Category: Uncategorized

“Once you’ve built the big machinery of political power, remember you won’t always be the one to run it.” P. J. O’Rourke

So much is being made about the recent bombing of Iranian nuclear facilities regarding whether or not Trump’s actions are constitutional that you would think this was a unique event, but it was anything but. The US Constitution is clear and unequivocal that only Congress can declare war, and although such presidents like McKinley and Wilson fabricated the reasons for the Spanish American and the Great War, they nevertheless observed the constitutional requirement for congressional approval; unfortunately, as perhaps an unintended consequence of the 1973 War Powers Act, FDR was the last president to do so.

There have been many military conflicts since the end of WWII involving the US, but in none of them do we find a congressional declaration of war; Presidents Truman, Kennedy, Johnson, Reagan, Bush, Clinton, Obama and now Trump have exercised “War Powers” without having a congressional declaration of war. Given the constitution’s unequivocal enumeration of war powers for congress alone, and the fact that these presidents, with the exceptions of those prior to 1973, relied on the War Powers Act of that year, raises the commonsense question as to why we needed a “War Powers Act” to begin with?

Truman relied on the UN resolution for an “International Police Action”, involving almost 300,000 US troops, as if the UN had US congressional power. Kennedy and Johnson relied on the “Domino Theory” as a substitute for a congressional declaration of war, committing 550,000 US troops. All subsequent presidential actions involving war relied on this curious legislation whose stated intent was to limit such action, despite the fact that the US Constitution already made it an enumerated power for congress alone; the President is not a king.

Among the constitutions executive powers is for the president to be the commander-in-chief; however, he is that for everyone in the executive branch, not just the military, but that is not a legislative power. Using the “shared powers” argument for presidential war powers is at best disingenuous. The president’s role regarding war powers is to sign or veto a congressional resolution for war, as is the case for all legislation. Curiously, given Nixon’s penchant for power lust, it was surprising that he initially vetoed the War Powers Act; which brings us back to the question as to why we needed it to begin with?

Among the reasons given for this act was the clear and present danger doctrine that the constitution requires the president to protect the US from foreign attacks, and even imminent danger of attacks against the US, but the War Powers Act goes further by extending to the president a considerable period of time before he needs congressional approval. Even way back in the ancient times of 1973 we had sufficient information technology to make such latitudes questionable; the act does require that within 48 hours the president must advise congress of such actions, but for 60 days does not need congressional approval to wage war. Despite Nixon’s reticence to sign the War Powers Act, what it did was provide presidents with what the constitution did not, the power to wage war.

If the argument against Trump’s action is reduced to a quantitative analysis, then we have to compare it to what others have done.  For example, the strike against Iranian nuclear facilities consisted of a one-day event involving high tech bombs and cruise missiles on one country, whereas over the course of his presidency, Barack Obama authorized more than 26,000 bomb drops against seven countries.  If the argument in support of Trump’s action is raised to a qualitative analysis, we are relying on the intelligence assets of the US that Iran presented a clear and present danger to the US, i.e., an imminent nuclear attack.  Obama’s attacks on such countries like Libya and Syria are not supported by any facts that they represented a clear and present danger to the US. Skepticism about US intelligence in relation to clear and present dangers is supported by such things like the “Gulf of Tonkin Incident”, “Weapons of Mass Destruction”, or “Remember the Maine”.

We are told that Israel has solid intelligence regarding Iran’s nuclear capabilities and intentions of imminent attacks on Israel and the US. If so, and assuming we are not dealing with another WMD episode, what then prevents Trump from going to Congress for a declaration of war against a clear and present danger? It is reported from that same intelligence source that Iran moved their enriched uranium out of the facilities that the US bombed; do they know where to?  As far as what happens next, it’s not a question as to whether or not the US is in a war with Iran because bombing a foreign country is an act of war; we can sugar coat it with descriptions of a precision strike, saving democracy, or any other evasive language, but war is still just war.

“The object of waging a war is always to be in a better position in which to wage another war.” George Orwell

“That’s too coincidental to be a coincidence.” Yogi Berra

Most conspiracy theories are to some degree based on coincidences theoretically related but lacking empirical evidence to establish a factual basis. As awkward as a “Yogi-ism” can be, it has a humorous insight that will make you think about stuff, and there was some recent stuff that is just too coincidental to be a coincidence; for instance, we have the US Army Founding parade, the ICE riots, and the war between Iran and Israel. While none of the coincidences involved with any of these events represent empirical evidence, they do qualify for coincidences that are just too coincidental.

