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A Modest Proposal for Interposition

So, the Tea Party Congress is seated and the “revolution” is underway. After voting to repeal Obamacare, a largely symbolic gesture that has no hope of passing in the Senate or overturning a presidential veto, the new Congress has outlined its plan to attack the federal deficit. The result: A proposal to cut $100 billion in “non-defense discretionary spending.” While that may sound like a lot of money to someone who hasn’t taken a gander at the federal budget in about 50 years, it amounts to a little under seven percent of this year’s deficit.

That’s right. Seven percent of the deficit, not the budget. In other words, the tea parties, the stormy town hall meetings, the supposed “mandate from the people” to cut the size and scope of the federal government will result in the government spending $1,380 billion more than it collects in taxes this year instead of $1,480 billion more. Worse yet, the same people who “stormed the Bastille” and threw the former bums out will defend this proposal with half-hearted panaceas like “you have to start somewhere.”

However, if history has taught us anything, it is that this isn’t “just the beginning,” with more substantial cuts to follow. This will be the high water mark as far as reduction in government spending is concerned. We should expect that by the time that this proposal goes through the process of back room deals and compromises with special interest-motivated committee members, that the $100 billion number will be reduced by at least half, perhaps more. They may even end up increasing federal spending. Would anyone honestly be surprised?

It has been obvious for at least a century that “throwing the bums out” doesn’t make a lick of difference in the behavior of our elected officials. Now we know that staging protests, waving signs, raising a ruckus at town hall meetings, and then throwing the bums out doesn’t make a difference either. Clearly, it is time to stop doing the same thing over and over again and expecting a different result.

The nullification movement has been decried by the left as right wing extremism at its most dangerous, despite the fact that it was conceived and introduced by Thomas Jefferson, the father of the Democratic Party. However, I have a proposal that I believe both conservative and liberal Americans would find very reasonable. There is a way to use the idea of state interposition to force the Congress to at least listen to its constituents. Let’s put the idea of interposition together with another of Jefferson’s ideas, drafted by him in a resolution of the Continental Congress in 1775 in response to Lord North’s Conciliatory Proposal.

“That this privilege of giving or of withholding our monies is an important barrier against the undue exertion of prerogative, which if left altogether without our control may be excercised to our great oppression; and all history shews how efficacious is its intercession for redress of greivances and reestablishment of rights, and how improvident it would be to part with so powerful a mediator.”

Let me be clear. As opposed as I am to all taxation, I am not suggesting that one dollar be cut from the existing tax schedule for 2011. What I am suggesting is that the people exercise their right to withhold their taxes until the Congress does what the people have clearly mandated them to do – balance the budget. A seven percent cut in the deficit just isn’t enough and we are running out of time. We can argue later about the role of government and the wars in the Middle East and Social Security and the rest. Right now we have to take away this Congress’ ability to borrow any more money or we’re going to be in the same boat as Greece.

I am not calling upon people to exercise civil disobedience or rebel. The stakes are high in either of those endeavors and we have other options. I am calling upon people to utilize their state legislatures to support them in withholding their taxes until a balanced budget is passed by Congress. As much as I’d personally like to see them withhold their tax money permanently, they would then release the funds to the federal government.

This would be accomplished in the same way as several other recent nullification/interposition efforts. The state legislatures would pass a law indicating that no person or business in their state could be prosecuted or fined by the federal government for failing to file an income tax return or failing to pay their quarterly payroll tax deposits, so long as said filings and payments were made within sixty days of the Congress passing a balanced federal budget. For those who still trust the people less than they do the government, a stipulation could be added that the funds go into escrow and be audited by the states, if necessary.

This would accomplish two things. First, it would reestablish exactly who works for who in this relationship. Obviously, elections have failed to do that. More importantly, it would work. The blind fear that would grip our legislators when they realize that the party is really over would at least scare them sober enough to balance what would still be an over $2 trillion budget. While it wouldn’t solve our long-term problems, that truly would be a start.

Bloated governments are imploding all over the world and ours is poised to do likewise for all of the same reasons. Now that we have seen what “extremism” really looks like in Greece, Egypt, and Tunisia, this proposal should strike any rational person as reasonable and moderate. We do not need a rebellion or violence to balance the federal budget – just a little adult supervision.

Check out Tom Mullen’s hit book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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You’re On Your Own

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There are no end of commentaries on the recent murders in Arizona, resulting in the usual debates. Pundits argue over whether there should be stricter gun laws, whether talk radio, the movies, or “extremism” contributed to the tragedy, and, most obtusely, what the government should do to prevent a similar incident from occurring again. What is lost is the fact that this tragedy provides yet more proof of something that has been demonstrated to Americans repeatedly over the past decade. The government cannot protect you from the harsh realities of life.

Most people are good people, most of the time. Under normal circumstances, most people would rather cooperate with their fellow human beings in order to achieve their goals rather than steal from them or kill them. However, some people, at least some of the time, do not “live and let live.” During every moment that we are alive, someone somewhere is committing a crime. Someone is experiencing hardship, whether due to their own bad judgment, laziness, or just plain bad luck. Worst of all, someone is planning to commit an act of violence. These truths are confirmed by all of human history.

What is unique about the time that we live in now is the extent to which people believe that the government can shield them from these challenges. Never has a society had such high expectations of their government to ensure their security – both personal and economic security. The early 21st century is truly a high-water mark in terms of belief in government to eliminate all risk from the game of life. Over and over, we are offered proof of how foolish this misplaced faith is.

On 9/11/2001, a group of insane fanatics defeated what was at the time the most sophisticated security apparatus in human history and perpetrated heinous crimes against thousands of innocent civilians. The government failed to prevent this crime. The one set of murderers that was not successful was thwarted by private citizens acting on their own. They did not save their own lives, but saved the lives of hundreds, possibly thousands, of others. Our response to this outcome was to give the government more power and private citizens less liberty and privacy.

