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TGIF: The Coming New and Improved IRS

The brilliant people in the Biden administration and the U.S. Congress have decided that one thing America really needs is an Internal Revenue Service (!) fortified by 87,000 more employees and 80 billion more dollars so it can help reduce the inflation that currently menaces us.

You don’t believe it? Oh, ye of little faith!

How is that to be accomplished? By auditing rich individuals and corporations, of course, thereby harvesting tons of hitherto uncollected revenue and forcing the shirkers to pay their “fair share.” (No one ever says how we know they aren’t already paying it.) The law’s advocates also say that with its outright tax increase on corporations and cutting of energy and health care costs, inflation will be lowered still more. I wouldn’t take that too seriously.

You might suspect that the government’s story is not exactly kosher — and you would be right. Even though the Biden people insist that the IRS provisions of the just-enacted Inflation Reduction Act will leave people making less than $400,000 unscathed, nothing in the law guarantees that, and the defensiveness of the White House and congressional spokesmen seem to confirm that the nonrich are not safe. Last year the Congressional Budget Office said all taxpayers would face higher audit rates under an earlier, larger version of the Inflation Reduction Act. (It was then called Build Back Better.)

This stands to reason that all taxpayers will be at risk. The highest earners have battalions of the best tax lawyers and accountants who surely advise their clients how to (legally) avoid, not evade, taxes. (News flash: the tax code is complicated, even vague, and will become even more so under the new law.) When you combine that fact with the regrettably small number of really, really rich people, you have to figure that the newly beefed-up IRS won’t be anywhere near able to squeeze out the expected sums without going after lower hanging fruit. That’s the rest of us: additional audits of people of more modest means. (Just for the record: with the exception of any actual thieves, wealthy people also have a right to their money.)

How many times before have presidents and legislators promised to raise badly needed, deficit-shrinking revenue by stepping up IRS enforcement against the rich? It’s how progressives lull the middle class into accepting always-increasing spending.

But strangely, the deficits never shrink and stay shrunk. So either the revenue estimates were unalloyed bunk or the government spent the additional revenue on new projects. I’m sure it was a combination of both. Surprise, surprise! Birds gotta fly. Fish gotta swim. Politicians gotta spend.

At any rate, the deficit and debt (monetized by the Federal Reserve, our inflation engine) have grown without relief. Isn’t that likely to be the case this time? It’s surely the way to bet.

According to Forbes, “Democrats say the legislation will raise close to $740 billion in tax revenue over the next 10 years and devote $300 billion of that money toward reducing the federal deficit.” That’s 2 percent of the deficits expected over the next 10 years. You should realize that last year’s budget deficit was $2.77 trillion, the second highest after the 2020s $3.13 trillion.

But let’s remember that these revenue projections are really predictions about how people will behave — and how much taxable income they will produce — in an altered institutional environment. The prognosticators make their predictions with inherently dodgy computer models. Remember how well such models predicted the climate and covid catastrophe? In truth, we don’t know how creative, entrepreneurial people will adjust to changing tax and regulatory conditions. Individuals discover things when they face new situations. They are not robots.

Another thing to keep in mind is that corporations do not pay taxes. They collect them. Only people pay taxes. So which people pay the corporate income tax, which will go up under the new law? Economists have long known that the tax is paid by consumers through higher prices, employees through lower wages, and shareholders, most of whom are not wealthy, through lower returns to their retirement funds. The corporate tax is one of those great political deceptions that seems to be a permanent fixture of the landscape. By the way, taxes on savings and investment invariably constitute double and even triple taxation, stifling innovation and wealth creation. Thus the general welfare, and not only justice, suffers.

Will the Inflation Reduction Act really act to reduce inflation? No bloody way. Inflation is not merely a general price rise. That’s only the symptom. The cause is an inflation of the money supply by the government’s central bank.

When the government spends more than it collects in taxes, it borrows money to cover the budget deficit. The Federal Reserve will buy the government debt, creating money out of thin air to do so. When the conjured-up money is spent or lent, we have the proverbial more dollars chasing the same amount of goods and — voila! — a general rise in prices. The new money also will tend to push interest rates lower than the free-market level, which in turn will distort the calculations of investors — interest rates are key signals to producers, after all — resulting in unsustainable malinvestment. (This is one of the monumental theoretical achievements of the Austrian school of economics, featuring Ludwig von Mises’s and F. A. Hayek’s work on money and banking.)

