Rupert Murdoch’s Failing Attempts to Control the Internet Reformation

The Daily Bell

Saturday, July 02, 2011 by Anthony Wile

Anthony Wile

Rupert Murdoch lost nearly his entire investment in MySpace the other day when he sold the failing social network to musician and actor Justin Timberlake and an ad agency he backs for some US$30 million. This was a good deal less than the US$500 million-plus Murdoch paid for it.

Why did Murdoch make such a bad investment? Because he hoped to use the network as a vehicle from which he could disseminate news. He wanted to make MySpace into a mechanism to deliver current-events content. When it didn’t work out and he must have known that fairly soon he obviously lost interest. And as his interest waned, so did MySpace.

This speaks to Murdoch’s desperation and mainstream media’s generally. In a digital world, he is willing to burn US$500 million simply to confirm that a social network is not a news delivery system. I could have told him that for a much lower fee.

This also shows us the importance of news to the powers-that-be. The Anglosphere elites for whom Murdoch evidently and obviously works are determined (thus far without much success) to find a way to protect their failing information franchise.

Nothing in the past 300 years or so, while the elites have advanced their one-world-order, has been so devastating to their plans as the Internet and the rise of the alternative media driven Internet Reformation. It has poisoned the chalice and befouled the well; it has unbalanced the clarity of the concoction and clouded it with truth. A bitter brew … for them!

Western power elites will do ANYTHING to reclaim their news franchise. When one looks at 20th century media development one is struck by its massive size and strategic composition. Every part of Western 20th century media worked seamlessly together. The whole idea was to create an increasingly militarized society that would accept global government as part of the natural order of things.

Hollywood delivered messages of violence and fear; the magazines and newspapers rehashed the same sorts of information and television that unique, talking box broadcast alarm and resolution-of-the same 24-hours a day.

There was no escape from it. If the world was not in death throes, that’s only because the wise men clustered at the top of the West’s painstakingly created authoritarian systems were saving the world on a real-time basis.

It is news dissemination that the power elite craves. Everything else is just a backdrop. The entertainment, the talk shows, the game shows, these were all merely the wrapper supporting the main act. Everything in Western media in the 20th century led up to the News Program. And the talking heads providing the “news” were glorified as great intellects worthy of the most arduous approbation.

Walter Cronkite, a febrile and shallow socialist, was the “most trusted man in news.” Dan Rather, a compulsive self-aggrandizer, was a countrified, attack-dog. These individuals did nothing but read the news; but they were revered. Today, things have changed. Mainstream news … very little. As a delivery mechanism of mind control it is failing. In fact, every part of the intricate system is failing.

In order to build a new world order, people must be either frightened or enticed into cooperating. It is a great deal easier to scare people than to bribe them, less costly too. But when the delivery mechanism fails, when people begin to tune it out as they have in the 21st century, then the message is muddled and gradually grows more insignificant.

Murdoch’s properties are supposed to provide the conservative half of a worldwide Hegelian dialectic. He’s been funded by Western elites to provide this vision because if one is to move society toward global governance, a conversation is necessary. Thesis, antithesis … synthesis. Murdoch provides the antithesis, with relish.

As a major facilitator of the one-world conspiracy, Murdoch is tasked with taming the Internet Reformation. It must be brought under control and the Internet made to work on behalf of a larger world order.

One can watch him writhe, these days. We’ve compared him to Hamlet, especially a few years ago when he really seemed at a loss and began to lash out while mumbling to himself. He bought MySpace and ruined it like a petulant child when it didn’t perform as planned. When he began MySpace had nearly 75 million users. It now has less than 35 million.

He’s onto the next gambit increasingly known in the mainstream media as “fail walls.” These pay walls encircle Internet content like moats around castles. Instead of seeing articles for free, readers are enticed with an occasional news story and then urged to sign up and pay for access to fuller content.

The New York Times tried this a few years ago and saw its on-line circulation plunge; it is trying again now with a different model known as “freemium” a mix of free and paid content which is said to be working marginally better.

Murdoch, however, is the most active participant in this futile circus. He’s placed paywalls around his properties in Britain, The Times and Sunday Times, in the US with such publications as The Wall Street Journal and is now transplanting the strategy to his Australian publications. The fairly thick walls around his UK publications have indeed kept casual browsers out. Reports claim that the UK Times has blocked 20 million viewers and replaced them with 79,000 digital subscribers.

This is heralded as a “success” in the brave new world of the Internet era. Meanwhile, circulation figures from ABC show that The Times and Sunday Times print sales fell 14.8% and 9.5% year-on-year. The UK Guardian News & Media Group have pursued a non-paywall approach and reportedly generated a 50 per cent increase in digital advertising revenue in the first six months of the financial year. Free content open access works better than pay walls.

Murdoch has also started a dedicated, online newspaper known as The Daily. It is delivered through Apple aps and people pay for it. But the problem is no different; the information being delivered hasn’t changed, only the delivery system. Murdoch keeps tinkering with the hardware when it’s the software that is the problem.

It could be that the open-access model is the one that works the best. It certainly makes the most sense. The 20th century, as we’ve written before, was a time of artificial news scarcity. The 21st century is one of news plenty. In such a brave new world, how can one successfully charge for content?
Better to give it away and try to surround it with ads or, in the case of the Daily Bell, operate a non-profit, advertising free site and rely on the generotisty of readers to help make the message grow.

But the trouble for the mainstream press is that the information has to be compelling in order to compete with the alternative media. DB reports a kind of truth; the mainstream media promotes fear and globalism.

In an environment where there is a plethora of product, the only distinguishing factor is quality. Power-elite media does not “do” quality very well. That is not why it exists. This is another problem Murdoch has when it comes to trying to charge for product. His news and information are a tool designed to advance the larger conversation and move it in the direction of international governance.
He is not a free agent in this regard.

In order to compete with the Internet’s alternative media, Murdoch’s media has changed its tone. It is much more strident than in the past about “conservative” issues. This is because the free-market thinking that’s driving the Internet Reformation is pulling the dialogue in a libertarian direction. Murdoch compensates with conservative viewpoints but gradually the fulcrum of the conversation is shifting.

In the 21st century, the larger social conversation is gradually repolarizing itself around what is natural and normal. The more people learn, the less convincing his conservative editorial thrust becomes; and the more strident authoritarian voices like Bill O’Relly’s become. People, once they understand their own manipulation, trend toward the libertarian point of view, which is why in the US, libertarian Texas Congressman Ron Paul is increasingly popular.

In order to accommodate the realigned conversation, Murdoch is forced to go along with it. This accounts for the rise of people like Glenn Beck. There is no way that Beck’s increasingly libertarian viewpoints would have been tolerated in the 20th century and evidently not in the 21st century either.

Obviously, the Glenn Beck experiment proved too arduous for Murdoch’s Fox as Beck has been released and is now starting his own TV channel. It may be that Beck proves more successful on his own than with Fox. He claims to have retained his soul. This is another problem that Murdoch’s media has it doesn’t appear to have much of a soul.

As the conversation shifts, Murdoch has to shift with it. But in order to accommodate the changing conversation he begins to BECOME exactly what his elite backers hoped to eradicate. To retain credibility he must present a version free-market thinking; yet this is anathema to his sponsors who wish only to promote covert and overt globalism. It is a conundrum.

This puzzle shall remain with the elites. The Internet Reformation, in fact, is a process not an episode. The trends that the Internet has produced are only going to get more powerful. As with the Gutenberg Press, the Internet’s effects will not easily be tamed. The apparent results of the Gutenberg Press the Renaissance, Reformation, etc. reverberated long after its inception. The changes began to occur with rapidity some 100 years its invention. The changes spawned by the Internet began after about 20 years.

From this we can see, mathematically speaking, that the ratio between the Internet and the Press is perhaps one-to-five. It took the elites about 350- 400 years to control the Press and to begin to monopolize its output. Thus, it may take the elites about 50-75 years to control the Internet.

But there is something else to consider. Assume for the sake argument that the mainstream media historical timeline is an accurate one (which we no longer do, necessarily) there can be no doubt things have speeded up. There was a 25,000 year gap between cave paintings and incised tablets. There was perhaps a 10,000 year gap between tablets and papyrus. There was perhaps a 5,000 year gap between papyrus and the printing press. There was a 500 year gap between the invention of the press and the advent of the Internet.

It may be that just about the time the elites have managed to fully control the Internet in say 50 years a NEW technology will come along and make life difficult all over again. The competition between the elites and the middle class was fully joined with the advent of the Gutenberg Press. This marked a fundamental shift in human history from what we can tell, defining history as a race between technology and elite mind control. The confrontation has only sharpened in the Internet era.

We may be at the early stages of a great Internet-inspired Reformation. The initial Reformation gave rise to fundamental shifts in society 500 years ago and redefined the relationship between peasantry and the elites of the day. It also kicked off a series of low-level, pan-European wars.

If one studies the Gutenberg Press and its impacts, one can see plenty of parallels between what is occurring now and what occurred then. At the time, the elites struggled to advance their control and maintain what they had already achieved. But it seems to me they lost control, despite the wars, at least temporarily, and now they are losing control again. For those in tune with what is happening, the 21st century may eventually prove a fine time to be alive and working.

At some point, the confluence of modern free-market thinking may force the powers-that-be to take a step back. Murdoch’s struggles are not made up. One only has to look at them over the past ten years to see a concretization of the theoretical proposals we’ve been presenting.

These issues are real. They may have great ramifications as the Internet Reformation rolls on, affecting everything from investments to lifestyle choices. In fact, I’d argue the impact is already a powerful one, even though people may not realize just what is occurring. Murdoch believes that he can regain control of the message with social networks, paywalls and dedicated content. He will likely go to his deathbed (he is not a young man) believing this. He and his backers and handlers may be wrong.


And just to prove how wrong … you can join the Daily Bell for no charge and receive an advertising-free perspective on the Great Conversation. We wear our agenda proudly on our editorial sleeves to spread the awareness of free-market thinking concepts worldwide in the hope that the Internet Reformation (Knowledge Revolution) can halt the drive towards manipulated globalism. Take a look at what others are saying about our rapidly growing community of free-market thinkers Subscribe Now.

Freedom Matters – Issue: January 18th 2011

Where is Galt’s Gulch When You Need It?

Welcome to 2011 and the establishment media is telling us happy days are here again. Expect economic growth, falling unemployment, more manipulated stock market gains, a stronger dollar, rising real estate values and the end of the recession.

Come to think of it, I believe this was also their forecast for 2009 and 2010. Eventually they will get it right at least temporarily and – who knows? – it might be this year, given with trillions of additional stimulus and costs added to the national debt and future generations of taxpayers.

Here at Freedom Matters, we don’t care about the short term and we have no reason to be cheerleaders for Washington, Wall Street, the EU or the political establishment. Looking back at the last decade it would appear the euphoria and propaganda early in the decade was certainly misplaced.

The Last Ten Years December 31, 2000
December 31, 2010 Gold $316 $1,400 plus Silver $5.00 $30.00 plus Swiss Franc/Dollar Exchange Rate 61 cents $1.06 plus

Later in the newsletter Ron Holland will give us his dire forecast for the next decade as Washington and other governments attempt to maintain the sovereign debt Ponzi scheme for a few more years by stealing more of our private wealth.

We agree with Pat Buchanan’s 12/28 editorial question, “Is A Bond Crisis Inevitable?” Who Lost the Middle East? by Pat Buchanan on – A Syndicate Of Talent and we believe the answer is yes and the only unknown is the timing of the event.

Our concern is although the sovereign debt crisis is primarily a creation of the Wall Street financial elite, the consequences will be almost global in nature due to their success in exporting this flawed financial scam to politicians and governments across the West.

We are concerned the nations of the world may well demand retribution and reparations from the US and Wall Street for the crisis in the longer term. America will no more be able to pay the outrageous costs than was the Weimer Republic of Germany with the illegal war debt levied by the Treaty of Versailles.

In Ayn Rand’s freedom classic, “Atlas Shrugged”, Galt’s Gulch, the place of safety and security for those that had planned ahead was for practical purposes located somewhere in the western United States. Her model for the location was actually Ouray, Colorado where she wrote much of the novel. I’ve visited Ouray many times and on occasion there is indeed a mist or fog over the village protecting it from being easily seen from above just like Galt’s Gulch in the novel.

We are not entirely sure where the safe haven locations will be in the coming bond crisis and dollar collapse but be assured neither you or your assets will be safe inside the United States or most other debt ridden western nations as this event unfolds. .

But never fear! The House Republicans promise to read the entire Constitution aloud in Congress; they will challenge raising the debt ceiling in the upcoming session. More smoke and mirrors. Won’t work in this day and age. The Internet will cover the real story and the Tea Party will read between the lines.

If incoming House Speaker John Boehner thinks that by crying on cue and making the right noises about “budget cuts” he can damp the anger of the American people, he may soon find out how wrong he is. More and more Americans today now look past the establishment news propaganda organs of the state and get their news on the internet and see these pathetic staged events for what they are, just window dressing for a failed political system based on government debt and nothing more.

Rest assured, we will continue to search for and report on locations and strategies to help you build your own Galt’s Gulch to defend your family, wealth and liberties.

Anthony Wile
Executive Director
The Foundation for the Advancement of Free-Market Thinking

Your Private Wealth Is Threatened By Government Revenue Needs & Treasury Debt

Ron Holland

This is Part 2, of Ron Holland’s speech “Down Argentine Way” presented on the recent FreedomFest Untitled 1 financial cruise down in South America during November. Here at the Foundation we hope to report more information and editorial comment about what is happening in South America. …
There is nothing very complicated or prophetic about forecasting how Washington plans to steal much of the remaining private wealth of most American citizens over the next decade or so. This is the norm in history and politics throughout world history and this has always been the major function of governments. While the Anglo-American establishment has whitewashed this part of history, politics and information over the last 150 years, today with the internet, the truth of our history is apparent to anyone willing to do the research.

Just as the citizens of America and Great Britain have in the past financially benefited from living under the Anglo-American Axis in many ways, today in these twilight latter-days of the empire so we will suffer under the wealth confiscation and likely retribution from the rest of the world due to the accident of our birthplace and citizenship.

As the American national debt grows larger, here are 15-plus probable attacks on your wealth over the coming ten years.

Your assets, benefits and future prosperity will be forfiet to Washington’s elites as they try to buy time to right a sinking ship – and to no avail. The impact on our wealth and future prosperity will likely dwarf what has happened before in Argentina, during the Russian collapse and in Germany with the post First World War Weimer republic.

This essay will discuss the threats and possible new taxes, penalties and controls designed to transfer wealth from the private sector to the federal government.

Social Security Theft – As we see today in France, Social Security retirement ages will be further extended into the future. Wealthy Americans will be “means tested” and entirely forfeit their benefits and Washington will eventually end cost-of-living adjustments for all but the poorest Social Security recipients.

Manipulate Cost of Living Adjustments & Statistics To Steal Your Wealth – Even those receiving existing benefits will find their cost-of-living adjustments dramatically reduced over time with false inflation statistics just as we see today.

The End of Capital Gains – The severe depth of the recession has bought US investors a couple of years extension of capital gains but this will not be a permanent benefit regardless of the party in power. First favorable capital gains treatment will likely be ended for all privately owned investments except for US domestic stock and bond investments. Foreign stocks and bonds will be taxed at regular income tax levels while domestic securities other than (non-productive assets) including mining and natural resource companies will still be provided favorable capital gains treatment. If they are able to manipulate the stock market to new highs then expect an eventual end to capital gains for US equities.

The Probable Imposition of a Non-Productive Asset Gain Tax – Americans with highly appreciated precious metals investments (including numismatics and collectibles) will find a substantial amount of their gains charged with an emergency non-productive asset gain tax. Not only will you lose capital gains treatment but expect an additional high penalty tax on gains as the last thing the establishment wants is hard money investors benefiting while the rest of population find their investments collapsing in value.

This Tax Will Likely Be Extended to Mining and Natural Resource Stocks – Another reason to take your profits sooner rather than later in a crisis situation where the public with conventional investments will clamor for this type of retroactive tax.

A Two-Tier Gold Price Structure – At the very least there may well be a government enforced set or internal price for precious metals sales that operates outside the free-market pricing outside the jurisdiction of the United States. This could be handled by the non-productive asset tax mentioned about or used during a time of government gold confiscation to pay lower prices to American investors than the price outside of America. This is what happened during Roosevelt’s earlier gold confiscation and don’t expect Congress to help you.

The Risk of Private Gold Confiscation Will Continue To Increase – When the dollar and Treasury market crashes, Washington will enact legislation or use Presidential Executive Orders against gold investors to curtail your profits, add a confiscatory non-productive asset tax or confiscate your gold with some type of fiat currency exchange. In any case, they plan to end up with your gold as this will be the basis of a fake gold standard which may be used as the pretense to confiscate your gold. This will take place during the coming bond and dollar crisis by Presidential Executive Order. (Next month’s letter will have a discussion on Presidential Executive Orders past and future.)

The Fed & Washington Might Manufacture A Fake Gold Standard – Free-market public and private currency competition should replace the failed fiat currencies in use around the world today, But Washington will not give up their monopoly on currency creation without a fight and fraud against the American people and we can expect in the latter stages of a dollar crash some type of complicated, fake gold standard or backing as a final fallback position. .Just plan on this happening and it may well be the excuse used for outright gold confiscation.

Washington Will Confiscate Large Private Retirement Fund Balances – Hungry, Bulgaria and Poland are already seizing private retirement funds to meet budget shortfalls. This will take place in the United States. Read the current report on the European pension seizures later in the newsletter under “What You Might Have Missed in the Press”.
The long-term confiscation and control idea is to eventually force all retirement benefits under the new automatic/mandatory IRA program where everything will be combined with and managed like your Social Security benefits. Wealthy and productive Americans will find their retirement benefits used to support the trillions in underfunded union, state and local government employee plans.