A few years later, another unbalanced individual tried to blow up a plane with explosives concealed in his shoes. He, too, had defeated the by that time even more powerful government security apparatus and was thwarted by private citizens. Our reaction to that incident was identical.

Last year, the pattern repeated with the so-called “underwear bomber.” The government failed and private citizens thwarted the killer. Again, more power was given to the government and more liberty stolen from the people. We are now allowing ourselves to be photographed naked and physically violated by the government in the hopes that the next time the results will be different.

In 2002, a deranged man walked into the Appalachian School of Law and began shooting students and faculty. There were no police on hand when the shooting started. This is not meant as a criticism of the police. It is unreasonable to expect that there will be an officer present whenever a random act of violence occurs. In any case, when the shooting started, two private citizens ran to their cars and retrieved their firearms. They confronted the shooter, forced him to drop his weapon, and tackled him to the ground. He was eventually arrested and prosecuted.

However, the fact that private citizens bearing firearms had prevented further bloodshed was omitted in the media coverage of the incident. Following the familiar pattern, the government was given more power and private citizens lost more of their liberty. Stricter gun controls were enacted in Virginia. A few years later, with campuses forced by law to be “gun free zones,” the victims at Virginia Tech were powerless to resist.

Luckily, this latest incident in Arizona did not take place on a college campus, an army base, or any other “gun free zone.” The brave man who tackled the shooter in Arizona said that he was not afraid to do so “because I was armed.” More importantly, this was another example of private citizens defending themselves and their neighbors. The police arrived after the shooter was subdued and fulfilled their proper function in a free society – to arrest the person who had committed the crime.

The repeated failure of government to protect us from the uncertainties of life is not limited to violent crimes. Over and over again, we have looked to government to provide us with economic security and have been similarly disappointed. We sanctioned its war on poverty and got more poverty. We allowed its central bank to loot our wealth in the hopes that it would prevent recessions and inflation and we got more severe recessions and more rampant inflation. We let the government bail out corporations to save jobs and restore economic growth and we got higher unemployment and less new businesses.

As with personal security, our reaction is to reward these failures with more power for the government. More wealth redistribution. More power to the central bank (but I repeat myself). More bailouts. Consistent with the pattern, the only economic security we get comes from private individuals cooperating voluntarily with each other to create new products, new industries, and new opportunities for those seeking work.

In a free society, the government should never be charged with preventing anything. The very definition of the word “prevent,” when used in relation to government, is a repudiation of liberty. Since government is nothing more than the societal use of force, it cannot prevent anything without initiating force against the innocent. The whole idea that someone is “innocent until proven guilty” assumes that the government is not allowed to act until after a crime is committed. Force must be initiated by one party or the other. Until a criminal commits his crime, he is innocent. To apply force against him at that point is a crime itself. Moreover, since we do not know who will commit the next crime, the government can only attempt to prevent it by initiating force against everyone. This is the trap we fall into by relying on government to prevent hardship in our lives.

If liberty and the state can coexist, the state’s role must be a retrospective one. It must only be allowed to act when one human being has committed aggression against another. This applies to crime, economics, safety, and foreign policy. At one time, the United States did not go to war unless the president could convince Congress that direct aggression had already been committed against the United States. If you doubt that, read the requests for a declaration of war made by Madison, Polk, McKinley, Wilson, and Roosevelt. Read the subsequent resolutions by Congress to declare war. In each case, those documents demonstrate the principle that military action by the government is not justified until aggression has been committed by the other nation.

This might prompt some to respond that in order to be free, we must relegate ourselves to being victims, or “sitting ducks,” able to act only after it is too late. This is a false assumption, rooted in a failure to recognize one undeniable fact of our existence. As far as the preservation and security of our lives is concerned, we are all on our own. No government, no matter how powerful, can assume the responsibility we each have to defend our lives and determine our own destinies. We can allow the government to rob us of our liberty, our property, and our privacy. We can create the kind of police state previously relegated to dystopian fantasies like 1984 or V for Vendetta. Even then, the government will fail – and then ask for more power as a reward for its failure. Must it come to that before we acknowledge the obvious?

Check out Tom Mullen’s book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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Jesus Christ, Libertarian

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“Then the scribes and the Pharisees brought a woman who had been caught in adultery and made her stand in the middle. They said to him, “Teacher, this woman was caught in the very act of committing adultery. Now in the law, Moses commanded us to stone such women. So what do you say?” They said this to test him, so that they could have some charge to bring against him. Jesus bent down and began to write on the ground with his finger. But when they continued asking him, he straightened up and said to them, “Let the one among you who is without sin be the first to throw a stone at her.” Again he bent down and wrote on the ground. And in response, they went away one by one, beginning with the elders. So he was left alone with the woman before him. Then Jesus straightened up and said to her, “Woman, where are they? Has no one condemned you?” She replied, “No one, sir.” Then Jesus said, “Neither do I condemn you. Go, (and) from now on do not sin anymore.” (John 8: 3-11)

As we approach the new year with conservatism again ascendant in the political sphere, this story of Jesus’ uncompromising libertarianism seems even more timely than stories of his birth, despite the approach of his celebrated birthday. Nowhere does Jesus admonish “social conservatives” more harshly.

There is an important distinction here. By “social conservative,” I do not mean anyone who disapproves of certain human behavior. The freedom to follow the dictates of one’s conscience was the first inalienable right recognized by the founders of our nation. If one truly believes that homosexuality, adultery, or other “non-conservative” behavior violates the laws of God, it is that person’s inalienable right to disapprove of it, even to voice his disapproval of it, regardless of the anguished cries of the political correctness lobby on the left.

However, no one has a right to use violence against those who engage in behavior that does not harm another person, regardless of whether or not that behavior violates the laws of God. Since all laws are enforced under the threat of violence (as this story illustrates wonderfully), Jesus makes it clear in this passage that it is not for men to enforce the laws of God. With the exception of cases in which one human being has done injury to another, the right to punish human behavior is reserved for God.