The Battles of Lexington and Concord on April 19, 1775, as promoted in the announcement for the US Army Founding parade, did not involve the Continental Army; those conflicts occurred before there was a Continental Army, involved Colonial Militias and didn’t qualify as a battle, but skirmishes. The parade was by no means unique historically as there are four regularly scheduled parades in the Capital involving the military, i.e., Inaugural Day, Memorial Day, Veterans Day, and Independence Day. There were also special parades like the one to celebrate the end of the Civil War and VE Day. What was special about this one was the coincidence with Trump’s birthday; the day of the parade was June 14, 2025, whereas the founding of the US Army was June 15, 1775. The birth date of Donald Trump is June 14, 1946.

The numbers don’t lie, the date of the US Army Founding parade was scheduled on Trump’s birthday; this huge parade was less about the US Army than the ego of a narcissistic birthday boy, and “…too coincidental to be a coincidence…”. It was also not in the tradition of this Republic to have such a huge militaristic Soviet-like parade, and one that wasted millions of taxpayer dollars. I agree with those Republicans like Rand Paul and Thomas Massie who expressed their distaste for such an ostentatious display, especially from an administration that preaches against wasteful spending. Clearly hypocrisy is a non-partisan trait as most of the Democratic criticism is opportunistic partisan hype, especially given their support for a lot of wasteful spending.

It was not a coincidence that the ICE rioters knew when and where the immigration enforcements were taking place; not only were they well organized, funded and prepared, but more critically, well informed. The administration’s position that the immigration enforcement leaks have been addressed doesn’t appear to be the case; this doesn’t only apply to the rioters, but to elected officials who were all too well scripted for grandstanding, and in some cases obstruction and even assault.

As Trump’s deadline for Iran to agree to a deal expired, Israel was all over Iran with its air force, destroying both its nuclear infrastructure and its command and control. While massive barrages of missiles, drones, air strikes and propaganda followed, and contrary to what Secretary Rubio and others said, our government was involved; true, no Americans were part of the air strikes on Iran, we just supplied the munitions, technical assistance and intelligence. The truth came out when Trump admitted that Netanyahu had told him this was going to happen after Iran passed on Trump’s deadline; sometimes the coincidence is so obvious as to be just too coincidental.

One of Trump’s campaign promises was that he would never allow the US to be drawn into a war unless the US itself was attacked by another country; that’s kind of vague as the US has more foreign military bases than any other country in the world, so is an attack on them the same as on the US?  This particular coincidence historically is that those who promise what they can’t deliver find themselves in an awkward position they themselves created; Trump has stated that Iran will never have a nuclear weapon, but we are told by mass media that the only way to assure that is for the US to deploy the only weapon that can make that happen.

Remember please the WMD in Iraq, the Gulf of Tonkin, the Maine, the Lusitania, the Domino Effect and all the other lies we were told to justify the war mongering propaganda of failed leadership, and hope that Trump’s promise is just not another political coincidence.

“History is just new people making old mistakes.” Sigmund Freud

“Why have a national debt ceiling if it doesn’t really put a ceiling on the national debt?” Thomas Sowell

Mostly ignored in all the media hype about the Trump/Musk feud is the issue itself, which is deficits and debt. While this clash between the Super Egos provides journalists a source of catchy headlines, few pay attention to what Senators Rand Paul and Ron Johnson are saying as to why they, and other Republican senators are not on board, and it’s simply that despite all the talk in the administration about cutting spending, and all the great work done by DOGE, this bill actually increases spending and provides for raising the debt ceiling.  What happened to the Republican Party that over the last few administrations voted against one “Continuing Resolution” after another? Why is this time different?

What was also missed, or ignored by the media, was the 06/03/25 US Treasury’s $10B buyback of its own bonds, the largest in history. Alarmingly, this was not even half of what the market wanted to unload. The reason provided by Treasury Secretary Scott Bessent was to reduce debt and the debt service given the unlikelihood of Fed rate cuts; he called it “retiring debt”, but you still own the debt, or actually we do. Another question is where did the $10B come from to buy back those bonds? Is this just another case of financial gimmicks to create more road to kick the debt can along?

