Betrayal New Ruskin College
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Lecture Notes: 12-17-04 Betrayal
It has been said that the $7.6 trillion national debt has been deliberately created to control the government. US Senator Moynihan used to refer to David Stockman’s book, The Triumph of Politics, as evidence of this thesis. By blocking taxes and piling up, heaping up, this debt, $26,000 per person, the theory goes, the Republic will be so hobbled that government will be unable to offer assistance to the people.
The burden of simply financing this debt is so great, that an ever increasing share of the taxes is needed for interest payments alone, thereby suffocating the government. In the dynamics of the market economy the burden of taxation falls most heavily on those who are least able to raise their prices in response to the ever increasing costs. The interest payments themselves go to the owners of capital which is first lent to the government then the treasury notes themselves become collateral in further transactions, thus creating a vice in which the people are trapped.
Further pressure is applied to those in the bottom of the economy by importing goods and services from abroad where deflation continues in the labor market as long as the planet’s six billion continue to procreate, a phenomenon which is expected to continue in the near term. President Bush’s oft repeated proposal that anyone should be allowed to offer citizenship to anyone to fill any job at any time, with the sole proviso that the “job” must first be “advertised” is only a formal statement of the current immigration practice. (Notice that Mr. Bush’s policy is a continuation of Reagan’s. Reagan sought to undermine government by piling up the national debt to control the people’s ability to direct their activities through government. Now Mr. Bush would smash the labor market with unlimited immigration cutting off the ability of the people to raise their prices in response to the ever increasing rounds of price rises by the elite.)
Currently the legal immigration from Mexico is set at 170,000 a year while the actual immigration number is estimated, (by Time Magazine), to be three million a year. The steady infusion of labor guarantees downward pressure on labor prices and therefore continued concentration of taxes on those least able to pay. (We have previously proposed that the US agree to take half of Mexico’s increase over the next fifty years. Mexico is expected to double in size by 2050. If the US were to take a million Mexicans a year for the next 50 years the burden on Mexico could be made manageable. (However, the Post Liberal elite prefers “illegals” precisely because they are illegal and can be violated at any time. The better to control the subject people.))
Rarely is it remarked that this downward pressure on labor prices is a consequence of the success of the United States Navy. Navies have controlled history because of the preeminence of economics in human affairs. Ultimately economics decides history. What is economics but the interactions of human beings? Human beings determine history. Why navies then? Because the easiest way to move goods, (the least friction), is to move goods by sea. Navies control the trade routes therefore navies control history.
The downward burden on the people is a result of their success in making free trade possible. The success of the US Navy in holding open the world’s trade routes makes globalization possible and means that the people of the United States are increasingly being forced to lower their prices even as the interest payments on the national debt continue to be redistributed by the market price mechanism in the economy and redirected down onto those with the lowest ability to raise their prices, i.e. those most constrained by foreign goods, services, and the three million workers entering the US every year. The people are caught in a vice.
Betrayal.
From the beginning of time, from the beginning of the market, the wealthy have sought to escape the market, (voluntary relations of mutual consent), and force others to pay them using the power of the state, (coercive relations).
Yet the study of economics reveals that voluntary relations of mutual assent are always more productive than coerced relations. Therefore, not only can this vice on the people be broken, when it is broken there will be a huge increase in productivity. The people are being betrayed by their government because their government has been taken over by a powerful elite that seeks to use government to coerce payments rather than having to participate in the market of mutual assent.
The lending of capital to the government is the most obvious example. However, as soon as the government begins drawing down the debt the increasing productivity gains will create huge gains in the economy to the benefit of the people. The capital lent to the government actually disappears. However, when it is repaid it once again reemerges in the economy. “There is no such thing as capital there are only capital goods,” was the dictum Ludwig von Mises used to hammer into his students heads.
His point was that bankers and financiers, stock brokers, had created the false impression that their bookkeeping activities were the heart of the capitalist economy. He wanted to disabuse his students of this error. Real capital exists only in bricks and mortar, in metal stamping machines, in all the apparatus of the productive economy. Capital is not a share of stock but the underlying assets of the firm. Ultimately capital must be invested in something, some piece of equipment, a productive asset. (Which is why the elite prefer Treasury Notes. They do not want to have to make a commitment to any business scheme. They do not want to be subject to the will of the market. They would rather rely on the IRS to collect their money.) This is why I say that the capital lent to the government disappears. It is no longer part of the productive economy.