It is important to recognize that Jesus does not condone the sin that the anonymous woman has committed. When he has shamed away the mob who would have stoned her, Jesus commands her to sin no more. Neither does he insinuate that her behavior might not have consequences for her soul. With flawless libertarian reasoning, Jesus teaches us the true meaning of freedom: that God grants us the liberty to do as we wish, even to reject him and his laws, but that we also bear the full consequences of our actions. If we harm another person, then we are subject to the laws of men. However, it is otherwise left to each individual to determine the will of God according to his conscience and to choose whether to act accordingly or not. There never has been nor can there ever be any body of corruptible men who can save an individual’s soul.

Read the rest on LewRockwell.com…

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.

Progressives Should Target the Real Robber Barons

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The political winds have shifted wildly over the past four years. After decisive defeats in both the 2006 and 2008 elections, the Republican Party’s prospects seemed dreary. There was widespread talk of how the party needed to “remake itself.” There was even speculation from some quarters that it would fade from influence permanently, as had its predecessors, the Whigs and Federalists. Certainly, the conservative movement needed a rallying point in order to regain a foothold upon public sentiment.

That rallying point was public aversion to the radically socialist agenda of Barack Obama and the Pelosi Congress. Regardless of whether the Republicans had any new ideas to offer, they were able to remake their image quickly by jumping aboard and partially co-opting the Tea Party phenomenon. Somehow, they have again established themselves in the minds of most Americans as the party of small government, free markets, and individual liberty, their consistent behavior while in power notwithstanding.

Now, it is the Democrats who find themselves on the wrong end of a one-sided mid-term election defeat, with more of the same looming over the 2012 presidential elections. As much as the 2008 elections were a repudiation of George W. Bush and all associated with his philosophy, 2012 will be a repudiation of Obama and all associated with his. If the modern “conservative” philosophy had been thoroughly discredited two years ago, the modern “liberal” philosophy has been annihilated this year. Nothing that Democrats won on in 2006 and 2008 is going to fly with voters right now. The left needs a rallying point that will resonate with voters and make them forget why they voted them out of office just two years earlier, just as those same voters forgot why they had voted the Republicans out merely two years before the 2010 mid-terms.

If they are not to completely abandon their image as champions of the poor, disadvantaged, and working class against the power of the wealthy elite, they must find a way to restore that perception in the minds of voters without associating themselves at all with socialism, which average Americans have quite obviously choked on and spit out over the past two years. They need their own avenue to tap into the Tea Party phenomenon, or a grass roots movement like it, and appear as the party fighting for the people against a federal government run amok. Their traditional anti-corporate, pro-welfare platform won’t work. For better or worse, Americans right now associate corporatism with the free market and aversion to welfare programs has never been more ascendant. However, there is a rallying point available to the left that is completely consistent with the modern progressive philosophy and which conservatives are completely ignoring.

The left’s political dominance during the 20th century all began with the early progressive movement, which was given its first life under Republican presidents Teddy Roosevelt and William Howard Taft. However, it was the “new freedom” promised by Woodrow Wilson which established and defined the progressive platform, subsequently advanced in great strides by FDR and Lyndon B. Johnson. A core tenet of this philosophy was the need to protect “the little guy” against the robber barons of capitalism – which the progressives successfully defined in the minds of voters as anyone of great wealth, whether they have achieved that wealth legitimately or not.

Indeed, the tragic aspect of the early progressive movement was that they lumped together all successful business people as plunderers and exploiters of the working class, thus discrediting free market capitalism along with the crony capitalism that was as rampant at the time as it is now. Along with corrupt railroad companies that soaked the people for corporate welfare, only to deliver shoddily constructed railroads that all went bankrupt, the early progressives also targeted companies whose success was due to superior products and lower prices, with their profits earned from consumers voluntarily choosing to buy their products.

John D. Rockerfeller’s Standard Oil was one such example. His company was dismantled by the government after more than two decades of offering the public higher quality oil at lower and lower prices. Instead of holding him up as an example of what a truly free market could achieve for the common man, the left attacked Rockerfeller as the definitive robber baron, regardless of facts to the contrary. With his company dismantled by the government, Rockerfeller abandoned the free market and became the robber baron he was wrongly accused of being. He decided to get into banking.

This is not to repeat the mistake of early progressives. All bankers in the 19th and early 20th century were not robber barons, nor is banking a de facto dishonest profession. Like any other business, it offers a service of great value to the public when that service is voluntarily purchased by consumers. When consumers choose to store their savings in a bank or allow the bank to invest their savings by loaning it out at interest, the banks that most conscientiously and wisely protect their depositors’ interests will prosper the most. Those that make good loan decisions will be able to pay higher interest rates to depositors and provide more stability. In a truly free market, they will win, because they benefit average Americans – the political base of the progressives – the most.

However, this is not the banking model that John D. Rockerfeller helped found in 1913. Rockerfeller was no longer interested in competing on a level playing field and relying on talent and hard work to make his fortune. He had already done that successfully and had been plundered by the government for his trouble. He was not interested in being victimized again. This time, he would be the plunderer. Along with J.P. Morgan, Rockerfeller sent a delegation of men to Jekyll Island in 1913 to devise the mother of all robber baron schemes – the Federal Reserve System.

The Federal Reserve System is the most ingenious fraud in human history. It appeals to the right because it is seen as an institution of capitalism. It appeals to the left because it is seen as a regulator of the financial system that protects the little guy from the supposedly violent machinations of unregulated capitalism. In the meantime, it funnels trillions of dollars of plundered wealth to politically-connected corporations at the expense of average Americans and those corporations which still actually prosper because they offer superior benefits to the public.

Without getting into what really goes on behind the scenes at the Fed, let us consider what the Fed purports to try to do. Ninety-seven years of results notwithstanding, the Fed supposedly regulates the market by maintaining both full employment and price stability. The left supports this agenda because its constituency depends upon jobs and affordable consumer goods in order to survive. They never stop to think about how the Fed attempts to accomplish these goals.