Remaining Retirement Funds May Be Forced Into Mandated US Treasury Obligations – As in Europe, you can expect a percentage of your remaining retirement funds and new required contributions in the proposed Automatic IRA accounts will be forced into government bond obligations and your funds will become the buyer of last resort of US Treasury debt. While the Chinese, Japan and offshore nations, central banks and investors are dumping Treasuries your retirement security will be sacrificed to provide liquidity for investors selling the debt obligations.

All Productive Working Americans Will Be Forced Into A Mandatory, Automatic IRA Scheme With Required Annual Contributions – Americans with limited or no savings may actually benefit with this program while those of us with substantial retirement assets will find our benefits stolen to prop up the retirement programs of cities, states and unions.

Home Values May Continue To Decline From the Bubble Levels – There are still substantial levels of foreclosures and short sales on the market which will be followed by more homes being listed for sale which are currently held off the market due to low demand during any temporary price upturn.

An End to the Home Interest Deduction – Proposals in Congress are already putting the home interest deduction on the table of deduction to be reduced or eliminated in the future. I project the home interest deductions will first be eliminated for wealthy homeowners and later expanded to the middle class. This will create further downward pressure on real estate values and the current weakness may buy some time for homeowners.

Rising Income & Estate Taxes – We have already seen this play out during the Lame Duck session of Congress. Estate taxes have been restored and the only question is will the rate remain at current levels or go up. Second, the Bush tax cuts have been extended for two years due to the bad economy but both parties will soon raise income taxes due to revenue needs.

A National Sales or VAT Tax Is Coming – Most western nations already have a VAT tax and this is also already in discussion stages by Congress. Expect an initial tax rate of 5% or more in addition to existing state, county and city sales taxes and the rates will only go up from there.

State, Municipal & Union Bankruptcies & You Pick Up the Bill – Note these costs which will be bailed out by the federal government in many cases and ultimately by the taxpayers will be in addition to the coming bailout on their existing retirement and health benefit plans. Note there is finally some good news on this front as many Democrats and Republicans are attempting to curb the growth and powers of parasitic public employee unions.

What Should Americans Do About Washington’s National Debt?

Everyone with any intelligence in the US and around the world knows that there is no way for Washington to manage the tens of trillions in debt and unfunded liabilities short of ultimate repudiation or hyperinflation. Thanks to Wall Street bankers and the Anglo-American financial elite, our ruinous debt-financing Ponzi scheme has been exported to most Western nations as their politicians have made a compact with the devil in delivering vote buying programs and postponing the interest and debt reduction to future generations. Watch the cuts and subsequent riots in Greece, Ireland, the United Kingdom and you’ll see just a little of the future for the United States with its faltering world reserve currency status.

The question is, should the citizens and the formerly sovereign states of the United States wait for Washington’s foreign creditors to seize the remaining government and private assets left after our politicians have finished with us?
Our politicians are in the process of totally bankrupting the country, individual states and municipalities and in a less than a decade will have confiscated most private wealth and placed tens of trillions of more debt on future generations. Should we act now before Congress and our politicians loot our personal, retirement and real estate wealth, destroy our Treasury obligations and kill the dollar and democratically take matters into our own hands before the looming dollar and debt crisis?

One alternative is for Americans in the individual states to organize and work toward a “Washington National Debt Constitutional Amendment” and repudiate much of the Washington government debt before it bankrupts every private American citizen. Otherwise, the massive increase in the level of indebtedness due to the meltdown and depression may first bring down the Treasury market followed by the US dollar and this will destroy the American economy for decades to come.

The American people need to meet the problem on terms which will make the best of a difficult situation for the nation and our personal financial security instead of allowing foreign creditors, our financial establishment and Washington to buy more time for them through the confiscation of our private wealth, financial security and liberty.

Only a grassroots effort by the American people through state-nullification or the constitutional amendment process have any hope of success. The alternative is to expect those who are destroying our economy and nation to solve the problem they created without sacrificing us in the process. This is just wishful and foolish thinking.

On 12/21/1913 the New York Times stated “New York will be on a firmer basis of financial growth, and we shall soon see her the money centre of the world”, one day before the Federal Reserve Act was hurriedly passed and signed into law with limited debate by a Congress controlled by Washington and banking special interests.

These undemocratic tactics were designed then – just as today – to thwart the will and overwhelming opposition of the American people to expensive handouts for Wall Street and those shadowy few who stand behind the banking system.
Now, Washington’s illegitimate national debt is growing exponentially due to the bailouts and stimulus bills as Congress tries to jumpstart a depression threatened economy. This additional debt load will within the next decade bankrupt our nation and impoverish most productive, working Americans.

The Federal Reserve, together with the above financial elites, essentially manufactured the credit and real-estate bubble. The result: continued enhancement of foreign investment in their Treasury debt Ponzi scheme along with obscene profits for Wall Street at the expense of the American people.
This scam by our financial establishment makes Bernard Madoff’s despicable actions look like Mother Teresa’s charity operation in comparison. An unintentional consequence of these actions was the meltdown in markets, the credit crisis and spreading global depression when the bubble finally burst.

Now there is a cover-up of the cause and coming global run, crash and probable collapse of US Treasury obligations because of the dramatic increase in Washington’s national debt to unsustainable levels. This economic tidal wave threatens the financial security and wealth of every American along with their savings, real estate, retirement plans, investment portfolios as well as their promised Social Security and Medicare benefits.

Concerned Americans must bypass a corrupt Congress and the leadership of both political parties often controlled by special interests at the national level and seek a debt solution through the constitutional amendment and nullification process starting at the state level.

Repudiating the illegitimate national debt of Washington politicians and special interests will allow existing treasury debt obligation owners and investors time to dispose of the unlawful debt created only to profit special financial and corporate interests. They own and control majorities in the House and Senate, much of the party leadership positions and the Federal Reserve System. State legislatures must resolve that most of the national debt is not a legitimate debt of the American people nor the future generations who would otherwise find their prosperity and financial security sacrificed for the profit of a few corrupt global financial elites.

It will be a mistake to waste our time or effort in another futile attempt to lobby Congress, the Courts, the President or the national party leadership of either party. Most have shown their willingness to sacrifice principle, integrity and our future in the recent bailouts and the legislation just passed during the Lame Duck session of Congress.

The proposed constitutional amendment must first call upon the state legislatures to ratify, an amendment repealing Section 4 of the 14th Amendment which outlawed even questioning the validity of the national debt; “The validity of the public debt of the United States, authorized by law….shall not be questioned”, followed by language to further prohibit future indebtedness and deficit spending by the federal government and repudiate all federal government debt (except for obligations for Social Security Trust Funds) and debt and interest service obligations accrued after the 12/22/2013 deadline regardless of when the amendment is ratified by 2/3 of the states.

Thankfully, our Patriot Founding Fathers provided Article Five of the United States Constitution for a future time of congressional, judicial and presidential tyranny as we have seen for the last ten plus years. It provides for an option to assemble a national Convention to propose amendments to the United States Constitution as an alternative to the process of securing two-thirds approval in both houses of Congress.

Like the bailout actions and national debt increases today, Section 4 of the 14th Amendment was an unconstitutional act forced on the American people in a time of crisis just after the end of the War Between the States much like the questionable creation of the Federal Reserve and the Income Tax were enacted on the American people back in 1913.

The amendment was proposed on June 13, 1866 and later ratified on July 9, 1868 at a time when the legitimate voters of all the former Confederate States of America were disenfranchised and not allowed to vote and the states were under military occupation, reconstruction and control of the same special interests who started the war. In addition to making it illegal to question the validity of the public debt of the United States, it also unilaterally prohibited the payment of previous lawful debts incurred by the Confederate States of America or the individual state debts during the war.

Therefore we seek the right by constitutional amendment to lawfully question the validity and legality of a $60 plus trillion Washington national debt forced on productive Americans without their consent by a Congress representing only special interests and not the will or best interests of the nation or the people of these United States.

We urge by constitutional amendment the repudiation of the unlawful debt service and repayment of principal based on an excessive level of taxation and confiscation of the private wealth, earnings and productivity of this and future generations of Americans accrued after December 22, 2013.

Yes, this may be a pipedream solution but I have heard nothing from the political establishment except empty promises. The time for talk is over. Either we take action soon or wait for China and other world creditors to act. They will not be working in our best interests.

What You Might Have Missed In the Press
European Nations Begin Seizing Private Pension To Meet Revenue Needs
European nations begin seizing private pensions –
This confiscation of private retirement plans and IRA style accounts will happen here in the United States probably within the next decade.

Russia Cuts the Number of Federal Officials By 20%
Medvedev signs decree to cut number of federal officials | Russia | RIA Novosti
A great idea so why can’t we get congress to do this in the United States? We all know the answer to this rhetorical question but the fact is while Washington is borrowing, the rest the world is cutting government employees and benefits. This does not bode well for the United States.

Janet Napolitano to the Rescue in Afghanistan
Napolitano Visit Aimed at Beefing Up Afghan Border Security, Customs –
What a joke and a farce as her visit to Afghanistan to help secure their border would be funny if Janet Napolitano’s entire performance as Homeland Security Secretary wasn’t such a total failure. 150 thousand troops plus almost as many highly paid mercenaries, now described as “private contractors” can’t secure the borders of Afghanistan. While at home 67,000 TSA gropers do nothing to defend the totally open American border other than molest peaceful airline passengers.
If she really wants to do her job and defend the security of our homeland maybe she should either close our border with Mexico or take the opportunity and join the US military. They could make her another butt kissing general or something and she might even do a good job in some areas.

China Will Bailout Spain?
China backs Spain to emerge from crisis: Beijing
Or so they claim? It is looking more and more like China will continue to purchase much of the European sovereign debt at least for now. What happens if they bailout the western world except for the United States? This would certainly make foreign retribution and claims against the Anglo-American banking elites and the United States far more popular and possible after a worldwide debt crash as we would have few friends and many foreign leaders and politicians looking to solve their problems at home with our remaining wealth and government assets.

New Jersey Is the Grinch That Wants To Steal Christmas
News Headlines
They want to seize and confiscate unused Christmas gift cards to help balance the budget. Just a taste of what we can expect in the future from desperate politicians at the state, local and federal level. Why stop with gift cards? Why not any extra cash in checking and savings account, money market funds etc.

In Conclusion
We hope you have enjoyed the forth issue of Freedom Matters, the official publication of The Foundation for the Advancement of Free-Market Thinking. The Foundation is a non-profit organization recently established by Appenzeller Business Press (publisher of The Daily Bell) to provide financial support for projects that further the public’s understanding of free markets.

During this new-year, we hope you will consider making a small contribution toward restoring freedom to a world badly in need of it. The foundation emphasizes Austrian economics to solve the deep problems threatening the West today.

France: Can You Hear Us Now?.. The Big Science Promotion Grows Stranger

France: Can You Hear Us Now?

Friday, October 22, 2010 – by Staff Report

Nicholas Sarkozy

Nobody expected this French revolution … The pensions row has turned into a referendum on Sarkozy … As the French Autumn of Discontent morphs into its second week (more trains, fewer planes, long lines at petrol stations, banlieues kids indulging in a bit of self-administered wealth redistribution in the streets), no one can predict how things will turn out for Nicolas Sarkozy (left) and his embattled government. And yet this should have been the easiest reform of his first term … The strikes have turned into a referendum on Nicolas Sarkozy – not his actual policies, so much as his style. The perception is that he panders to the rich, an unfair one when you consider his predecessor Jacques Chirac, who never paid for any holiday he took in or out of office. … Sarkozy (whose fortune is the product of selling his family flat for £1.6 million when he was elected in 2007) earned himself, early on, the “bling bling president” tag. Nothing he has done since has shifted the impression that he wants the French to make efforts he will not subject himself and his rich friends to. – UK Telegraph

Dominant Social Theme: The French are crazy and need to blow of steam once in a while.

Free-Market Analysis: Until recently we have been somewhat alone in trying to explain the reality of what was taking place in Europe. In a series of articles, we predicted that Europe would blow up sooner or later, because Europe was basically a tribal environment and, in fact, a patchwork of tribes. In one of our recent articles, we even provided a Wikipedia excerpt showing how the tribes had conquered Rome and then migrated throughout Europe in the next 500 years. To think that Europeans themselves are not quite conscious of their background, or have no tribal solidarity, was naïve in our view.

The tribes are bloody-minded. In fact, Europe has been a cauldron of blood and resentments, much of it whipped up by the Anglo-American power elite for purposes of consolidating wealth and power. But the tribal solidarity and brutal arithmetic used by the tribes to calculate their well-being had not in our view changed much in eons. We felt fairly certain the tribes of Europe would take action once they perceived that the EU was not going to prove a net benefit but would actually have a negative impact on their wealth and property. We recalled the unrest of the 1960s (in which admittedly American intelligence played a part via Operation Gladio) and we predicted that those days would come again.

The EU, in fact, was not providing any other options, or making it any easier to avoid what has now occurred. Either the elite is out of ideas or out of options. We believe it may be the latter (assuming the powers-that-be are not engineering some sort of total implosion for nefarious reasons yet to be fully comprehended.) By insisting that the common man in various PIGS nations pay back large commercial banks that had lent recklessly to those same countries and enriched their political and industrial elites, EU leader were almost inviting (and arrogantly so) what has now occurred. The so-called “austerity” unrest was about this perception. Normal people saw that the EU had bribed national elites to build a consensus for joining – and they didn’t wish to pay the bill.

It’s not just government pensions. Taxes are going up even as services are going down. Distorted private industrial sectors, gorged on the inflationary euro, imploded over the past few years and shed jobs. Harried people have sought shelter in government work, and now the government jobs are leaving as well.
Many economies lie in ruins, and still there are no jobs to be had. Meanwhile, Brussels’ Eurocrats pretend it is the “people’s” fault. Sure governments had been greedy, but ultimately the blame lies with the electorate. So it is said.
The Greeks were the first to reject these assumptions. At the time, the mainstream media shouted in one voice that austerity was necessary and that the public unions in Greece were being unreasonable. The Anglo-American power elite that runs the EU no doubt hoped that anger against public unions and negative public opinion would help neuter protests. It was a clever dominant social theme. The mainstream media was not to cover the protests – which were to be blamed, in any case, on public sector profligacy. There might be protests, but they would easily handled.

Only they haven’t been because these protests are increasingly an expression of anger at how EU citizens have been treated over the years, and how the ever-expanding EU itself has been forced through. For years we have been writing about this. We have watched in wonder as whole nations were made to vote over and over again until the right answer was arrived at by the electorate. When the Eurocrats didn’t get their horrible constitution, they divvied it up into legislation and dumped some of it into a treaty that that didn’t need a popular vote.

The EU is an increasingly, profoundly anti-democratic institution. It has launched a torrent of job-killing regulations at the nations suffering beneath it. It has achieved power by pretense, but those running it behind the scenes no show indication of slowing down. Every arrogant, anti-democratic trick has been used to turn an obscure trade treaty into an over-bearing empire. What worked before will work again, or so it was thought.

From our point of view, the Internet era only made things worse. The truth-telling of the ‘Net noted each phony vote and every contemptuous and condescending statement. People doubtless grew angrier. But, as in America, it took bad times to turn the Internet from a social network into a instrument of freedom. As austerity rumbled across Europe, people doubtless went online and found plenty of chat rooms and alternative news articles to confirm their fears and incite their resentment.

And now they protest. The article with which began this analysis claims that, “no one expected this French revolution.” Au contraire! This has been coming for years. “The strikes have turned into a referendum on Nicolas Sarkozy – not his actual policies, so much as his style. The perception is that he panders to the rich.” Yes, this is another way of writing what we wrote yesterday – that the protests are a kind of class warfare. And we do not believe they will go away any time soon.

In Iceland, protestors chased legislators out the back door of the Parliament building. In Greece, protestors occupied the Acropolis. In Spain and Portugal they marched, and even in Ireland, resentment has started to boil over into activism and violence. In France, where everyone pretty much expected there would be SOME trouble, there has been quite a lot of it.

Germany’s Angela Merkel and France’s Nikola Sarkozy have put their heads together to come up with a solution to the troubles that rack Europe. They want Brussels to be able to penalize countries severely for being profligate; and they want a much larger pool of euro-money to bail out nations that indulge in bad behavior. They want a mini-IMF in other words.

But to get what they want, the dynamic duo will need to reopen the Lisbon Treaty to pan Euro voting. Mostly it will be the legislatures that will vote, and will no doubt do as asked. But in some countries, reopening the Treaty will reopen the whole issue of joining the EU. Countries like Ireland and Britain may end up having further referenda about the EU itself, and staying or going.
Eurocrats want to doom the PIGS to austerity for a decade or longer. Whole generations shall labor under a kind of neo-economic fascism. This is not the Europe that was promised. We have predicted that it may end badly, and we see no reason to revise that forecast now. Perhaps there is a reservoir of good will that we do not comprehend. Or perhaps the EU leader shall manage to impose some sort of quasi-martial law, as some have predicted.

Conclusion: But is that how class wars end? With the middle class muted and stuck in sullen rage? Like the Internet itself, a class war is a process, in our view, and we would be surprised if it doesn’t play itself out in fits and starts not just for several more months, but perhaps for several more years. And the topography of Europe may be much changed as a result. And more quickly than we expected.

The Big Science Promotion Grows Stranger

Friday, October 22, 2010 – by Staff Report

CERN scientists eye parallel universe breakthrough … Physicists probing the origins of the cosmos hope that next year they will turn up the first proofs of the existence of concepts long dear to science-fiction writers such as hidden worlds and extra dimensions. And as their Large Hadron Collider (LHC) at CERN near Geneva (pictured left) moves into high gear, they are talking increasingly of the “New Physics” on the horizon that could totally change current views of the universe and how it works. “Parallel universes, unknown forms of matter, extra dimensions… These are not the stuff of cheap science fiction but very concrete physics theories that scientists are trying to confirm with the LHC and other experiments.” – Reuters

Dominant Social Theme: Isn’t it amazing how real-life imitates the movies?

