Category Archives: Economics

Blaming elites is childish; It’s time to put aside childish things

First, let’s debunk a loudly trumpeted fiction: “corporate power.” There is no such thing. Power is the ability to use force and violence with impunity. No corporation has that. Only the government has power and only as much as the citizenry will allow it.

Yes, very wealthy people have more influence over the government than everyone else. You should have known that before you built a government with such enormous power to begin with.

And it was you, who identify yourselves with the deceptively innocuous name, “We the People,” who constructed the monstrosity that now demands you take any injection it decrees and refrain from speaking any word or even thinking any thought that threatens it.

You didn’t build it all in one day. It took decades. But every brick in this edifice of evil was made of the same clay: invading the property of your neighbors to obtain what you believed was additional safety. Before each brick was laid, voices of reason warned you of the danger. You not only refused to listen but derided all who appealed to your common sense.

It’s one thing to disregard the morality of respecting the life, liberty, and possessions of your fellows. It’s another to refuse to recognize the obvious results.

You told healthcare providers they could charge anything they wished, regardless of their customers’ ability to pay, and taxpayers would pay the difference. Then, you were outraged by how quickly healthcare prices rose.

You told colleges and universities they, too, could charge whatever they wished, financed by loans guaranteed by taxpayers. You were again outraged not only at the artificially high prices, but the students inability to pay back the loans. What did you expect?

It doesn’t take an advanced degree in economics to recognize these obvious cause and effect relationships. Anyone with a sixth-grade education and control over his emotions could spot them a mile away. Unfortunately, people meeting both criteria are in the minority.

One can trace the beginning of the problem as far back as one wishes. The Constitution itself was an enormous expansion of government power, passed much like the infamous Patriot Act. But even its powers didn’t satisfy you.

Throughout the following century you participated with your banks in the fraudulent practice of fractional reserve banking, resulting in periodic “panics.” You didn’t need government to protect you from these. Arrangements wherein you earned interest by foregoing use of your money while the banks lent it out were available to you. But you wanted to “have your cake and eat it, too.” When the inevitable result occurred, you screamed for the government to protect you.

You had been warned as early as the first Congress against allowing the government to incorporate a bank. You were told it was unconstitutional and economically destructive by none other than Thomas Jefferson himself. You ignored the warning and supported the bank. Ditto the second version.

You were again provided loud and vociferous warnings against the Federal Reserve System, a scheme that transfers wealth from everyone in society straight to those “elites” you are always complaining about. But you supported it overwhelmingly because it promised you safety from the aforementioned panics caused by your own refusal to accept reality.

When the bank caused the Depression you were also warned it would cause, you demanded the government save you from that, too. Your so-called “greatest generation” elected a fascist who transferred the legislative power from Congress to the executive branch and built the modern administrative state. The New Deal regulatory structure is a barrier to new competition for the established corporations that write its rules.

Having demanded this structure be built, you now complain corporations are too big and don’t have enough competition.

The same dictator also granted your demand to be released from responsibility to save for your retirement. He and his accomplices in Congress created a program that takes 15 percent of your income – money you could otherwise save – and spends it immediately, promising to tax others in the future for a monthly pension doled out to you.

For running similar schemes, you imprisoned Charles Ponzi and Bernie Madoff. But the architect of this criminal scheme was rewarded with four terms as president.

The history of rewarding tyrants and vilifying benefactors is long. The Federal Reserve was conceived in secret by a cabal of corrupt government officials and representatives of the Rockefeller and Morgan financial empires.

Rockefeller had built his fortune honestly, foregoing larger dividends to reinvest profits in his oil company, resulting in growth for the company and decades of falling oil prices for consumers. When his competitors appealed to the government for help, you overwhelmingly supported breaking up Standard Oil, resulting in higher oil prices for you, unearned wealth for Standard Oil’s competitors, and enormous new powers for the government.

Considering how his honest effort was rewarded by those it benefited, it’s hard to blame Rockefeller for throwing in with the government in a scheme to make dishonest money at the same peoples’ expense.

Several decades later, Bill Gates built a software company that refused to send money to Washington. You rewarded that with full-throated support for the government’s antitrust suit against Microsoft, based upon the ridiculous premise that Microsoft had an obligation to design its product for the convenience of its competitors.

Gates learned the same lesson Rockefeller did. That mob self-styled “We the People” can’t be trusted with freedom. Better to collude with the government and try and control them. Who knows what they might do next?

Yes, very wealthy people with names like Schwab, Gates, Bezos, and Benioff get together with government officials at meetings like the World Economic Forum and the Bilderberg Group, where they make all sorts of nefarious plans for running your life. Guess what? That’s just talk, something they have every right to do. Only power you gave the government gives it any teeth.