The Fed attempts to maintain full employment through inflation. Inflation is properly defined as an increase in the supply of money and credit, not an increase in consumer prices (more on that in a moment). During periods when unemployment is higher and overall economic growth is lower, the Fed attempts to stimulate investment in new business ventures or expansion of existing ventures by “lowering interest rates.”

However, Mr. Bernanke cannot lower interest rates with a fiat command. Instead, the Fed manipulates the interest rate by buying large quantities of U.S. Treasury bonds from its member banks. This artificially increases the demand and lowers the supply of U.S. Treasuries. It also artificially increases the supply of money available to be lent in the market. With more money available to be lent, banks offer loans at lower rates than they would if money were in shorter supply. With lower rates, more businesses take out loans with which to expand or start new ventures. At the end of this chain of events, more average Americans supposedly get hired in order to support the new business activity that has been “stimulated” by the Fed’s monetary expansion.

Taking the Fed at its word, there is still a rub to this story. The magic described above and in the Fed’s press releases does not come without a cost. The money and credit infused into the economy during this process does not come from any “reserve” that is held by the public or by the privately-owned Federal Reserve. It is created out of thin air by the Fed, which enjoys this privilege as a result of legal tender laws and the Federal Reserve Act. By increasing the overall supply of dollars in the economy, this monetary inflation drives up the price of consumer goods.

It also causes capital to be misallocated, meaning that working people are hired for projects that are not ultimately going to succeed. This inevitably happens much more frequently when banks are able to loan “free money.” When they must convince depositors to invest their own money in loans the bank wishes to make, they are forced to make much wiser choices with that capital than when the money is simply created out of thin air and handed to them, with more fiat money forthcoming if they should make a mistake. In fact, a true understanding of the economics behind monetary inflation reveals that misallocation – economic booms and busts – are inevitable when monetary inflation is allowed to take place.

Progressives should automatically be suspicious of this whole charade simply because Wall Street loves it. Whenever the Fed makes an announcement that it will attempt to lower interest rates, the stock market immediately goes up. Of course it does. Cheap money hitting the market allows investors to get in on ground floor companies and pump up their stock value with newly-created money, subsequently bailing out long before the bust occurs. When the reality hits the market that half of these new companies had no viable business plan, the stock prices collapse and the ventures go out of business and lay off their employees. This is a recession. Average Americans are unemployed while the sharks who gobbled up the cheap money to pump and dump the stocks are sitting on a beach, enjoying the fruits of their heist.

Furthermore, while monetary inflation causes prices of consumer goods to rise for everyone, it is really average Americans and the poor who are most affected by it. When the price of gasoline rises to seven dollars per gallon, the Wall Street elite have lost purchasing power in terms of the dollars they hold, but they more than make up for it during the economic booms. Millionaires become billionaires, negating the effects of a further devalued money supply, while average Americans living paycheck-to-paycheck start looking for second jobs just to pay their rent and fill up their gas tanks to get to work.

However, the most compelling reason for progressives to oppose the Federal Reserve System is because of what it openly admits it represents. Taking the Fed and its supporters at their word, the Fed is nothing more than a subtler, more devious version of “trickle-down economics,” whereby large corporations receive huge sums of money in the hopes that they will then create jobs for the little guys. There is absolutely no difference between this argument and the “Reaganomics” of the 1980’s. Any self-respecting progressive who opposed Reaganomics must oppose the Federal Reserve System. If they are not strictly opposed to government redistribution of wealth, they certainly are opposed to redistributing from the middle class and poor to Wall Street. That was the whole principle upon which the movement was founded.

There is no reason that the left should concede the Tea Party movement to conservatives. It is not fundamentally a Republican phenomenon. It is just that the Republicans are the only party that has been able to adapt their rhetoric to what the Tea Party demands to hear. The Tea Party is rediscovering America’s founding principles. However, their perceptions are being skewed toward the conservative founding philosophy that advocated corporate welfare, a large military establishment, and a central bank to provide the necessary capital – plundered from average Americans. They quote Jefferson but are deceived into supporting policies consistent with his political arch-enemy, Hamilton. They need to hear from the left on what they are missing, instead of being vilified by the left as kooks.

The true American philosophy of free enterprise as expressed by the liberal Jefferson was completely opposed to the central bank of the time, recognizing it as incompatible with the free market and wholly a vehicle for big business to plunder the people. These ideas have been dead and buried for an entire century while the Fed has been allowed to wreak its havoc with impunity. They are ripe for rebirth within the Tea Party, which would embrace Jefferson’s ideas about the dangers of central banking as readily as they do his warnings about big government. There is a strong populist undercurrent in the Tea Party. Progressives are ignoring it at their peril.

Never in its existence has the Fed been under such scrutiny in the media as it is now, nor the subject of so much public opposition. It is a grassroots fire smoldering beneath the surface, waiting for someone to strike a match. To liberals and progressives everywhere, don’t let the conservatives snatch this opportunity out from under your noses. Take up your fight against the real robber barons – the Federal Reserve System and all of its beneficiaries.

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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The Government Can’t Create Jobs (And It Shouldn’t Try To)

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As the November elections approach, politicians are doing what politicians do best: making promises. President Obama’s anti-business image, justified or not, will not score points with voters this year as unemployment continues to court 10% on the government’s math and 20% in the real world. With these figures virtually unchanged since he took office, the president has been unable to sell the idea that his economic policies have created any jobs. So, he is doing the best he can with the hand that he has dealt himself and trumpeting the millions of jobs his policies have “created or saved.” In addition, he has rolled out yet another boondoggle from the Keynsian toolbox in the form of a $50 billion infrastructure package designed to stimulate the economy and finally create some actual jobs.

Meanwhile, the Republicans are gearing up for what should amount to shooting fish in a barrel in the coming mid-term elections, getting incredible traction on criticizing Obama policies which largely mirror those of George W. Bush, for which he and the Republicans were tossed out of office just two years ago. They correctly point out that Obama’s policies haven’t created a single job. Americans must put them back into office or face economic Armageddon. Polls show that Americans are largely buying what the Republicans are selling, having apparently forgotten the “jobless recovery” of the early part of the last decade, which occurred while the Republicans controlled the White House and both houses of Congress.

