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“Money often costs too much.” Ralph Waldo Emerson

Recently my friend Paul sent a text asking for my thoughts about the US currency, its reserve status, and the impact of the US debt, and suggested my blog for a response. The subjects of Paul’s text represent issues with considerable historical background and economic perspective, but I will attempt to keep the post readable in a few minutes; first, here is (in italics) Paul’s text:

“John, I hope this finds you well.

Periodically I do a little bit of updating and research on global economics and I thought I’d reach out to you as a knowledgeable and thoughtful individual and ask your opinion about a couple of things that I’ve been looking at. And this goes back before Trump 2.0, so I’m not just talking about what’s happening at this particular moment.

The subjects that I would like to get your thoughts on (or those of Libera Voce) are first de-dollarization, the reduction of the US Dollar as a reserve currency, and correspondingly what’s happening in the rest of the world with the reduction of their dollar reserves and increase in gold reserves, the impact on US Treasuries and the US economy.

The second subject is the impact on the US debt on the economy.  I know you’ve spoken about this in the past, but it seems to be reaching more of a head, so I’d also like to hear what you have to say about it now. And again the effect of the debt on the economy on the near and the longer term.

Also, any information sources you recommend on these subjects, be they blogs, magazines, ideas, articles, even books on these subjects. It’s hard to find something what’s objective and intelligent. Thanks John.”

OK, here goes…………….

Paul makes clear in the first paragraph that he’s talking more expansively than “…this particular moment.” I’m glad he brought that up since economic policies rarely manifest results in a short period of time. I find even the last four years of “Bidenomics” failed policies insufficient to explain the dire straits we are in regarding the subjects Paul outlines; the root causes of what the US faces are an accumulation over more than a century of poor monetary and fiscal policies such as creation of the Federal Reserve, abandoning the gold standard, and the abuse of the printing press. Paul noted that I’ve written about the US debt previously, as I have about the other stuff, so I’ll start with the WWII period:

The reserve status of the US dollar was first established with the Bretton Woods Agreement by an assembly of UN delegates in 1944; odd that they met even before the UN was officially created the following year, but there was a near panic sense of urgency given the economic chaos the Great Depression and five years of war had created. The agreement established the US dollar as the reserve currency for international trade as it was the only convertible currency left based on a commodity standard, i.e., gold, and fixed the dollar at an international rate of $35/oz. All other currencies part of the agreement had a fixed rate relative to the dollar. This system collapsed in 1971 with Richard Nixon’s decree (fiat) to abandon the gold standard; in reality, FDR and LBJ had made Nixon’s decree inevitable.

I vividly remember Nixon’s decree of August 7, 1971 as I was in Europe at the time; overnight, no one would accept payment in dollars as the exchange rate plummeted; I had to quickly exchange my dollars and travelers checks to pounds, francs, etc. in order to buy anything as the rate continued to fall. Subsequently the US Treasury had to auction their bonds denominated in Swiss Francs as the dollar suffered not only the actuarial backlash, but the perception it was on the verge of default.

Nixon’s decree was the end game to what FDR and then LBJ had done before. On April 5, 1933, FDR issued an executive order making it illegal for Americans to own gold species (coinage or ingots) or Federal Reserve Gold Certificates; they were required to exchange them at the current rate of $20.67/oz. within a month. Subsequently FDR through the UST and Fed raised the price of gold to $35/oz. in the US. Nice to be king as this was blatantly unconstitutional, an attack on sound money which had limited FDR’s grandiose plan called the New Deal, but more was to follow. LBJ signed a bill on March 19, 1968, to discard what was known as the “gold cover”, i.e., the law that required the Federal Reserve to maintain a gold reserve minimum in the UST of 25% of the issuance of Federal Reserve Notes. This allowed LBJ to fund his “Great Society” agenda without restraint, meaning inflate at will.

Amazingly, following Nixon’s decree the US dollar reserve status remained, but other currencies changed their rates as it suited whomever the powers were at any given time; this was the beginning of the modern currency wars, a floating crap game of fiat money. The differentiating characteristics as to the relative strength or weakness of any particular currency, besides fiat itself, are interest rates, monetary inflation, fiscal spending, and political stability, which are all interrelated.

The fact that the US dollar remains the reserve currency has more to do with the relative weakness of other currencies, and the stability of the states issuing them. However, such things are inherently unreliable, lacking any standard that is resilient to political machinations. Currency became a game of relativity, and despite the chaos in the US in the 1960s through the 1980s, it was still relatively stable; it became a safe haven for foreign sovereign states to invest their wealth in US Treasuries and have adequate dollar reserves for international trade. What many foreign sovereign states don’t like is the dollar dependency creating a US hegemony they resent; it is this that motivates some to seek alternatives more than any economic or fiscal integrity.

In global politics some major players like China, Saudi Arabia and Russia have instituted policies to use their dollar reserves, including liquidating UST’s, to buy gold, silver, and other precious metals, which they are doing with increasing frequency and volume, but what is their goal? Supposedly (meaning unaudited) the US still has the largest gold reserves in the world, but as far as currency strength is concerned, so what if you don’t use that as a standard to create a real stable commodity money?