While a most egregious level of debt was created by the Biden administration, it added to what was already historic debt levels contributed to by a long list of prior ones, and the Trump administration is apparently willing to join the list despite its rhetoric to the contrary. I stand with Musk on his criticism of this, though he could have chosen a more civil approach to avoid the focus on his means and more on the substance. The criticism from the Democrats is predictably about the reduction in spending, but you now also have Republicans doing the Potomac Two Step dancing around the $36 billion elephant in the room who is only getting bigger by the day.

This is not a One Big Beautiful Bill, but a broken promise, and as Musk said, it may be big, but it’s not beautiful, unless of course you like debt. I understand Bessent’s motive given the reality of this bill, but the government buying debt doesn’t mean the debt goes away, it just moves it to a different line on the ledger. Further, I agree that it’s a historical reality that when taxes are cut, revenue increases, but the taxes in this bill are a continuation of what currently exists, not a decrease. Also, making the DOGE cuts permanent, and whatever further can be found is great, but while significant they only provide a fraction of what is needed.

Hopefully what Rand Paul and Ron Johnson are working on will help to have a meaningful first step in reducing not just current deficits, but the debt itself. UST bond sales have been anemic at best even before the credit rating downgrades by S&P, Moody and Fitch, and the move by both Americans, who own about 68% of UST bonds, and foreign sovereign banks away from USTs may forecast future interventions by both the Treasury and the Fed, but the problem is that neither has the coin to do more than play this buyback game. Like corporations that buy back their own stock, it does little to nothing about the underlying problem inherent with debt.

What’s most insidious about our current national debt is that it creates double trouble; inflation, and a burden that inhibits real economic growth. Deregulation can help spur growth and further tax cuts will increase revenue, but our current level of debt now exceeds our GDP. Government exists on tax revenues, but when it lives beyond its means, it also relies on debt; when it reaches the point when it can’t carry its own debt, it’s a political as well as an economic default. The Trump administration may have good intentions on those issues, but time is not on its side; if they don’t drastically reduce all spending and create sufficient surplus with which to start reducing debt, like in the Clinton Administration, it will inevitably create an economic crisis. Since the creation of the Fed, the dollar has lost about 95% of its value due to inflationary policies; there’s not much value left before just the risk of a collapse precipitates a global abandonment of the dollar as a reserve currency.

Apparently neither of our two main political parties are capable stewards of the national treasure as they treat it like a party piggy bank to promote their own narratives, and themselves; their policies have brought us the forever wars, an egregious debt greater now than our GDP, chronic inflation, high crime, dysfunctional educational institutions, and ludicrous crisis mongering. Throwing out mindless labels like left-wing or right-wing extremists shows a lack of thoughtful consideration of the issues, a fig leaf to cover the essence of a problem and a sure-fire way to perpetuate the polarizing partisanship we claim we want to cure. Such politicians perceive reality as a mirage, and delusions as reality; this is a fatal mistake by people who are addicted to debt as the financial analyst and adviser, Dave Ramsey observes:

“Debt gives you the ability to look like you’re winning when you’re not.”

“Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions and will receive praise or blame for them. Liberty and responsibility are inseparable.” Friedrich Hayek

There are ambiguous and confusing terms and definitions that make such things like liberty, freedom, and democracy synonymous, when in fact they are not. There are also contrived compound words like democratic republic, liberal democrat, democratic socialism, conservative republican, etc., that confound a rational discussion with meaningless and/or contradictory labels; that contributes to the confusion and much of the irrational partisan politics dominating our current political debates. Add to this the vitriol of name calling and profanity that provides no opportunity for civil discourse.

It is odd that in a nation founded on the principles of liberty we hear precious little as to what that means. The Oxford Dictionary has a clear definition of both liberty and freedom; liberty is defined as the state of being free within society from oppressive restrictions imposed by authority on one’s way of life, behavior, or political views, while freedom is defined as the power or right to act, speak, or think as one wants. However, as Hayek so insightfully observed, it also means that every individual must accept responsibility for their actions and the consequences of those actions. While we are “free” to choose and take advantage of opportunities, we are not guaranteed the outcomes we desire, but we are responsible for whatever those outcomes are.