The truth is that neither the Republicans’ “supply-side economics” nor the Democrats “demand-side economics” have ever really created any jobs. Certainly, the housing boom successfully put some people to work in the homebuilding industry for a few years. However, when that bubble popped there was nowhere for those people to go. The Democrats’ success seems to have been limited to the 600,000 or so people that took jobs with the census bureau. Unfortunately, the demand for people counting won’t sustain a census-driven recovery. Obama’s latest act of political desperation isn’t getting much traction with anyone – even liberal talking heads are finding it hard to get behind another supposed “infrastructure” program, especially one that pales in comparison (in terms of dollars) to the American Recovery and Reinvestment Act, which was long on investment and short on recovery.

So, if neither supply-side nor demand-side economics work, if neither the Republicans nor the Democrats have a program that will actually create jobs that will outlast the average car loan, where else can we look for an answer?

Perhaps we should reconsider exactly what it is that we are asking the government to do. People of all political persuasions talk about “creating jobs” as if there were no question that the government should be trying to create them, the only question being what program will create the most jobs, the highest paying jobs, or the longest lasting jobs. This is just another in an endless series of false dichotomies that accompany every election year, when voters are served up a “debate” that is framed to include two undesirable alternatives, with no acknowledgment that there may be a third. On job creation, that third alternative is this: the government can’t create jobs, regardless of whether conservatives or liberals are at the controls, and moreoever, it shouldn’t try to create jobs.

Amidst the noise surrounding an election year, it is easy to forget the obvious. Before deciding what to do about unemployment, let’s answer a few fundamental questions. The first one is, “What is a job?”

A job is an agreement between a buyer and a seller that involves an exchange of private property. The buyer is the employer, the seller, the employee. The two parties reach an agreement wherein the buyer will purchase a specific service from the seller at a mutually agreed upon price. This simple fact does not change whether the employee is selling his services as a brain surgeon or a custodian. In each case, the buyer has a need for the seller’s services and the seller is willing to sell those services to the buyer if the buyer is offering the market price or better. The most important aspect of this transaction is that it occurs with the mutual, voluntary consent of both buyer and seller. This is the only way in which a job can be created.

When people are perfectly free to dispose of their labor as they see fit, including their unconsumed labor in the past (their savings or capital), there is a natural coordination in the labor and capital markets that results in people and resources being used most efficiently to meet the demand of consumers. People are not employed to produce products that consumers don’t want or can’t afford because employers are risking their own money and livelihoods and therefore must invest their capital (savings) in projects that will be profitable. Neither do most employers prefer to invest in temporary projects that will end in six months or a few years, because they would then have to take the risk of starting a whole new business. Neither employers nor employees are ever 100% correct, but for the most part they make the right choices because they stand to gain or lose personally based upon those choices. These natural market forces regulate the market, based entirely upon the voluntary choices of employers, employees, and the consumers who buy their products.

However, when the government attempts to create a job, all of these natural forces are removed. The market has produced no demand for the government-created job. In other words, no buyer has voluntarily agreed to purchase those services, because to do so under current market conditions would be unprofitable. Were it profitable to hire someone to do the government-created job, an employer would have done so voluntarily. So, the government steps in and forces the taxpayer to purchase those services against his will. In additional to violating the taxpayer’s rights, the entire coordination that existed between employer, employee, and consumer is disrupted.

A typical response to this argument from the left would probably revolve around how the profit motive and the greed of employers is what kept the person unemployed. However, this argument begs the question: Why were these greedy employers unable to make a profit from employing this person?

The answer is that the services of the employee were not demanded by employers because the products that would be produced as a result were not demanded by consumers. If consumers were willing and able to buy the products that the employer and employee would have produced together related to this job, then there would be no need for the government to create it. By overriding the choices of consumers and forcing them to purchase those services for the employer, the government not only engages in a theft, but causes vast resources to be devoted to producing products that no one will eventually buy. Thus, when the government “investment” in the job is spent, the job no longer exists. It generates no revenue on its own to allow it continue to exist.

To use one of the favorite buzz words of the progressive left, government-created jobs are unsustainable. They are all doomed to fail by their very nature because they attempt to set aside economic laws that cannot be set aside. Commerce cannot exist without voluntary choice. Government job programs attempt to override the choices of capitalists on what to invest in and the choices of consumers on what to consume. This is what produces millions of empty homes, food shortages born of miracle energy programs, and mass amounts of people unemployed. Worst of all, these programs destroy the capital that otherwise would have created real jobs that were demanded by the market. This is not because private investors are more noble creatures than government bureaucrats, but because their own livelihoods depend upon investing that capital wisely and profitably.

While it is easy to see how this argument applies to the government spending programs that are presently more associated with the Democrats, one should not forget that the Republicans’ ideas are no less wealth redistribution and no less destructive to the economy. Most arguments made by the Republicans involve targeted tax cuts that will either stimulate specific areas of the economy or merely leave more money in the hands of private investors in general. While this sounds like the exact opposite of what the Democrats are proposing, it is really just the same strategy dressed up in “free market clothes.”

In the present paradigm, where the supposedly free market is already distorted by a thousand government interventions and taxes are sky-high for everyone, decreasing taxes for a particular class of people is merely a back-door way to try to override the free choices of investors and consumers. If the cuts are targeted at specific industries, such as the oil industry, then more oil will be produced regardless of the true demand for oil by consumers. If the cuts are general in nature, then whatever that capital is invested in will be investment not by private decision but by government central planning.