It’s even worse. This century’s massive money creation has been accompanied by the depressed production of goods brought about by the economic lockdowns during the covid pandemic. It’s not just more money chasing the same supply of goods, but a smaller supply of goods. Thank you, politicians throughout America, for your service.

A real inflation reduction act would do nothing but slash spending — assuming we think the government should spend anything at all. After all, it ultimately obtains its money at gunpoint, that is, by theft. Slashing spending means rethinking big government, that is, — top of the list — the warfare and welfare state.

So the touted Biden achievement is the just same old snake oil in new packaging. The government is out of control, and I don’t see how that will soon end. Taxation is a blank check for politicians. The income tax is especially bad because it requires all to account to the government for their income-earning activities under threat of penalty. This inquisitorial device ought to be seen as intolerable in a theoretically free country. (For more, see my book Your Money or Your Life: Why We Must Abolish the Income Tax.)

How Much Worse Can the Economy Get?

The most important question for asset prices right now, from stocks to houses to Bitcoin, is whether we’re due for a recession. Last week we got confirmation that according to the traditional definition of a recession—two quarters of negative growth—we are already in a recession.

The response from this administration has been denial and word games rather than actually trying to stop the slide. At which point the betting shifts to whether it’ll be a shallow 1991-style recession or a big, 2008-style one, perhaps with a financial crisis to spice things up.

Bigger-picture, what we’re seeing is a concentrated version of the world that paper money delivers: an endless series of booms, busts, and financial crises, all to sustain a permanent siphon of the peoples’ wealth towards subsidizing federal deficits and Wall Street-brokered leverage. Millions are waking up to what fiat money does, which could be bullish for Bitcoin in the long run.

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The Numbers

First, the GDP numbers. Going by the Bureau of Economic Analysis (BEA), real GDP shrank at an annualized rate of 1.6% in Q1 and then dropped another annualized 0.9% in this most recent Q2. GDP is revised several times through the quarter, so that could change for better or worse. Meanwhile, of course, if they’re under-estimating inflation, as many believe, then the real decline could be much worse. Perhaps on the scale of a 3% annual drop in GDP.

To put that in perspective, in 2008 real GDP shrunk 1.6% in the first bad quarter (Q1 ’08), then rebounded to plus 2.3% in Q2 before falling to -2.1% in Q3. So, just reading the numbers, we’re in a substantially worse spot at the moment than 2008, even if we believe the inflation numbers.

By the way, about those definitions, the administration correctly claims that the private economics outfit NBER has the final say on what’s a recession. The problem is that over the past 75 years the NBER has never failed to call two down quarters a recession. Rather, they’ve only used their discretion to call a zig-zag a recession, as in 2008. So NBER only calls it worse, never better than the two-quarter standard. Why the chicken-little NBER is suddenly dismissing falling boulders is a very valid question, but then you probably already know why.

How Long will the Pain Last?

So where to next? Given the Fed is openly engineering a recession in order to slow inflation, the key question is whether inflation comes down on its own or will the Fed try to engineer harder.

Now, to be fair, inflation could come down to some degree. After all, if you shut down half the economy worldwide, there will be some hiccups along the way. Considering there’s little public appetite for new lockdowns and Ukraine is settling into a slog, barring a still-unlikely Chinese escalation over Taiwan things should continue ironing out.

Indeed, money printing is settling down to more normal rates: Over the past year, money supply in M2 has grown 5.6%, similar to the Obama and Trump eras. That’s down from 25% in the first year of the pandemic and 11% in the second year.

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So the main driver of inflation—federal spending—is easing.

Of course, that doesn’t mean the pain is over; inflation famously lags money supply, typically around 18 months. And M2 growth has only recently calmed down. Meaning money could continue driving high inflation for, going by history, another 16-odd months.

At the same time, the slowing economy itself will probably start slowing inflation via “demand destruction”—fewer people buying less stuff. Indeed, that’s the Fed’s goal in driving higher rates, to choke off the private economy. But the question is will private demand come down a little or a lot? Literally, nobody knows—as so often in economics, we’ve never had precisely this sequence of economic shocks, so we can only guess from history.

By the way, a few weeks ago I did guess based on history, and the punchline is it gets ugly depending on the comparables, but nobody knows which will happen. Indeed at a recent conference in Europe, Chairman Powell himself remarked, “We now understand better how little we understand about inflation.” Invites the question of why he didn’t resign on the spot. But underlining that nobody knows how fast inflation will fall—if it falls at all—and how much of the economy it takes down with it.