Like Frankenstein, only you can destroy the monster you created. The Canadian truckers are showing you how. Even if the government physically removes the truckers (which may not be as easy as it sounds), the truckers still have the power. By simply refusing to drive they can bring the global elites’ managed economy to its knees. If they remain resolved and people support them, they will win.

It’s much the same with social media censorship. Facebook’s stock recently lost almost 30 percent of its value in a single day after its total user base declined for the first time in its history. Imagine tens of millions of American Facebook users making a coordinated effort to delete their accounts on the same day and join Gettr, Gab, or MeWe.

That would be game over for Facebook. And it would be both morally superior and vastly more effective than trying to regulate Facebook through the political process. It could be done with a fraction of the time, effort, and organization it took to get Trump or the “Freedom Caucus” elected, which accomplished nothing.

Here’s an inconvenient truth: People like Gates, Bezos, and Benioff would be far richer than most people in any political system, whether capitalist, socialist, fascist, or our present combination of all of the above. If thousands of years of history hasn’t taught you that yet, then you’ll just have to take my word for it. But they only have power over you because they can collude with a government that has that power.

If you want your life and your freedom back, you’re going to have to change your behavior. Stop electing demagogues who promise to protect you from elites by making the government even more powerful. Start electing representatives who will do the opposite.

Stop demanding more “taxes on the rich” and instead demand repeal of capital gains taxes, especially on gold, silver, cryptos, and other competition for the Federal Reserve’s currency. Stop demanding more regulation of corporations and start using your economic power as consumers to support their competition. Elect people who will outlaw executive branch agencies usurping the legislative and judicial powers.

These suggestions share two things in common: 1) they are realistically attainable and 2) they are less emotionally satisfying than trying to “stick it to the elites.”

Children make decisions based on their emotions. Adults make them based on reason. For over one hundred years, you’ve demanded society be run based on the childish notion that anything about reality that displeases you can be rectified by giving the government the power to prohibit it, mandate it, or subsidize it. Playing this sucker’s game has resulted in people like Klaus Schwab and Bill Gates being poised to literally rule the world.

It’s time to put aside childish things.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Did Omicron Really Kill the Economy or Was It Something Else?

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I canceled cable in June 2020. I made that decision for two reasons:

1. It no longer provided value to me. Until Coronasteria, I was able to watch the so-called news programming, filter out the spin and propaganda, and obtain some knowledge of things happening in the world. As of the beginning of the Covid Regime, that was no longer possible.

2. I didn’t want to subsidize evil. That may sound like hyperbole, but it isn’t. And I don’t want a single dollar of mine helping to perpetuate it.

But I still need to know what they’re telling everyone else. So, virtually every morning, I dutifully visit the websites of CNN, ABC, NBC, Fox, etc. and see what today’s menu of falsehoods has to offer.

I’ve noticed what hasn’t been on the menu the past few days: Covid. At least not the screaming headlines we’ve grown accustomed to over the past two years. Instead, most are leading with the news that Old Man Biden killed a BIG TERRORIST (it turns out he blew himself and his family up during a raid by US special forces).

But the most interesting story featured near the top of a mainstream news site was on CNN, which said, “America’s economic recovery is about to go into reverse.”

The White House is preparing for a dismal jobs report on Friday following ADP’s report earlier this week that the economy lost 301,000 jobs in January. The booming Biden economy seems to have hit a speed bump.

The media want to blame the Omicron virus, but that doesn’t make much sense. No businesses were closed because of Omicron. If you want to blame the knock-on effects of the 2020 lockdowns, or perhaps the disruption caused by Biden’s attempted vaccine mandates, that might be more plausible.

Or maybe it’s because the Federal Reserve is so far keeping its promise to slow down quantitative easing (QE) by $30 billion per month through March and end it completely by March 31.

If Jay Powell doesn’t blink first, we may be about to see how much of the post-lockdown recovery was real and how much was merely malinvestment caused by monetary inflation. The answer might be frightening.

If you want to know who really runs the economy (hint: it ain’t presidents or the free market), download a free e-book copy of It’s the Fed, Stupid here.

It’s also available in paperback here. It’s priced at a pre-hyperinflation level so grab a few copies for friends if you can.

It makes a great introduction to the government’s most economically damaging institution for liberals, conservatives, libertarians, socialists, and independents alike.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

It’s a Wonderful Life and A Christmas Carol Aren’t Just Stupid; They’re Evil

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If you’ve read my book, An Anti-State Christmas, you’re familiar with my critiques of It’s a Wonderful Life and A Christmas Carol. If you haven’t, you can download a free copy at antistatechristmas.com.

One may have walked away thinking the writers of both stories were merely misguided, lacking understanding of elementary economic concepts. That’s true, but their stories aren’t just stupid. They’re evil. They instill in people, at a deep, emotional level, an idea that has led to more human suffering in the world than any other.