One might ask, “How can this be?” Aren’t the investors spending their own money? Not really. The Republican plan never involves a reduction in spending to go along with reductions in taxes for the investor class. In fact, every Republican administration in the past forty years has increased government spending while cutting taxes, leading to large deficits that are funded by debt or inflation. This merely transfers the tax burden of that government spending to other taxpayers. In other words, the jobs “created” through supply-side economics are really funded by taxpayers – by present taxpayers through the loss of their purchasing power due to inflation or future taxpayers through government debt. This explains why the artificial booms accompanying Republican administrations never last either.

The only real answer to the economic malaise is to stop asking the government to create jobs in the first place. Real jobs can only be created by individuals agreeing to exchange their labor and capital by mutual, voluntary consent. The use of force cannot create a job any more than it can create freedom, either here or anywhere else in the world. Furthermore, it represents violation of the very rights that government exists to protect. Instead of voting for candidates that claim that they can create jobs, Americans should demand that government get completely out of the job-creating business in particular and central planning of the economy in general. Only a massive decrease in government spending, leaving capital in the hands of the people who earned it and allowing employers, employees, and consumers to make their own choices can stimulate true job creation. Anything else is just another government program that is destined to fail.

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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People Power Hour – WEUS Orlando Tom Mullen Interview 08/08/2010

Remarks to the Punta Gorda Tea Party July 3, 2010

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I would like to thank the organizers of the Punta Gorda Tea Party for giving me the opportunity to come here today and speak to you on this joyous occasion. I say “joyous occasion” because I suspect that everyone of you, like me, has at sometime in the past imagined that he or she was the only person in the world who understood that our liberty was in jeopardy, or who cared enough to do something about it. Yet, today, although the danger has never been greater, there is joy in my heart, as I hope there is in yours, because of what this movement has made plainly obvious: we are not alone! In fact, to paraphrase words attributed to Japanese Admiral Yamamoto after the attack on Pearl Harbor, I believe that those who would dare to attack our liberty have merely awakened a sleeping giant.

I would like to take just a few moments to reflect upon the meaning of that which we fight for, to share a few words from those who established this land of liberty, and to humbly suggest to you an idea to carry forward in this sacred fight. I want to start with the question that I began my first book with, which is, “What is freedom?”

234 years ago, a man named Jefferson answered that question for us. I would like to share a few passages from Mr. Jefferson’s favorite philosopher. This man’s writing was so important to Jefferson that he actually had a resolution passed that said,

“Resolved, that it is the opinion of this Board that as to the general principles of liberty and the rights of man, in nature and in society, the doctrines of Locke, in his ‘Essay Concerning the True Original Extent and End of Civil Government,’ and of Sidney in his ‘Discourses on Government,’ may be considered as those generally approved by our fellow citizens of this, and the United States.”

I share this with you not to make some theoretical or academic point, but because the ideas Jefferson refers to have the utmost relevance to the struggle we find ourselves in now. Let me read to you the opening words of the essay by John Locke that Jefferson cites:

“TO understand political power right, and derive it from its original, we must consider, what state all men are naturally in, and that is, a state of perfect freedom to order their actions, and dispose of their possessions and persons, as they think fit, within the bounds of the law of nature, without asking leave, or depending upon the will of any other man.”

“A state also of equality, wherein all the power and jurisdiction is reciprocal, no one having more than another; there being nothing more evident, than that creatures of the same species and rank, promiscuously born to all the same advantages of nature, and the use of the same faculties, should also be equal one amongst another without subordination or subjection…

You no doubt recognize that this was the source of those famous words, “We hold these truths to be self evident – which means that no proof is required, for these truths can be directly observed in nature – that all men are created equal, that they are endowed by their creator with certain unalienable rights.”

I wanted to read those passages from Locke because they contain a very important point. Our natural liberty is not the license to do anything we wish. We must exercise our will “within the bounds of the law of nature.” But what are those bounds? What is the law of nature?

Locke tells us. “The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions.”

So, natural liberty is the right to order our actions AND DISPOSE OF OUR POSSESSIONS as we see fit, as long as we do not harm another person in his life, health, liberty, or possessions. Libertarians today call this “the non-aggression principle,” but it is really the principle of natural liberty itself. It is the fundamental, founding principle of the United States. It is vitally important that the connection between liberty and non-aggression be understood, for it is upon this foundation that the limits on government power rests.

Jefferson confirmed this many times over the course of his life. Whenever he was asked about the role of government in a particular matter, he consistently applied the non-aggression principle. In a letter he wrote in 1816, he said, ““Our legislators are not sufficiently apprised of the rightful limits of their powers; that their true office is to declare and enforce only our natural rights and duties, and to take none of them from us. No man has a natural right to commit aggression on the equal rights of another; and this is all from which the laws ought to restrain him.”

Of religious freedom, Jefferson wrote, “The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbor to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg.”

On another occasion he wrote, “But rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law,’ because law is often but the tyrant’s will, and always so when it violates the right of an individual.”

There are many more quotes just like these that I could read, but the point is made. You may ask yourself, “what does this have to do with Obamacare or any of the countless other present incursions into our liberty?” The answer is this: the reason that Obamacare violates our liberty is because it violates the non-aggression principle, which is liberty.

Now, I want to stop here to draw a crucial distinction. Non-aggression is not pacifism. While the principle of liberty forbids us to initiate force, we have a right and a duty to defend ourselves with force, if necessary, against those who commit aggression against us. And so, in order to secure our rights, we delegate this individual power to government – making government the societal use of force. It is also crucial to remember that all government action is backed by the force of arms. When we make laws, they must be followed or he who breaks the law will encounter that armed force. This power comes from us, from each individual – from our right to use force in self defense. However, we cannot delegate a power to government that we do not possess individually, and so the limit on government power is the same as the limit on individual power: that force may only be used in defense against aggression. When government is kept within this limit, its people are free. When it goes beyond this limit, even if the intentions are good, it is initiating force against its people and we call this tyranny.

When one person steals the property of another, we employ the societal use of force – government – to compel that person to make restitution and to accept punishment for the crime. This is consistent with the non-aggression principle. We call this justice.

When a foreign nation attacks us, we employ our military to defend our lives and liberty with force against that nation. This, too, is consistent with the non-aggression principle.