Free-Market Analysis: In a series of articles, we have explored what we consider to be the risibility of building multi-billion dollar Big Science machines like colliders to enhance scientific understanding. Our point, though we have never entirely boiled it down to its essence until now, is that scientific progress should probably come out of the marketplace (or perhaps from dreamy, brilliant science students dozing under apple trees). It should conform to the modesty of accumulated profits – and certainly to natural law.

The strangeness of modern Big Science goes well beyond its funding stream. As those at CERN grow more desperate for results, the rhetoric surrounding the experiments grows more promotional. This is in fact how the power elites’ dominant and sub-dominant social themes are produced. They begin with ideas in controlled scientific journals and then are rebroadcast through the controlled elite mainstream media and if possible, may be recycled once more on TV or in the movies. Finally, once public fervor has been aroused, the ideas are guided to the public trough for financing with taxpayer dollars.

In the case of the Large Hadron Collider, we are startled to find in the most recent statements what sounds like concepts lifted whole from cast-off Star Trek episodes. Are those running this boondoggle really searching for evidence of parallel universes, extra dimensions, etc? (Yes, we’ve read this in the past but didn’t take it seriously.) It has certainly been the stuff of cheap science fiction for nearly a century now.

Hypotheses such as the ones based on an “electrical universe” have as much or more to recommend them in our humble view. Instead of building a multi-billion dollar tube, scientists might be better off “thinking out side the box.” It is like the law itself. When regulations stray from natural law they tend to not to work very well. One can pass a law, for instance, that all people wear seatbelts, but this is not a “natural law” in that it is impossible to enforce. What cannot be enforced will be flouted and bring more laws into disrepute. Legislation, therefore, that does not hew to natural law tends to be disregarded and, as well, spreads contempt for civil society.

Of course in our view Western canon law should be discarded entirely. It is monopoly law, in that the state passes laws, enforces them and punishes offenders. We would prefer to see eons-old common law resuscitated along with market-based justice. To the greatest extent possible, issues between people and families should be worked out locally or simply face-to-face. The idea that the current legal-industrial complex, with its jailed millions and working hypothesis that “a debt to society” needs to be paid is increasingly hard to justify in our humble view.

And the same should go for science. If someone, or a company, can afford an experiment, then by all means the research should be undertaken. It does not in any sense flout natural law. It is research moored to the market itself. But let a dozen governments contribute US$1 billion each to build a circular track the size of Belgium to crush invisible particles and we fail to see the linkage to reality. Absent the force of government, this money simply would not be allocated.

The best businesses are often built on cash flow. Put cash aside and expand an existing base of business or elaborate on what has worked with new ventures, built from successful ones. The easiest way to lose a lot of money is to start an entirely new business venture massively funded with other people’s money. Why should it be so much different with science?

Does the size of the project make a difference? People fondly point to the Manhattan Project as an example of successful Big Science. But in fact the research had already been performed by Albert Einstein (and maybe others who did not get the credit they should). The Manhattan Project was merely an elaboration of what had already been discovered and proven, at least theoretically.

Perhaps somewhere there is an example of multi-billion dollar government project producing new theoretical results. But we have never heard of any. We are quite aware of the chorus that rises when we present these articles however. We are always told by indignant feedbackers that science has simply grown too complex for any one individual (or even a modest group of individuals) to accomplish anything of merit.

Conclusion: Apparently, one must throw billions at science to achieve anything of note these days. Maybe there is nothing left for the future but ever more expensive superstructures presenting diminishing returns. Is this why the promoters of Big Science increasingly use the rhetoric of cancelled TV shows, some of it dating back decades? We find it odd. Is Big Science indeed merely a smokescreen for Big Military expenditures? Is the Hadron Collider actually being used for more specific and targeted war research? What exactly are they promoting? And why?

US Jobs Aren’t Coming Back… Rand Paul’s Anti-Libertarian Fence

US Jobs Aren’t Coming Back

Saturday, June 26, 2010 by Staff Report

Joe Biden

Biden: We Can’t Recover All the Jobs Lost … Vice President Joe Biden (left) gave a stark assessment of the economy today, telling an audience of supporters, “there’s no possibility to restore 8 million jobs lost in the Great Recession.” Appearing at a fundraiser with Sen. Russ Feingold (D-Wisc.) in Milwaukee, the vice president remarked that by the time he and President Obama took office in 2008, the gross domestic product had shrunk and hundreds of thousands of jobs had been lost. “We inherited a godawful mess,” he said, adding there was “no way to regenerate $3 trillion that was lost. Not misplaced, lost.” AP

Dominant Social Theme: They may not be able to replace every single job but they’re trying.

Free-Market Analysis: One of the hoariest dominant social themes or sub themes promoted by the power elite is that government can create jobs. It is possibly a sub theme because the dominant theme is simply that “government can do it all.” In fact, the only things government can do with any modicum of efficiency are collect taxes, inflate currency and pass laws that usually have the opposite effect from what is intended. Of course this doesn’t stop government pols from claiming they can create jobs when the economy becomes troubled and needs help. Here’s some more from the article:

Claims for jobless benefits fell by the largest number in two months last week, but were still high enough to signal weak job growth. Meanwhile, the Senate on Thursday failed to pass an extension of unemployment benefits. Biden said today the economy is improving and noted that in the past four quarters, there has been 4 percent growth in the economy. Over the last five months, more than 500,000 private sector jobs were created. “We know that’s not enough,” the vice president said.

Last week the White House put out a Recovery and Reinvestment Act update claiming that between 2.2 million and 2.8 million jobs were either saved or created because of the stimulus as of March 2010. In signing the Recovery Act into law on Feb 17, 2009, Mr. Obama said the measure “will create or save 3- and-a-half million jobs over the next two years.”

Peer behind the numbers claimed by the Obama administration and the questions multiply, as was pointed out in a recent Wall Street Journal article, “The Media Fall for Phony Jobs Claims.” The article explained that one way the Obama administration had been able to make extravagant claims about jobs was by using the “saved or created.” The US president used this phrase recently in announcing that the administration, via certain stimulus spending, had saved or created 150,000 American jobs. Obama then claimed that further job-savings programs were in the works to save another 600,000 jobs, but these numbers still pale against promises to save up to four million jobs that were made previously.

Of course, using such vague language makes it impossible to do any substantive fact-checking of claims. And there are no government or even private bureaus that track such statistics apparently. How is it possible to know whether a job has been “saved” or not? The claims are gobbledygook but the administration gets away with it because it has the bully pulpit and the media repeat the claims. Here’s some more from the Journal:

If the “saved or created” formula looks brilliant, it’s only because Mr. Obama and his team are not being called on their claims. And don’t expect much to change. So long as the news continues to repeat the administration’s line that the stimulus has already “saved or created” 150,000 jobs over a time period when the U.S. economy suffered an overall job loss 10 times that number, the White House would be insane to give up a formula that allows them to spin job losses into jobs saved.

The real reason for the downturn and loss of jobs have little to do with the Bush administration or even with the current cyclical downturn. It has everything to do with the constant inflationary measures of the mercantilist Federal Reserve and the company-killing graduated income tax that has sent companies large and small away from American shores. The combination of endless asset inflation and punitive taxation has been hollowing out America for at least a century if not longer. Regulatory “free-trade” agreements that are nothing but “managed trade” don’t help either.

The American political regime of the past century has truly begun to bankrupt America. The country has lost vast amounts of manufacturing capability and even the chattering classes today speak of America’s “service” economy as if this in some sense can compensate for the loss of the vital entrepreneurialism that builds the wealth of nations and individuals. Meanwhile, America’s infrastructure degrades, its cities crumble, its vital middle class shrinks and companies that were founded there move offshore to grow.

Conclusion: The reasons for this ruin are clearly evident in the fiscal and monetary policies that the US has adopted over the past 100 years. To claim in any way that the Federal government is able to “save or create” jobs is truly a misleading statement given the policies that the US Federal government implemented in the 20th century. These policies in fact were supported by the larger Anglo-American power elite that has been trying to tear down the American republic since its inception in order to create a seamless US/European governmental authority. The idea that those who create fundamental policy for the US Federal government actually care about American workers, either blue collar or white collar, or want to see them succeed is a promotion, not a credible reality.

Rand Paul’s Anti-Libertarian Fence

Saturday, June 26, 2010 by Staff Report

Rand Paul

Rand Paul (left) Electric Border Fence Baffles Cornyn, Libertarians … Republican Senatorial candidate Rand Paul wants to build a fence along the U.S.-Mexico border. It’s a rather ho-hum proposition in the larger context of conservative ideas — except that Paul wants that fence to be electric and he wants it built underground. Among the variety of proposals to stem illegal immigration along the southern border, the construction of an underground electrical fence appears to stand alone on the extreme. There is little contemporary evidence of other Republican officials proposing such a project, even among the most conservative of the bunch. Indeed, when approached in the halls of Senate several weeks ago and asked about the idea (though not told who proposed it), National Republican Senate Committee Chair John Cornyn (R-Tex.) assumed it was a joke. “I have not heard that,” the Texas Republican said. “Underground? What would happen? How would that work?” Huffington Post

Dominant Social Theme: Keep track of those migrants any way you can.

Free-Market Analysis: We have written about Rand Paul in the past expressing some hesitation about the race he is running. We wondered if he would have done better to use his hard-fought platform as a bully pulpit to educate the public about free-market themes instead of apparently compromising and muddying his message. But Rand Paul is not a libertarian (he says) and as can be seen from the excerpt below (which we have quoted before), he positions himself as a Constitutional Conservative, whatever that is.

“His [Rand Paul’s] success so far has the GOP establishment fighting back. In his ads, Grayson is attempting to paint Paul as a kook whose beliefs are outside the mainstream. Which may explain why on several issues, Paul is edging toward the center. Pure libertarians, he says, believe the market should dictate policy on nearly everything from the environment to health care. Paul has lately said he would not leave abortion to the states, he doesn’t believe in legalizing drugs like marijuana and cocaine, he’d support federal drug laws, he’d vote to support Kentucky’s coal interests and he’d be tough on national security. “They thought all along that they could call me a libertarian and hang that label around my neck like an albatross, but I’m not a libertarian,” Paul says between Lasik surgeries at his medical office, where his campaign is headquartered, with a few desks crammed between treatment rooms. “Frankly, I’d rather be coming from the right than from the left like Grayson, who not too long ago was a Democrat and Bill Clinton supporter.” (Grayson voted for Clinton in 1992 before switching parties and entering politics in the mid-1990s.) Time Magazine

Let’s see. Rand Paul is positive about the drug war and about “national security” which means in some sense he supports America’s many, serial overseas adventures. He believes the label libertarian is an “albatross” which presumably surprised his father who ran for US president on the libertarian ticket. Now, Rand Paul has come up with the idea of an electrified underground fence along the border between Mexico and the US and sending out helicopters to arrest migrants when they pass over the fence and trip the detectors.

While this may be seen as a bit of a loony idea to begin with (what happens when a coyote walks across the border?), the problem we have with it is the same one we had when we heard about Rand Paul’s other positions. They seem like variants on the larger Anglo-American imperium. From our point of view given what we understand of his father we expected Rand Paul to run a race that would be both competitive and educational. He has succeeded with the competitive part, but unlike his father we fear he is sacrificing the educational element.

Actually, Rand Paul’s positions lead us even to wonder exactly what is he in the race for. Does he really want or need to be in politics so badly that he is willing to stuff himself into a rhetorical, anti-libertarian straight-jacket. The positions he is taking, including this latest one having to do with an electrified, underground fence, seem to us to be less libertarian, less constitutional, and less conservative than they are NEO-conservative.

The late, great Austrian economist Murray Rothbard was a close friend of Rand Paul’s father, Congressman Ron Paul (R-Tex). Rothbard, like Paul, abhorred America’s myriad overseas adventures and was no fan of the “drug war.” We don’t think Ron Paul is much of a drug-war fan either, but we know for a fact that Ron Paul treated his presidential campaigns (both of them) as educational endeavors. He didn’t think he would win, but he hoped to bring some new ideas to the national table that he shared with Rothbard and other free-market thinkers.

One of the most extraordinary parts of Ron Paul’s Republican presidential campaign was the effective way he pointed out that America’s foreign ventures were not predetermined or necessary affairs. This had an extraordinary effect on the American psyche, not right away but as time passed Paul’s message percolated. Today, both the Iraq and Afghanistan wars are under attack in America as they rightly should be. They have contributed nothing to America’s fundamental security but have certainly raised additional enemies abroad and contributed to the erection of a police state domestically.

Ron Paul went on to build an influential national liberty community supported by donations of those who believe in his rhetoric and are willing to put time and money behind the free-market and libertarian causes that he espouses. If one wants to leave a safer and more orderly civil society for one’s children, this would seem to make sense to us. Ron Paul’s defeats at the ballot box only led to a bigger political program and more influence than he might ever have dreamed of.

But if one runs on a platform that is both pro-war and pro-drug war, it doesn’t seem to us that very much is left of a bully pulpit from a free-market standpoint (assuming that was what Rand Paul was originally after). Rand Paul is doing what he needs to do to win an election but in the process he may be switching off a vast constituency of quasi-libertarians types (growing all the time) who would have given him truly national support. Of course, it is entirely possible that Rand Paul believes in the various positions he espouses; in fact it would be cynical to impute anything else. But that makes his run all the odder as, given the nature of many of his positions, he sounds in a sense no different than a lot of other conservative Republicans.

The idea of running an electrified fence across the border between Mexico and the US may or may not be a kooky idea. But it is one more statist solution of the type we would expect to come from the right wing of the Republican party, not from a libertarian-oriented campaign or even a “constitutionalist-conservative” one. We would much rather have heard Rand Paul discuss how government welfare programs and government control of “public” lands encourages migrants to come to the US and abuse a system of generous public benefits. It is the welfare state itself and public ownership that facilitate illegal immigration. Not only that, but it is very obvious that brain-trusts within both the Republican and Democrat parties seek a closer merger with Mexico and surreptitiously encourage the very migrations they claim to oppose.

Rand Paul could have brought up all these issues. Presumably as a Constitutional Conservative he believes in some of them. Instead, he has made an issue of an electrified fence which sounds as if he means to electrocute Mexican people as they try to cross the border. Obviously Rand Paul was trying to present a “practical” solution to an intractable problem. But from our point of view, this is a good example of how politics as usual playing to win only debases the debate and further confuses political positions. Now, no doubt, many who oppose a libertarian or constitutional agenda will claim falsely that proponents of such agendas have suggested the forced electrocution of Mexicans.

Conclusion: We fear that it may be too late for Rand Paul to build directly on his father’s constituency. Many who support his father may by this point be less enthused about the son. In this sense, we write with a good deal of sorrow, that it may be a missed opportunity for both Pauls. Over the past two years, since losing his presidential run, Ron Paul has built a national freedom movement comprising thousands of committed individuals young and old that is gaining in influence and support every day. The son may win the election and lose a legacy.

Traditional American Values Are Dead and Buried?.. UN Swaps One Fear for Another

Traditional American Values Are Dead and Buried?

Monday, May 24, 2010 by Staff Report

Who owns America today? … Perhaps the greatest threat to … the tea party is that they appear to be arguing a case that, for all practical purposes, has already been settled for the majority of Americans. The America of the Founding Fathers roots a modest, decentralized, and agrarian nation is gone, or is at least being pushed to the demographic margins, inhabiting the great red swath of the country’s middle. Politically, the America of today is as much a product of Lyndon Johnson and Franklin Delano Roosevelt as James Madison and Thomas Jefferson of the sprawling government programs of Medicaid and Social Security as much as the Second Amendment and its provision for nongovernment militias. Though he was speaking of … the Civil Rights Act specifically, Republican National Committee Chairman Michael Steele’s comment Sunday morning on “Fox News Sunday” appears to be broadly relevant to the tea party as a viable political movement: “The philosophy was misplaced in these times,” he said. “The philosophy got in the way of reality.” Christian Science Monitor

Dominant Social Theme: It’s ovah! The blue states have won. Federal government activism is gloriously ascendant.

Free-Market Analysis: Working closely together, we Bell staffers have developed a most un-libertarian, hive-like mentality. These days, buzzing in our brains are recollections, often, of the compelling Claudius books by Robert Graves. What comes to mind, however, is not so much the pomp and decrepitude that Graves brought to life as the books’ over-riding, semi-tragic perspective that the Republic was gone and could not be brought back.

Indeed, the theme of Roman republicanism-now-lost hangs over these books and in our humble opinion lifts them into the realm of great art. Not only does Graves have an apparently thorough grasp of ancient times, but he is able to bring these times to life and to inhabit them with living, breathing creatures who are often among the most maleficent and fascinating since Edward de Vere, 17th Earl of Oxford, wrote his great character-driven plays (Hamlet, Othello, Macbeth, etc.).

Graves’ insight was to utilize the Roman emperor Claudius as the narrator for these two books (I, Claudius, and Claudius the God). Who was this historical personage? Wikipedia tells us that “Tiberius Claudius Caesar Augustus Germanicus (1 August 10 BC 13 October AD 54; Tiberius Claudius Drusus from birth to AD 4, then Tiberius Claudius Nero Germanicus until his accession) was the fourth Roman Emperor and a member of the Julio-Claudian dynasty, ruling from 24 January AD 41 to his death in AD 54. Born in Lugdunum in Gaul (modern-day Lyon, France) to Drusus and Antonia Minor, he was the first Roman emperor to be born outside Italia.”

