Tag Archives: U.S. Government

End the Fed: Cyprus vs. the Federal Reserve?

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The government of Cyprus is dominating the headlines at the moment, thanks to an audacious scheme to seize the savings of bank depositors. Many Americans are aghast at the situation. But is it really all that different from what the Federal Reserve does to U.S. depositors on a daily basis?

The Cyprus Conspiracy?

Cyprus isn’t the first European Union government to find itself in financial straits. However, the approach to dealing with those straits is unique. Usually, the EU provides immediate bailout money to such countries. In exchange, those countries agree to cut costs, raise taxes, and restructure debts.

This time, the EU required Cyprus to raise 5.8 billion Euros in order to receive a 10 billion Euro bailout. In order to pay for part of the bailout, the Cyprus government is effectively confiscating money from bank accounts worth more than 100,000 Euros (roughly equivalent to $129,000). Losses on those excess deposits might be as high as 40%…or perhaps even higher.

The Federal Reserve Conspiracy: Revisted?

The Cyprus seizure is theft by government, plain and simple. Ordinary Americans may find it hard to imagine this sort of thing ever happening in the U.S. But is the Cyprus Conspiracy all that different from the Federal Reserve Conspiracy? Not at all. Here’s more from Thomas Sowell at The American Spectator:

The U.S. government is very unlikely to just seize money wholesale from people’s bank accounts, as is being done in Cyprus. But does that mean that your life savings are safe?

No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever the politicians feel like using it for. If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save, before you are even aware, much less alarmed.

That is in fact already happening. When officials of the Federal Reserve System speak in vague and lofty terms about “quantitative easing,” what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do — and has been doing in recent years, to the tune of tens of billions of dollars a month…

(See the rest at The American Spectator)

Whiskey Rebellion: A Rebellion against Taxes?

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The history of the Whiskey Rebellion is shrouded in myth. Many scholars consider it a victory for the young U.S. government. But was it really a win for the anti-tax patriots?

What caused the Whiskey Rebellion?

The Whiskey Rebellion was the second major internal uprising in U.S. history (preceded only by Shays’ Rebellion). It was a response to an excise tax created by Alexander Hamilton, who served as Secretary of the Treasury under George Washington.

The U.S. government racked up $79 million in debt during the Articles of Confederation period. The Federal government owed $54 million of that amount. The individual states owed $25 million. Alexander Hamilton saw this as an opportunity to centralize government. He proposed to consolidate the debt. In order to pay it back, he would create a tax on domestic spirits. This was seen as a relatively safe luxury tax. In addition, he had support from those who viewed alcohol as a sinful indulgence. Thus, the Whiskey Act was passed into law in 1791.

What happened during the Whiskey Rebellion?

The Whiskey Tax was extremely unpopular, especially on the frontier (back then, the frontier consisted of Kentucky as well as parts of Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, and Georgia). Many people in these areas just refused to pay the tax. But in western Pennsylvania, protestors fought back.

In July 1794, more than 500 people attacked the tax inspector’s home. George Washington sent a massive militia, 13,000 people strong, to quell the rebellion. By the time the militia arrived, the rebellion had dispersed. Some 20 people were arrested, but no one was ever convicted of a crime.

Guerrilla Explorer’s Analysis

Many scholars consider this a victory for the federal government. In his book, Character: Profiles in Presidential Courage, Chris Wallace provides a fairly typical pro-state treatment:

By acting decisively to quell the threat, Washington had proven that the federal government would stand behind the law. Many continued to fear that the government would destroy their dearly purchased freedoms. But as President Washington noted in his farewell address, a strong government, not a weak one, was the “main pillar…of your tranquility at home; your peace abroad; of your safety; of your prosperity; of that very Liberty which you so highly prize.”

However, the true story of the Whiskey Rebellion lies elsewhere, namely in the frontier. The U.S. government was never able to collect the Whiskey Tax on the frontier. In fact, it hardly tried. In fact, the Whiskey Rebellion, by and large, was mostly a non-violent tax protest. People just refused to pay it. Eventually, Hamilton and his fellow Federalists lost power and all excise taxes were repealed.

Here’s more on the Whiskey Rebellion from Murray Rothbard at LewRockwell.com:

The Whiskey Rebellion has long been known to historians, but recent studies have shown that its true nature and importance have been distorted by friend and foe alike. The Official View of the Whiskey Rebellion is that four counties of western Pennsylvania refused to pay an excise tax on whiskey that had been levied by proposal of the Secretary of Treasury Alexander Hamilton in the Spring of 1791, as part of his excise tax proposal for federal assumption of the public debts of the several states.

Western Pennsylvanians failed to pay the tax, this view says, until protests, demonstrations, and some roughing up of tax collectors in western Pennsylvania caused President Washington to call up a 13,000-man army in the summer and fall of 1794 to suppress the insurrection. A localized but dramatic challenge to federal tax-levying authority had been met and defeated. The forces of federal law and order were safe.

This Official View turns out to be dead wrong…

(See the rest at LewRockwell.com)

Dystopian Visions: Orwell vs. Huxley?