This is the perennial belief that a person acting in his or her own self interest not only doesn’t benefit others but harms them. This really is the basis for every slander hurled at Potter and Scrooge, respectively.

It contradicts one of the very first economic principles, which Adam Smith famously called, “the invisible hand.” He observed that in an environment where property rights are protected and exchanges of property are voluntary, people pursuing their own self-interest through peaceful market transactions will do more good for others than people supposedly sacrificing their self-interest.

The truth of this maxim has been proven so many times it’s astounding the lesson remains unlearned. As just one example, it is commonly known extreme poverty fell by 90 percent in the thirty years between 1990-2020. What’s less commonly acknowledged is that 100 percent of the progress occurred in countries that “reformed” their economies.

Let me translate “reformed” so you understand what the academics prefer you didn’t: they became less socialist and more capitalist.

China is the largest example, but the trend is consistent in economies large and small. Wherever a country privatized government-owned industries and allowed market forces to operate, poverty fell dramatically.

Yet another way to say this is poverty fell in countries where people were no longer forced to sacrifice their self-interest for some mythical “common good,” but were instead allowed to pursue their self interest in the only peaceful economic system yet discovered: the market economy.

The communists who wrote It’s a Wonderful Life take great pains to make the hero someone who does not pursue his self-interest. In addition to unsuccessful, this also makes George Bailey very unhappy.

We are supposed to admire him because he is selflessly miserable, which begs several questions:

Is the only “moral” system one in which everyone is miserable?

Or are some people morally required to be miserable so others may be happy?

How can the latter be true if “all men are created equal?”

The claptrap pedaled by these writers is absurd but effective because it appeals to people’s emotions – and not noble ones. When Potter tries to recruit George Bailey to work for him, the truth is told, although most viewers believe the truth is false, and falsehood is the truth.

“Now, take during the Depression for instance,” says Potter. “You and I were the only ones that kept our heads. You saved the Building and Loan and I saved all the rest.”

“Yes, well, most people say you stole all the rest,” answers George

“The envious ones say that, George, the suckers,” replies Potter.

Potter is telling the truth in this exchange and George Bailey is lying. Potter did not steal anything during the Depression. He acquired assets in voluntary exchanges with their owners, the very opposite of stealing.

Potter didn’t make those he bought the assets from worse off. He made them better off. If that weren’t true, the transactions wouldn’t have occurred. That Potter was acting purely in his self-interest doesn’t change that.

As he has all his life, Potter helped others during the Depression. While exchanging much needed cash for hard assets, Potter likely saved lives and certainly preserved the existence of Bedford Falls, all while acting entirely in his own self-interest.

Meanwhile, the “selfless” George Bailey doesn’t help his customers during the crisis. They are forced to help him.

Regardless of how people feel about it, this is the way the world works. And speaking of feelings, this supposed admiration of selflessness and condemnation of selfishness does not proceed from any noble place in the human heart. Rather, Potter speaks the truth when he says the proponents of this nonsense are “the envious.”

The poisonous idea of self-sacrifice to some illusory “common good” led to hundreds of millions of deaths in the 20^th century, with starvation alone killing tens of millions in the midst of plenty. It appeals to the basest of human emotions and inspires a disregard of reason and observable reality.

In a society morphing into a pure democracy as constitutional limits designed to prevent that are whittled away, everyone who watches this supposedly heartwarming holiday film or reads any of Charles Dickens’ socialist propaganda and believes it becomes a threat to us all.

It is not a new threat. The central lie of both stories is what led to the revolutions in 1789 France, 1917 Russia, and 1949 China, just to name a few. If you’re wondering how to see it coming, consider a few common characteristics of those disasters: the tearing down of statues and other symbols of the past, the public shaming (and sometimes assault) of “politically incorrect” dissidents, the politicization of science (see “Lysenkoism”), and weaponization of the media by the state.

Surely that can’t happen here.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

It’s Not the Elites’ Fault; It’s Yours

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My fellow liberty broadcaster Alan Mosely put out a humorous tweet that read, “Who knew Omicron would be such a hero?” He was retweeting an announcement that the World Economic Forum in Davos had been called off due to the Omicron variant.

Certainly, no good ever comes from a bunch of billionaires hobnobbing with the heads of national governments. Ditto the Bilderberg Group, The Council on Foreign Relations or any of several other such elitist gatherings.

But here’s the part most people miss: No bad really comes from them either. Sure, the Federal Reserve was cooked up at a secret meeting of elites on Jekyll Island. But it only became reality because of overwhelming support from the public after it was pitched as a way to protect them from the “elites.”

There was plenty of opportunity to hear opposition to the Act from the minority of Congressmen and Senators who voted against it. But the public ignored their warnings and supported the Act anyway.