And further …

He was reportedly afflicted with some type of disability, and his family had virtually excluded him from public office until his consulship with his nephew Caligula in AD 37. Claudius’ infirmity may have saved him from the fate of many other Roman nobles during the purges of Tiberius’ and Caligula’s reigns; potential enemies did not see him as a serious threat to them. His very survival led to his being declared emperor (reportedly at the insistence of the Praetorian Guard) after Caligula’s assassination, at which point he was the last adult male of his family. (- Wikipedia)

It was Graves’ great fictional conceit (which in fact has some historical justification) that Claudius was among the most literate, thoughtful and generally best emperors of the generally horrid Roman imperium. Here’s a good Amazon book review by “Mary Whipple” that sums up the matter:

Arguably the greatest fictional biography ever written. December 5, 2006 … In I, Claudius, Robert Graves creates the first person narrative of Claudius Drusus Nero Germanicus, known in Roman history as Claudius, and widely regarded as an idiot. Telling the story of his family’s rule from the beginning of the Christian era until his death fifty years later, Claudius relates stories of his grandmother Livia, one of the most treacherous women in history, a woman who manipulated the imperial succession through poisonings, assassinations, marriages, and secret alliances. The reign of her son Tiberius is bloody, murderous, and corrupt. Tiberius’s succession by Caligula, his insane grandson and the protege of Livia, takes Rome into even more terrifying debauchery. Claudius’s ultimate succession to the throne is widely regarded as a joke.
In Claudius, the God, Graves continues the story of Claudius, who is hugely popular when he first becomes Emperor, refusing many of the numerous titles claimed by his predecessors because he believes he has not yet earned them. Gradually, we observe the truism that “power corrupts and absolute power corrupts absolutely.” His invasion of Britain, his relationship with his wife Messalina, and his attempts to control the succession to the throne show his attempts to manipulate Roman history and his own legacy. The reader develops enormous sympathy for this man who began his reign with pure motives but who was ultimately powerless to control his own destiny and that of Rome.

Characters are complex, fully developed humans, instead of cardboard, costumed ancients, and their machinations, though extremely bloody, show the conflicts that occur when absolute rule and republican sentiments contend for dominance, a conflict in which Graves says he saw parallels to World War I and its aftermath. Taken together, these two novels of Claudius constitute what is arguably the greatest fictional biography ever written. Precise historical detail creates a rich tapestry of life in the period, while, at the same time, Graves’s keen awareness of psychology leads to vibrant and believable characters behaving badly. The values (and lack of them) in the period are presented in dramatic scenes of violence and excess, and the fickleness of the masses (whom Claudius calls “the frog pool”) is both realistic and sadly universal.

Graves apparently had the ramifications of World War One and the decline and fall of the British Empire in mind when he wrote these books. In looking at the startling unwinding of what is left of American exceptionalism, especially, we find ourselves reminded over and over of Claudius’ dilemma as related by Graves the yearning for a bygone republic (the Roman republic) that Claudius shared (as Graves’ relates it) with other academics and romantics of his day.

While many items, anecdotal and otherwise, remind us of Graves’ great work, this CS Monitor article, excerpted above, is among the most startling. At least Graves didn’t CELEBRATE the demise of the Roman republic. No, for him and his protagonist, the expansion of empire can be perhaps justified or at least comprehended but never truly endorsed. Both books, but especially the first, show in great detail just what the establishment of an empire entails, with all its murder, moral, spiritual and economic degradation and degeneration.

In fact, we had to read the article in question twice to fully absorb what we consider to be its wrongheadedness. Are we supposed to be relieved, or at least satisfied that, “The America of the Founding Fathers roots a modest, decentralized, and agrarian nation is gone, or is at least being pushed to the demographic margins, inhabiting the great red swath of the country’s middle?”
Here’s some more from the article, which is actually built around Kentucky conservative/libertarian senatorial candidate Rand Paul’s recent “controversial” remarks regarding the constitutionality and appropriateness of the nation’s far-reaching Civil Rights Act of the early 1960s. (The general gist of his remarks was that from a philosophical standpoint, anyway, the federal government might have been seen as over-reaching.)

What the tea party wants … While Paul’s comments are political gaffes, they do not appear to be too far afield from tea party doctrine to the degree that such a thing exists. The battle flag of the tea parties has been the Revolutionary War “Don’t Tread on Me” banner. But the enemy to liberty, in this instance, is not the British, but the overbearing American government itself. The tea parties’ 10-point Contract From America includes “restore fiscal responsibility and constitutionally limited government in Washington.” As if to underscore the point, it also includes: “demand a balanced budget” and “end runaway government spending.”

Paul has been anointed to carry this gospel to Washington, and in each instance, Paul’s comments last week spoke to the desire to lessen the grip of the American government on its people in this case, business. In theory, almost all Republicans have this aim. The difference between Paul and more mainstream Republicans, however, has been his apparent willingness (or inability not to) speak the pure doctrine of Barry Goldwater libertarianism regardless of the political costs.

Paul is burrowing deep into political theory. The fundamental question he is raising is: Who should be in charge of changing the United States the government or the American people themselves? Tea party principle, as interpreted by Paul, suggests that the American people must be free to evolve on their own. In other words, business-owners should have the right to discriminate even though Paul says he “abhors” racism because the alternative is a slippery slope of government interference, leading to tyranny.

For people like Paul, the hope is problems such as racism will be increasingly exposed as abhorrent, and society will gradually change on its own without government interference. Yet on race in particular, one prominent conservative abandoned this philosophy. The late William F. Buckley Jr., founder of the National Review, originally opposed the Civil rights Act. “I once believed we could evolve our way up from Jim Crow,” Mr. Buckley said in 2004, according to The New York Times. “I was wrong: federal intervention was necessary.”

There is a “gotcha” aspect to all this that we have noted before in other American mainstream-media references to the apparent demise of Thomas Jefferson’s vision of an agrarian republican nation-state. The article’s implications are obvious: In the modern world, freedom is not free and the US federal behemoth soon to redistribute up to 40 percent of this bleeding nation’s wealth is both inevitable and apparently necessary.

At least Robert Graves had the decency not to celebrate the demise of the republic. In fact the Claudius books are nothing if not a cautionary tale as to what happens to a society that degenerates as Rome did. As for William F. Buckley, the libertarian movement in America reflects (and correctly in our opinion) an increasing Rothbardian repugnance toward this legendary intellectual. In fact, Buckley, a walking, talking mechanism of cognitive dissonance, spent his adult life celebrating free-markets while seemingly endorsing (or at least ignoring) the gamut of military-industrial activities undertaken by the Pentagon and America’s spying agencies.

We’ve stayed away from commenting on Rand Paul’s remarks directly, for the issue has blown up into a national controversy and plenty of publications have covered it. What we are fascinated with is the approach that the CS Monitor has taken to the subject by implying (regardless of the appropriateness of Rand Paul’s remarks) that he is likely standing futilely athwart the path of history and shouting “stop!”

Now we can recognize a dominant social theme when we see one (the Bell is supposed to sniff them out, after all). We are sufficiently cynical to suggest that one reason for Graves’ continued success and celebration by the powers-that-be (other than the greatness of the work itself) is that it delivers the message that empire is implacable and irreversible. And that is what this article is implying heck, stating!

We have a meme of our own to suggest. We regularly offer up the idea that the Internet is the second, modern communications’ revolution of the past 500 years, and is putting “the hurt” on power-elite fear-based promotions. The first one (initiated by the Gutenberg press) eventually resulted, one way or another, in the Renaissance, the Reformation, “these united States” and a host of other far-reaching changes. These happened despite ongoing wars and an apparent determination by the powers-that-be to roll back the transformative aspects of Gutenberg’s book-printing invention.

There are similarities between then and now in terms of the elite’s increasing dysfunction. The elite is fairly obviously applying 20th century damage-control techniques to a 21st century problem. In the 20th century, when a fear-based promotion was in danger of unraveling, the elite could bring to bear all the academic, media and governance forces at its disposal to make sure that the problem was snuffed out and credibility restored. In the 21st century, the elite has seemingly lost control of various portions of its command-and-control apparatus. The Internet is an evolving emergency, not amenable to one-time fixes.

Most damagingly, the elite’s mainstream media is not fully in control of fear-based messaging any more and thus problems that might have been quickly alleviated, linger and drastically erode the believability of what has been painstakingly created with tremendous cost and clout. Not only that, but each erosion subtly effects the rest. The ongoing degeneration of the global warming theme has eroded the ability of the elite to justify other power grabs and even to create additional promotional spin-offs as planned.

A most successful dominant social theme for the power elite in the 20th century was the whole promotion of regulatory democracy as the only logical and inevitable methodology of governance. Today, we would argue, this meme is increasingly under siege along with central banking, so-called international trade agreements and, in fact, the entire superstructure of global government.
Rand Paul’s Kentucky nomination in the US, the Tea-Party movement itself, along with the destabilization of the euro and the EU itself are signs from our perspective that the inevitability of regulatory democracy is finally being questioned by the West’s long-suffering citizens at a fundamental level. We reject the meme as enunciated (smugly) by the CS Monitor (and even by Graves himself, regretfully) that empire is irreversible and that what is once done, no matter how bad, cannot be undone, or at least rectified.

Conclusion: Since we are in a naming mood, we will call this dominant social theme (the inevitability of regulatory democracy and the expansion of the Anglo-American empire) the “I Claudius meme.” If we are correct, the insanity of current Western governance with its endless warring, destructive taxation and phony money printing will eventually go the way of Rome itself falling silent as something else evolves.

UN Swaps One Fear for Another

Monday, May 24, 2010 by Staff Report

Goods and services from the natural world should be factored into the global economic system, says UN biodiversity report … The economic case for global action to stop the destruction of the natural world is even more powerful than the argument for tackling climate change, a major report for the United Nations will declare this summer. The Stern report on climate change, which was prepared for the UK Treasury and published in 2007, famously claimed that the cost of limiting climate change would be around 1%-2% of annual global wealth, but the longer-term economic benefits would be 5-20 times that figure. The UN’s report dubbed the Stern for Nature is expected to say that the value of saving “natural goods and services”, such as pollination, medicines, fertile soils, clean air and water, will be even higher between 10 and 100 times the cost of saving the habitats and species which provide them. To mark the UN’s International Day for Biological Diversity, hundreds of British companies, charities and other organisations have backed an open letter from the Natural History Museum’s director Michael Dixon warning that “the diversity of life, so crucial to our security, health, wealth and wellbeing is being eroded”. UK Guardian

Dominant Social Theme: OK, OK, global warming didn’t work out, but now we’ve got one that will really run shivers up and down your spine the “destruction of the natural world.”

Free-Market Analysis: There are many that would maintain the larger Daily Bell approach to news and analysis is fatally flawed by its analysis of a non-existent power elite. For those who adopt this argument, the world runs on serendipity and there is no rhyme, nor reason to current events, human triumphs, disasters, etc. This is a perfectly logical “conditioned” way of looking at the world and one that, especially in the 20th century, was most understandable. But today there is the Internet, and here at the Bell we think the Internet has given serious students of the world-as-it-is an opportunity to “connect the dots” when it comes to the socio-political manipulation of Western nation-states and the world in general.

In this article we want to use the above news report from the UK Guardian, also featured yesterday on the Drudge report, to illustrate why we believe the Bell’s way of looking at the world may have something to it. (We want to “promote” our point of view in other words!) We think we have a case to make.

The Internet, in our opinion, has revealed a great deal of connectivity between some of the wealthiest funds, families and non-profits and various manipulations of industries, politics and even military initiatives. These connections are abetted by the power elite’s lack of anticipation as regards the Internet, and the maintaining and expanding of a fairly sizable paper trail throughout the 20th century one that in large part has found its way on-line. It is thus fairly easy to find out who funded what initiative and who was in favor of this promotion or that one. (We have noticed in our several decades of trolling the web that this paper trail has diminished rather markedly of late at least as it concerns Google. But the information is still “out there.”)

Another reason the elite left a paper trail is because those involved (not very many) were fairly paranoid about being accused of doing anything in secret. If one is worth literally trillions, then it makes sense to support an ever-expanding regulatory democracy because regulations can always be traduced by smart lawyers, accountants, etc. given access to enough funds.

This is the reason, in our opinion, that the power-elite feeder system focuses on symbol manipulators from the best Western universities. Thus it is, that the smartest symbol manipulators (often those with unusual mathematical aptitude) are hired by the biggest corporations and financial firms because these entities need to work around the rules and regulations hemming in the “little guy.”

The elite may take its decisions in private, but it has constructed a vast matrix of academic, political and non-profit entities that “paper” the decisions that likely have already been made. This is the reason that those in elite positions are often seen as giving speeches or disseminating policy statements that provide valuable clues to as to what is going to happen next from economic, industrial and sociopolitical policy perspectives.

The above report in the Guardian is a good example of how this elite programmatic element actually works. The UN, from our perspective anyway, is a perfect example of a power elite vehicle, one established primarily as a receptacle for the elite’s fear-based dominant social themes. These themes propose a problem anything from global-warming, to over-population, to economic catastrophe. But it is just as important to have an authoritarian receptacle providing a solution (the UN) that can further consolidate the wealth and power that fear-based promotions are supposed to generate.

In the case of the upcoming announcement about biodiversity and humans “destruction of the natural world,” we would argue that the powers-that-be are returning to the hoary global-warming promotion from a different angle. UN-o-crats are still arguing that the environment is “at risk” only now humans are creating problems through industrial EXPLOITATION rather than outright “carbon pollution.”

Being somewhat cynical (it’s true), we don’t buy either of these memes. We didn’t believe in carbon pollution causing global warming even when it was fashionable to do so. We believe even less, if that’s possible, that individual human beings are “degrading” the environment its flora and fauna in catastrophic ways, or that the UN can actually do anything about it even if it were occurring. (It is the nature of evolution to shape and reshape all living things via extinction, which is a natural process not some sort of manmade disaster.) That this latest warning comes from the same outfit that documented the “damages” from carbon pollution, is not exactly a confidence builder. Here’s some more from the article:

The UN report’s authors go further with their warning on biodiversity, by saying if the goods and services provided by the natural world are not valued and factored into the global economic system, the environment will become more fragile and less resilient to shocks, risking human lives, livelihoods and the global economy. …

The report will advocate massive changes to the way the global economy is run so that it factors in the value of the natural world. In future, it says, communities should be paid for conserving nature rather than using it; companies given stricter limits on what they can take from the environment and fined or taxed more to limit over-exploitation; subsidies worth more than US$1tn (£696.5bn) a year for industries like agriculture, fisheries, energy and transport reformed; and businesses and national governments asked to publish accounts for their use of natural and human capital alongside their financial results.

And the potential economic benefits are huge. Setting up and running a comprehensive network of protected areas would cost $45bn a year globally, according to one estimate, but the benefits of preserving the species richness within these zones would be worth $4-5tn a year. The report follows a series of recent studies showing that the world is in the grip of a mass extinction event as pollution, climate change, development and hunting destroys habitats of all types, from rainforests and wetlands to coastal mangroves and open heathland. However, only two of the world’s 100 biggest companies believe reducing biodiversity is a strategic threat to their business, according to another report released tomorrow by PricewaterhouseCoopers, which is advising the team compiling the UN report.

[This] report shows that on average one third of Earth’s habitats have been damaged by humans but the problem ranges from zero percent of ice, rock and polar lands to 85% of seas and oceans and more than 70% of Mediterranean shrubland. It also warns that in spite of growing awareness of the dangers, destruction of nature will “still continue on a large scale”. The International Union for the Conservation of Nature has previously estimated that species are becoming extinct at a rate 1,000 and 10,000 times higher than it would naturally be without humans.

We remember when hysteria was at its manufactured height prior to the miserable failure of the Copenhagen conference on global warming. At the time, top officials at the UN were literally claiming that the “world” was at risk and that the next few months were going to be critical in terms of humankind’s survival and life on the planet as we know it. Well, Copenhagen fizzled and life has gone on. In fact, as we have long-maintained, the effective dissemination of these fear-based promotions is foundering thanks in large part to the Internet (and also the anger and enlightenment caused by the ongoing financial crisis). People actually understand the mechanisms and are catching on to the manipulation.

Admittedly, this is non-scientific opinion, but we read feedbacks at mainstream media news sites and inevitably they are filled with comments that make our Bell articles look, well … tame by comparison. The amount of non-believers roaming the blogosphere is large, astonishingly well informed and not at all inclined to take the authorities at face value anymore. And those circulating in leadership roles at major, elite groups seem increasingly aware. Alternative news reporter Paul Joseph Watson recently pointed out the following in an article entitled Brzezinski Decries “Global Political Awakening” During CFR Speech, as follows:

At a recent Council on Foreign Relations speech in Montreal, co-founder with David Rockefeller of the Trilateral Commission and regular Bilderberg attendee Zbigniew Brzezinski warned that a “global political awakening,” in combination with infighting amongst the elite, was threatening to derail the move towards a one world government. … Brzezinski then explained another significant factor in that, “For the first time in all of human history mankind is politically awakened that’s a total new reality it has not been so for most of human history.”

Brzezinski continued, “The whole world has become politically awakened,” adding that all over the world people were aware of what was happening politically and were “consciously aware of global inequities, inequalities, lack of respect, exploitation. … Mankind is now politically awakened and stirring,” said Brzezinski, adding that this in combination with a fractured elite “makes it a much more difficult context for any major power, including currently the leading world power, the United States.”

We will stick with our paradigm until we see evidence that it doesn’t explain what’s going on in the world today. But the UN’s transparent (almost pathetic at this point) attempt to swap one global, environmental fear-based meme for another and Brzezinski’s startling admission in Montreal provide us additional confidence we’re on the right track. In fact we’ll go even further out on a limb by writing as we have before that the power elite has not yet shown it has any answers to the truth-telling of the Internet. What was secret in the 20th century is common knowledge in the 21st.