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Aldous Huxley and George Orwell were two of the great prognosticators of the last century. Both men feared dystopian tyranny, albeit via different methods. At this point in history, who looks more correct?

In Huxley’s dystopian novel Brave New World, citizens are controlled by placating them. In Orwell’s 1984, the government controls citizens via constant oppression and mass surveillance. Both dystopian visions are fearful and ring true in today’s world although I’d give the slight edge to Huxley. Here’s a good summary on the competing dystopian visions from Neil Postman’s book, Amusing Ourselves to Death: Public Discourse in the Age of Show Business:

What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared we would become a captive audience. Huxley feared the truth would be drowned in a sea of irrelevance. Orwell feared that we would become a captive culture. Huxley feared we would become a trivial culture, preoccupied with some equivalent of the feelies, the orgy porgy, and the centrifugal bumblepuppy.

As Huxley remarked in Brave New World Revisited, the civil libertarians and rationalists who are ever on the alert to oppose tyranny “failed to take into account man’s almost infinite appetite for distractions.” In Brave New World, they are controlled by inflicting pleasure. In short, Orwell feared that what we hate would ruin us. Huxley feared that what we love will ruin us.

(Read the rest via Amusing Ourselves to Death: Public Discourse in the Age of Show Business)

Did the U.S. Government kill Big Bands?

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In 1935, Benny Goodman launched the Big Band era with a famous performance in Los Angeles. By 1946, the Big Band era was dead. Despite high popularity, it was replaced by the far less dance-friendly (and far less popular) BeBop era. What happened to the Big Band era?

The U.S. government holds a substantial part of the blame. In 1944, the U.S. government imposed the so-called “Cabaret Tax,” partly to raise funds for World War II. Essentially, it placed a 30% tax rate on all establishments that “contained dance floors, served alcohol and other refreshments, and/or provided musical entertainment.” The tax, like so many others, was supposed to be temporary. But when it was reinstated, dance halls closed across the nation. Thanks to the extra cost of doing business, few places could afford to hire big bands. Thus, many big bands were forced to break apart. Musicians formed smaller bands and started playing non-danceable music. Thus, the era of Bebop began. Here’s more on the government’s war on Big Bands by Eric Felten at The Wall Street Journal (paywall protected):

These are strange days, when we are told both that tax incentives can transform technologies yet higher taxes will not drag down the economy. So which is it? Do taxes change behavior or not? Of course they do, but often in ways that policy hands never anticipate, let alone intend. Consider, for example, how federal taxes hobbled Swing music and gave birth to bebop.

With millions of young men coming home from World War II—eager to trade their combat boots for dancing shoes—the postwar years should have been a boom time for the big bands that had been so wildly popular since the 1930s. Yet by 1946 many of the top orchestras—including those of Benny Goodman, Harry James and Tommy Dorsey—had disbanded. Some big names found ways to get going again, but the journeyman bands weren’t so lucky. By 1949, the hotel dine-and-dance-room trade was a third of what it had been three years earlier. The Swing Era was over.

Dramatic shifts in popular culture are usually assumed to result from naturally occurring forces such as changing tastes (did people get sick of hearing “In the Mood”?) or demographics (were all those new parents of the postwar baby boom at home with junior instead of out on a dance floor?). But the big bands didn’t just stumble and fall behind the times. They were pushed…

(See the rest at The Wall Street Journal)

The Comics Code: Tyranny Based on Lies?

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New findings shows the research that lauched the War on Comics and the Comics Code was based on omissions, fabrications, and outright lies. That’s right, Dr. Fredric Wertham was the comics equivalent of Mike Bellesiles. We like to think of scientists and academics as impartial experts, who are only concerned with knowledge. Nothing could be further from the truth. Here’s more on the faulty foundations for the Comics Code by Dusty Rhodes at the University of Illinois:

Behavioral problems among teenagers and preteens can be blamed on the violence, sex and gore portrayed in the media marketed to them – that was the topic of televised public hearings held by the U.S. Senate Subcommittee on Juvenile Delinquency in 1954 to address the scourge of comic books. The hearings, which resulted in the decimation of what was an enormous comic book industry, had been inspired in large part by the book “Seduction of the Innocent,” by psychiatrist Fredric Wertham, based on his own case studies.

Wertham’s personal archives, however, show that the doctor revised children’s ages, distorted their quotes, omitted other causal factors and in general “played fast and loose with the data he gathered on comics,” according to an article by Carol Tilley, published in a recent issue of Information and Culture: A Journal of History.

“Lots of people have suspected for years that Wertham fudged his so-called clinical evidence in arguing against comics, but there’s been no proof,” Tilley said. “My research is the first definitive indication that he misrepresented and altered children’s own words about comics.”

(See the rest at the University of Illinois)

Does America need the Constitution?

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No, according to Louis Michael Seidman. He wants to keep the government but toss the Constitution, arguing that it was written by a very specific set of people from a very different time period. So, rather than debate the merits of an issue, we debate what people who died a long time ago would’ve thought about it. He also makes the very good point that we shouldn’t depend on the Constitution to secure our natural rights like freedom of speech.