Ditto the 16th Amendment. This was also pitched as a way to shift the burden of taxation away from the middle and poorer classes to the rich, the “elites.” The public swallowed this bait and switch hook, line, and sinker, and today clamor for the so-called elites to pay even more income taxes.

But whom do income taxes really hurt the most? The super-rich, making millions or billions in income? No. It’s those middle-income earners, especially those who work the hardest to get ahead, for whom that extra $10,000 – $20,000 paid in income taxes could represent significant capital accumulation over a period of years.

Maybe it’s just a coincidence that this provides a barrier to competition for those above. Does it really matter if it’s intentional or not, since it does?

Right down the line, the public overwhelmingly supports policies that harm them when pitched as protection from the elites. The god-awful Teddy Roosevelt styled himself the “Trust Buster.” His even more awful cousin sold the New Deal to protect the public from the “greed” of the rich.

Everyone was outraged by the EpiPen scandal a few years ago. This was the direct result of the FDA having legislative power, acquired during the New Deal without any amendment to the Constitution, and using it to keep competitors of the EpiPen off the market.

That’s just one little product protected by just one of scores of federal agencies but it’s representative of how the entire New Deal regulatory structure works. And the public not only approves of it but constantly clamors for more.

I don’t care how many private jets Elon Musk or Bill Gates owns. Their getting richer doesn’t make me poorer. Quite the opposite, in fact. But here’s what does make me poorer: government intervention that purports to protect me from “the elites.” That the elites overwhelmingly support it should tell you something.

No system in the past has ever resulted in economic equality; nor will any system in the future. But here is one thing history should have taught you by now: If you set up a system where the property of the elites and yours is subject to disposition by majority vote, you shouldn’t be surprised when the elites end up with all of yours.

Most people on my e-mail list get this. For all those who don’t, I offer these thoughts as some you can pass on to counter so-called “populist” arguments for further “regulating” or plundering the elites. It’s a sucker’s game.

Don’t forget my new e-book, It’s the Fed, Stupid, is also available in paperback here. It’ll cost you less than a sawbuck and is great for introducing friends to our ideas.

Like the music on Tom Mullen Talks Freedom? You can hear more at tommullensings.com!

The disastrous anti-capitalist mindset of the early 20th century is back

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The 20^th century was a period of startling technological advancement. Compared to the lifestyle of average people in 1925, most of human history before that time amounted to what we’d now call “camping.”

Just 30 years earlier, most people traveled on foot or by animal power, except when taking trains. They lit their homes with candles and provided themselves heat mostly by burning wood, just as their prehistoric ancestors had. They went outside to use the bathroom. They died from diseases we brush off today with a 10-day regimen of pills.

The technological explosion in the early 20^th century had its roots in the 19^th, when what used to be called liberal values informed the western world. By “liberal,” I mean individual liberty, free markets, and limited government. Today, we call that worldview “classical liberal” or “libertarian” (really the same philosophy at different stages of development) because “liberal” no longer means anything of the sort.

Many people believe the cataclysmic world wars were an inevitable price the world had to pay for too much freedom. That’s the opposite of the truth. The early 20^th century saw a violent reaction against the tidal wave of freedom that had swept the world during the previous century. At the center of this anti-liberal sentiment was resentment against free markets.

“Laissez faire is dead,” politicians routinely said. It was a self-fulfilling prophecy.

The anti-capitalist mindset was international and, within America, bipartisan. The Progressive Era became mainstream with Republican president Teddy Roosevelt in the White House. It was under Roosevelt that the seeds of the modern, omnipotent executive branch were planted. Those seeds were given tender-loving care by Woodrow Wilson as he attempted to militarize the economy, hoping wartime anti-capitalist policies would become permanent.

There was a brief pause in America during the 1920s, but overseas the anti-capitalist mindset ran rampant. People have forgotten – or perhaps were never taught – how central anti-capitalist thinking was to Italian fascism and Naziism. That’s why during the 1930s even Hitler had admirers here in the United States. He was seen as a “man who could get things done” in terms of overriding the voluntary relationships of the free market to achieve government-promulgated economic outcomes.

It is also the reason both Hitler and Mussolini praised FDR’s New Deal. No, the New Deal wasn’t quite as totalitarian as what Mussolini or Hitler were doing in Europe. FDR never legally prohibited people from quitting their jobs, as Hitler had done, in order to maintain “full employment.” But as Vincent Vega would say, “it’s the same ballpark.” The New Deal brought the economy under the arbitrary orders of executive branch bureaucrats, where it remains to this day.

WWII is widely believed to be a glorious event. Supposedly, the forces of totalitarianism were defeated by the champions of “democracy,” establishing a New World Order (novus ordo seclorum) under which the United States would lead the world in stamping out tyranny forever.