Of course, this “demand destruction” is up against the shrinking economy itself. That is, if the real economy is shrinking because of Biden’s War on Production or because new climate or race mandates are imposed on the economy, then inflation rises simply because there’s less stuff being produced.

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Finally, I think the biggest unknown on inflation, hence on GDP’s future path, is what happens to the giant lump of fresh money that was pumped out during COVID—indeed, almost $5 trillion. Much of that new money isn’t showing up in inflation yet because it remains stashed in bank accounts. It’s stashed either because people didn’t need the free money and saved it, or because they saved up as a cushion during the scary times of COVID.

Effectively, all that money has been buried in the backyard in terms of inflation—it’s not for sale. But once those bank accounts start to empty, which should happen both as Covid fears recede and as the economy slows, all those frozen trillions are released into the wild to go chase a now dwindling pile of goods, giving inflation a second wind. You can see in the chart below it’s just starting to trickle out, with much more to go.

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So, in sum, the main drivers of inflation these past two and a half years are fading, but most of that fresh money is still locked up. So we could still have a long period of elevated inflation. And, if we do, the Fed could continue panic-hiking into a serious recession or even a financial crash.

One interesting Zerohedge chart this week noted that bouts of high inflation tend to last two and a half years before coming down. Which would put us at another year or so of pain. Of course, that two and a half year cycle doesn’t drop from the sky; it’s driven by the central bank itself reacting to bad numbers and jacking rates, noting that lag between M2 and inflation.

Having said, the orgy of money printing these past two years has been substantially higher even than the “Great Inflation” of the 1970’s—it turns out it took a lot of trillions to tranquilize the population into accepting lockdowns. So the magnitudes are likely to be larger, or the timelines longer, than what we’ve seen since the 1950’s.

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Recession: How Long and How Deep

The shape of recession will be a question of how those four inflation factors (slowing M2, fading COVID, falling production, draining savings) impact Fed rate decisions, which in turn either crash harder or soften the blow.

If inflation does come down a lot due to those four factors (“on its own” is how the news will frame it), then the Fed will pause or reverse hikes, and we’ll probably limp along like the Obama years. That is, government will continue to excrete new economy-hobbling regulations and taxes, but the economy will be able to handle it, cleaning up the messes as quickly as government makes them.

Indeed, that’s the going bet on Wall Street, with current projections for positive but fading GDP growth the rest of this year and 2023, ending next year at 1.3% real growth—pathetic, but not a 1970’s-style catastrophe.

So that’s the best case: we coast like a car that’s run out of gas, slowing gradually until either a new administration reverses course or until enough economic deadwood has been cleared that the economy turns back to growth.

And if inflation doesn’t come down “on its own?” Then the Fed, after its habitual several quarters of denial, gets back to economy-crushing hikes. Ushering in a potentially severe recession.

Of course, there is an out-of-box solution, which is to end inflation by dramatically lowering federal spending. Simply getting back to pre-COVID could drop federal spending by some $1.5 trillion per year, while getting back to a Bill Clinton-scale government drops more like $4 trillion every year. We’d have the debt paid off in a decade.

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Trimming a couple trillion off federal spending would indeed tame inflation for decades to come. But then you’d have to be pretty naïve to think this administration and Fed will go that path.

So that leaves the most likely stubborn-inflation scenario: Fed pretends it’s not there for a while, then crashes the economy so We the People get to, once again, tighten our belts.

So, bottom line, it’s a recession at the moment; whether it gets worse depends on inflation, and policymakers goofing around whistling past graveyards should give anyone pause.

This article was originally featured at Peter St. Onge’s substack CryptoEconomy and is republished with permission.