Of course, we hope we are not foolish optimists. We try to stay level headed. But so many elite memes are under attack or foundering these days that we are having trouble keeping track of them. We are also fully aware that when powerful people are being pushed the usual solution is to push back with some sort of military activity. A war in, say, Iran might fit the bill, given other economic and socio-political difficulties faced by the elite. We don’t necessarily anticipate it, but we are certainly more concerned about that possibility than humankind’s gross, planetary depredations. Here is some war news from the Western intel-analysis webiste DEBKAfile:

Obama starts massive US Air-Sea-Marine build-up opposite Iran … DEBKAfile’s military sources report a decision by the Obama administration to boost US military strength in the Mediterranean and Persian Gulf regions in the short term with extra air and naval strike forces and 6,000 Marine and sea combatants. Carrier Strike Group 10, headed by the USS Harry S. Truman aircraft carrier, sails out of the US Navy base at Norfolk, Virginia Friday, May 21. On arrival, it will raise the number of US carriers off Iranian shores to two. Up until now, President Barack Obama kept just one aircraft carrier stationed off the coast of Iran, the USS Dwight D. Eisenhower in the Arabian Sea, in pursuit of his policy of diplomatic engagement with Tehran.

For the first time, too, the US force opposite Iran will be joined by a German warship, the frigate FGS Hessen, operating under American command. It is also the first time that Obama, since taking office 14 months ago, is sending military reinforcements to the Persian Gulf. Our military sources have learned that the USS Truman is just the first element of the new buildup of US resources around Iran. It will take place over the next three months, reaching peak level in late July and early August. By then, the Pentagon plans to have at least 4 or 5 US aircraft carriers visible from Iranian shores.

Conclusion: The difficulty with attempting to decipher elite memes and actions in the era of the Internet is that as the workability of fear-based memes has decreased, the level of uncertainty regarding elite actions and their effectiveness has actually increased. There are many ways of looking at them. Military analysts, for instance, point out that additional naval strike forces could actually be aimed at dissuading Israel from a nuclear attack on Iran. Yet, just as possibly, America may be positioning itself for a quick and overwhelming attack on Iran, one that could conceivably utilize “tactical nuclear” weapons to ensure victory. If military activities do commence in this part of the Mideast, one could conceivably see huge price hikes in precious metals, oil and other important or valuable commodities. On a more basic level, a nuclear war, even a limited one, would constitute a REAL degradation of the environment. There’s something for the UN to work on.

Douglas French on Ludwig von Mises and the Advancement of Free-Market Thinking

Sunday, April 25, 2010 with Scott Smith

Douglas French The Daily Bell is pleased to present an exclusive interview with Douglas French (left).

Introduction: Douglas French is president of the Mises Institute and author of Early Speculative Bubbles & Increases in the Money Supply. He received his Masters degree in economics from the University of Nevada, Las Vegas, under Murray Rothbard with Professor Hans-Hermann Hoppe serving on his thesis committee.

Daily Bell: Can you give us some background about yourself? Where did you grow up and how did you become interested in Austrian economics?

Douglas French: I grew up in Abilene, Kansas and like Dwight D. Eisenhower, was an average student at Abilene High School. Sports was my primary interest in school. I lettered in three sports, and went on to play football at Washburn University in Topeka, Kansas.

I dropped out of college in my third year out and worked as a bartender and bar manager for ten years. During that time I returned to college to finish my undergraduate degree with a major in economics and finance.
After moving to Las Vegas in 1986, I took an entry-level job at a bank and ultimately worked in the banking business in Nevada for 22 years. In the fall of 1989 I decided to enroll at the University of Nevada at Las Vegas (UNLV) and pursue a masters in economics. In the fall of 1990 I took “History of Economic Thought” with Murray Rothbard and my life was changed forever. I took “U.S. Economic History” with Murray as well and wrote my masters thesis under his direction. While researching and writing my thesis on early speculative bubbles I became interested in Austrian Economics, especially Austrian Business Cycle Theory.

Daily Bell: Tell us what you do at the Mises Institute and how you came to your important free-market role.

Douglas French: I serve as the President of the Institute. Lew Rockwell and the late Burt Blumert asked if I would come to work for the Institute in the fall of 2008. Along with being a student of Murray’s I had been a donor to LvMI and had attended a number of events as well as speaking at a few conferences. So I feel like I’ve been closely involved with LvMI’s mission for a number of years.

Daily Bell: You studied under Murray Rothbard and with Professor Hans-Hermann Hoppe. Can you give us some background and anecdotes about them? What has made them such famous proponents of free-markets and human action?

Douglas French: Murray was the happiest person I’ve ever met. Especially considering that the UNLV economics department did all it could to discourage students from take his classes and classes from Hans. He was generous with his time and his students would wait long periods just to chat with him. Thankfully, someone eventually found a chair and put it outside his door so we didn’t have to keep sitting on the hard tile floor in the hallway.

The first night of class I remember Murray walking through the door and he started talking immediately about the crazy politicians wanting to fix gas prices. Anyone who has taken classes with Murray will tell you he was a walking bibliography. His lectures were filled with endless reading suggestions. And not just book titles but author, publisher, date published. Of course, as a thesis advisor he was the best: references, strategist, and cheerleader.

Of course Murray selected the rest of my thesis committee for me and professor Hoppe was at the top of his list. However, I never had the opportunity to take classes from him.

My thesis defense lasted for more than a couple hours as I remember. Sitting through my oral defense had to seem like the longest two hours of my committee members’ lives. But none of the Keynesian faculty members who dropped by to comment chose to stick around long enough to critique me.

Since I had no background in Austrian economics or Libertarianism, at the time, I had no idea how lucky I was to be studying under the man who is considered the father of the modern libertarian movement and was the dean of the Austrian school until his death, not to mention having one of the most important scholars of our time and the current dean of the Austrian school as a thesis committee member.

Daily Bell: Give us a historical economic framework for Ludwig von Mises. How did his thinking evolve?

Douglas French: When Mises went to college he described himself as a statist “through and through” like most of his fellow classmates. However, he was anti-Marxist, writing that the “platitudes of Marxist literature repelled me.” Mises believed that all the Marxist scholars he met were mediocre, except Otto Bauer.

By his fifth semester he began to have doubts about government interventionism. His work on housing conditions in Austria revealed to him that taxation hindered capital investment and limited supply leading to higher rents. But, reductions in these taxes didn’t reduce rents and led the government to impose other taxes to replace the taxes that landlords had been paying: early insight that one government intervention leads to a series of others due to the unintended consequences of this intrusions.

In 1903 Mises read Carl Menger’s Principles of Economics and from that book, he wrote, “I became an economist.” Mises attended Eugene Böhm-Bawerk’s seminar in Vienna until 1913 and witnessed continuous debates between Böhm and Bauer over Marxist theory. Mises applied Menger’s marginal utility theory to money and the business cycle and these were the subjects of the seminar the last two winter semesters that he attended. The finished manuscript for The Theory of Money and Creditwas in the hands of the publisher in early 1912.

Daily Bell: Mises is one of the greatest men who ever lived for his insights into what he called “human action.” How did the concept of human action evolve in his mind and why is it one of the most profound statements about the human condition ever uttered?

Douglas French: It was actually Carl Menger who developed a complete theory of social institutions arising from interactions among humans, each with his own subjective knowledge and experiences. It is the spontaneous evolution of these human actions that create institutions whereby individuals discover certain patterns of behavior that aid each person in attaining his goals more efficiently. Menger, and then Mises, applied this insight to the development of money which in turn makes the division of labor possible and satisfaction of wants attainable. This reasoning is the bedrock for understanding how societies and human progress advance. Conversely, this same understanding reveals how government intervention causes society to devolve.

Daily Bell: Can you summarize his great work, Human Action for our readers? Can you recommend some other books by von Mises?

Douglas French: I remember Murray talking about Human Action in class. He said that after he had read it, someone asked him what the book was about, he replied, “Everything!” So, can I summarize a book about everything? Not adequately. To quote from the Introduction to the Scholar’s Edition, Human Action is “a comprehensive treatise on economic science that would lay the foundation for a massive shift in intellectual opinion that is still working itself out fifty years after publication.”

Mises explained why he wrote Human Action:

Economics does not allow any breaking up into special branches. It invariably deals with the interconnectedness of all phenomena of acting and economizing. All economic facts mutually condition one another. Each of the various economic problems must be dealt with in the frame of a comprehensive system assigning its due place and weight to every aspect of human wants and desires. All monographs remain fragmentary if not integrated into a systematic treatment of the whole body of social and economic relations.
To provide such a comprehensive analysis is the task of my book Human Action , a Treatise on Economics. It is the consummation of lifelong studies and investigations, the precipitate of half a century of experience. I saw the forces operating which could not but annihilate the high civilization and prosperity of Europe. In writing my book, I was hoping to contribute to the endeavors of our most eminent contemporaries to prevent this country from following the path which leads to the abyss.

Bob Murphy, writing in the preface to his, Human Action Study Guide, “Suffice it to say, one cannot really claim to be an Austrian economist certainly not a Misesian! without reading Human Action.

In an essay written about Mises, Murray wrote that Human Action is “one of the finest products of the human mind in our century.”

One can’t go wrong reading any books by Mises. For those interested in booms and busts, I leaned extensively on a book that is now titled The Causes of the Economic Crisis when writing my thesis. For those who wonder why intellectuals and opinion makers hate capitalism, The Anti-Capitalist Mentality is very revealing. Want to understand big government? Read Bureaucracy. Theory and History was Mises’s favorite next to Human Action.

Of course the big three are Human Action, Socialism, and The Theory of Money and Credit.

Daily Bell: Tell us how Mises and FA Hayek expanded and finalized the concept of the business cycle.

Douglas French: As I mentioned, Mises applied marginal utility analysis to the money and the problem of the business cycle which became Austrian Business Cycle Theory (ABCT). As Murray Rothbard wrote in an essay about Mises, “At long last, economics was whole, an integral science based on a logical, step-by-step analysis of individual action. Money was fully integrated into an analysis of individual action and the market economy.”

Mises exposed the fallacies of the quantity theory of money and Irving Fisher’s “equation of exchange.” Mises put individual choice into monetary theory and dispensed with the “distorted concentration on mechanistic relations between aggregates.” Mises’s Regression Theorem showed that money can only be established by the market, beginning with barter, not by government construct. This of course has been proved right as every fiat currency in history has ultimately been made worthless.

Mises formulated his ABCT during the 1920s out of three elements; the boom-bust model from the Currency School, Swedish “Austrian” Knut Wicksell’s delineation between bank interest rates and the “natural” rate, and Böhm-Bawerk’s capital and interest theory.

“Mises’s remarkable integration of these previously totally separate analyses showed that any inflationary or created bank credit,” wrote Rothbard, “by pumping more money into the economy and by lowering interest rates on business loans below the free market, time-preference level, inevitably caused an excess of malinvestment in capital goods industries remote from the consumer.”

Hayek’s ABCT work continued from Mises’s explaining the origin of the business cycle in terms of bank-credit expansion.

Daily Bell: Did John Maynard Keynes know Mises? Keynes knew Hayek, but we wonder if he avoided Mises somehow or was in some way reluctant to engage him.

Douglas French: I can’t find any evidence that Keynes knew Mises personally. But Keynes did review the German version of The Theory of Money and Credit for the Economic Journal and dismissed it as being unoriginal. But as Donald Boudreaux pointed out in a letter to the Wall Street Journal, “in his 1930 book Treatise on Money, [Keynes] confessed that ‘in German, I can only clearly understand what I already know so that new ideas are apt to be veiled from me by the difficulties of the language.'”

Daily Bell: Were there differences between Hayek and Mises intellectually and otherwise. Was Hayek Mises’ favorite pupil?

Douglas French: Hayek attended Mises’s Privateseminar, be he didn’t necessarily consider himself a student of Mises. He wrote in the introduction to Mises’s Memoirs that he was closely associated with Mises. But he came to Mises, “not as a student, but as a fresh Doctor of Law and a civil servant, subordinate to him, at one of those special institutions that had been created to execute the provisions of the peace treaty of St. Germain,” Hayek wrote. “The letter of recommendation by my university teacher Friedrich von Wieser, who described me as a highly promising young economist, was met by Mises with a smile and the remark that he had never seen me in his lectures.”
Murray writes in Keynes, The Man that Hayek was charmed by Lord Keynes but he didn’t succumb to Keynes’s ideas. However, Hayek never wrote a critique of The General Theory. And Mark Skousen speculates that Hayek backed off of Keynes in the 1940’s not wanting to interfere with Britain’s financing of the war effort.

So while Hayek may have been politically pragmatic, Mises never was. Mises’s widow Margit described her husband’s character, quoting the words Mises wrote about Benjamin Anderson. “He never yielded. He always freely enunciated what he considered to be true. If he had been prepared to suppress or only soften his criticism of popular, but obnoxious policies, the most influential positions and offices would have been offered to him. But he never compromises.”

“Of all the Misesians of the early 1930’s, the only economist completely uninfected by the Keynesian doctrine and personality was Mises himself,” Rothbard wrote. “And Mises, in Geneva and then for years in New York without a teaching position, was removed from the influential academic scene.”

Hayek was able to secure teaching positions at the London School of Economics and the University of Chicago, and in 1974 was awarded the Nobel Prize. Mises would never secure such positions, was driven from his own country and had to fight for students and a chance to teach at all. While Henry Hazlitt wrote in Barron’s, “If ever a man deserved the Nobel Prize in economics, it is Mises,” he of course was never awarded the prize.

Daily Bell: Mises was a proponent of a gold standard was he not?

Douglas French: He was, and wrote: “The superiority of the gold standard consists in the fact that the value of gold develops independent of political actions.”

Daily Bell: We have an interest in free-banking here at the Daily Bell (see Selgin interview). We think any kind of financial system is allowable in a free-market and that competition will sort them all out so long as government is not involved and we do think in a free-market that a gold and silver private market standard would evolve as it has historically. Do you think this is an intellectually defensible position?

Douglas French: Certainly freely competitive banking is far better than the state regulated, fractional-reserve, fiat currency, central bank cartelized banking system we have now. However, in practice, in a free market, I don’t believe that the market would accept fractional reserves. It would be regarded as embezzlement at best and fraud at worst. Fractional reserve systems have fallen apart since the ancient goldsmiths issued more gold receipts than they had gold for. I can appreciate the theorizing, but when the rubber meets the road, the sternest task master the market would just not allow it.

Fractional reserve banking depends upon hope and prayer: Hope that not everyone shows up for their money all at once and pray that the borrowers pay their loans back. That’s not a sound basis for a banking system and requires the force of government to keep propped up.

Daily Bell: Do you think Mises position might have evolved toward free-banking if he was alive currently? Was Rothbard’s position evolving toward free-banking before his untimely death?

Douglas French: Murray wrote in an article that now is the Appendix to his book The Mystery of Banking “Ludwig von Mises was one of those believing that free banking in practice would approximate a 100 percent gold or silver money.” Mises believed “that demand deposits, like bank notes beyond 100 percent reserves, are illicit, fraudulent, and inflationary as well as being generators of the business cycle.” I believe this was also Murray’s view when he passed away.

Daily Bell: Is there anything wrong with fractional reserve/fiat-money in a free-market environment?

Douglas French: You couldn’t have fractional reserves and fiat money in a free-market. It would not last one day. Fractional reserves require a central bank to cartelize the banking system. In a free market demands on deposits would instantly shut down banks who engaged in fractionalized banking, by lending our their customers deposits.

No one would except paper money with no backing but for the power of government to require people accept it through legal tender laws.

Daily Bell: Regardless of the money standard argument, what was it about von Mises that made him utter such profound truths?

Douglas French: Mises was the rare combination of a dazzling brain, indefatigable work ethic and uncompromising courage.

Daily Bell: What can come after a genius like von Mises? Has everything been said that needs to be said?

Douglas French: There is always intellectual work to do. But all Austrians stand on the shoulders of Mises. Mises himself believed there was little room for economic theorists. “In every field there are very few who can make actual contributions to its intellectual treasury,” Mises wrote. “If academic positions were contingent upon independent contributions to economics, barely a dozen professors could be found throughout the world.”

Daily Bell: What are your preoccupations going forward from an intellectual standpoint? What are you exploring, researching and writing?

Douglas French: I’m still very interested in speculative bubbles, banking, the effects of inflation and applying Austrian Business Cycle Theory to current economic events (and there is plenty of that to do).

Daily Bell: You are receiving a million visits a month or more at the Institute, online. What has made the Institute such a success under your leadership? What have you been doing to make it grow so fast?

Douglas French: As Lew Rockwell has said, the Institute has been talking for 28 years and now people are finally listening. So, it’s not really anything I’ve done. I just happened to become part of the staff just after the financial crash. Because the Austrian explanation for the financial meltdown is the credible one people are paying attention and interested in the Austrian view. What we do day-to-day is try to make use of every communication avenue we can to spread the message and expose more students (young and old) to the teachings of Mises, Rothbard, Hayek and the other great Austrians. As technology opens more of these avenues, we reach more people and grow quickly. Technology is the greatest weapon that the freedom movement has ever had. Now, time and space cannot limit ideas, and ideas change the world.

Daily Bell: Did you ever dream of the impact that you and Lew Rockwell would be having? You’ve truly started an international free-market movement.

Douglas French: I didn’t start anything. The man I studied under Murray Rothbard his friend Lew Rockwell and many others started this modern free-market movement . I’m just honored to be a small part of it.

Daily Bell: Is the Austrian economic movement now starting to catch on at colleges and universities? Will it ever exceed Keynesianism?

Douglas French: Austrian economics is only starting to gain a toehold at a handful of colleges. But the future of education is changing. How long will state governments and parents be able to afford paying for four, five or six years of partying, football games, and sorority dances, with a few classes from out-of-touch tenured professors sprinkled in? The university system sells pieces of paper-diplomas-that have value to employers who use these pieces of paper to making hiring decisions. Eventually, technology will allow employers to test an applicants skills and knowledge and not depend on these expensive pieces of paper. The value of diplomas are depreciating like the value of fiat currency. Because there is nothing (no real education) backing it.