However, as soon as the government pays down, say $300 billion in debt, (at that rate it would only take 26 years), there is suddenly $300 billion in new capital that has been created. $300 billion is forced back out into the market where it must meet the needs of the consumers or perish, or at least be redistributed by the market. There will be a huge increase in productivity as this capital is injected back into productive activities.
In a world of 6 billion by all accounts North America is under populated. The problem with the 3 million illegals is that they are illegal. But they are illegal because the Post Liberal elite prefers illegals not because of any natural law that requires them to be illegal. But here you can see but one example of how the economy, the society, is twisted by the elites, who are pursuing their own interests and not the people’s interest.
There is no natural law that limits educational opportunities, or the availability of housing, or the providing of medical care; it is only the actions of government, in all three areas which has so restricted the market and has turned these three areas into the three largest centers of inflation. Just as with taxes, the Post Liberal elite is able to raise its own prices and pass the taxes on to others, so too here, in the spiraling cost of education, medicine and health care, and housing, the elite is able to transfer all of its cost onto the rest of society.
If one points out that government has driven up the cost of education, medicine, housing, out of the reach of the people, the elite is indifferent. Notice that recently we heard the claim that the “blue states” pay most of the federal income tax. Once again the Republicans were so uninformed, (or worse), they did not know how to respond. The wealthy elites in the blue states do pay most of the tax, however, they then redistribute the tax in the form of higher prices. These higher prices are paid by the red states and everyone else in the blue states. This is why they are indifferent to higher prices for housing, education, health care and even higher taxes.
They are so positioned in the economy that they can pass these ever increasing costs onto everyone else. For example, Mr. Gates’ father advocated higher taxes, saying that he thought he was under taxed. However, the Republicans did not know what to say in reply. They should have asked the Gates family to agree not to raise the prices of Microsoft’s products. Then Mr. Gates’ taxes would have some bite.
This is not “sour grapes,” or envy; I am not a communist. To the extent they can pass on their costs in the free market place I am in complete accord. I am pointing out here that these Post Liberal elites use their domination of society and government for their own ends not for those ends most felicitous of the interests of the people.
For example, most of you think that “inflation” is some monetary issue that the Federal Reserve deals with in setting the interest rates. We do not have time to go into this here but it is perhaps enough to explain that Ludwig von Mises argued against the Federal Reserve and regarded it as another example of government intrusion into the economy. For proof just consider one point: When the Federal Reserve raises interest rates they raise them for the entire country. But please consider, does every part of the economy suffer from inflation equally?
Of course not. For example, the laborers have not been adding to inflation, they have not been able to raise their prices. Are the red states leading inflation? No. Who is raising their prices? Yes, of course, the elites are the ones who are raising their prices. This is why they are elite. But, owing to the way the government has organized the economy, the currency, there is no other way of setting interest rates. In the blue states the Post Liberal elite has twisted the power of the state to restrict the economy and force up prices, yet everyone, red states and the rest of the people in the blue states alike must pay the higher interest rates.
The elite in the blue states does not care that their own policies in for example, housing, in Boston, New York, San Francisco, Chicago have ratcheted up inflation by restricting supply. The elite can simply raise their prices in response to increasing prices. And when the Federal Reserve raises interest rates to control the overheating economy the elite in these blue states, again, is indifferent.
Why? Because we all have to pay higher interest rates! So the Post Liberal elite uses its control over the state to restrict supply, then they experience appreciation on their capital assets, then when the Federal Reserve raises the interest rate to control the inflation the Post Liberal elite again benefits from the higher interest on its capital. Who suffers? Those at the bottom. Alabama, Mississippi, Okalahoma, Kansas, you know, red states. They have not created the inflation yet they must pay the higher interest. Payments which go to the Post Liberal elite in the blue states.
The blue states may create the inflation with their interference in the economy, but the higher interest rates are paid by red states as well. But we do not all enjoy the same ability to pass on these higher costs. This is the vice they have us in.