Veteran Says Good Riddance to Liz Cheney

Yesterday was a very important day.
It’s the day the America First movement exiled the most despicable, most debased Swamp Monster on Capitol Hill.
Yesterday Liz Cheney lost renomination for Congress after three terms of using and abusing the people of Wyoming.
The reason is simple: voters are tired of fighting endless wars.
They’re tired of spending trillions of dollars in the Middle East and Central Asia while they struggle to fill their own gas tank or complete a grocery shopping list.
They’re tired of seeing their sons and daughters in uniform come home physically, mentally, and spiritually broken by war.
Or often, not come home at all.
Liz Cheney has been a face of the War Party for years.
In 2003 the Bush-Cheney administration fabricated intelligence to lie our country into a disastrous war where over a million people were killed.
Liz Cheney says “Good.”
The Bush-Cheney administration set up an international collection of secret prison camps where thousands were tortured, some to death.
Liz Cheney says, “Good.”
Barack Obama gave billions of dollars in cash and weapons to Jihadists in Syria, the same terrorists who would later start ISIS.
Liz Cheney says, “Good.”
Joe Biden is inching us dangerously close to World War III with Russia to protect his family corruption in Ukraine.
Liz Cheney says, “Good.”
And yesterday the conservative voters of Wyoming kicked Liz Cheney out of office right back to her military-industrial complex mansion in Northern Virginia.
And I say, “Good.”
Smedley Butler said “War is a racket.” And I say that Liz Cheney is a war profiteer. And someday we may rid our nation and ourselves of the former, but yesterday we rid ourselves of the latter.
Good riddance to the Beltway Butcher.

In Rebuke of the Dishonorable David Petraeus

In a recent article for The Atlantic David Petraeus came to the conclusion that American soldiers should still be in Afghanistan today. Two thousand, three hundred twenty-four American servicemen killed$2.3 trillion dollars and over 20 years later convicted criminal and adulterer David Petraeus concludes “In essence, then, from the beginning through to the end—but especially at the end—American commitment was lacking.” Petraeus made vague statements regarding the success he achieved while in command of American forces in Afghanistan. He referred to what he believes the American decision makers should have done differently while rarely offering details.

David Petraeus seems to still believe that his counter insurgency (COIN) strategy was a successful and just needs more time, perhaps even a “generational commitment.” He maintains that during his time in command he took on the issue of corruption without offering any specific details of how he solved the problem. The Special Inspector General for Afghanistan Reconstruction’s (SIGAR) report on Stabilization Efforts seems to contradict his account. The American Military and USAID poured billions of dollars into what were sold as public works projects. The SIGAR report states “The elite capture of relationships with, and aid and contracts from, the coalition, created new grievances and exacerbated old ones as some tribes and other groups benefited from the war, while others were alienated and driven toward the insurgency.” With little knowledge of the history or intricacies of the areas in which they were deployed American forces sought to work with the people that seemed the friendliest to their operation without knowing the historical implications of giving one tribe or family more power over the other. Petraeus repeatedly mentioned his supposed success in Iraq but failed to mention the collapse of the Iraqi army in 2014 in the face of an ISIS assault.

Petraeus enumerates a few specific instances that could have been done differently. In one, he writes,

“We also did not always deliver what the Afghan military needed or should have had. Instead, we gave them what we thought they needed and, under pressure from the U.S. Congress, we sought to buy American, even when U.S. systems, such as our helicopters, were too complex for the Afghans to maintain. Had we helped the Afghan military along a path where it acquired less complex (typically non-American) equipment we might have built it into a more sustainable fighting force, but one that remained nearly as capable and would have been more able to operate independently of us.”

Is it realistic to think that any American Congress would not be so captured by the military industrial complex as to forgo giving their patrons in the arms industry billions of dollars and instead buy Russian made equipment for the Afghans? Would any U.S. General with thoughts of a spot on Raytheon or Lockheed’s board of directors would make such a request?

Petraeus goes on to argue that the Americans should have given the Afghan government’s military more Russian made helicopters, that the Afghans were able to maintain, to support their troop movements and air cover across the country. For three years I worked on the Department of Defense contract to maintain the Russian made Mi-17 helicopters for the Afghan Army’s Special Mission Wing. I saw no indication that the Afghan forces were capable of maintaining this fleet of MI-17 helicopters with which they had much more experience. Throughout my three years on this contract I saw the Ukrainian subcontractors shoulder the burden of keeping the MI-17 fleet mission capable. The Afghan military mechanics would routinely disappear for long stretches of their work day. When they would work they would make sure to leave the most difficult and labor intensive jobs to the Ukrainian mechanics to complete. They quickly learned that the contractors were judged on how mission ready they could keep the fleet and not on how well the Afghan mechanics were capable of doing the job themselves. There were Afghan civilian subcontractors, often the sons of well-connected government officials, working on all facets of the program. They were proficient in their jobs. These Afghan subcontractors would not be a long term solution for the maintenance of the fleet because after two years they became eligible for the Special Immigration Visa and were off to live in the United States.