Anyone who wants to learn Austrian economics can do so online, for free, at There are hundreds of books, thousands of articles and hours of audio and video material made available due to the generosity of our donors. What we learn best is knowledge that we seek for ourselves, that we are passionate about. We have a generation that is teaching themselves economic truth, no matter what they hear from the talking heads on TV or the tenured Keynesians babbling nonsense about aggregate demand in the classrooms.

Daily Bell: What is planned for outreach? And what’s next for you? Can you recommend some articles or books you have written for our viewers?

Douglas French: As I mentioned before, we try to take advantage of every communication portal there is. I believe that based upon the initial response to the first class in the Mises Academy (over 200 enrolled), this program will expand. Our intent is to make all of our books and publications available in ePub formats. Our Mises Circle events held around the country are very popular and we will continue and expand the number of events we hold. Homeschool programs at the Institute have also proved to be very popular and I hope that these one-day programs can eventually be held in other cities. Mises University, the Austrian Scholars Conference and the Summer fellows programs will also continue and to expand. And we will continue to publish books through our publications department and reprint classic works through on-demand avenues, as well as the Quarterly Journal of Austrian Economics. We also host Libertarian Papers, a scholarly journal being managed so well by Stephan Kinsella, on and many of the great libertarian publications from the past.

Much of what I’ve written is on Just type in my name and click on the link to my archives. The thesis I wrote under Murray’s direction is online, and for sale at Ludwig von Mises Institute – Homepage.

Daily Bell: Thank you for your time and the great work you do.

We are extremely fortunate to be able to bring this wonderful interview with Douglas French, the head of the world-renown Mises Institute. We can remember vividly the early 1990s when the Mises Institute was not well known. If the Internet has given Austrian economics a kind of rock-star-band appeal, especially for younger people, then von Mises is surely the lead axe-man.
We have been fortunate enough to interview several individuals close to the Mises Institute including its founder Lew Rockwell who, along with Murray Rothbard, could be said to have sparked the most influential intellectual movement of the late 20th and 21st century. Sure, free-market Austrian economics had been around for several hundreds years and was in fact the most influential economic discipline in the sense that the powers-that-be were constantly reacting to it and trying to restrict its influence.

Mises was hardly mentioned for much of the 20th century and when he came to America after World War II, he had trouble finding a job. Academic texts were dismissive of both Mises and the Austrian school so named by German economists who believed in statist bromides and could not, like many others of statist stripe, stomach the truth-telling of free-market economics.

The power elite, which the Bell regularly comments on, couldn’t abide either Mises or the larger thrust of Austrian economics. At the heart of Austrian economics are some of the most profound insights ever voiced about the current human condition. The idea of marginal utility that only the market itself could determine fluctuations in price makes every law and every regulation a kind of price fix.

What appears to be the most sublime and significant insight into the human condition belongs to the modest and beleaguered professor from Austria, Ludwig von Mises. His insight into economics (building on the great Menger’s initial insight) that it was basically an explanation of the humanity’s vital spark and should acknowledge people’s capacity for human action at all times is perhaps the most profound statement about humanity since the Sermon on the Mount.
Not only is the concept of human action extraordinarily significant, it is also in its magnificent simplicity a rebuttal to every falsification and fabrication put forward by would-be dictators to justify their petty schemes and tawdry rapine. Statists will always maintain that a small elite is necessary to guide society toward a better future.

In fact, human action shows us that no matter what leadership is provided by a governing elite, it will never come to fruition as planned. That’s because individuals seeing outcomes of which they either approve or disapprove will take human action long before the results of the statist scheme are realized. Humans are pro-active. People, in aggregate, take care of themselves and their families and do so far in advance of any of the dangers that an elite might predict, and often arrive at personal solutions far in advance of solutions offered by the state.

Adam Smith’s Invisible Hand, marginal utility and human action, stand as a kind of holy trinity of free-market economic thought. (There is also the profound Misesian analysis of the business cycle, but that is of slightly less consequence than the three concepts just mentioned.) Taken together they are a devastating rebuttal to statists everywhere and certainly to the absurd and soul-destroying policies by most of the nations in the world today, including Western ones.

Thanks to the Internet and to the hard work of committed free-market thinkers such as Doug French and the legendary Lew Rockwell, Austrian free-market concepts are now well known to millions around the world. The proverbial cat is “out of the bag” and this is one reason why the Daily Bell has been so confident about predicting that the elite and its plans for global dominance, as currently configured, will become less effective over time, at least for the foreseeable future. This happened before, when the Gutenberg press launched a communication revolution some 500 years ago that resulted in the Renaissance and the Reformation. We think this is, generally, good news for anyone who believes in freedom and free markets.

Finally, this afterthought would not be complete without a word about the gold standard and free banking, which Doug French commented on his interview above. We think interview itself contains a very good description of Doug French’s Misesian position and we have already addressed this issue, previously, in an interview with free-banking proponent George Selgin. Click Here to read the Selgin interview. Between the clear pronouncements of Doug French, and the equally clear approach of George Selgin, we think we have done readers a service in illuminating these issues in a way not often accomplished in the general press. Granted, the Bell is not “mainstream” but these issues are compelling and actually of great import, even though they might not seem to be in the current environment. We are confident they will be, just as we were confident that Misesian thought would eventually sweep the world. Thanks to Doug French, Lew Rockwell and others dedicated to free-market thinking. More changes are coming.

How Goldman Sachs Aided Greek Spending… The Truth About Political Correctness

How Goldman Sachs Aided Greek Spending and Why

Tuesday, February 16, 2010 – by Staff Report

Goldman Sachs

The Greek crisis has taken on a decidedly sub-prime feel following revelations that Wall Street investment banks earned hundreds of millions of dollars over the past decade from transactions that helped the country hide billions of dollars of debt. The New York Times reported on the weekend that Wall Street tactics had played their part in worsening Greece’s financial position and undermining the euro by helping European governments to hide their mounting debts. The reports said that in 2001, shortly after Greece joined Europe’s monetary union, Goldman Sachs helped the government quietly raise billions of dollars. Athens was able to continue its free-spending ways while complying with the strict EU deficit regime, because the transaction was treated as a currency trade rather than a loan. Apparently, Greece wasn’t the only EU government to use these types of deals, where a government would raise cash up front in exchange for handing over the rights to a future income stream. They were also popular in Italy, Spain and Portugal. Greece has defended its use of financial derivatives, saying they were legal at the time. The problem for Greece is that it now finds itself under extreme pressure to cut its budget deficit by slashing spending and boosting its revenues. But the result of these past deals with Wall Street banks is that the Greek government has already handed over the rights to big chunks of its revenues, such as airport fees and lottery proceeds, for years to come. And, of course, the revelation that Greece participated in these Wall Street transactions has further undermined its credibility within the EU. Greece had already been criticized by the EU for supplying incorrect information about its budget situation in the past. – Business Spectator

Dominant Social Theme: It’s Goldman’s fault.

Free-Market Analysis: It has apparently emerged that Wall Street’s Goldman Sachs was not alone in helping Greece – and other countries – avoid EU-determined governmental budget limits. But the way this story is playing out, Wall Street is made to look like an enabler of bad and profligate Greek behavior. In fact, it seems a bit more complicated than that. Follow along (if you wish to) dear reader …

First we need to relate the story of a fine feedback we read somewhere explaining how (price) inflation was actually one of the causes of the current Greek predicament, and that the adoption of the euro itself had helped ruin the Greek economy. While corruption in Greece was certainly bad, the proximate cause of the current crisis, this feedbacker wrote, involved the one-size-fits-all euro. We were intrigued, as it was not an argument that has received a great deal of attention (though it rings true).

This person was of Greek descent and had visited Greece for years. His well-made point (or so it seemed to us) was that the euro was great for industrial Germany, and to a lesser degree France, but that it was hell for countries like Greece that had to import high-priced euro goods from industrial countries, while relying on lower-priced dollars and other currencies for their (tourist) revenue, etc. What this means practically is that Greek income went down while the nation’s import costs went up. This is one definition of price inflation. The Greeks started borrowing, buying houses on credit, etc., and so did the government.

Now actually we have heard something like this before. And it makes sense. Italy, Spain, etc. – these governments are all terrible black holes. But Germany’s government, we would venture to say is not that much better. What has apparently helped Germany is its industrial economy. Which brings us back to what we have been writing about the EU recently – that it is essentially a project that has massive benefits for Germany, so long as Germany agrees to be bound by EU conventions. Sort of like Gulliver being bound by Lilliputians.

Anyway, the EU is working out fairly well for Germany and a lot less well for the “Pigs” as they are called. And while the considered wisdom of the EU mainstream press is that the Greeks will do anything they need to stay in the union, we wonder when it is that Greek citizens will figure out that they have been sold downstream by their own elites – which wanted the upfront loot the EU was dangling – and EU bureaucrats themselves.

Greece is in for a long hard slog. The EU itself will insist on Greece reducing governmental “profligacy.” But what this may mean in reality is that Greek citizens, having struggled with painful euro-inflation for years are now to be slugged with a “euro recession” of indeterminate length and viciousness. “How’s that EU-thingy working out for you,” Sarah Palin might ask. We also believe the EU, Germany, somebody … is going to have to step in and help Greece unless the intention is to have Greece default. How bad is it? This bad:

The recent credit crisis was over a few trillion in bad, mostly US, mortgage debts, with most of that at US banks. Greek debt is $350 billion, with about $270 billion of that spread among just three European countries and their banks. Make no mistake, a Greek default is another potential credit crisis in the making. As noted above, it is not just the writedown of Greek debt; it is the mark-to-market of other sovereign debt.

That would bankrupt the bulk of the European banking system, which is why it is unlikely to be allowed to happen. Just as the Fed (under Volker!) allowed US banks to mark up Latin American debt that had defaulted to its original loan value (and only slowly did they write it down; it took many years), I think the same thing will happen in Europe. Or the ECB will provide liquidity. Or there may be any of several other measures to keep things moving along. But real mark-to-market? Unlikely.

The entire EU is faced with no good choices. It is coming down to that moment of crisis predicted by Milton Friedman so many years ago. And there is no agreement on what to do. (-

We haven’t predicted the breakup of the EU over Greece or the Pigs, only a great deal of pain, so far. But we have asked how long the long-suffering citizens of the EU will be prepared to tolerate an endlessly painful euro-experience. Eventually, the pain will be used as a cynical launching pad, we expect, for Europhiles to call for a political union to supersede the current economic one. Of course, this has probably been the plan all along, but we wonder whether it is going to work.

We think the EU is a despicable organization, clearly corrupt from heel to head, a dictatorial regulatory democracy of the worst kind, one apparently modeled on purpose after the USSR’s old bureaucracy. It is a kind of engineered coup of the power elite, a step toward creating and then integrating large national blocks in anticipation of ever larger, global economic union. Unfortunately, for the elite, the Internet has clearly become a focal point for organizing against the EU in Europe, and has even been a main force in keeping Britain out of the euro.

It is not surprising to find Wall Street mixed up in the Greek mess. And many may make a big deal out of it. But as bad as Wall Street is, the EU itself is worse – at least when it comes to culpability for the Greek situation. And boy does the EU have problems. You probably won’t read this elsewhere (which is why you read the Bell!) but the biggest problem the EU has is not the failing of the Pigs but the failing of the Euro promotion itself. And for this reason in this case, Wall Street’s (direct) involvement seems to us, for once, more a symptom than a cause.

The EU’s problems actually are far bigger than the Greece of the Pigs or the endless, looming economic crisis. The biggest problem is that the cynical plans of its leaders to exploit the inevitable currency crisis (one sure to come, they knew) are dimming thanks in large part we believe to modern electronic communications. There is an incredible amount of anti-EU sentiment on the Internet in Britain. And we have to think that there is a good deal of anti-EU sentiment being expressed elsewhere on the ‘Net in Europe as well.

Conclusion: Here’s our point: When the bureaucracy of the EU attempts to “spin” the currency crisis toward a more perfect political union, watch out. The EU powers-that-be rammed the euro through. But building a stronger political union at this point in time, given the ubiquity and power of the ‘Net and the increasing disillusion of EU citizens, may be a rougher haul than EU planners expected. Times have changed. Power elite dominant social themes are not looking healthy, and it is possible that the EU itself may fall victim. Couldn’t happen to a more deserving bunch.

Tuesday, February 16, 2010 – by Staff Report

Glenn Beck / Getty Images

This candidacy will self-destruct in five seconds… Texas Republican gubernatorial candidate Debra Medina imploded on the Glenn Beck (pictured left) radio program … when she said she didn’t have an opinion on whether the US government was behind the 9/11 attacks. Medina, who has literally come out of nowhere to quickly become a legitimate candidate in the Republican primary, first laughed when Beck said he had received emails from listeners saying she was a “9/11 truther.” “That’s the first time I’ve heard of that accusation,” she said, not exactly denying the charge. So Beck asked her straight up: “Do you believe the government was in any way involved in the bringing down of the World Trade Centers on 9/11?” Easy answer, right? Nope. “I think some very good questions have been raised in that regard,” Medina replied. “There are some very good arguments, and I think the American people have not seen all of the evidence there, so I have not taken a position on that.” That answer caused a stir in the studio. Beck quickly followed up by asking her if she would disavow any of her staff if they were “9/11 truthers.” “Well, you know, that’s a federal issue. We’re very focused on issues in Texas, on Texas state government,” she said. “I’m certainly not into mind control or thought policing people. We’ve got a very diverse team in this state and that’s because Texans are standing shoulder to shoulder to support and defend the Constitution. I frankly don’t have time, you know, to go through and do psychological testing on people and know every thought or detail that they have.” – Christian Science Monitor

Dominant Social Theme: Crackpots come in all colors and sizes.

Free-Market Analysis: The Glenn Beck program has provided us with an instructive lesson on the nature of modern political correctness. This article will use Beck’s behavior, as related above, as a jumping-off point to analyze the term within a 21st century context – at a time when the term, in fact, is a little less popular than it used to be. Perhaps the leftwing of Anglo-American axis is less powerful than it used to be, and thus inspires less animosity, or perhaps other media concerns have become more compelling. But the point we want to make is most pertinent, we think, and much larger than points that have been made about political correctness in the recent past.

This is indeed a term that became very popular in the later 20th century and yet was in a sense indefinable except as a collection of mores that seemed vaguely leftwing. Of course back in the early 20th century political correctness was indeed a socialist and even communist preoccupation. One WISHED to be political correct to fit into those organizations. The pejorative odor came later. We looked up political correctness in Wikipedia just to see how it was defined. Here’s what we found:

Political correctness (adjectivally, politically correct; both forms commonly abbreviated to PC) is a term denoting language, ideas, policies, and behavior seen as seeking to minimize social offense in gender, racial, cultural, sexual orientation, handicap, and age-related contexts. In current usage, the terms are almost exclusively pejorative, connoting “intolerant” and “intolerance” whilst the usage politically incorrect, denotes an implicitly positive self-description. Examples include the conservative Politically Incorrect Guides published by the Regnery editorial house and the television talk show Politically Incorrect. Thus, “politically incorrect” connotes language, ideas, and behavior, unconstrained by orthodoxy and the fear of giving offense.

In Marxist-Leninist and Trotskyist vocabulary, correct was the common term denoting the “appropriate party line” and the ideologic/ “correct line”. Likewise in the People’s Republic of China, as part of Mao’s declarations on the correct handling of “non-antagonistic contradictions”. MIT professor of literature Ruth Perry traces the term from Mao Zedong’s Little Red Book (1964).

The New Left later re-appropriated the term political correctness as satirical self-criticism; per Debra Shultz: “Throughout the 1970s and 1980s, the New Left, feminists, and progressives . . . used their term politically correct ironically, as a guard against their own orthodoxy in social change efforts”. Hence, it is a popular English usage in the underground comic book Merton of the Movement, by Bobby London, while ideologically sound, an alternative term, followed a like lexical path, appearing in Bart Dickon’s satirical comic strips. Moreover, Ellen Willis says: ” . . . in the early ’80s, when feminists used the term political correctness, it was used to refer sarcastically to the anti-pornography movement’s efforts to define a ‘feminist sexuality’.”

Nobody really seems to like the idea of political correctness a whole lot. Yet it can still be argued that the term even today defines what can and cannot be argued within the “mainstream” of the Anglo-American media (and European media as well, of course). Here are issues that we would argue ARE politically correct. Beck touched on one of them in the Medina interview: US government culpability for 9/11 is NOT up for discussion. Adding to the list, we would offer the following (just for starters): That …
Al Qaeda IS a valid international terrorist force;
Israel is NOT an aggressive and even hostile theocracy;
the Anglo-American axis is NOT an aggressive force for war in the world;
the wars in Iraq and Afghanistan WERE justified;
national defense and national security CANNOT be a part time civil responsibility;
the environment IS degrading;
public education cannot EVER be eliminated;
regulation WORKS;
government is OBVIOUSLY necessary;
public service is ALWAYS important;
the world is TERRIBLY overpopulated;
the world is on the BRINK of running out of food and water;
public/private central banking CANNOT be eliminated;
paying taxes is NEVER, finally, a waste of money;
no CORE service provided by Western governments could be done better and more efficiently in a competitive and private manner.
We’ve listed the above areas of “political correctness” only to prove what regular readers of the Bell already have guessed: that our impression of political correctness (in the 21st century anyway) has to do with being careful not to contradict the dominant social themes of the power elite! Until only a month or two ago, we would have added global warming to the list, but as has been amply documented, global warming is one elite promotion that seems to be dying a lingering and public death.

To return to the lead of this article, there are plenty of PUBLIC red lines that media and government proposes, and in his Medina segment, Glenn Beck was very clear about one of them – you don’t question whether the American government was involved in 9/11 if you want to run for public office. What is also clear is that after Beck conducted this interview, the backlash began. Medina has apparently surged in the Texas polls and Beck himself has been excoriated for “ambushing” Medina and asking her questions about an issue irrelevant to Texas politics.