However, again, as we say with the national debt, as soon as we wrest control away from the Post Liberal elite there will be huge gains in productivity, and general deflationary pressures across the economy. The elite uses its control of government to force up prices. Take this power away from them and prices will fall. Falling prices with the same or increasing productivity, is called deflation.
So even though world trade may control our ability to raise our prices, we can enjoy an increasing standard of living. How? Efficiency.
Lower the cost of housing, lower the cost of medical care, lower the cost of education. How? Efficiency.
The elite does not care if parts are interchangeable but we do; The elite does not care if our cell phones work with different systems but we do; Or if our auto parts are interchangeable; Or if Microsoft rewrites its proprietary code to crash competitor’s programs; Or if our public schools decline; Or if stem cell research continues apace; Or if buildings are delayed years in litigation; Or if everyone pays the same road tax regardless of whether one lives in San Francisco or Fresno; Or if regulations spiral out of control; Or if the tax code is unintelligible; Or that factory building techniques are banned in housing; This is the vice they have us in.
This is the betrayal.
At one time to be Liberal meant a recognition of the importance of free and open markets. This is why I call our elite Post Liberal. They have given up on free markets, on democracy, the Republic. Their interests are not ours, yet see how they have control of the state and pursue their own aims.
These rich powerful people who have used their power to destroy my life, have, as a class, done the same to the society as a whole. Like some terrible serpent they have intertwined themselves around the state, and they now strangle us.
It does no good to try to reason with them; to explain that total productivity would increase if they would only release their strangle hold; or that they could become even richer in a free market. Ultimately they are not interested even in their own self interest.
Ultimately it is about power.
There was no market reason for Michael Weiner to break into my room and steal my notebook. Interfering with my employment at State Farm and GAB Robins did not put one dollar into Don Imus’ pocket. Mrs. Jack Swanson, Michael Krasney, Ron Owens, all the rest, had no market reason to hector, and vex, and harasse me.
This was none of it, never, was it about the market. Egotism. Power. Viciousness. Yes.
But not the market.
Using the market the people can free themselves from the national debt, then they can free themselves from the Post Liberal elite who use the state to strangle them in this vice of greed and corruption.
Soon I will free myself.
www.NewRuskinCollege.com
Lecture Notes: 12-17-04 Betrayal
It has been said that the $7.6 trillion national debt has been deliberately created to control the government. US Senator Moynihan used to refer to David Stockman’s book, The Triumph of Politics, as evidence of this thesis. By blocking taxes and piling up, heaping up, this debt, $26,000 per person, the theory goes, the Republic will be so hobbled that government will be unable to offer assistance to the people.
The burden of simply financing this debt is so great, that an ever increasing share of the taxes is needed for interest payments alone, thereby suffocating the government. In the dynamics of the market economy the burden of taxation falls most heavily on those who are least able to raise their prices in response to the ever increasing costs. The interest payments themselves go to the owners of capital which is first lent to the government then the treasury notes themselves become collateral in further transactions, thus creating a vice in which the people are trapped.
Further pressure is applied to those in the bottom of the economy by importing goods and services from abroad where deflation continues in the labor market as long as the planet’s six billion continue to procreate, a phenomenon which is expected to continue in the near term. President Bush’s oft repeated proposal that anyone should be allowed to offer citizenship to anyone to fill any job at any time, with the sole proviso that the “job” must first be “advertised” is only a formal statement of the current immigration practice. (Notice that Mr. Bush’s policy is a continuation of Reagan’s. Reagan sought to undermine government by piling up the national debt to control the people’s ability to direct their activities through government. Now Mr. Bush would smash the labor market with unlimited immigration cutting off the ability of the people to raise their prices in response to the ever increasing rounds of price rises by the elite.)
Currently the legal immigration from Mexico is set at 170,000 a year while the actual immigration number is estimated, (by Time Magazine), to be three million a year. The steady infusion of labor guarantees downward pressure on labor prices and therefore continued concentration of taxes on those least able to pay. (We have previously proposed that the US agree to take half of Mexico’s increase over the next fifty years. Mexico is expected to double in size by 2050. If the US were to take a million Mexicans a year for the next 50 years the burden on Mexico could be made manageable. (However, the Post Liberal elite prefers “illegals” precisely because they are illegal and can be violated at any time. The better to control the subject people.))