It’s a nice story that is somewhat undermined by the facts. In truth, both world wars were disasters for Western civilization. Yes, Hitler was defeated, but it’s hard to argue in retrospect that bringing half of Europe under the brutal rule of the Soviets, who killed ten times more people than the Nazis and were at least as totalitarian was a slam dunk win.

Worse yet, the relatively freer societies among the Allies became significantly less free. The United States became a garrison state, first ostensibly to oppose the Soviets, and then terrorism, and now…a virus. The European allies descended into socialism from which they only marginally retreated during the late 20^th century. The U.S. now seems eager to repeat their mistakes.

The progentior of the world wars and everything that followed was the anti-capitalist mindset that swept the world in the first half of the 20^th century. It was belief political power could improve economic outcomes that led to the rise of dictators like Hitler and Mussolini in Europe and dictators-lite like Wilson and the Roosevelts here in America.

Like a bad sequel, the anti-capitalist mindset is back. While the Republican Party may never have delivered the laissez faire market they campaigned on, they understood the need to at least give it lip service. Why? Because a large segment of their constituents wanted to hear it. And that sentiment among a large segment of the public – even if not a majority – is the only thing that can check further destruction of our liberty.

Now, with “economic nationalism” on the right and “democratic socialism” on the left dominating the thinking of close to 100 percent of the population, we are back to the near-unanimous contempt for laissez faire markets that defined the 1930s. And this time, the nation states are armed with nuclear and biological weapons.

How will this latest epidemic of anti-capitalist thinking end?

Tom Mullen is the author of It’s the Fed, S tupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Anti-Trust Laws Are Not the Answer

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Austrian economist Bob Murphy recently appeared on Timcast IRL. Among the topics discussed, there was a brief discussion of anti-trust laws that was left with a dissatisfying “I-guess-there’s-nothing-we-can-do-about-it” answer.

The argument host Tim Pool made for anti-trust laws rests upon the assumption that in a free market, successful market actors can accumulate so much wealth that they exercise “power” just as oppressive as a tyrannical government’s. Pool cited as an example Blackrock buying up houses and using its vast accumulated resources to effectively outbid any smaller or individual bidders.

Pool said that companies like Blackrock will acquire assets by offering “insane sums of money,” i.e., paying well over the market price. Eventually, the large company or a few of the largest companies “own everything” and the common folk “own nothing.” Pool asks Murphy if he would support anti-trust laws to address such a situation.

Murphy gave all the correct answers but didn’t elaborate upon them. He pointed out we aren’t operating in a free market, specifically mentioning bailouts, and that it never helps to give the government more power. Pool agreed empowering the government doesn’t work but concluded there is nothing anyone can do about undesirable economic outcomes. Anyone watching would assume this is a defect of the free market one must live with or tolerate government intervention.

That’s the opposite of the truth.

First, as Murphy said, the U.S. economy is not remotely a free market. I would add that it hasn’t been since at least the New Deal, when a fundamental, constitutional change took place.

No longer is economic activity regulated solely by laws passed by Congress and signed by the president. Instead, a plethora of executive branch bureaucrats write enforceable regulations which are at most overseen by a Congressional committee, but which largely bypass the adversarial process of passing a law per the Constitution.

These agencies don’t merely protect property rights but instead micromanage the way businesses are run for all sorts of ends, legitimate and otherwise. This adds cost, stifles innovation, and inevitably succumbs to regulatory capture. All of these effects tilt the playing field towards larger firms and away from smaller or new competitors.

Monetary inflation and bailouts also contribute to the problem. Pool says that large firms like Blackrock pay far more than the market price “because they can.” But how can Blackrock afford to give away its wealth?

If Blackrock pays $230,000 for a house worth only $200,000 (Pool’s example), they have transferred $30,000 in wealth from themselves to the seller of the house. The seller has gained $230,000 in cash while Blackrock has gained only $200,000 in real estate.

That the property in question may appreciate enough to overcome such a loss is completely the result of monetary inflation. Houses are depreciable goods. They wear out and are eventually torn down and replaced. In a free market, the price of a house should go down over time (all other things being equal*), just like the price of an automobile.

Conversely, honest money appreciates over time. It is the natural tendency for prices to fall as society produces more output with the same or less inputs. That’s why prices fell over the course of the 19^th century under various iterations of the gold standard. It is only monetary inflation that causes prices to rise even as society becomes more productive.

With an honest monetary system, it would not be profitable for any firm, no matter how big, to buy houses at prices well above their market value. Doing so would make the firm poorer over time and those it bought the house from richer – precisely the opposite result of the big firm “owning everything” and the common folk “owning nothing.”