Petraeus is critical of the Trump Administration’s deal with the Taliban to completely withdrawal from the country. One of his many ridiculous criticisms, “Throughout, but particularly in the final few years of our involvement in Afghanistan, we also repeatedly failed to appreciate the damaging effects of our stated desire to leave on the psyche of Afghan political and military leaders and those in the rank and file.” After the deal was signed I never saw any indication that the Afghan contractors and soldiers or even the long time American contractors actually believed that the US military was going to completely withdrawal. There was a constant state of denial that in the end the Americans would stay and the money and easy paychecks would continue to flow. It was not until the Biden administration’s announcement confirming the withdrawal that the Afghan forces suddenly had an urgency to learn their jobs.

Petraeus falsely claims that, “The timeline that had the US withdrawing during the height of the fighting season was a major mistake.” The deal called for the withdrawal to be complete by May of 2021. It was the Biden administration the foolishly and unilaterally delayed the withdrawal to September 11th, 2021 for no apparent reason with fatal consequences. The Taliban almost assuredly had planned their countrywide assault to begin after the Americans were gone and refused to alter it after Biden’s fateful decision.

When making his case for why the Americans should have remained in Afghanistan he mentioned that American soldiers were in little danger because they were no longer on the front lines. However in Afghanistan there were no clearly defined front lines and our supposed allies were often our enemies. Pfc. Brandon Jay Kreischer, 20, of Stryker, Ohio, and Spc. Michael Isaiah Nance, 24, of Chicago were murdered in July of 2019 by an Afghan National Army soldier that was supposed to be an ally of the Americans. Their deaths should not be written off.

There were no doubt true warriors among the SMW soldiers. Col. Karim Rahimi was a brave man that risked his life countless times for his countrymen. I witnessed the sadness of his family a friends when his body was brought back to Kabul for burial after days of searching after he was piloting a helicopter that was shot down. In three years countless bodies were piled into ambulances that were always waiting to greet the latest return flight from a battle. In the end these men were betrayed by the leadership of their government and the American generals and politicians that promised American soldiers would always be there to die with them.

Not one more American soldier should die in Afghanistan. It is a tragedy that thirteen more American servicemen were murdered during the final days of the withdrawal. These Americans would still be alive were not for political inaction and the failed plans and strategy of generals from the same mold as Petraeus. In a healthy and honorable culture Petraeus would be condemned to forever beg the forgiveness of every family that had a son, father, or brother die trying to execute his failed counter insurgency strategy.

We Don’t Believe You

David French, maybe National Review’s most reliably wrong scribe, issued this gem in response to the FBI raid on Donald Trump’s residence in Florida:

French

Imagine thinking federal police agents and lawyers will be “held accountable,” or that presidents are not above the law! Is this an afterschool special? “Let’s wait and see, folks, before we judge the situation. It might be perfectly on the up and up! Have faith in the rule of law and trust the process!”

French, in keeping with the listless residue of Conservative Inc., either can’t or won’t face the reality of postgoodwill America. This starts and ends with politics. If politics is war by other means, subterfuge is part and parcel of every battle and skirmish in that war. We are not required to take a combatant’s claims at face value, blundering ahead like Lucan and Cardigan at Balaclava. The contrary, in fact. Any political statement made today, by any politician or candidate or public official, can be answered thus: “We don’t believe you.” And with this comes a corollary: “We don’t trust you.”

When the Left talks about banning assault rifles, for example, we all know the true ambition of the gun controllers—many of whom are open and honest about their desire to completely eliminate private ownership of firearms in America. Progressives apply the same lens to bans on late-term abortion. But the Trump era, enhanced by the perverse dopamine incentives of social media, took this disbelief and distrust to a new rhetorical level. Witness today’s poisonous political lexicon, one that makes clear any presumption of good intentions is gone: insurrection, treason, racist, Nazi, fascist, domestic terrorist, MAGAt. These terms are not used to persuade, but to dehumanize and banish. Which of course is nothing new in politics. But it’s worth pointing out the Frenchist folly of claiming that democratic norms are poised to reassert themselves and bring us together once Orange Man is gone.