Rarely is it remarked that this downward pressure on labor prices is a consequence of the success of the United States Navy. Navies have controlled history because of the preeminence of economics in human affairs. Ultimately economics decides history. What is economics but the interactions of human beings? Human beings determine history. Why navies then? Because the easiest way to move goods, (the least friction), is to move goods by sea. Navies control the trade routes therefore navies control history.
The downward burden on the people is a result of their success in making free trade possible. The success of the US Navy in holding open the world’s trade routes makes globalization possible and means that the people of the United States are increasingly being forced to lower their prices even as the interest payments on the national debt continue to be redistributed by the market price mechanism in the economy and redirected down onto those with the lowest ability to raise their prices, i.e. those most constrained by foreign goods, services, and the three million workers entering the US every year. The people are caught in a vice.
Betrayal.
From the beginning of time, from the beginning of the market, the wealthy have sought to escape the market, (voluntary relations of mutual consent), and force others to pay them using the power of the state, (coercive relations).
Yet the study of economics reveals that voluntary relations of mutual assent are always more productive than coerced relations. Therefore, not only can this vice on the people be broken, when it is broken there will be a huge increase in productivity. The people are being betrayed by their government because their government has been taken over by a powerful elite that seeks to use government to coerce payments rather than having to participate in the market of mutual assent.
The lending of capital to the government is the most obvious example. However, as soon as the government begins drawing down the debt the increasing productivity gains will create huge gains in the economy to the benefit of the people. The capital lent to the government actually disappears. However, when it is repaid it once again reemerges in the economy. “There is no such thing as capital there are only capital goods,” was the dictum Ludwig von Mises used to hammer into his students heads.
His point was that bankers and financiers, stock brokers, had created the false impression that their bookkeeping activities were the heart of the capitalist economy. He wanted to disabuse his students of this error. Real capital exists only in bricks and mortar, in metal stamping machines, in all the apparatus of the productive economy. Capital is not a share of stock but the underlying assets of the firm. Ultimately capital must be invested in something, some piece of equipment, a productive asset. (Which is why the elite prefer Treasury Notes. They do not want to have to make a commitment to any business scheme. They do not want to be subject to the will of the market. They would rather rely on the IRS to collect their money.) This is why I say that the capital lent to the government disappears. It is no longer part of the productive economy.
However, as soon as the government pays down, say $300 billion in debt, (at that rate it would only take 26 years), there is suddenly $300 billion in new capital that has been created. $300 billion is forced back out into the market where it must meet the needs of the consumers or perish, or at least be redistributed by the market. There will be a huge increase in productivity as this capital is injected back into productive activities.
In a world of 6 billion by all accounts North America is under populated. The problem with the 3 million illegals is that they are illegal. But they are illegal because the Post Liberal elite prefers illegals not because of any natural law that requires them to be illegal. But here you can see but one example of how the economy, the society, is twisted by the elites, who are pursuing their own interests and not the people’s interest.
There is no natural law that limits educational opportunities, or the availability of housing, or the providing of medical care; it is only the actions of government, in all three areas which has so restricted the market and has turned these three areas into the three largest centers of inflation. Just as with taxes, the Post Liberal elite is able to raise its own prices and pass the taxes on to others, so too here, in the spiraling cost of education, medicine and health care, and housing, the elite is able to transfer all of its cost onto the rest of society.
If one points out that government has driven up the cost of education, medicine, housing, out of the reach of the people, the elite is indifferent. Notice that recently we heard the claim that the “blue states” pay most of the federal income tax. Once again the Republicans were so uninformed, (or worse), they did not know how to respond. The wealthy elites in the blue states do pay most of the tax, however, they then redistribute the tax in the form of higher prices. These higher prices are paid by the red states and everyone else in the blue states. This is why they are indifferent to higher prices for housing, education, health care and even higher taxes.
They are so positioned in the economy that they can pass these ever increasing costs onto everyone else. For example, Mr. Gates’ father advocated higher taxes, saying that he thought he was under taxed. However, the Republicans did not know what to say in reply. They should have asked the Gates family to agree not to raise the prices of Microsoft’s products. Then Mr. Gates’ taxes would have some bite.