Hayek was not the first to discover and understand the existential relationship between liberty and responsibility as Aquinas and Locke spoke to this before him. Aquinas went further stating that men have free choice as long as they are rational, meaning that if they are ruled by irrational behavior they are not then free; while that may be true, it is also true that liberty means that men may make irrational decisions, such as alcohol or drug addiction, but still retain inalienable rights as long as they accept the responsibility for their decisions and actions.

There are those who do not want a state of liberty because it requires responsibility for the freedoms it provides; they just want the freedoms without responsibility, but that is not liberty. There are no rights in a state of liberty that provide things that are free; that would be a state of dependency which requires a parasitical and authoritarian system of governance. There is this misconception that somehow democracy creates liberty, while in reality they cannot co-exist; democracy provides for majoritarianism, essentially mob rule, which is contrary to liberty that provides for the protection of rights.  

The laws that guarantee a state of liberty for US citizens are founded in the US Constitution. What is important to understand about the US Constitution is its radical departure from national constitutions up to that time, i.e., it is not what governs the people, but what governs those who govern the people by clearly defining the powers that they have. This is an existential concept for the preservation of liberty. The framers of the US Constitution were well aware of the historical struggle between those who were inclined to domination and those who wanted no part of domination; in that sense the US Constitution limits the former and protects the latter by defining the state of liberty. The US Constitution is not perfect, and even some of its amendments are in contradiction to its founding principles, but there is no foundational law that can’t be violated if society fails to understand, respect and support it.

One of the most often used and abused concepts in democracy is equality. If used in the context of natural law, equality means all are treated the same under the law. If used under the guise of social justice, it means making people equal, when as Aristotle observed, “The worst form of inequality is to try to make unequal things equal.” At the very core of human existence is the reality that no two people are the same, which makes each and every one of us an individual, unique in many ways while similar physically, but even then, not equal. Intellectually there is even a wider range of both ability and personality. Natural law does not provide for a guarantee of happiness, only that there are choices, which means that happiness is not a reward but simply a consequence; similarly, misery is not a punishment, but also a consequence. This all goes to illustrate again that while liberty means freedom, it also means responsibility.

Many historians have identified the timeline for the discovery and understanding of natural law as the Age of Enlightenment, with the writings of Locke and Mills; however, Aristotle, Augustine and Aquinas obviously predate that period and wrote about the subject. During the Renaissance, Dante Alighieri in “De Monarchia” observed that “The human race is in the best condition when it has the greatest degree of liberty.” These great thinkers were not stating what they had invented; for them, this was a matter of discovery, an observation of natural law. More to follow, but for now consider what the great SciFi author Robert A. Heinlein said about responsibility:

“I am free because I know that I alone am morally responsible for everything I do. I am free, no matter what rules surround me. If I find them tolerable, I tolerate them; if I find them too obnoxious, I break them. I am free because I know that I alone am morally responsible for everything I do.”

“A man is not dead until he is forgotten.” Unknown Soldier

There’s debate about who the author of this quote is; some say it’s by George Eliot, but while what she said was close (“Our dead are never dead to us, until we have forgotten them.”) I prefer the Unknown Soldier’s quote, even though the irony is not lost on me that he is unknown. I came across this quote while composing my father’s eulogy; he was the youngest and last surviving of the nine children of my grandparents, five of whom were brothers, all of whom served in WWII, all of whom survived, but are now deceased. My four aunts were no less memorable, but thankfully never had to endure the horrors of combat, but they too will always be remembered.

On this Memorial Day, we do not “celebrate”, we simply remember, that’s all this day is for.  It is not about politics or partisan narratives or even what the conflict was in which they served, or died in, but that they did so and are now no longer with us, except “In Memoriam”.  This ancient Latin phrase has been found on monuments and gravestones throughout the Roman world, followed simply by the name of the deceased. The idea behind it was that if carved in stone, they would not be forgotten; the intent was that if the name was not forgotten, the deceased would achieve some kind of immortality, and what better way than to have the living remember you.

I prefer our Memorial Day, because the mind is a better steward of precious memories than stone; pass the names and memories to your children and grandchildren that they may remember, because when all is said and done, history is for the living to remember the past.