But even with our present monetary system, under which real estate prices are bid up to absurd levels during inflation-infused bubbles, there are inevitable busts. When those occur, any firm that acquired substantial real estate holdings at inflated prices should go bankrupt, its assets turned over to new owners in bankruptcy court. However, for the past several decades, this market result has increasingly been overridden by “too big to fail” bailouts. It didn’t start with the 2008 financial crisis; the 1979 Chrysler bailout and 1998 Long Term Capital Management bailouts are notable previous examples.

Bailouts don’t just encourage reckless behavior; they reverse natural market outcomes. If not for the 2008-9 TARP bailouts, the country’s largest firms, including Goldman Sachs, Citibank, Bank of America, and others would either have gone bankrupt or been significantly downsized. Smaller firms that didn’t engage in irresponsible behavior would have acquired their assets, their market share, or both. That would have been the free market result.

Incidentally, while Blackrock itself was already a big player in financial markets before the 2008 crisis, it only became the behemoth it is today by first encouraging its clients to purchase the toxic mortgage-back securities at the center of the meltdown and then becoming the Federal Reserve’s partner in bailing out those same firms. That cosey relationship has continued right through the current “Covid-19” economic crisis.

In other words, nothing about Pool’s scenario represents a market result and anti-trust laws attempting to counteract it are the epitome of the government “breaking your leg and handing you a crutch.” Just as the welfare crutch brings with it little relief and all sorts of unintended, negative consequences, anti-trust laws typically result in consumers paying more for the same products and society becoming less productive overall.

Even more important, supporting the use of anti-trust laws against dominant corporations is a strategic blunder for anyone who believes in private property and free markets. Yes, they might be used to temporarily hinder large corporations whose behavior we don’t like. But getting the remnant who support freedom on board with this state intervention will forever set the precedent that even the most ardent supporters of laissez faire recognize the need for intervention under some circumstances.

The enemies of freedom think strategically. That’s why they’ve been winning for the past century or more. When the TARP bailouts occurred, there was a loud minority on the pro-market side saying, “let these corporations go bankrupt. Let the market work.” That those statements are a matter of record is a thorn in the side of the interventionists that they’d rather didn’t exist.

This time around, they would like nothing better than to have even the most uncompromising advocates for laissez faire on the record supporting anti-trust laws or other government interventions. That would take laissez faire off the table forever in terms of future debate regarding private property and freedom vs. central planning and state intervention.

Don’t give the central planners that win.

The answer to grotesque economic outcomes is not more government intervention. The answer is to allow for a market-based monetary system (repeal capital gains taxes on competing currencies like precious metals and crypto), prohibit future bailouts, and repeal the New Deal root and branch.

*A property far from convenient shopping, recreation, schools, and other amenities which later development provides nearby may appreciate in value overall even as the house itself depreciates, but this is the exception rather than the rule.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

If you’re really against fascism, repeal the New Deal root and branch

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fdr signing If there is one thing the American political right and left agree on, it’s that the other side is fascist. The left thinks Trump is Mussolini; the right points to Big Tech suppressing political dissent. We even have an organization that styles itself, “AntiFa,” its chief means for fighting fascism being to dress all in black and beat its political opponents with clubs.

We live in interesting times.

But for all the accusations of fascism, justified or not, no one ever makes mention of the overtly fascist institution that dominates a large part of our lives: the New Deal.

No, I don’t mean the Green one, proposed by democratic socialist Alexandria Ocasio-Cortez and others. I mean the now hoary, 88-year-old New Deal inspired directly by Mussolini’s fascism and praised both by Adolph Hitler and Il Duce himself.

This isn’t to equate the whole of Roosevelt’s governance to Hitler’s or Mussolini’s. But in economic terms, Roosevelt was in lockstep with the fascists.

Fascism rejected socialism’s government ownership of the means of production. For this reason, the left imagines fascism to be an extreme form of capitalism. It isn’t. Fascism was more anti-capitalist than it was anti-socialist, according to Mussolini himself.

As Mussolini wrote, “Fascism is definitely and absolutely opposed to the doctrines of liberalism, both in the political and the economic sphere…The Fascist State lays claim to rule in the economic field no less than in others.”

Fascism left business ownership in private hands, but at state direction. Business owners may have retained title ownership, but they largely produced what the state told them to produce, sold at prices dictated by the state, and made future plans based upon the needs and dictates of the state, rather than their individual interpretation of market signals.

FDR did precisely the same things under the pretense of fighting the Depression. The Supreme Court struck down a few of his worst abuses, but the fascist regulatory structure he built not only remains in place to this day; it continues to metastasize.

Fascism was also anti-democratic. It was “opposed to that form of democracy which equates a nation to the majority,” wrote Mussolini. Thus, the rules governing society, including economic activity, were made by an unelected bureaucracy taking its direction from a supreme leader who embodied the state and therefore the spirit of the nation.