The FBI raid on Mar-a-Lago is an obvious example of America watching two politicized movies. We are not required to judge it apart from the broader political context, like children examining a single rock. The entire event is bound up with the larger war against Trump, one which began almost immediately after he was elected, with the Russiagate campaign. The goal of that ongoing war is to ruin both Trump and his family, salting the earth with their populist movement of Deplorables. Trump and his supporters must be destroyed politically (at the very least), ensuring Trump cannot run for president again but also that no candidate outside the uniparty’s acceptable parameters can ever run again. So one of the most important campaigns in America’s political war effectively seeks to criminalize a whole category of dissent—or at least place dissenters outside the bounds of acceptable society. If you doubt any or all of the 2020 presidential election results, you are an election denier. If you protested at the Capitol, you are an insurrectionist. If you question Russian collusion, you are a Putin supporter. And so forth.

We have not seen the FBI’s warrant or the supporting evidence presented to the magistrate. Was the raid an actual step toward a criminal prosecution? What were the actual crimes contemplated and the specific evidence sought? We don’t know, but at this point, it doesn’t matter. Merrick Garland surely knew Republican partisans would view the raid as pure political harassment, a warning to Trump, his family, and close associates. He also surely knew that many Democratic partisans hope to gin up legal arguments to disqualify the former president from running again (either under the Fourteenth Amendment or, more dubiously, under this federal statute). And of course he knew a media brouhaha would ensue. So there are two broad but conflicting interpretations of Garland’s actions. First, he is a brave defender of the rule of law who doggedly follows the evidence wherever it goes, with no consideration for politics, appearances, or timing whatsoever. Second, he knew exactly how ardent Trump fans would react to the warrant and seizures, and actively intended this effect. In other words, he intended to send a threatening message and quell political enthusiasm for Trump 2024.

Decent people can and should resist a world organized around politics, and deplore the politicized state of America. Ordinary Americans don’t want to live political lives and have their personal and professional relationships defined by this terrible environment. But politics is interested in us, as the saying goes. So we arm ourselves with a clear-eyed worldview, put away childish things, and never accept political pronouncements at face value. “We don’t believe you” is always the default position.

This article was originally featured at the Ludwig von Mises Institute and is republished with permission.

How to End the Culture War

The following is a section from The Voluntaryist Handbook, organized by Keith Knight.

There exist two blatant contradictions which roughly ninety-nine percent of intellectuals, journalists, and voters erroneously believe.

On the one hand, they say that the free market must be regulated in order to prevent monopolies. It is assumed that these monopolies would have such great power over the market that their customers would be forced to settle for products far more expensive than, and inferior to, those that would be offered under competitive market conditions. On the other hand, these intellectuals, journalists, and voters explicitly advocate that one group (government) monopolize the money supply, policing, courts, taxation, legislation, compulsory education, and a myriad of other things that we may consider to be vitally important.

Second, the vast majority of people recognize the moral legitimacy of the biblical commandments “Thou Shalt Not Steal” and “Thou Shalt Not Murder.” Yet, when it comes to the practices of taxation and war, these principles are blatantly disregarded by almost everyone. If taxation is not theft, why can only governments do such a thing? Why not simply allow all organizations, companies, clubs, churches, or individuals to issue taxes?

It should therefore come as no surprise that governments are infamous for delivering poor quality. Imagine a restaurant where you had to pay regardless of whether they brought food to your table.

Likewise, war is simply a euphemism for theft-funded mass murder, a blatant crime that we would never dismiss if non-government actors were to engage in it.

What if justice required us not to have double standards? This book seeks to dispel the belief that morality applies differently to government employees. If it is immoral for me to do something—say, conscript people to perform labor against their will—how can I justifiably vote for a representative to do such a thing on my behalf?

Many real criticisms apply to the free market: greed, envy, dog-eat-dog mentalities, short-sightedness, etc. The problem with all of those criticisms is that they apply many times over to the state, since, by definition, the state does not face competition and one cannot opt out of funding it. While voluntarily funded competing organizations may have shortcomings, they are preferable to the coercively funded monopolies of the state.

The following collection of essays, excerpts, and quotes has given me the intellectual capacity to stop hating people based on arbitrary differences and to focus on what really matters. Should I achieve my ends in life violently with threats, or voluntarily with persuasion?

The corporate press will explicitly seek to divide people of goodwill based on gender, income, race, nationality, and any numerous other interchangeable sources of division to suit their agenda. No longer should we tolerate such an obvious scam.

Is it really a surprise that as the government gets bigger and bigger and bigger, everything in life becomes more and more hyper-political?

When you think about it, right, there are such profound differences that people have…you will have right now in this audience…a Christian sitting next to an atheist, the most profound difference in belief: one person believes that the person next to them is going to burn in a pit of Hell forever, and that atheist looks over at you and believes you are delusional.

