reading

Pearl Harbor! Why?

Pearl Harbor! Why?.

World War Two, the last war in which the United States declared its entry in accordance to the Constitution (as in Congress says there is a war and prescribes specifically who against and why, not the UN, not NATO, not the international community, not the president on his own, not the president with Congress making a law giving itself the authority to turn a blind eye ). The Second World War. Not a just war, at least as it pertains to United States entry, but at least a technically “legal” one.

What were the reasons for going to war? There are likely several theories (one of which I formulated myself, but make no claims to being the first). One of them listed here is generally accepted but rests on very shaky ground. Another (also listed) is conventional wisdom, is true even, but relies on circular logic, and the next three I have listed are more plausible but get less play in mainstream circles. They might even be considered conspiratorial. Even more so for the last theory. Until, that is, they are compared to theories that blame the Illuminati or the Jews or the Reptilians among us, which, sorry to tell you, are not listed here.

1. Adolf Hitler was a madman and the Roosevelt Administration and Congress were far sighted enough to realize that if the United States did not go to war (using Germany’s ally, Japan as a pretext), there would be no stopping der Führer from his designs of world conquest. You mainly read this one or very similar ones in the comments section on websites.

This is all so very sensational, and equally absurd. Hitler still had to face down the mighty Soviets (it is true the Soviets suffered the worst losses of the war but they had not yet begun to fight), and his empire was far from a stable one. It remains possible that FDR and company thought Hitler was going to subjugate the entire world, but those arguing this case are likely just projecting pure motives on a man who is their hero for reasons other than his foreign policy. Let me be blunt: Franklin Delano Roosevelt was no hero. He was an effective leader, and by that I mean a tyrant, but not a hero. His administration was probably one of the least transparent, most dishonest, administrations in history, and while some think that his ends were good and therefore all of this is justified, my opinion is that neither his means nor his ends were all that noble.

2. The United States went to war with Japan because Japan provoked the United States. Another mainstream (but less exaggerated) explanation.

This is true on the surface because the declaration of war, in point of fact, did indeed come after the attack on Pearl Harbor. But it is far more accurate to say that Japan went to war with the United States because the United States provoked Japan. Japan made war first by attacking Pearl Harbor (this day 71 years ago), and the United States had little choice but to either lose face and back off from its provocations of Japan or double down and go to war. The same choice that the Japanese faced as a result of the embargoes and sanctions placed on them by the United States and other Western powers. Needless to say, rather than dishonor themselves by relinquishing their conquests Japan chose instead to attack United States soil, shifting the pressure to someone else. Predictably enough, the United States followed suit. This theory still begs the original question. Why?

3. The United States was doing the bidding of other Western Powers, specifically Anglo-Dutch economic interests, and deliberately provoked Japan to war in order to help the governments, economic interests, and allies of Great Britain and Holland (and the Dutch government in exile) to maintain their colonial and petroleum holdings in Southeast Asia. I like to think of this theory as my own, but it doesn’t seem like it would be that hard for anyone to see the connections.

This sounds awfully conspiratorial, but it follows the same trend of many later US interventions (at least three with Iran, four with Iraq, and two with Libya). The events leading up to Pearl Harbor are compatible with this theory, but don’t necessarily prove it.

4. The United States was doing the bidding of Great Britain, just as it had clearly done it World War One, and was brought in as an ally against Germany, but because Germany had no clear quarrel (at least not one worth it for them to declare war over) with us, needed a pretext and used Japan’s attacks (which were provoked, perhaps deliberately) for one. This is LaRouche type of stuff, but again, it is not hard to see the connections. In my humble opinion, the assertion that World War One was entered by the United States as a favor to Great Britain is beyond reproach (not to mention that it dovetails rather nicely with the passing of the Federal Reserve and Liberty Bond acts, which greatly aided the attempts by the United States to bail out Great Britain after the war, but those might just be convenient coincidences).

Another one with questionable merit at first glance, but again borne out by the US foreign policy trends. United States involvement in World War One was largely the result of the pleading of Great Britain. It is also consistent with Germany’s response to US declaration of War on Japan. In World War Two, Germany avoided declaring war on the United States until after the United States declared war on Japan. But they did declare war first (between Germany and the US). Why would Germany do something so ill-advised? One possible answer is hubris. There is probably some truth to that but it still seems to be missing something. Another possibility is that Germany knew that the United States going to war with Japan was little more than a pretext for war with Germany. According to this line of thinking, war with the United States was inevitable. Why delay it any further? By the same token, if the United States had never gone to war with Japan, it may be that the Germans would never had declared war on the United States.

5. The United States was doing the bidding of the USSR, and drew Japan into war with itself so the Soviets would only have to fight on one front, that of Germany. This theory seems to come originally from Waldo Heinrichs (died 1959), from which work I do not know.

Again I will point to trends. The Yalta Conference (which destroyed the entire British excuse for declaring war on Germany, the liberation of Eastern Europe), the events resulting from Japanese surrender and Allied Occupation of Japan (more communist footholds in Kuomintang/nationalist China resulting in Mao’s Peoples’ Republic of China and the death of 70 million people, diplomatic tensions between mainland China and the US over the Republic of China/Taiwan even in the present day, the Korean War as well as the North’s current criminally insane dictatorship, the Viet Nam War, the Cambodian-Vietnamese War, and the Khmer Rouge’s murder of  2 million in Cambodia, but who’s counting?), and the disgustingly warm Anglo-American-Soviet relations at almost all levels (civil government, military, academia, labor , and even big business) prior to, and at times even during, the Cold War, are consistent with this theory.

6. Japan was the pretext for US involvement in World War Two, but the reason for entering the war at all was to provide a form of public works based economic stimulus, the intention either being recovery from the Great Depression (which was rooted in World War One involvement) or distraction from it (and the domestic policies that deepened and broadened it). Regardless of what was intended by this Keynesian experiment, it seems only to have succeeded in the latter. This argument is usually, but not always made in a retroactive way. As though the “fact” that World War Two led to economic recovery is another reason to justify involvement.

I do not know how strong of a theory this is in terms of the thoughts going through the heads of the Roosevelt Administration and the Democratic Congress. Surely military Keynesianism, whether espoused by Keynes himself or not, was a predictable outcome of a world war even prior to the war. There is no reason that peaceful and wartime spending should have different effects, or that world leaders wouldn’t be aware of that fact. And as Keynes was advocating the former since the 1920s and was taken seriously by the British and American governments in the 1930s, it is not a stretch to think that any stimulative spending, including war, could be motivated by or rationalized on Keynesian ideas.

If someone has alternative theories that they have heard or discovered, or reasons why any of the ones listed above are complete  nonsense, I would love to hear from them. I am temporarily revoking Godwin’s law (actually it is a “law” modeled after the immutable laws of physics, but for the sake of having fun I’ll treat it as a prohibition that has been lifted) for just this post, so fire away.

I have consulted Wikipedia, and yes, my memory of events, for the material facts, and beyond that only this piece.

I have written about some of these things and related matters herehere, and here as well. There will be more to come, including a post on energy independence, which is finished and just needs an opportune moment in which to be showcased.