The New Deal is similarly anti-democratic. Not only does it transfer myriad decisions previously made by private business owners to the government; it allows those decisions to be made by unelected bureaucrats in the executive branch.

This unconstitutional transfer of legislative power from Congress to the executive was rationalized away by New Dealers and their SCOTUS enablers by drawing an arbitrary distinction between legislation and “regulation.” This is dishonest. Whenever government officials write enforceable directives that either require or prohibit human action, they are legislating, no matter what those written directives are called.

These regulations are presented to the public with benign motivations like safety and fairness, just as Mussolini posited his fascist state, “concentrates, controls, harmonizes and tempers the interests of all social classes, which are thereby protected in equal measure.”

In effect, they amount to the government dictating the minute details of business operations to the owners.

This has several deleterious effects. First, it stifles creativity. Enforcing compliance with hundreds of thousands of regulations naturally tends towards all businesses being run the same way. Revolutionary improvements like the assembly line and mass production could never have occurred under the New Deal.

Who knows what innovation has been stifled since?

Second, all this compliance has a cost, which is much more easily borne by large firms than small ones. As time goes by and the regulatory burden gets heavier, the advantage of large firms over small widens. This has the effect of promoting consolidation and elimination of marginal producers.

In a laissez faire market, there is always a natural tension between large firms with economies of scale and smaller ones that can adapt more quickly to changing market conditions. Both the cost burden of regulation and its stifling of innovation neutralize the strengths of smaller firms and tilt the playing field dramatically towards large ones.

Yet, ironically, the New Deal is most staunchly defended by progressives who claim to oppose big business and support “the little guy.”

Third, the New Deal inevitably leads to what we now call, “regulatory capture,” meaning the large corporations themselves writing the regulations that govern them. When the government’s job is merely to prosecute crimes and referee civil actions, it can be accomplished by competent attorneys. But when the government aspires to regulate the minute details of business operations, it requires in-depth knowledge of the regulated industries, including understanding of sophisticated machinery and other technologies, supply chains, specific market conditions, etc.

Only an industry insider can provide that level of expertise. And so, the government must go to these insiders for recommendations on how to make their own industries “safer,” “fairer,” etc. Naturally, the government will turn to the largest firms, understood to be the most efficient, and who also have the money to lobby.

Anyone truly committed to ridding America of fascism should concern themselves less with what politicians they don’t like say or post on social media and instead support repealing the New Deal root and branch.

Tom Mullen is the author of It’s the Fed, S tupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

The government can’t make realities like scarcity go away

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magic Whenever I point out the predictable (and often predicted) negative consequences of a particular government intervention, someone will invariably come back with, “Oh yeah, what’s YOUR solution, smartypants!”

Like that’s some sort of zinger.

In almost every case, the inquisitor is looking for me to propose an alternative government solution, when the obvious recommendation implicit in my post was, “Stop letting the government…”

No matter how high the past failures mount up (drug war, education, health care, war on “terror”), they’re always ready to call in the government again.

It’s almost as if they can’t confront the reality that, as the great John Bender put it, “The world is an imperfect place; screws fall out all the time.” They are constantly looking for someone, usually a politician, to wave a magic wand and make realities like scarcity go away.

How many examples will it take? How many thousands of repetitions do they require before every day isn’t their first day?

What would it take for people like this to acknowledge:

1. Some problems can’t be solved. We just have to learn to live with them.

2. In a world of scarce resources, the voluntary cooperation of the market always produces the best outcomes.

3. In that same world, the government always produces the worst outcomes.

Freedom is impossible without confronting reality.

When the Coronavirus Shutdown is over, will anyone blame their governments for the economic devastation they caused?

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The Dow and S&P 500 were both down nearly eight percent, the largest drop since 1931 according to data from LPL Research. FULL CREDIT: Fotosearch/Archive Photos/Getty Images

The expectation that governments (local, state, federal) allowing people to go back to work in a few weeks or a month will mean the economy will immediately be just like it was in January is delusional.

Long-term and permanent damage is being done. Some businesses will close. Some will never rehire all the staff they once employed.

Risk aversion will skyrocket because there is no reason to believe governments won’t do this again in the future, perhaps perennially over less and less significant threats.

Would you put your life savings into a business knowing the government might close it down indefinitely next flu season?

Will anyone bother to track the increased suicide and drug overdose rates caused by massive unemployment?

Will anyone bother to track the increased mortality rates of other illnesses untreated, either during the shutdown or because of the government-inflicted economic depression after it?

Will anyone question the wisdom of previously allowing the FDA to limit competition in drugs and medical supplies (face masks, ventilators, etc.) resulting in shortages when we needed them most?

Will anyone point to these and other obvious negative consequences of government policies and not ask for more government to address them?