However, when the government makes a law that says that one person must pay the medical bills of another, or purchase a product that he does not consent to purchase, then it is the government that is the aggressor. It is the government that initiates force against someone who has not committed aggression himself. This is a violation of the non-aggression principle – a violation of liberty – and that is why it cannot be tolerated by a free people. No law written by men can violate the law of nature.

I respectfully suggest to all of you that this be the measuring stick against which you judge all acts of government, from its economic policies, to its criminal law, to its foreign policy. It was the non-aggression principle that our founders used to determine the limits of government power. It is the founding principle of our nation. Once you apply it, you will find that our government has violated our liberty for many decades. This has happened under Republican and Democratic rule. At home, it is characterized by the massive redistribution of wealth, not just for welfare for the poor, but for bankers on Wall Street, for farmers, for scientists, for educators, and for every one of us in programs like Social Security and Medicare – all of these are violations of our liberty that we must begin talking about responsibly phasing out, if we are to regain our freedom.

The violation of our founding principle extends to our foreign policy as well, for we fight wars with nations that have committed no aggression against us. This is a threefold violation: against the people of the nation we attack, against the soldier whose life is risked or sacrificed unnecessarily, and against the taxpayer who is forced to pay for it at the point of the same gun that compels him to pay for Obamacare.

Now, I know that the Tea Party movement strongly supports our troops and so do I. God help us if we ever become a nation that does not honor the men and women who walk in front of bullets to preserve our liberty. However, it is not the soldier that takes us to war. He does not make that decision – not because he is incapable of it – but because for a limited time while he serves, he pledges to follow the orders of his civilian leaders about where he will go and whom he will fight. By doing so, the soldier places a sacred trust in those leaders that they will call upon him to fight only when our lives and liberty are truly in danger.

Now, let me ask you one question: Do you truly believe that those same civilian leaders who have given you Obamacare, the Community Reinvestment Act, Fannie Mae, Amtrak – all of which are failed and bankrupt – were suddenly competent when they made decisions about taking us to war? I will suggest this to you: it is not merely incompetence, but a deliberate violation of our founding principle for the purpose of acquiring power that has informed all of their decisions. Remember that Washington, Adams, and Jefferson spent their entire presidencies trying to keep our country out of foreign wars. As James Madison said, “No nation could preserve its freedom in the midst of continual warfare.”

My friends, we are in a struggle for the greatest idea that the world has ever known: freedom. You, the Tea Party, are being attacked by the established powers with every weapon at their command, and for one reason only: they are afraid of you. They know that their power over you requires your continued consent and you are no longer willing to be governed without it. I ask you to remember the meaning of that great principle of liberty, the non-aggression principle, and apply it objectively to everything that our government does. You will find that most of what it does today violates that principle. In other words, even after we get rid of Obamacare and send this president and Congress job hunting, we will still have a lot of work to do. It will not restore our liberty to vote out those who commit one form of aggression and replace them with people who will merely commit another. We must select representatives from amongst ourselves who will accept the natural limits of their powers or we will be no freer than we are now. But I am joyful today because we the people have that power. We have slumbered for decades, but we slumber no more. The sleeping giant is awake and we are going to win.

Check out Tom Mullen’s book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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The Government Can’t Regulate Safety (And It Shouldn’t Try To)

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President Obama has come under heavy criticism for his dictatorial “shakedown” of BP and rightly so. Considering the presidencies of Woodrow Wilson, Franklin D. Roosevelt, Lyndon Johnson, and most recently, George W. Bush, it is no small accomplishment for a president in 2010 to actually commit an unprecedented violation of the U.S. Constitution. I am sure that sooner or later his extortion will be described by his supporters as “bold,” which is the new euphemism for the illegal exercise of arbitrary power.

However, during the June 15 speech* in which he announced this and other planned incursions into what is left of the free market and the rule of law, the president made one very correct observation about the Minerals Management Service (the federal regulatory agency in charge of regulating oil drilling). He said,

“At this agency, industry insiders were put in charge of industry oversight. Oil companies showered regulators with gifts and favors, and were essentially allowed to conduct their own safety inspections and write their own regulations.”

The president correctly recognizes that this is a problem. One cannot reasonably expect that a regulatory agency is going to police an industry if the policemen are all hired directly out of the companies that they are supposed to regulate. However, the president’s statement begs the question, “Who should replace these industry insiders in regulating the safety of deep-water oil drilling?”

The only possible answer is that government-appointed bureaucrats, with no knowledge of or experience with the machinery, equipment, and specific engineering principles associated with deep-water oil drilling should replace them. Of course, logic dictates that if unqualified people start making rules about how equipment and machinery that they don’t understand is operated, there are going to be a lot more accidents. Is there no way out of this dilemma?

There is an important distinction to be made between “laws” and “regulations.” A law is a statute that prohibits conduct that constitutes intentional harm to someone by another person. There are laws against murder, theft, fraud, and other crimes of aggression. A law should always be the exercise of a negative power (the new healthcare bill violates this fundamental principle).

A regulation, on the other hand, has an entirely different purpose. Regulations attempt to prevent economic agents from having the opportunity to harm another person or the environment, whether intentional or not. So, regulations either prohibit actions that do not constitute harm to other people, such as procedures that are considered unsafe by the regulator, or actually compel the regulated person or entity to do certain things that the regulator deems necessary (a positive power). This is why it was necessary for the Minerals Management Service to recruit its regulators out of the oil industry. Who else can tell an oil company how to run an oil well?

However, the president is a bit disingenuous in implying that this agency is unique in being peopled with industry insiders. The practice of hiring insiders to regulate their former employers is the norm in Washington, as is the practice of the regulated companies actually drafting the regulations that they are to be governed by themselves.

If you think that this means that the resulting regulations don’t do a very good job of protecting consumers or the environment, you are correct. Workers aren’t safer since the creation of OSHA, food and drugs aren’t safer since the creation of the FDA, consumers aren’t protected by the Consumer Protection Agency, and as we are now painfully aware, the oceans aren’t safer because of the Minerals Management Service.