And then there is this found in the feedback queue in response to a story on the Medina Beck controversy, “Debra Medina Says Comments on Glenn Beck Show about More than 9/11:”

By Judiladybug February 12, 2010 4:28 AM EST … A VERY interesting development happened right after Debra Medina’s interview with Glenn Beck. Friends from Austin, Houston, Dallas & Fort Worth began getting robo calls from not only Perry but Hutch. They started within an hour or so after the Glenn Beck radio show, guess what enlightening news they had to share? That Debra Medina was not a worthy candidate because she is a 9/11 Truther.

Wow!! Isn’t that interesting. How was Mr. Perry’s team so ready to start a massive robo blitz with this new Truther news so quick? Looks like someone is getting scared, and that he had a little help from a friend. Some coincidences are just too coincidental to be brushed aside. I am not any more of a Truther than Ms. Medina, but I have friends that feel that certain things don’t add up with the 9-11 facts and questi ons OB’s birth certificate. Everyone has a right, not an obligation to question everything going on in our country.

Throughout the 20th century, and into the 21st, power elite promotions were so powerful, threatening and effective, that people – businesses, too, and, of course, government – carefully self censored, even when they could not explain how and why they came to their self-censoring determinations. This was the ultimate triumph of elite promotional memes – they exercised an iron-class hold over people’s imaginations and internal life. Yet of course it would be the Bell’s argument that all of that may be changing now as the Internet-driven conversation continues to rapidly expand.

Conclusion: The ongoing implosion of the global warming meme is perhaps a sign of what is to come. And so is the Medina interview on the Glenn Beck radio program. We’ve predicted that even the 9/11 meme would eventually come under fire, along with the endless and devious justifications for various Western national security and government military industrial complexes. The idea that only big government, spending trillions on domestic spying and overseas military campaigns, can properly defend Western citizens against terror attacks is the most well funded and well promoted elite promotion of the 21st century. But even this dominant social theme may be destined for the fate of global warming. Just give it time. And Beck, too.

China wants new one-world currency … IMF to save the world?

TheDailyBell – Issue 236 • Tuesday, March 24, 2009

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” – Ayn Rand
China wants IMF to manage new one-world reserve currency

Getty Images

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund. In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan (pictured left), the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”. Analysts said the proposal was an indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China. “This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC. Although Mr. Zhou did not mention the US dollar, the essay gave a pointed critique of the current dollar-dominated monetary system. “The outbreak of the [current] crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr. Zhou wrote. – Financial Times

Dominant Social Theme: China, concerned, suggests alternatives.

Free-Market Analysis: Wow, out of left field. The International Monetary Fund is attracting encomiums from all over the place! Even China. China! Some big shot in China sees the same positive qualities in the IMF that the English Prime Minister and the French President see in that world-spanning organization. Incredible. What are the odds? And where does this man – whom few have heard of – Zhou Xiaochuan come from? And why would he be interested in the IMF? Well, let’s look a little deeper. …

Hm-mm. We are doing our research … He is certainly a most interesting and powerful banker – and comes from a powerful family. His father, a leading communist, was apparently mentor to China’s most powerful bureaucrat in the 1990s – Jiang Zemin. As for Ziaochuan himself, Wikipedia informs us that: In December 2002, he was appointed to his present position as governor of the People’s Bank of China. As leading banking authority, Zhou is in charge of clearing up some $865 billion bad loans in the Chinese banking system. Recently he has been under pressure from the finance ministers and central bankers of the G7 countries, to revalue the Renminbi and change its exchange rate-setting mechanism. Later on, in 2005 Zhou joined the influential Washington-based financial advisory body, the Group of Thirty.

Zhou, is apparently considered perhaps the most “academically capable” of the current Chinese leadership and has been called “China’s most able technocrat” (Wikipedia). His most famous motto: “If the market can solve the problem, let the market do it. I am just a referee. I am neither a sportsman nor a coach.” Additionally, Zhou is said to be known for hiring Chinese who have been trained overseas and have real Western market experience.

But from our point of view, perhaps Zhou’s most interesting feature as a Chinese leader is his participation in the Group of Thirty. The Group of Thirty, often abbreviated to G30, is an international body of leading financiers and academics which aims to deepen understanding of economic and financial issues and to examine consequences of decisions made in the public and private sectors related to these issues. … The group is noted for its advocacy of changes in global clearing and settlement. The group consists of thirty members and includes the heads of major private banks and central banks, as well as members from academia and international institutions. It holds two full meetings each year and also organizes seminars, symposia, and study groups. It is based in Washington, D.C. The Group of Thirty was founded in 1978 by Geoffrey Bell at the initiative of the Rockefeller Foundation, which also provided initial funding for the body. Its first chairman was Johannes Witteveen, the former managing director of the International Monetary Fund. Its current chairman of trustees is Paul Volcker. (Wikipedia)

Certainly we are familiar with some of these names, especially Paul Volcker, former chairman of the US Federal Reserve. “After leaving the Federal Reserve in 1987, he became chairman of the prominent New York investment banking firm, J. Rothschild, Wolfensohn & Co., a corporate advisory and investment firm in New York, run by James D. Wolfensohn, who was later to become president of the World Bank.” (Wikipedia) Volcker also headed the recent panel that investigated the United Nations scandal and is currently a senior economic advisor to Barrack Obama and head of the President’s Economic Recovery Advisory Board. Also, we note this: The Group of Thirty’s first chairman was Johannes Witteveen, the former managing director of the International Monetary Fund.

In a previous Daily Bell article, we pointed out how certain politicians were making the case for the International Monetary Fund to become a kind of global regulator – and even holder of reserve currency. British Prime Minister Gordon Brown has been a big IMF backer in this regard for some reason. And the IMF itself recently launched a scathing report that flagellated its own performance in the most recent crisis, but then slyly hinted that the reasons for its abysmal failures had to do with a lack of resources and a lack of power. With more of each, IMF leaders seemed to say, the IMF would do a great deal better.

And the tide keeps building. What about this just recently offered perspective…

The Kremlin published its priorities Monday for an upcoming meeting of the G20, calling for the creation of a supranational reserve currency to be issued by international institutions as part of a reform of the global financial system. The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a “super-reserve currency accepted by the whole of the international community,” the Kremlin said in a statement issued on its web site. (Moscow Times)

Now comes leading Chinese technocrat Zhou Xiaochuan to add an Eastern perspective to the IMF’s gloss. One would like to think that Zhou arrived at his perspective entirely on his own, but certainly those in the West with whom Zhou interacts would seem to have various pro-IMF prejudices. The first Group of Thirty chairman (the group to which Zhou belongs) has direct links to the IMF. Another member of the Group of Thirty, Paul Volcker was in business with James D. Wolfensohn who became president of the IMF’s sister organization, The World Bank.

Conclusion: We were all set to believe that Zhou came to his conclusions by himself, from rigorous study of the way the world works. But now we are not so sure. And here is a question that gives us a bit of a headache: Where does all this enthusiasm for the IMF come from in the first place? So many important people want the IMF to step up and assume a bigger international role. Why? First Gordon Brown, then the Obama administration and even, incredibly, the Kremlin. And now China!

Is it because of the competence of the IMF? No, can’t be. The agency itself admits it is incompetent – and others say far worse things about it. And yet the calls for its enlargement continue. It seems almost like an orchestrated campaign, but a campaign that includes Europe, Russia and China? Who or what would have the resources and clout to put together such a campaign? And why would someone – anyone – want to do so. Impossible! And yet … it really is quite curious. As Alice would say, “curiouser and curiouser …”

IMF to clean up banks and tackle dire world crisis?

Getty Images

The world is in a dire economic crisis, but no recovery is possible until the financial sector is cleaned up, the head of the International Monetary Fund said on Monday. The crisis will push millions into poverty and unemployment, risking social unrest and even war, and urgent action is required, IMF Managing Director Dominique Strauss-Kahn (pictured left) said. “Bluntly the situation is dire,” he told a meeting on the crisis at the International Labour Organisation, a United Nations agency representing unions, employers and governments that studies labour issues. Strauss-Kahn was talking less than two weeks before a summit of the G20 leading nations on April 2 to tackle the crisis. As the crisis spills over into developing countries, millions of people will be pushed back into poverty and hardship, Strauss-Kahn said. “All this will affect dramatically unemployment and beyond unemployment for many countries it will be at the roots of social unrest, some threat to democracy, and may be for some cases it can also end in war,” he said. – Reuters

Dominant Social Theme: Another sterling analysis by the IMF.

Free-Market Analysis: Don’t get us wrong. We are impressed. The IMF has been way out in front on all of this. In fact, the Reuters article excerpted above, notes at its end, the following: The IMF’s experience of 122 banking crises around the world had taught it that economic recovery was impossible until banks were cleaned up, whether this was done quickly or slowly.

Now we didn’t realize that the IMF specialized in banking crises – we thought it specialized in COUNTRY crises and GOVERNMENT budget crises, but perhaps “banking crises” is just another term of art. Of course, why the IMF wants to be known as a specialist in banking crises is kinda strange – and why Reuters would just throw in that tidbit at the end of an article on the IMF is also a bit weird, but these things happen … serendipity, we guess.

While we are at, we want to express our admiration for IMF managing director Dominique Strauss-Kahn often known as DSK. We are not big fans of the IMF, but DSK’s recent agile stewardship of the IMF from a public relations standpoint is impressive to behold. He’s been all over the news lately and always seems to pro-offer the right kind of quote for the moment. We went to trusty Wikipedia again (well not so trusty but on top politicos it usually gets it right, or close-to-right) and found that DSK is a pretty big mover and shaker in French politics. Here’s a little bit on DSK:

DSK served as French Minister for Industry (1991-93). In 1991, he was nominated by Mitterrand to be Junior Minister for Industry and Foreign Trade in Édith Cresson’s social-democrat government. He kept his position in Pierre Bérégovoy’s government until the 1993 general elections. After the electoral defeat of 1993, Strauss-Kahn was appointed by former Prime Minister Michel Rocard chairman of the groupe des experts du PS (“Group of Experts of the Socialist Party”), created by Claude Allègre. The same year, he founded the law firm “DSK Consultants” and worked as a business lawyer. In 1994, Raymond Lévy, then director of Renault, invited him to join the Cercle de l’Industrie, a French industry lobby in Brussels, where he met the billionaire businessman Vincent Bolloré and top manager Louis Schweitzer; Strauss-Kahn served as secretary-general and later as vice-president. This lobbyist activity earned him criticism from the alter-globalization left.

We were interested in Vincent Bolloré, because we had heard the name before. He, too, is an impressive fellow. A French industrialist, corporate raider and businessman, he heads the family investment group Bolloré and is ranked 451st richest person in the world according to Forbes, with an estimated fortune of US$1.7 billion. He is married, with 4 children. Vincent Bolloré is from a well-off family from Brittany, and he graduated with a Bachelor of Laws (LLB) degree from Université Paris X Nanterre. Bolloré started his investment career as a bank trainee at investment bank Edmond de Rothschild. His personal investment career began when he took over the reins at his family-controlled conglomerate Bolloré, which deals in maritime freight and African trade, and paper manufacturing (cigarette and bible paper). The company he leads today employs 33,000 people around the world.

These two men move in impressive circles and it is no wonder that the IMF continues to have clout on the world stage given the kinds of corporate personnel behind it. Of course, as we have pointed out above, the IMF’s resources and allies apparently extend far beyond its immediate circle. And many of these allies seem to want the IMF to play a larger role in world affairs.

Conclusion: We are not surprised that the IMF is issuing warnings about the grimness of the world economic climate. It makes perfect sense if one believes that the IMF leadership is positioning itself for expanded power under the aegis of the Group of 20 that will meet in April. Certainly the stars have all aligned. It is an almost magical event – with Europe, Russia and now China all calling for the IMF to have more power and responsibility. The IMF itself has not shied away from increased duties. It has publicly declared it doesn’t have the resources to do a good job. Now, with this latest announcement, the IMF shows us that the world is indeed in dire straits. Must the IMF come to the rescue? Well, we’re not so sure. Maybe the G20 upcoming communiqué will help change our minds.

© Copyright 2008 2009 Appenzeller Business Press AG. All Rights Reserved. The Daily Bell is an informative compendium of independent economic views and analysis, which is published by Appenzeller Business Press AG. The information contained in the Daily Bell is for informational purposes only, is impersonal and not tailored to the investment needs of any particular person and should not be construed as financial or investment advice. Appenzeller Business Press AG does not accept any liability or responsibility for, nor does it verify the accurateness of the information being provided in the Daily Bell. Readers of the Daily Bell or any affiliated or linked sources or sites must accept the responsibility for performing their own due diligence before acting on any of the information provided within the report regardless of the source.

G. Edward Griffin discusses the Federal Reserve

TheDailyBell – Issue 234 • Sunday, March 22, 2009

“If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer.” – John Maynard Keynes

Special Guest Interview: G. Edward Griffin discusses the Federal Reserve, Bernanke’s bailouts, Obama’s stimulus plans and much more…

G. Edward Griffin/Reality Zone

Introduction: The editors of Appenzeller Business Press (ARBP) have been avid readers of Mr. Griffin’s tremendous literary contributions on free markets and personal liberty. Mr. Griffin is an American film producer, author and political lecturer.
The focus of today’s interview will be the relevance, perhaps even more so today than when it was first published, of G. Edward Griffin’s business bestseller, The Creature from Jekyll Island.

First released in 1994, The Creature from Jekyll Island is a no-holds-barred look into the inner workings of the Federal Reserve banking system, or cartel if you will. Mr. Griffin peels back the layers of obstruction to rational analysis and leads the reader on a wonderfully researched, although disturbing, journey from the very beginning, when the Fed was still in the planning stages, up to the present, where it is now struggling to survive.

Daily Bell: We’d like to begin by thanking you for taking the time out of your very busy schedule to grant Appenzeller Business Press and readers of this exclusive interview.

G. Edward Griffin: Thanks for inviting me. I am honored to be invited to share my thoughts with your prestigious readership.

Daily Bell: For those of our readers unfamiliar with the fact that the US Federal Reserve is not a government agency, but a privately controlled corporation, how would you best describe this creature and how did it come into being?

G. Edward Griffin: Many people are shocked to discover that The Federal Reserve System is a cartel, no different than a banana cartel, a sugar cartel, or an oil cartel. It is a banking cartel composed of the largest and most powerful American banking institutions. This group wrote a cartel agreement in 1913 and then persuaded Congress to give it the status of law. In that way, the cartel can be sure that all the banks will conform to the agreement or be subject to criminal prosecution, a benefit that many cartels do not enjoy.

The first draft of the cartel agreement was prepared at a highly secret meeting held on Jekyll Island in November of 1910. The participants of that meeting represented the most powerful banks in the nation and also had financial roots to the largest banks of Europe as well. Those American institutions included the J.P. Morgan companies; the banking conglomerate of William Rockefeller; and Kuhn, Loeb and Company. The European connection included the Rothschild banks of England and France and the Warburg banking consortium of Germany and the Netherlands.

The irony in this is that the Federal Reserve Act was sold to the American public as a bill to control the banks when, in truth, it was drafted by the very banking interests it supposedly would control. The banking cartel decided to be its own regulator while making it appear that it was being regulated by Congress. That was the reason for the secrecy surrounding the Jekyll Island meeting. If the public had realized that the Federal Reserve Act was parented by the same industry it was supposed to control, there would have been great opposition to it, and it never would have been enacted into law.

Daily Bell: In your best selling book, The Creature from Jekyll Island, you refer to fractional reserve banking as the Mandrake Mechanism. It really isn’t much of a trick and certainly not a very funny one considering it’s a trick used to redistribute the wealth and savings of the majority to a few – leaving a path of destruction in its wake. How does this rather sick trick work?

G. Edward Griffin: I named this after a comic book character from the 1940s called Mandrake the Magician. Mandrake could wave his large, black cape and make anything appear out of thin air and, with another wave, make it disappear again. He was quite a guy and, when I finally came to understand how the Federal Reserve System creates money out of nothing and causes the money supply to shrink as well, I knew that it was The Mandrake Mechanism.

At first, the mechanism can appear to be very complicated – and, in fact, one has to be a diligent student to follow the twists and turns, the banking terminology, and the accounting concepts; but, when one stands back and observes the operation as a whole, the mechanism is simple. The problem most people have with understanding it is that they try to make sense out of it. They try to understand how it is fair and how everyone is benefitted by it. The fact is that it does not make sense insofar as fairness is concerned, and the administrators are benefitted far more than the participants. In fact, at the end of the game, the participants (meaning the general public) actually are plundered by it while the administrators are greatly enriched.

Here is how it works: The first step happens when the government needs to borrow more money than the public is willing to lend at the interest rate offered. At that point, the government turns to its partner, The Federal Reserve System, and goes through the motions of borrowing the shortfall. I say “goes through the motions” because the Fed has no money to loan. The government, however, gives it permission to create the money t needs out of thin air, a move that, if done by anyone else, would send them to prison for counterfeiting. The Fed can do it, however, because the government authorized it to do so when it passed the Federal Reserve Act. So the Fed creates whatever amount of money is needed and then gives it to the government, calling it a loan. In truth, the government essentially printed its own money but, instead of using printing presses, it used the banking system which entered numbers into an accounting ledger and called it checkbook money. The end result is the same except that the public doesn’t understand it (a great advantage to the politicians) and the banks earn interest on so-called loans of money it never had (a great advantage to the banks).

That’s just the starting point. When the government spends the money it receives from the Fed, it goes to individuals and corporations that immediately deposit it into their private banking accounts. This is where the action really becomes interesting. The banks (under the protection of the Federal Reserve Act) are allowed to create out of thin air up to ten times the amount of those deposits and then go through the appearance of lending it to their customers. Once again, I use the phrase “go through the appearance” to emphasize that most of the money they loan does not exist until borrowers request it. At that point, the money is created out of thin air and advanced to the borrower – at interest, of course. Think about that. Banks collect interest on nothing.