In other words, is there any chance we emerge from this epidemic bearing any resemblance to a relatively free and prosperous society?

‘Inflation is low’: The Federal Reserve’s Scam of the Century

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MW-HG082_jay_po_20190321070916_ZQ In the wake of the federal government’s $2 trillion fiscal monstrosity and the Federal Reserve’s even more monstrous promise to create new money and credit with no limit whatsoever, it is a good time to reiterate a point I’ve made before: the claim that “inflation” has been low over the past ten years is a scam.

No, I’m not talking about the real definition of “inflation” being the creation of new money and credit, rather than the resulting rise in prices. Nor am I merely claiming the inflation rate is underreported due to all the tricks played with the numbers (hedonic adjustments, substitution, etc.).

I’m saying the claim that prices are not higher because of all the previous quantitative easing is a bald-faced lie. It represents perhaps the biggest gaslighting of an entire population in human history. And because it’s been so successful, the Fed is about to do it again.

The Fed reports the consumer price inflation rate over the past ten years as ranging from about 1.5% to 2.4%, not counting a few outlying years. The average from 2010 – 2019 was 1.77%. The Fed then tells us that low number proves its massive inflation of the currency during the last decade “hasn’t resulted in inflation,” by which they mean a rise in the price of consumer goods. But it has.

The key to this deception is its false premise: that one should compare the prices of goods and services this year to what they were last year. That’s the wrong comparison.

The correct comparison would be between what prices are today vs. what they would be without quantitative easing. Perhaps they wouldn’t be higher at all. Perhaps they would be lower.

Perhaps they should be lower.

Obviously, we don’t get to do a controlled experiment where we relive the past ten years with the Fed’s printing press shut down. But we can look at other factors influencing prices and draw some reasonable conclusions.

One major factor is automation. Donald Trump got elected largely based on his claim that unfair trade deals have destroyed American manufacturing, sending manufacturing jobs overseas. This may play well with unemployed Rust Belters, but there is one problem: American manufacturing hit its all time high in 2007, long after NAFTA and long before Trump got into politics.

It wasn’t trade deals that took away the jobs; it was automation. That means the American economy is producing far more manufactured goods with far fewer people. And this trend isn’t limited to the manufacturing sector. It is ubiquitous across the economy, from robots in warehouses to automated kiosk ordering in fast food restaurants.

So dramatic has been this trend that another presidential candidate, Andrew Yang, campaigned on the idea that we need a “universal basic income” because of all the jobs being eliminated.

Yang’s argument rests upon an old fallacy, but one thing is certain: Automation represents a huge deflationary force on consumer goods prices, as does a host of other trends like ever more powerful computing capabilities, web retail replacing brick and mortar stores, etc.

For these reasons and others, GDP has continued to rise, albeit modestly, during the mass retirements of the baby boomers. So, the increase in total goods produced combined with the decreased demand represented by retiring baby boomers should result in falling consumer prices.

Instead, the Fed’s QE and other monetary inflation interventions – injecting massive amounts of new dollars into the economy – have overcome massive price deflationary forces to make consumer prices rise modestly when they should have been falling.

Falling prices raise real wages, even when nominal wages don’t rise. To put it in topical terms, if the price of toilet paper falls from $2 per roll to $1 dollar per roll, you can buy twice as much toilet paper without getting a raise. Ditto consumer goods in general.

The Fed has a whole story about why falling prices would be catastrophic. But falling prices are what naturally happens as society produces more per capita.

Don’t believe me? Take another look at the Fed’s inflation table, this time from 1800 – 1899, most of which time the U.S. was on a gold standard.

If you make a spreadsheet multiplying a basket of goods costing $100 in 1800 by the inflation rate each year, you’ll see something quite startling.

Nevermind, I did it for you.

That’s right. Prices fell dramatically over the course of the 19^th century. A basket of goods that cost $100 in 1800 cost only $48.94 in 1899. That means one could buy twice as much with the same wages in 1899 as one could in 1800.

Falling prices are the natural result of a more productive economy. But as the Fed’s inflation table also shows, it has always overcome this natural tendency and made prices rise (the Fed was created in 1913). That same basket of goods that fell from $100 in 1800 to $48.94 in 1899 cost $1,498.45 in 2019. It should have cost something like $24.00, or even less considering accelerating innovation.

Yes, monetary inflation eventually raises wages, too, but always more slowly than it raises consumer goods, making wage earners poorer while the beneficiaries of inflation – mostly in the financial sector – get richer.

Get it yet? You’re being ripped off on a massive scale. You’ve been ripped off by the monetary system your whole life as automation and other innovations allowing society as a whole to produce more goods and services should have made prices fall even faster than usual.

You’ve been had. And now the Fed is going to use its disinformation about consumer prices to take you again.