“Tariff policy beneficiaries are always visible, but its victims are mostly invisible. Politicians love this. The reason is simple: The beneficiaries know for whom to cast their ballots, and the victims don’t know whom to blame for their calamity.” Walter E. Williams

Trump made a lot if promises during the last presidential campaign, and admittedly he’s keeping them; that’s not always a good thing. In the case of tariffs, as with all protectionist rackets, it’s only good for those it protects, and only for as long as everyone else is willing and able to pay for them. Tariffs are taxes, and like inflation, they happen without representation. When organized crime practices protection rackets, we call it like it is, but when organized labor does it, politicians call it democracy.

Historically, the Democrats have been the champions of tariffs, so the fact that the Trump administration is so focused on tariffs is not representative of its party’s principles, but of the man who made it a campaign promise; it was not based on any principle as he did so to cull votes from that very “organized labor” that was so much the base of the Democratic Party. Ronald Reagan’s response to when congressional Democrats pressured him to use tariffs said, “We should be aware of the demagogues who are willing to declare a trade war against our friends, our national security, and the entire free world, all the while cynically waving the American flag.”

I’ll bet that few Americans can explain what calamity Williams is referring to, except those businesses affected by supply chains, which is just about all of them. Politicians love tariffs because they provide the means to secure support of organized labor both in dollars and in votes; what’s missed with the protectionist propaganda is the collateral damage. The problem with those that support tariffs is that they don’t grasp the great and simple economic principle of comparative advantage, the foundation of free trade that created the huge human progress away from poverty.

While the administration may not grasp these existential realities of economics, the USA’s and China’s slowing economies are a wakeup call that trade wars hurt everyone. Yesterday’s news on progress in trade deals may be good news or wishful thinking, but politically the advent of the 2026 midterms, coupled with the rise in bond yields, created the pressure to make trade deals; what was needed was the time and space to do so, hence the ninety-day delay. The recent stock market volatility is more about overvaluations than tariffs; while a correction was inevitable, headline news has become a market metric. While it’s true that Wall Street is not Main Street, the recent bond market data is not welcomed by Wall Street, Main Street or Congress; all want lower interest rates, and all are disappointed. 

Trade is “The Wealth of Nations” as Adam Smith so clearly illustrated, and free trade creates the most wealth; trade balances are a myth as the less we export and more we import, the more stuff we get for trading less stuff. It’s a “stuff surplus” that we need to understand as money is only a means of exchange in order to buy wealth, not an end in itself.  Whatever we export, we can’t use for ourselves, and that goes for whomever we import from; all countries export whatever they produce more efficiently and in surplus than anyone else. It’s called division-of-labor, and that specialization is what has made human progress possible, and that’s why trade wars are economic killers.

Historically there are many lessons about “mercantilism”, a nationalistic economic policy to maximize exports and minimize imports; this was the leading cause of conflict that led to the Great War, the assassination of Archduke Ferdinand being just an excuse for the blood lust. Tariffs, coupled with central banking currency manipulations and resulting market speculations, were the root causes of the Great Depression. It’s a reality based on historical experience that nations that trade with each other tend to avoid war for fear of the economic consequences.

I am not discounting Trump’s insistence that his play on tariffs is a negotiating tactic, but it’s one that is based on a flawed policy, coupled with really bad timing given persistent inflation, deficits, and debt. Granted, Trump has successfully isolated China on the trade issue, but this also provides for a dangerous confrontation between the world’s two largest economies, a crisis for both the US and China, which may very well lead to where nobody wants to go.

While America professes free trade as a pathway to economic growth, an expression of liberty for its people, and a respect for voluntary exchange among nations, we hypocritically practice coercive policies like sanctions and tariffs. This does not provide for a good end game, and making excuses that other nations are ripping us off with their trade practices ignores the fact that, despite all the self-inflicted wounds by our government, we still have the strongest economy in the world; that doesn’t mean that all other nations are good trading partners, just weaker ones.

As if the US dollar has not already been severely diminished through poor monetary and fiscal policies, the recent showing in UST bond sales shows a decreasing confidence in what many believed was a safe haven, and a reliable reserve currency; creating trade wars, including with our allies, erodes our currency even further. Sometimes we need to understand that not all promises are good.