When the loans are paid back, the money disappears back into the vaults or ink wells, or computer chips from which it came. That’s the Mandrake Mechanism.

Daily Bell: The Federal Reserve states that one of its primary objectives is to protect us from inflation. It doesn’t sound like the guys running the Fed really care about doing that? In fact, it seems as if they are purposefully doing the exact opposite.

G. Edward Griffin: Remember, the Fed is a banking cartel. It was not created to serve the public or the nation or the economy or any of the other myths we are taught in school. All cartels have but one mission, and that is to serve the best interests of the members of the cartel. Period.

When Greenspan or Bernanke tell Congress that the Fed is trying to fight inflation or promote employment or help industry or help homeowners, don’t believe any of it. That is what they have to say to keep the gullible public asleep and content with the system. It wouldn’t go over well if they were to say, “Who cares about inflation? We are bankers, and our mission is to keep the banks afloat. Our mission is to get the stupid voters to cough up enough money through taxes and inflation to reimburse us for all those bad loans we have made – and to pay our exorbitant salaries. That’s our mission and, by God, don’t think for an instant we’re going to let anyone stand in our way.”

Daily Bell: Why do you suppose more media outlets don’t question such an obviously destructive monetary structure? Do you think there is a coordinated relationship between those in control of the mainstream media outlets and those in control of the Federal Reserve?

G. Edward Griffin: I think the answer is obvious just by studying performance. However, an examination of the people on the boards of directors and the companies they represent confirms that Media companies are controlled by the same financial matrix we are discussing. Any editor or reporter in a major media company knows instinctively that it would be career suicide to speak the whole truth about the Federal Reserve.

Daily Bell: So, is it safe to say that the general public is not supposed to know the truth about the Federal Reserve and the intentions of those who control it?

G. Edward Griffin: Your phrasing is significant. “The general public is not supposed to know …” My reply is: Who is doing the supposing? Of course, I understand the implication that the financial elite say the public is not supposed to know, and I agree. If the public understood, the scam would end. But, from my point of view, and from the view of members of Freedom Force International who are working to rebuild financial security and political freedom, the public definitely is supposed to know the truth. It is on this very point that the future of mankind is hinged.

Daily Bell: Do you think the liberating power of the Internet is something the banking elite is not prepared for and that the awareness spawning around the globe about their deceitful banking practices has them scrambling for solutions?

G. Edward Griffin: There is no doubt that the ruling elite do not like the Internet’s present ability to bypass the controlled media and reach the people directly. However, I do not think it is correct to say they are not prepared. They have known almost from its inception that the Internet will need to be controlled by them if they are to keep the masses dumbed down. That is why we constantly have been conditioned to accept Internet content regulation supposedly as a means of preventing terrorism, crime, child pornography, drug traffic, and just about anything else that the public dreads. The real objective is control for its own sake. They already have this censorship of the Internet in China and numerous other Asian countries. The next step in this evolution is to put the UN in ultimate control of the Internet. If we allow this type of control to be established, the Internet will no longer be a tool of enlightenment but one of suppression.

Daily Bell: Dr. Ron Paul, the popular free-market Congressman from Texas, has suggested that if the US does not make changes now, albeit painful ones, towards an honest money system that the country faces an inflationary financial crisis that makes the inflationary period of the Carter era look like a warm up act. Do you agree with that and that rampant inflation will undoubtedly revisit America’s shores as a result of all of these bailouts and stimulus programs?

G. Edward Griffin: Yes I do. The collectivists who run the Fed and dominate our government do not believe in free-market solutions to any problem, least of all, those of such magnitude as money and banking. They know only one trick: inflate the money supply. So, as long as collectivists dominate our power centers, I see no way to avoid inflation. However, I must add that we need to look at more than the money issue. The freedom issue is just as important, if not more so. While inflation ramps up and while the government is pushing more and more newly created money into the system, parallel to that we are witnessing a tremendous loss of personal freedom. If the government funds a bank, eventually the government will own the bank. If the government funds a manufacturing company, eventually the government will own the company. If the government funds a homeowner’s mortgage, eventually the government will own the house. If the government funds a person’s food, shelter, health care, transportation, and education, eventually the government will own that person.
My biggest concern is that, in the name of purchasing financial security, people are paying with their freedom – and they’re not getting security either.

Daily Bell: We’ve heard it argued that 40% of the world’s wealth has been wiped out in the deleveraging phase of this economic collapse and that inflation is unlikely to happen as a result. How do you answer those folks?

G. Edward Griffin: We need to define terms. Fiat money (the kind without precious-metal backing) is not wealth. It can be called wealth or capital or whatever you want to call it; but, true wealth is measured in terms of tangible assets with intrinsic value, which means they have characteristics that give them value even if they were not used as money. Gold or silver as money, therefore, has the advantage of being money and wealth at the same time.

Money with only the promise and threat of governments to back them up is not wealth. This means that the 40% of the economy that has disappeared never existed as wealth in the first place. It was only fools wealth. People who had all those digits in their banking accounts thought they were wealthy when they were not. True, during the boom cycle, they could have spent those digits for houses, cars, boats, and airplanes (or gold) and could have acquired wealth in that fashion. Those things did not disappear in the last 6 months. The only things that disappeared were digits in a computer, which represented fiat money.

If you had $1 million in gold a year ago, you would have had $1 million in wealth a year ago and about the same amount today. However, if you had $1 million in fiat money a year ago, you would have had no wealth a year ago and the same amount today: zero. Only when you possess tangible assets do you have wealth. That’s one of the beauties of a gold or silver-backed currency. When you hold that type of currency you actually do have wealth. Unless we are talking about assets that are subject to destruction (such as timber that can be destroyed by fire) wealth never just disappears.

Regardless of this definition, I feel that deflation will continue for a little while longer as most of the fiat bubbles are wiped out and prices return to a fair-market balance between price and value but, what will follow will be a new, even larger bubble based on the incredible amounts of fiat money now being pumped into the system. As long as collectivists are running the show, we will have inflation and will continue to build totalitarian governments everywhere.

Daily Bell: How about the pundits who tell us that General Motors, AIG, Citigroup and others are too big to fail? Do you agree with that?

G. Edward Griffin: This may begin to sound like a broken record, but as long as collectivists are in charge of governments and monetary systems, we will continue down exactly the same track we have been following. That means the corporations will be maintained at the expense of taxpayers. Are they too big to fail? Of course not. That is merely a slogan to end the debate. However, I might rephrase the statement. Corporations, with their present influence over Congressmen, are too corrupt to fail.
Daily Bell: What about the over-leveraged American home-owners who can no longer afford to make their mortgage payments? Shouldn’t US taxpayers be expected to help them out? Don’t people have a right to own their own home?

G. Edward Griffin: It would take more time to adequately answer that question than we have; so, at the risk of sounding too harsh and inconsiderate of my fellow humans, I must give the short answer. The proper function of government is to protect the lives, liberty, and property of its citizens. Nothing more. Acts of charity are very important but must be kept away from government. Otherwise every scheme and scam would be perpetuated through under the guise of helping some unfortunate individual or class of citizens. The class of citizens called taxpayers should not be expected to help the class of citizens called homebuyers with distressed mortgages. People do not have a right to force me or anyone else through taxation to give them a home.

If anyone finds that to be uncharitable, I urge them to examine the more complete defense of this point of view as posted to the Freedom Force web site: Freedom Force International – Welcome.

Daily Bell: It seems safe to say that you do not think any of the current bailout and stimulus solutions being offered by Bernanke, Geithner or Obama have any hope of stabilizing the banking industry and that they are they simply ignoring the problem and pouring more fuel on a burning victim?

G. Edward Griffin: I like your analogy of pouring more fuel on a burning victim. That’s it exactly.

Daily Bell: Would you agree that the only way to get out of this current crisis and to prevent future ones is to abolish the central banking cartel and privatize the issuance of currency? And further to that point, do you think an Honest Money system, one anchored by gold or silver, or both, would be the best way to anchor confidence in the US dollar?

G. Edward Griffin: I definitely think the banking cartel called the Federal Reserve System should be abolished, but I will take that one step further. Some critics of the Fed are calling for its abolishment as a private institution but that it be empowered to continue performing its function as an agency of the government. They want to take this power away from those big, bad bankers and give it to those nice, trustworthy politicians. That is such a foolish concept. The problem is not who creates money out of nothing but that anyone does it. The politicians and bankers have a tight partnership. It would continue exactly the same whether operated as is or under the theoretical supervision of the Treasury. Does anyone really think that any of the last ten Secretaries of the Treasury would change anything?

So, I am for the abolishment of the Fed, not a change in appearance.

Privatizing the currency is another issue. I do not advocate this nor do I oppose it. I believe what I preach, and I preach freedom-of-choice so long as government does not give competitive advantage one way or the other and so long as all players are required to honor their contracts. Under those conditions, it would be appropriate for the government to issue its own gold or silver-backed currency provided there is no legal-tender law to force citizens to accept it. If the currency is sound, people will accept it without coercion of law. If it is not sound and there is public dissatisfaction with it, privately-issued currencies would spring up and, if they were solidly backed by gold or silver, people would use them in preference to government money. If we just remove the element of coercion, the best money eventually would become the nation’s money.

Daily Bell: What are your thoughts on gold backed money versus a bimetallic standard of both gold and silver. Which do you prefer and why?

G. Edward Griffin: Anyone interested in this question probably already is familiar with the history of money, particularly in the United States, where both gold and silver were simultaneously used for backing government currency. This was awkward, as one can imagine but, as long as the free-market value of gold and silver were left alone, the ratio between the two metals remained amazingly constant for long periods of time, and the system worked without hardship to anyone. Then, as the ratios between the metals began to change, the system began to break down leading to a defacto single standard.

My preference would be a single-metal standard. Should it be gold or silver? My preference would be gold, but I must add that, if the public wants silver, that would be fine with me. The important thing is that one or the other must be settled on if we ever hope to return to sound money.

Daily Bell: As an aside, the press coverage of the recent Madoff scandal was focused on the issue of Wall Street greed – most media coverage anyway. But in its essence, isn’t the Madoff Ponzi scheme similar to the Federal Reserve’s scheme? Don’t they both rely on an increasing base of demand for their obligations in order for the house of cards to stay erect?

G. Edward Griffin: That is a common view among critics of the FED. In fact, I carried a cartoon to that effect in our weekly Internet news service called Unfiltered News. (A free subscription is available: Free subscription. The current edition can be viewed here: Reality Zone Home Page.) While it is true that the Fed constantly expands the money supply and its customer base of interest-paying customers, that is not an intrinsic characteristic. Theoretically, the system could stop expanding or actually contract to some extent and still operate as it has. The Fed could plunder the public at a constant rate without accelerating if it chose to do so. A Ponzi Scheme has no choice. It must expand or collapse. Technically, therefore, the Ponzi analogy is not entirely accurate. In practice, however, it is very accurate.

Daily Bell: Ok, so we’ve established that the mainstream media and the elite who control both it and the Federal Reserve are continuing down a road that’s been traveled before. One, as most Germans and Austrians will tell you, doesn’t end very nicely. So what can anyone do about it?

G. Edward Griffin: Nothing!

OK, have I shocked you? What I mean is that, so long as collectivists continue to control our government and our monetary system, there is nothing we can do, because they hold the power to make change, which is the same power to prevent change. It is an exercise in futility to talk about what should be done when those who have the ability to do it are determined not to do it. It may be useful for those of us who are trying to mobilize public awareness to discuss and analyze the necessary components of reform, but we know well that the powers in Washington will, not only ignore our arguments, but will do everything possible to silence our voices.

The reason we formed Freedom Force International was to address this very issue. If, in addition to seeking an understanding of the problem and in addition to drafting a workable solution to the problem, we also unite to recapture control of the power centers of society (including but not limited to political parties) only then will we acquire the power to bring about reform. We have a slogan in freedom Force that sums it up: Don’t fight City Hall. Become City Hall.

Daily Bell: Your suggestion that people accept personal responsibility for their future and to employ human action to protect their family’s future is one we certainly endorse. Should people who own gold be concerned we may once again see a 1933 style confiscation? After all, Barack Obama is being compared to FDR?

G. Edward Griffin: That is a real possibility. The power elite will stop at nothing to perpetuate and expand their control over all of us. Our only defense is to work together, to unite, to develop a strategy, and then work like crazy to become City Hall.

Daily Bell: We are very concerned to see America moving further and further away from a freedom-loving nation to one that is rapidly looking more and more like a police state. Where does it all end?

G. Edward Griffin: One thing is certain. It will not stay as it is. It is constantly moving. Right now, the movement is in the wrong direction. We are headed directly for totalitarianism. Unless something changes, that is where we are going to be. I’ll say it again, that is what motivates us in Freedom Force. This is no idle philosophical discussion. Our lives and those of our children are on the line right now.

Daily Bell: Tell us a little bit more about Freedom Force International, the non-profit organization you referenced earlier in this interview. When did you launch Freedom Force and how is it making a difference today?

G. Edward Griffin: Freedom Force International was founded on December 12, 2002. I launched the organization with the vision that, someday, our members all around the world would become leaders in their respective countries on behalf of sound money and personal freedom. We have a long way to go, of course, but we are under way. Already we have members in over sixty countries.

Our members are not mere complainers. They have a plan to do something about it. They also share a common belief in The Creed of Freedom, which is a statement of principles that guide them in their mission to build a better world.

We are determined to influence the political direction of the world by becoming influential in the power centers of our respective countries. The most obvious of those are political parties, but we also know the importance of the media and the educational system. Most power centers are comprised of large numbers of people who follow small numbers of people. It is the mission of Freedom Force members to become influential within the small groups that lead.

Another mission of Freedom Force is to provide an ideological umbrella under which many patriotic groups can unite toward a common goal. By unite, I do not mean one organization but many organizations, each with their special purpose, style, and leadership, but united under the ideological principles expressed in The Creed of Freedom. It’s very important to know what you are for as well as what you are against.

Freedom Force already has become a significant movement. Anyone who really wants to make a difference on behalf of sound money and personal freedom will want to become part of this international brotherhood.

Daily Bell: Where can one go if they wish to find out more about Freedom Force International and to consider adding their voice to this growing movement of liberty minded people?

G. Edward Griffin: The web site is Freedom Force International – Welcome. There is a lot of information there, but it is not expected that anyone will read it all at one sitting, although that sometimes happens. It is structured so that the most important information appears first with sub categories available for drilling down into many areas of interest. Freedom Force is the answer.

Daily Bell: One final question, Jim Rogers, Peter Schiff and many other outspoken free-market thinkers have suggested gold could rise to $2,000 per ounce or even much higher. Do you think this is likely to happen as more and more people awaken to the truth about our current monetary system and as inflation rears its ugly head? Do you have your own prediction?

G. Edward Griffin: I think $2000 per ounce is very realistic in view of the run-away money creation machine we have been discussing. However, I must remind newcomers to this topic that purchasing gold and silver should be viewed primarily as insurance, not investment. Even if the price of gold should rise to astronomical levels, the price of everything else also will be rising at about the same rate. If the price of a loaf of bread becomes twice what it is today, then the price of gold at twice what it is today will not seem to be particularly shocking. The value of holding precious metals in time of inflation is not that you will increase your purchasing power but that you will not lose purchasing power. You will hold your own while those who do not own gold or silver or other tangible assets will have their savings wiped out.

Daily Bell: Thank you so much for taking the time to share you wisdom with us. We wish you all the best in your future endeavors.

G. Edward Griffin: Thank you for the opportunity. I hope this will be of value to your readers.
This interview was conducted by Scott Smith.

Meet Scott Smith: Before his recent retirement, American-born Scott Smith spent nearly 30 years as a member of the Swiss investment banking community. He spent most of his long career at legendary investment banking giant Credit Suisse, where he was an executive working in the foreign exchange and derivatives departments.
Over the course of his career, Scott became privy to the closely guarded, somewhat regimented, wealth building and asset-protection strategies that have made the Swiss among the wealthiest people in the world – wealthier than Americans, according to the World Bank.

In addition to writing special reports, such as this Swiss Perspective, Scott is also a contributing editor to and the editor of a membership based investment newsletter called Swiss Confidential.

A second look at the Federal Reserve: The Creature from Jekyll Island, by G. Edward Griffin

Where does money come from? Where does it go? Who makes it? The money magician’s secrets are unveiled. Here is a close look at their mirrors and smoke machines, the pulleys, cogs, and wheels that create the grand illusion called money. A boring subject? Just wait. You’ll be hooked in five minutes. It reads like a detective story – which it really is, but it’s all true. This book is about the most blatant scam of history. It’s all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity. Your world view will definitely change. Putting it quite simply, this may be the most important book on world affairs you will ever read. 608 pages.

“A superb analysis. Be prepared for one heck of a journey through time and mind.” – Ron Paul, Member of Congress, House Banking Committee, 2008 Presidential candidate.

“Scary. It’s the story of the world banking system. Enough said.” – Willie Nelson, Musician/Author

“A gripping adventure into the secret world of the international banking cartel.” – Mark Thornton, Asst. Professor of Economics, Auburn University, Coordinator of Academic Affairs, Ludwig von Mises Institute

“This is a murder mystery about the financial ‘murder’ of the middle class.” – Robert Kiyosaki, author of Rich Dad, Poor Dad

“A train-load of heavy history, written in such a relaxed and easy style that it captivated me. I hated to put it down.” – Dan Smoot, Publisher/Editor, Dan Smoot Report

“As a career banker and president of a bank consulting firm, I thought I had a good understanding of the Federal Reserve, but this book changed the way I view our entire monetary system.” – Marilyn MacGruder Barnwall, Grand Junction, Colorado

“I have just finished reading this for the FOURTH time!!!! Each time only adds another gloss of patina to the truth.” – David J. Nitsche, ex banker (25 year career), Bridgeton, New Jersey

To order a copy of The Creature from Jekyll Island, also available in German, Japanese and Vietnamese, please click here now –