But you’re fine. Like, you’re not going to war, because it’s separated from politics. Now if tomorrow there was going to be a vote over whether the government is Christian or atheist, those people start going to war, because they’re warring over…who rules over you, and so, the problem with all of this, with comedy and with everything else online—it’s not that we have differences; it’s that we have political differences.

Politics is poison, and that’s why you want to reduce the size of government…

– Dave Smith, The Voluntaryist Handbook, p. 289

For a free pdf of The Voluntaryist Handbook go to Odysee.com, to purchase the paperback on Amazon or Barnes and Noble click here.

Cops Sicced on 8 Year Old Girl’s Lemonade Stand

Asa Baker is an 8-year-old girl from Ohio with an overwhelming entrepreneurial spirit. Over the hot summer, rather than spend the days inside watching TV, Asa would set up a lemonade stand in her front yard to make some cash.

“It’s fun and you get lots of people,” Asa told FOX 8 news in an interview, adding that lots of truckers stop buy and pay more than the $1 per cup that she charges.

“Especially on a country road, I get a lot of people,” she said.

Unfortunately for Asa, however, her summer of entrepreneurial spirit would come to a grinding halt when police shut down her stand for the crime of selling lemonade without a permit.

Earlier this month, Asa had her first experience with the state’s iron fist when she set up her stand at her father’s business downtown. Everything was cleared with the property owner and she had permission to be there during the town’s annual Rib and Food Festival.

Asa was in an alleyway about a half block from the festival and business was good—until police showed up.

Asa says when she saw a police officer walking up to her stand she thought he was going to buy a cup of lemonade. But that was not his mission. Instead of encouraging the little girl’s business acumen in the lemonade realm, he was there to shut her down.

Asa had not paid the government for the privilege of selling lemonade from private property and it was this cop’s job to enforce this law.

Highlighting the sentiment behind the “just doing my job” mentality, this officer actually had a conscience and was upset that he had to shut down Asa’s stand. But he still shut it down.

“Well, they were really sad that they had to shut me down but they gave me $20 to try and pay for it,” said Asa.

“I could definitely tell he did not want to shut her down, but, I mean, you get a call, he has to do it. He definitely did the right thing, you know, in the situation he was put in,” said Katrina Moore, Asa’s mother.

“We looked it up and it was pretty much anywhere in Ohio. You have to have a license and I’ve never heard of that,” said Kyle Clark, Asa’s Dad.

FOX 8 reached out to the city who stated that the police department is obligated to enforce the city’s ordinances—apparently, even if it means quashing an 8-year-old girl’s spirit.

In the codified ordinances of the city of Alliance, it clearly states that any vendor must procure a license before opening.

There are no exceptions. Not even for a child’s lemonade stand.

The law is so vague, that the family has no idea what permit to buy—especially for an 8-year-old girl.

“In order to get a food vendors license, it only lasts for five days and its $40 for five days so that’s kind of out of the picture. If she wants to sell on the street, she has to get a street permit. If she sells in front of a business, we have to get a solicitors permit,” said Moore.

The good news is that Asa was unphased and a week later, she was back out on the street, selling lemonade. After the negative press on social media, this time, police said they were going to leave her alone—a win for civil disobedience. 

This article was originally featured at The Free Thought Project and is republished with permission.

Public Choice ‘Conspiracy Theory’ and the Illusion of Grand Strategy

Murray Rothbard believed there are good conspiracy theories and bad conspiracy theories. He wrote about it for Reason Magazine in 1977.

The bad ones are gratuitous claims made without evidence that tend “to wrap up all the conspiracies, all the bad guy power blocs, into one giant conspiracy.” The claim that the 9/11 attacks were an insurance fraud scheme is a bad conspiracy theory.

The good conspiracy theories marshal evidence and recognize the political and economic incentives at play within government. The claim that high-level employees of the Saudi Arabian government helped facilitate the 9/11 attacks is a good conspiracy theory.

Of course, “conspiracy theory” is a useful rhetorical pejorative (akin to “racist” and “sexist”) that can be leveled at anyone who questions the imperial consensus. Claiming in defense that one has merely put forth a good conspiracy theory is not a compelling response.

I suggest we regard bad conspiracy theory as an anti-intellectual version of prestigious academic discourse on foreign policy grand strategy; a geo-political fan fiction for dummies. And I further suggest that we regard good conspiracy theory as merely the use of public choice theory to examine government’s foreign policy.