“Promises are not to be kept, if the keeping of them is to prove harmful to those to whom you have made them.” Cicero

“We’ve confused actors with heroes, currency with wealth, diplomas with intelligence, propaganda with news, indoctrination with education, demands with rights, tyrants with leaders, conformity with diversity, and slander with debate. It’s a fake world.” Alice Smith

The word “cringe” has only lately been accepted as an adjective, and Alice Smith’s claim to be the great-great-great-granddaughter of Adam Smith can’t be definitively confirmed; however, considering what the “Cringe Culture” do has caused many of us to recoil in disgust regarding their acts of hate, their support of cruelty and their intent to create fear. As for Alice, I don’t know if she is a descendant of Adam Smith or not, but she is fearless in her support of reason and liberty.

One of the most horrific events of our time is the 10/07/23 attack by Palestinians on Israelis; there’s no need to go into details of their heinous barbarism as it has been described ad nauseum, literally; what is equally disturbing are the protests supporting them by university faculty and students in the West. That they attempt to explain that they support Palestinians but not Hamas is disingenuous, a distinction with no difference as the vast majority of Palestinians, both in actions and words, support Hamas; that the few that don’t are murdered further attests to the validity of this fact and in turn to the obvious anti-Semitism of those that support them around the world.

In a sense, the support for Luigi Mangione, who shot the United Healthcare CEO Brian Thompson in the back as recorded on a video and wrote about his intent in his “manifesto”, is similar as it celebrates such violence as politically justified; this is exactly the very definition of terrorism no less than that by Hamas. Not only is Mangione charged with first degree murder as it was premeditated, but also terrorism as he wrote in his manifesto; why then would anyone campaign for his support and release?

Likewise, we have the Tesla terrorism, although so far no one has been murdered; however, given the use of Molotov cocktails, bullets fired, vandalisms and assaults, we have a clear case of politically motivated violence, which again is the very definition of terrorism. It is also odd that many of the perpetrators claim that they are doing so to fight fascism, a political ideology that openly supports the use of violence for the coercion of consensus.

Then there’s the bewildering support for biological men to compete in female sports, use the same locker rooms and bathrooms meant for women and girls, for teachers to take adolescent children to drag queen shows as part of their “education”, provide medical services in transitioning minors without parental knowledge, and include in their curriculum instructions on transgenderism. In a civilized society, we would condemn such things as forms of pedophilia. Instead, these supporters denounce such objections to these things as “transphobia”, using such labels to silence their detractors.

While these things may not be linked in a conspiratorial sense, they do have a common thread and that is instilling fear; after all, that is the basic purpose of terrorism. While we may “cringe” from such things out of fear, what we should be doing is first understand that such activists and ideologues use it to instill a collective herd instinct against those they do not regard as members of the herd; curiously, while they scream or deface property with a popular derogatory label against them, i.e., “Fascist”, or “Nazi”, often laced with expletives for emphasis, they are using the same playbook of those very same regimes.

Such a culture’s use of name calling for having a position contrary to their own is in itself an indication of fear, coupled with a lack of intelligence. What this “Cringe Culture” knows is that fear is easy to stoke and difficult to quell; it just takes violence and a willingness to support evil. What decent people need to do is have the courage not to allow fear of these things to create the superstition that such ignorance has any relevance to a civil society as that is itself the source of fear.  

“It is impossible to found a civilization on fear and hatred and cruelty. It would never endure. It would have no vitality. It would disintegrate. It would commit suicide.” George Orwell

“An economist is a man who states the obvious in terms of the incomprehensible.” Alfred A. Knopf

The quote above is by one of the world’s most famous publishers who supposedly read every book he printed, and this is his conclusion about economists. The debate over a recession includes some economists opining that we are in one, others that we are about to go into one, or perhaps just coming out of one; we are presented with graphs, data points, statistics and definitions, but what we aren’t getting much of is common sense. How about a recession being defined by an obvious decline in the standard of living; we can all understand and appreciate that regardless of how wealthy we are.

