Wednesday, July 28, 2010

Cross of Paper

We could not maintain the gold standard nor the silver standard. We could not maintain the copper standard, and now we cannot even maintain the zinc standard." Ron Paul referring to U.S. pennies.

See more here

The title Cross of Paper is a spin on the phrase Cross of Gold, which was used to attack and debase the gold standard in the early 20th century.  Systemic inflation is a relatively new phenomenon in our United States.

Consumer Price Index 1800-2005 (source)

Notice that older wars (1812, Civil War) correlate with an increase in CPI followed by deflation back to a nominal value. Later wars (WW1,WW2) inflate but then do not deflate. The Federal Reserve Central Bank was chartered in 1913 with the power to expand the money supply, which they promptly did. After 100 years, our 2010 dollar is only worth about 2 or 3 cents of your grandparents' dollar. Their savings were stolen; your savings are next.

End the Federal Reserve's monopoly of money (legal tender laws) and allow competing currencies.

Saturday, July 24, 2010

Reponse to Five Proposals for Distributist Agricultural Reform

H. L. Mencken said, "For every complex problem there is a solution that is simple neat and wrong."

This note conceptually responds to Phillip Campbell's "Five Proposals for Distributist Agricultural Reform" available here. This note seeks to reinforce one specific lesson: "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. (Hazlitt)"  Each of Campbell's 5 proposals violates this lesson. Each proposal might border on violating the Catholic prohibition of theft. Each proposal takes us further down the road to serfdom that is lined with price controls, property restrictions, tariffs, tax equalization, work programs, interest-free loans, and government monopoly.

The issue is not in magnitude, contrary to what Campbell says, that "some will say that my proposals are too mild; some free-market capitalists would say they go too far." The issue is principles in that distributism takes an interventionist attitude towards the property of others. Campbell is incorrect in saying that "the beauty of Distributism is that it needs no violent revolution to establish it..." The mere fact that he proposes non-contractual intervention in each of his 5 steps betrays the eventual use of violence.

No, Campbell's article did not address the economic fundamentals creating the modern state of American agriculture. Traditional free-market Catholics and many others claim that the disease affecting modern agriculture has the same base cause as the disease affecting our entire economy. The primary failure is that a central bank sets and enforces their official interest rate. At heart, the interest rate is a market's indication of available funds (i.e. savings) and seeks to coordinate economic behaviors. For nearly 100 years, the American public had access to low interest rates and inflationary fractional reserve banking. Stealing from savers to give to borrowers does in fact create a perverse economic situation biased towards the short term. Yet, distributism seeks to fight a disease with still more disease.

Next time, I will comment on the specifics of Campbell's proposals.

Personal Note:
This is not meant to rebuke Mr. Campbell personally. In fact, I encourage you to visit his excellent blog Unam Sanctam Catholicam.

Saturday, July 17, 2010


Please keep this from happening again.

From a letter sent to the local Republican Party Chairman.
Harold R. Cummings
Vernon Republican Town Committee
32 Ravenscroft
Vernon, CT 06066

Dear Mr. Cummings:
Thank you for your letter welcoming me to the Vernon Republican Party. I wish to emphasize to future Republican candidates that the following topics are absolutely essential to my vote.

• Free Market Economics as given by the Austrian school of economics. Free-will and contracts are critical.

• Sound Money: Get rid of the Federal Reserve or at least eliminate the manipulative central bank specification of interest rates. Controlled interest rates lead to boom-bust cycles.

• All human life is sacred. Denying human dignity leads to further evils.

• Individual Responsibility: Fight the cult-of-the-state. Eliminate regulations. No paternalistic government, No police-state, No stimulus, No bailouts.

• Protect the Constitution and Individual Liberty: The Ninth and Tenth Amendments seems to be a forgotten relics. I am especially concerned with our natural right to keep and bear arms.

In short, I wish for an exit from our current Road to Serfdom. I hope that Republicans can promote and exhibit the ideals of Jefferson and the patient courage of Coolidge. Please let me know if I can be of assistance.


[My Name]
I'm registered as a Republican. This is mainly to support certain candidates (Ron Paul in 2008 and Peter Schiff this year) in the primaries. The Road to Serfdom is a book by F. A. Hayak.

Friday, July 16, 2010

Frankly Incorrect

My local CT state senator Tony Guglielmo sent out his 2010 Legislative Report that discusses four topics: Budget, License Fees, Jobs, and Veterans.

The Budget section discusses the typical bankrupt state government. The License Fees section discusses why CT forces hunters and fishermen to buy permission from the state rather than the landowner.

In the Jobs section he says the following. My comments are in blue.
Getting people back to work is one of the most pressing issues facing our state. This year, the General Assembly passed a jobs bill [Not actual jobs, mind you.] that will do a number of things, but most importantly  [This is the most important action that the GA could come up with?] it will increase capital [nonsense] by providing up to $500,000 in loans and credit for small businesses and nonprofits so they can grow [Nonprofits grow?].
There is a fundamental law of economics here: Governments do not produce, they can only spend what they take by force. Senator Guglielmo, why you are promoting giving favored new businesses $500,000 by stealing from existing businesses and residents?

Another fundamental law of economics is: Growth requires savings, which is the deferred spending of profit. The entire definition of a nonprofit is to have zero profit; thus, nonprofits are by design not conductive to growth. Why support businesses that actively fail to save for the future?

The solution is to keep the General Assembly out of jobs creation. Let the people save and build businesses on our own. We don't want your help.

Audentior Ito

Audentior Ito translated from latin meaning to proceed boldly. The words audentior ito comes from the phrase ne cede malis, seal contra audentior ito. The translation means "do not give in to evil but proceed boldly." The purpose of this blog is to discuss topics that interest a libertarian Catholic from the northeastern United States. We'll see how it goes.