However, this “public-private partnership” (formerly known as fascism) does accomplish one thing. It creates massive compliance costs for the companies that are regulated. Combined with the fact that the regulations are written specifically to give an advantage to existing conglomerates, these artificially high start-up costs have the effect of insulating large, established companies from new competition. The result in each regulated industry is a small group of large corporations that have traded their liberty for the high profits resulting from artificially limited competition.

This does not mean that there are not conflicts between government and the corporations. Since the regulations are far too numerous and onerous to be followed, the regulated companies are constantly violating them. When a consumer or environmental issue makes the news, there is an immediate call for more or better regulations to prevent a similar incident from occurring again. The politician uses the incident to seek more power, while the corporation seeks greater protection from competition. The consumer pays higher prices and gets products that are of lower quality and safety than those that would be available in a free market.

This dysfunctional relationship between government, business, and consumers is allowed to persist for only one reason: the widespread misconception that it would be more profitable for unregulated industries to gouge their customers and sacrifice their safety and that of the environment in order to reduce their costs and widen their profit margins. This incorrect assumption flies completely in the face of history.

BP will pay at least $20 billion, not in fines for violating regulations, but in compensation to the people whose lives and properties were damaged by their negligence. There are already widespread rumors that they will be broken up and sold off because of the financial vulnerability resulting from the fall in the price of their stock. Similarly, Enron went bankrupt due to market forces and its officers were prosecuted for breaking the laws against fraud. Both of these outcomes would have been the same without the existence of the regulations and regulatory agencies that governed these companies, because they occurred as the result of the government enforcing property rights, not regulations. When property rights are enforced, the profit motive discourages companies from exposing themselves to liability. Those who do not heed this natural law quickly find themselves out of business.

Thomas Jefferson once wrote, “No man has a natural right to commit aggression on the equal rights of another; and this is all from which the laws ought to restrain him.” He was right. It is a violation of liberty for the government to try to prevent crime or negligence, which it is unable to do anyway. There will always accidents, regardless of regulations that attempt to prevent them. If you want to maximize protection of consumers and the environment, regulations are not the answer.

A truly free market without artificial barriers to new competitors will force companies to constantly improve their products, services, and production processes and limit their exposure to liability. It will also force them to please their customers. The companies that do these things the best will outperform and eventually eliminate those companies that do not. This does not represent “companies regulating themselves,” as President Obama argues, but rather regulation by economic law.

Liberals constantly rail against Big Oil, Big Pharma, and large corporations in general. However, they then call for expansion of the fascist regulatory complex that created them and keeps them big. The cure for the disease is not more of the bacteria that caused it. If you want to see fairness to consumers and protection of the environment, a truly free market is the only answer.

*Transcript of entire speech

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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Hooray for Hollywood?

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Libertarians generally cringe at most of what comes out of Hollywood and for good reason. The consistent message from its movies and movie stars is that private property and free enterprise are the scourge of society, that profits are made by exploiting the poor and working classes, and that private industry is the enemy of nature that will eventually destroy the earth.

Given this consistent anti-freedom message, it would be hard to blame anyone for a reflexive roll of the eyes upon hearing that Kevin Costner has come forward regarding the BP oil spill. However, this real-life story has a surprising twist. Costner is not calling for some tax-funded government boondoggle. Nor is he taking the opportunity to lecture the masses about their responsibility to sacrifice their lives and property to save the earth or why they should feel guilty for polluting it merely by being alive. Instead, Costner has provided a solution, born out of his entrepreneurial interest in a new technology, that may be effective in cleaning up the oily gulf.

According to an article in the LA Times, Costner and a business partner acquired Ocean Therapy Industries after the Exxon Valdez oil spill and “has spent 15 years and $24 million of his own money on this technology.” The technology had little commercial potential until the Deepwater Horizons accident, which may also qualify Costner as – gasp – a speculator.

The article goes on to say that, “The machines essentially operate like big, floating vacuum cleaners, which suck up oily water and spin it around at high speed. On one side, it spits out pure oil, which can be recovered. The other side spits out 99% pure water.” Costner and his partner hope to sell the reclaimed oil and donate most of the profits to local parishes which have suffered because of the spill. Presumably, the revenues for selling the machines themselves will constitute a handsome return on investment for Costner and his partner.

Whatever Costner’s political views may be, his actions speak louder than words. He is demonstrating yet again that every innovation that has improved the quality of human life has been the result of entrepreneurs taking risks in the hope of profits. While President Obama is making speeches and looking for asses to kick, private enterprise has stepped forward with a solution that will benefit all parties involved. Like all exchanges in a free market, the customer benefits from a new product that it needs or wants, the entrepreneur is enriched for risking his own money and devoting his own labor and time, and all of humanity benefits from the existence of new technology. There are no “losers” in a voluntary exchange of property.

In all fairness, this technology was originally developed by the U.S. government. However, it took the vision, commitment, and risk tolerance of a private investor to transform the technology into something useful and make it available when the time was right. This is also not without precedent. In the 1980’s, entrepreneur’s saw opportunity in a little-known technology called ARPANET, the result of a partnership between MIT and the Department of Defense. They decided to risk their own money developing this technology into something that would actually be useful to everyday people. They created products and services that billions now benefit from and the entrepreneurs were enriched in the process. Today, we call that technology the Internet.

Hopefully, Costner’s fellow actors, producers, and directors will not vilify Costner for “making money on this environmental tragedy.” I recommend that they look at it that Costner is “making the big, bad oil company pay” for the damage it has done. However, no amount of spin can change the facts. This solution was provided by a private entrepreneur who took a risk in the hope of profits. As far as this crisis is concerned, the score is Market 1, Government 0.

Libertarians don’t get to say this very often, so let me be the first: Hooray for Hollywood! Oh, and Kevin, good luck with your venture. I hope you make a million bucks.

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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