The reason Mises titled his famous treatise on economics “Human Action” is because he understood that all the technical jargon modern economists overwhelm us with fails to explain the simple societal behavior among humans to interact cooperatively to improve the quality of their lives. Adam Smith was not an economist, as that discipline didn’t exist in his time, but a sociologist; the “Wealth of Nations” was an account of his observations about this thing Mises later simply called human action.

We are getting a lot of human action lately, including violence on university campuses, arson, criminal gang activity, market volatility, trade disputes, recurring inflation, rising unemployment, international conflicts and bewildering judicial drama. These are all human actions, but not the kind that improves the quality of life; these kinds of negative activities are not only distractions from where our focus should be, but disruptive to productive activities known as the economy.

So, are we going into a recission, in one, or coming out of one? If we think about this as Smith and Mises would, sociologically we have more reaction than action while at the same time we have more confusion than clarity; is that just a coincidence? The markets don’t like confusion because it’s difficult to see where you are going. Businesses don’t like confusion because they can’t plan for the unknown. People are more prone to make mistakes when confused, which in turn gives markets and businesses skepticism about what lies ahead.

A basic axiom about markets is that they are forward-looking; a basic axiom about economists is that they are backward-looking. Right now, markets are so confused that they can’t be relied on for any indication where we are going. Economists make predictions usually based on something in the past that they judge to be the same or similar now, but that’s not a prediction but a statement of something current; why do experts talk in riddles?

With fiat currency, the price of gold is an inverse ratio to the value of the dollar, an indicator like the proverbial canary in the coal mine, telling us that our purchasing power is declining yet again, and now nearly on life support. To reverse that trend, we need deflation, which a recession can provide; has there ever been a politician re-elected in a recession? We already have a record rate of corporate bankruptcies and credit card debt; given that, would Americans tolerate having to endure a recession for a healthier economy?

All the above is being discussed by just about every “expert” who claims to be an economist, but none of them explain why our standard of living has declined while we are told all is well; the economy hasn’t been well for quite some time because our government keeps applying the same solutions that created the problems to begin with, like when Thomas Sowell observed that “Only in Congress do people adjust to economic adversity and growing deficits by spending more money.” When Keynes was confronted with the failure of his ideas of endless spending and consumption were unsustainable in the long run and that they would prevent the markets from functioning properly, especially in recoveries, he cynically responded that “In the long run, we will all be dead.”; this was narcissistic thinking at best as we may not be around in the long run, but our children and grandchildren will.

 “An expert is someone who knows more and more about less and less until finally he knows everything about nothing.” Mark Twain

“The misinformed observers blame the bust rather than the boom for economic misfortune.” Mises

As a follow-up to my post “Money Games”, which in response to my friend Paul’s questions had more to do with the dollar as a reserve currency and the effects of the US national debt, I thought that a post regarding the modern phenomenon of what we have come to call the “boom-and-bust cycles” of our modern economy would be appropriate. What Mises was referring to in the opening quote was the tendency of governments to manipulate fiat currencies to expand credit to “stimulate” growth in an economy; this stimulation is similar to drug addiction, and we know where that leads.

A great example of this was Bill Clinton’s 1994 policy called the “National Homeownership Strategy”, under which he issued an executive order requiring banks to practice “flexible mortgage underwriting guidelines”, with the goal to provide low-income and minorities homeownership opportunities. Mortgages were issued to borrowers with poor credit and little ability to otherwise qualify. Clinton’s executive order was translated legislatively into an updated version of the “Community Reinvestment Act” (CRA). This engineered expansion of credit, a form of inflation, led the Wall Street crowd to create credit default swaps and other dubious financial instruments, which inevitably proved to be the undoing of such legacy institutions like Lehman Brothers and Bear Sterns that spawned the “Great Financial Crisis”.

I always found it odd that it was J.P. Morgan who famously said that “Gold is money. Everything else is credit.”, as he was one of the chief architects of the Federal Reserve Bank, whose accommodative policies over the years in support of such disasters like the CRA are responsible for the boom-and-bust cycles we are burdened with. Artificially created credit is a form of monetary inflation as it provides capital out of thin air; add to this the physical monetary inflation by the UST’s printing press and the fiscal irresponsibility of government, and you have the perfect toxic formula for boom-and-bust cycles.