This is not “sour grapes,” or envy; I am not a communist. To the extent they can pass on their costs in the free market place I am in complete accord. I am pointing out here that these Post Liberal elites use their domination of society and government for their own ends not for those ends most felicitous of the interests of the people.
For example, most of you think that “inflation” is some monetary issue that the Federal Reserve deals with in setting the interest rates. We do not have time to go into this here but it is perhaps enough to explain that Ludwig von Mises argued against the Federal Reserve and regarded it as another example of government intrusion into the economy. For proof just consider one point: When the Federal Reserve raises interest rates they raise them for the entire country. But please consider, does every part of the economy suffer from inflation equally?
Of course not. For example, the laborers have not been adding to inflation, they have not been able to raise their prices. Are the red states leading inflation? No. Who is raising their prices? Yes, of course, the elites are the ones who are raising their prices. This is why they are elite. But, owing to the way the government has organized the economy, the currency, there is no other way of setting interest rates. In the blue states the Post Liberal elite has twisted the power of the state to restrict the economy and force up prices, yet everyone, red states and the rest of the people in the blue states alike must pay the higher interest rates.
The elite in the blue states does not care that their own policies in for example, housing, in Boston, New York, San Francisco, Chicago have ratcheted up inflation by restricting supply. The elite can simply raise their prices in response to increasing prices. And when the Federal Reserve raises interest rates to control the overheating economy the elite in these blue states, again, is indifferent.
Why? Because we all have to pay higher interest rates! So the Post Liberal elite uses its control over the state to restrict supply, then they experience appreciation on their capital assets, then when the Federal Reserve raises the interest rate to control the inflation the Post Liberal elite again benefits from the higher interest on its capital. Who suffers? Those at the bottom. Alabama, Mississippi, Okalahoma, Kansas, you know, red states. They have not created the inflation yet they must pay the higher interest. Payments which go to the Post Liberal elite in the blue states.
The blue states may create the inflation with their interference in the economy, but the higher interest rates are paid by red states as well. But we do not all enjoy the same ability to pass on these higher costs. This is the vice they have us in.
However, again, as we say with the national debt, as soon as we wrest control away from the Post Liberal elite there will be huge gains in productivity, and general deflationary pressures across the economy. The elite uses its control of government to force up prices. Take this power away from them and prices will fall. Falling prices with the same or increasing productivity, is called deflation.
So even though world trade may control our ability to raise our prices, we can enjoy an increasing standard of living. How? Efficiency.
Lower the cost of housing, lower the cost of medical care, lower the cost of education. How? Efficiency.
The elite does not care if parts are interchangeable but we do; The elite does not care if our cell phones work with different systems but we do; Or if our auto parts are interchangeable; Or if Microsoft rewrites its proprietary code to crash competitor’s programs; Or if our public schools decline; Or if stem cell research continues apace; Or if buildings are delayed years in litigation; Or if everyone pays the same road tax regardless of whether one lives in San Francisco or Fresno; Or if regulations spiral out of control; Or if the tax code is unintelligible; Or that factory building techniques are banned in housing; This is the vice they have us in.
This is the betrayal.
At one time to be Liberal meant a recognition of the importance of free and open markets. This is why I call our elite Post Liberal. They have given up on free markets, on democracy, the Republic. Their interests are not ours, yet see how they have control of the state and pursue their own aims.
These rich powerful people who have used their power to destroy my life, have, as a class, done the same to the society as a whole. Like some terrible serpent they have intertwined themselves around the state, and they now strangle us.
It does no good to try to reason with them; to explain that total productivity would increase if they would only release their strangle hold; or that they could become even richer in a free market. Ultimately they are not interested even in their own self interest.
Ultimately it is about power.
There was no market reason for Michael Weiner to break into my room and steal my notebook. Interfering with my employment at State Farm and GAB Robins did not put one dollar into Don Imus’ pocket. Mrs. Jack Swanson, Michael Krasney, Ron Owens, all the rest, had no market reason to hector, and vex, and harasse me.
This was none of it, never, was it about the market. Egotism. Power. Viciousness. Yes.
But not the market.
Using the market the people can free themselves from the national debt, then they can free themselves from the Post Liberal elite who use the state to strangle them in this vice of greed and corruption.
Soon I will free myself.
www.NewRuskinCollege.com
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