Grand Strategy Narratives

In his 2022 book Public Choice Theory and the Illusion of Grand Strategy, political/social scientist Richard Hanania said:

“A fallacy of conspiracy theorists is that they see intentionality where it does not exist, attributing economic and other outcomes to the plotting of nefarious actors…the study of American grand strategy suffers from the same fallacy as arguments that seek to understand any other complex system by appealing to a designer, when the topic of interest can better be explained as emerging from simpler phenomena.”

The “simpler phenomena” are captured in the subtitle to Hanania’s book: How Generals, Weapons Manufacturers, and Foreign Governments Shape American Foreign Policy. According to Hanania, top political decision makers tend to operate with short term political goals in mind. They are influenced much more by concentrated interests than by the broad public. And while public opinion cannot be completely ignored, it is quite malleable. The concentrated interests are adept at shaping it.

It’s not that there is no grand strategy. There are lots of grand strategies. The Neocons have some grand strategies. The liberal interventionists have some. So do the realists. It’s just that none of these strategies are being rationally implemented by the government. The most charitable reading of grand strategy is that it is a recommendation for what should be done, a normative claim about foreign policy. Zbigniew Brzezinski’s 1997 book, The Grand Chessboard, fits this description. The more Nietzschean interpretation is that grand strategy narratives are myths that obscure the swirling chaos of conflict, blackmail, and killing we politely call foreign policy. Samuel Huntington’s 1968 Foreign Affairs essay “The Bases of Accommodation” seems to do this for the Vietnam War.

Either way, none of the grand strategies dreamt up by our finest minds has ever been rationally implemented by the government.

Take a favorite example of Libertarian Institute Director Scott Horton; in The Grand Chessboard, Brzezinski recommended the United States support the Chinese-Pakistan-Taliban axis in Afghanistan to keep the Iranians, the Russians and the Indians out. After the September 11 attacks, the Bush administration seemingly decided to do the exact opposite, supporting Iran, Russia and India’s friends in Afghanistan to keep the Taliban, the Pakistanis and the Chinese out. This happened even though the Taliban were not involved in the 9/11 attacks.

Had one shrewd grand strategy devoured another? Not so fast. Things became even more bizarre during the Obama administration. As Horton said in his 2021 book Enough Already:

“Many Taliban fighters fleeing the violence of Obama’s Afghan “surge” at the beginning of the decade fled to Syria, where the U.S. was on their side, supporting their fight against the Shi’ite-aligned regime. After ISIS took over western Iraq and the Iraqi Shi’ite militias went home to fight them there. Iran then recruited hundreds of Afghan Hazaras—Shi’ites who largely support the Afghan government in Kabul and in turn have been supported by the U.S. since 2001—to travel to Syria, to fight for the state in alliance with Lebanese Hezbollah, Shi’ite Iraqis and Iran against the American-Saudi-al Qaeda coalition.”

The U.S. government didn’t implement Brzezinski’s plan. It didn’t implement the opposite plan. It didn’t implement any rational plan. There is no rational strategy at work. There are just interests. Bad conspiracy theories often note the interests but describe a governmental master plan consistently implemented over decades if not centuries.

Public Choice Theory

Public choice theory, the “use of economic tools in order to understand politics and government,” is central to Hanania’s understanding of international relations and foreign policy. He says:

“One begins with the assumption that people, rather than states, are rational in pursuit of their goals, whether they are material, ideological, or emotional…The irony of this approach to foreign affairs is that if we treat individuals as rational actors, then we have a reason to believe that states will not be.”

Scholars have used public choice theory to understand government domestic policy for decades. Hanania said:

“In domestic politics, political scientists rarely speak about the American government having an integrated plan to form the kind of society it wants.”

As Rothbard put it, a good conspiracy theorist:

“…believes that people act purposively, that they make conscious choices to employ means in order to arrive at goals. Hence, if a steel tariff is passed, he assumes that the steel industry lobbied for it…”

One need not invoke the specter of the Illuminati to make sense of steel tariffs. Nor is such a narrative necessary to explain America’s support of Iran’s, Russia’s, and India’s friends in Afghanistan. Similarly, the Great Society and the liberal, rules-based international order are just labels slapped on the chaos of interests.

Follow the evidence and you won’t be taken in by charlatans, whether they peddle their wares in podcasts or Ivy League lecture halls.

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