Yesterday, gold hit $3,100/oz, an all-time high, as were gold purchases in the US; the reasons why people, hedge funds, private investment firms and banks are doing so vary, but one common theme is a growing distrust of the Federal Reserve. When Jerome Powell held the last Fed press conference on March 19^th, he announced that there would not be a change in interest rates at that time, and again repeated his mantra about how the Fed’s future decisions on interest rates would be data driven. The Fed has backed itself into a corner as inflation has not only remained “sticky” but appears to be on the rise again, as is unemployment; the legislated mandate of the Fed is to ensure stable prices and employment, which is actually an economic contradiction. This creates an environment of uncertainty in which people seek a means of stability.

When you have a currency based on commodity money, such as a gold standard, you have a natural controlling limit against inflation, including expansion of credit; it’s not a guarantee against fiscal mismanagement but it makes such irresponsibility transparent without the cover of a fiat currency. When governments have the ability to produce the inflation that creates the boom, inevitably simple accounting catches up to the reality that nothing has really been produced other than consumption, and when prices rise as a result, it puts many things beyond the means of the average person, creating an economic event called a bust. Depending on the severity of the bust, it’s called a recession, or if really bad a depression, and this has been an observable cycle in every case where governments have manipulated money.

I am not focusing on gold for gold’s sake, but on the lack of sound money fiat has created. What is historically and therefore empirically obvious is the reality that humans created real money to facilitate trade and the resulting economic prosperity it brings them. The wisest philosopher and most critical thinker in history, said it best:

“The desire for gold is not for gold. It is for the means of freedom and benefit.” Aristotle

“When out of fear you twist the lesser evil into a lie that it is something good, you eventually rob people of the capacity to differentiate between good and evil.” Hannah Arendt

All too often we are told to choose the lesser of two evils, especially in elections, since voting for other than either of the two major parties is dismissed as a wasted vote; at times this lecture has turned into outright hostility, like the fear that there will be a loss of votes that would otherwise be theirs. It’s an understandable anxiety since categorically most of the electorate are independents who rely less on the personalities of the candidates than the policies they profess; this is what makes them independent.

What those who lecture are missing is that independents are not looking for narratives or agendas, or they would be Democrats or Republicans; what they’re looking for are policies that make sense to them. For something to make sense there must be clarity and relevance because if independents wanted ambivalence and equivocation there are plenty of mainstream politicians available. The ability to “read the room” and talk simple common sense about the things that affect the livelihood, safety and security for those who simply want peaceful and productive lives is far more powerful a message than vague lofty ideals expressed in a lecture that, if not accepted, gets you branded as someone to be despised.

Besides common sense, independents want positivity, not negativity, especially when referring to the competition. An example of this was the Clinton v. Bush campaign; Clinton focused on what he was going to do, Bush focused on Clinton. In the last election, same thing happened; Trump focused on what he was going to do, Harris focused on Trump. More importantly, Harris avoided policy and stuck to narratives and name calling that alienated many independents and even some Democrats, assuring Trump’s election.

The problem with the Democratic Party is that they are still campaigning as if the election isn’t over, and with the same narrative that lost that election; it gets worse as now the world has moved on, and applying the same narrative to current circumstances makes that narrative appear even more toxic, like support for Hamas or Tren de Aragua.  Add to this the tone and tenor of the party’s messaging that makes it even more alienating; what’s inexplicable is that a party with such huge media and pop culture support pursues such an obvious suicidal path.

This is not an endorsement of the Republican Party, and since I’m a libertarian I doubt they would want that anyway; they have their own issues with some policies that are contradictory, and at times counterproductive to their campaign promises regarding inflation, deficits, and debt. These are existential issues that hopefully Republicans will deal with soon as time is running out. However, the Democratic Party has so fatally undermined their viability and relevance that they have even less time for a resurrection.

It’s absurd that midterm election campaigning has in effect already started. I read recently that in Italy campaigning is only legal within six months of an election; it would be great if the US did that. The Biden administration was conducted like a “Theatre of the Absurd” and defended it by attacking anyone who called it out for being what it was; throwing out mindless labels like left wing or right wing extremism shows a lack of thoughtful consideration of the issues, a fig leaf to cover the essence of a problem and a sure fire way to perpetuate the polarizing partisanship we claim we want to cure. We need to realize that generations of voting for the lesser of two evils has gotten us to this point.