The issue with the U.S. Constitution (and really any written document) is that it can be tortured to mean just about anything. And since government has a natural tendency to grab power, politicians can easily interpret the Constitution in order to do so (case examples: the Commerce and the Necessary and Proper Clauses).

As a restraint on government, the Constitution has proven remarkably ineffective. Then again, it’s not clear to me that a U.S. government without the Constitution would be much better. Here’s more from an interview with Seidman, conducted by Amy Crawford at Smithsonian Magazine:

What would we gain by giving up constitutional obligations?

It would improve deliberation and rhetoric about issues that divide us—gun control, for example. Now, to the horror of most of my friends, I am actually quite skeptical about gun control. But that’s a subject on which reasonable people can disagree. But what happens when you start thinking about constitutional obligations? All of the sudden the argument is not, “How are you going to enforce this? Would it actually prevent violence? Would it cause more violence?” The argument is about, “What exactly did the word ‘militia’ mean 200 years ago? What is the relationship between the ‘bear arms’ clause in the English Bill of Rights and the American Bill of Rights?”

Those are questions that historians ought to have some interest in, but they’re completely irrelevant to the issue of gun control in 21st century America. Without enlightening us, arguments of constitutionalism unnecessarily divide us. Now, all of the sudden, instead of talking about a policy decision that reasonable people could disagree about, we’re talking about whether one’s opponent is really an American, whether they are violating the document that defines us and creates us as a nation.

(See the rest at Smithsonian Magazine:

Police State: Why are Feds Stockpiling Ammo?

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While the U.S. government works to disarm its citizens, bureaucrats are stockpiling ammo. Lots and lots of ammo. But no worries. You can trust the police state. Here’s more from Andrew Malcolm at Investors.com:

In a puzzling, unexplained development, the Obama administration has been buying and storing vast amounts of ammunition in recent months, with the Department of Homeland Security just placing another order for an additional 21.6 million rounds…

…DHS has been silent about its need for numerous orders of bullets in the multiple millions. Indeed, Examiner writer Ryan Keller points out Janet Napolitano’s agency illegally redacted information from some ammunition solicitation forms following media inquiries.

According to one estimate, just since last spring DHS has stockpiled more than 1.6 billion bullets, mainly .40 caliber and 9mm. That’s sufficient firepower to shoot every American about five times. Including illegal immigrants. To provide some perspective, experts estimate that at the peak of the Iraq war American troops were firing around 5.5 million rounds per month. At that rate, DHS is armed now for a 24-year Iraq war.

(See the rest at Investors.com)

The Comics Code & the War on Comics?

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In the early 1950s, a wave of hysteria raced through America. Comic books, according to the psychiatrist Fredric Wertham, were turning kids into monsters. The media, as reactionary then as it is today, demanded a Congressional investigation to (what else?) protect the children. Faced with government regulation, the comics industry created the Comics Code, which essentially ended horror comics and led to hundreds of people losing their jobs.

Today the War on Comics seems ridiculous. I wonder what future generations will think about the modern wars on obesity, drugs, etc.  Here’s more on the Comics Code and the War on Comics from The Christian Science Monitor:

In his 1953 novel “Fahrenheit 451,” named after the temperature at which paper catches on fire, Ray Bradbury painted a picture of a society beset by book-burning. In his vision, the censors didn’t bother to throw comic books on the pyre because they just weren’t worth worrying about.

Not so in mid-century America. For more than a decade, countless parents and teenagers made bonfires of comic books, reducing everyone from Captain Marvel to Archie to ashes.

It wasn’t so much Superman & Co. that drove the book-burnings, although even the Man of Steel had his critics. Instead, psychiatrists, politicians, and editorial writers feared the most extreme comic books – filled with crooks, monsters, and voluptuous women – would drive innocent children into the clutches of juvenile delinquency.

(See the rest at The Christian Science Monitor)

War on the Federal Reserve?

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The Federal Reserve is no good. Its money monopoly has wrecked havoc for 100 years. So, I welcome currency competition from Virginia, although I’d prefer it came from the free market. That said, the Federal Reserve will continue to dominate as long as legal tender laws are in full effect. Here’s more on the war on the Federal Reserve from Fox News:

Virginia is one step closer to breaking ties with the country’s monetary system.

A proposal to study whether the state should adopt its own currency is gaining traction in the state legislature from a number of lawmakers as well as conservative economists. The state House voted 65-32 earlier this week to approve the measure, and it will now go to the Senate.

While it’s unlikely that Virginia will be printing its own money any time soon, the move sheds light on the growing distrust surrounding the nation’s central bank. Four other states are considering similar proposals. In 2011, Utah passed a law that recognizes gold and silver coins issued by the federal government as tender and requires a study on adopting other forms of legal currency.

Virginia Republican Del. Robert Marshall told FoxNews.com Tuesday that his bill calls for creation of a 10-member commission that would determine the “need, means and schedule for establishing a metallic-based monetary unit.” Essentially, he wants to spend $20,000 on a study that could call for the state to return to a gold standard…

(See the rest at Fox News)