In truth, that last question, while serious, has an obvious answer; gold today is nearly $3K/oz. compared to $35/oz. in the Bretton Woods Agreement. The consequences of re-establishing commodity money, gold standard or otherwise, would be like detoxing a drug addict or alcoholic, an extremely painful process; there would likely be a depression during the period of sheading fiat failure for real money, but addiction has but one inevitable outcome and that’s not recoverable.  Unfortunately, the prime focus for most politicians is to get re-elected, and a depression doesn’t get you that.

Gold has no yield as an ounce of gold today remains an ounce of gold tomorrow, or in a millennium; what accounts for the drastic price change is inflation, the cause for the inevitable death of fiat currencies. Inflation is always monetary, and it doesn’t necessarily mean only paper money; there have been instances in history where nations issued silver currency at such frequency and volume that the silver content exceeded the face value of the coins; people actually melted coins down for its content at market value. Too much money in circulation relative to the supply of goods and services creates inflation, an immutable law of economics. Inflation on steroids occurs with fiat currency because it’s subject to the control and whim of central banks and their governments. Notice how the Fed keeps harping on a target inflation rate of 2%, as if any inflation is something desirable.

Whether or not the US dollar loses its reserve status is increasingly more a question of when, not if. The leader in gold purchasing and an economic power that could dethrone the US dollar is China; they may be headed for a recession or worse as some economists predict, but that really doesn’t affect its leadership because the state determines who that is, not an election. China is slowly selling off its USTs and declining to buy as much as in the past, and they are still the largest holders of US debt. If China were to start a serious sell-off, as they buy even more gold, and remain the world’s net largest exporter in trade, they would be in a position to make the yuan (officially the renminbi) a serious contender to replace the US dollar as the reserve currency, even more so than the anemic Euro which is in a similar condition as the US dollar.  

The US debt is a result of all the above.  Take whatever paper cash you have at hand, and it doesn’t matter the denomination, it all reads at the top of the obverse side “Federal Reserve Note”. There have historically been a variety of paper bills titled notes of some kind, or certificates, but they were recognized for what they were, debt instruments. When Federal Reserve Notes were first issued in 1914, they were redeemable in gold the same as Gold Certificates or Federal Reserve Bank Notes, because they were treated as labeled, i.e., a debt owed to the bearer. That ended in 1933 for Americans, and for the world in 1971, but US currency in paper form is still titled a Federal Reserve Note.

When someone buys US Bonds, they are simply trading one debt instrument for another, but with a difference. Given inflation, the value of the dollar constantly declines, but with US Bonds you get a yield depending on the interest rate, which you hope is greater than the rate of inflation over the term of the bond; at the end of that term, the US Treasury owes the bond holders whatever they paid for the bond plus interest due in dollars, i.e. Federal Reserve Notes. This revolving door of debt is like a “Ponzi Scheme”, which in the private sector would be fraud. However, in government there are few that call it like it is; the others call it “Modern Monetary Theory” (MMT), which in practice comes down to constructing Ponzi Schemes marketed as enlightened economics.

If the US was required to have a balanced budget, besides whatever it wanted to spend it would have to include the debt service. Given its lack of fiscal integrity, the US government spends like a drunken sailor; actually, that’s not accurate since drunken sailors spend their own money. Given this egregious spending, a balanced budget would require a level of taxation that would incur the wrath of the electorate, something politicians work hard to avoid. The alternative is to keep on borrowing and inflating, or cut spending, and at this level of deficits and debt, massive cutting. The current debt is at $36T, and the debt service more than a $1T/yr.; we have the spectacle of another Continuing Resolution that just passed which raises the debt ceiling as we face yet even more deficits. Clearly this is unsustainable as at some point the dollar will implode from the self-inflicted pressure of its own debt service.

Politically, especially when there are economic issues involved, we should always ignore the personalities and focus on the policies, and sound economic policies always focus on the long run. There will always be “Black Swans”, circumstances that unpredictably arise requiring immediate action, but all too often are the result of prior bad policies. The failed policies of many past administrations focused on the short term, the expediency of the moment as in an election; such policies often ignored the debt and even made it worse with more deficits. Unfortunately, while the efforts to root out waste, fraud and abuse are welcome though long overdue, that may not be enough; what is needed is not the metaphorical scalpel or axe, but a massive purge of our leviathan bureaucracy, and that will take time, but patience is not a virtue of politics.

Paul also requested my recommendations on sources regarding these subjects; I agree that it’s difficult finding objective and intelligent ones. I realize that being a libertarian makes me a radical in the view of many Democrats and Republicans; it also means that I am in the electoral category of “independent”, which is larger than either of the two majors. Whether anyone considers these recommendations intelligent and objective or not, I hope you do so knowing something about them.

I recommend “Reason Recap” and “Mises Wire” for daily news; the latter also publishes economic and political essays from various scholars. I also read the NY Times, mostly out of a long habit, but their journalism has become increasingly partisan and less objective. Nick Gillespie’s podcasts have interviews with some very interesting people. The best book on economics that I am still reading (it’s a massive tome) is Thomas Sowell’s “Basic Economics”; basic for him maybe, but extremely insightful. For lighter but still very educational book reading try James Ricards’ “The Death of Money” and “Currency Wars”. A great book on what the essence of economics is all about, is Mises’ “Human Action”, and then there’s the classic “Economics In One Lesson” by Henry Hazlitt. A book that is very applicable to the subjects Paul presented is Murray Rothbard’s “What Has Government Done To Our Money?”

The opening quote by Emerson is like a riddle as it doesn’t describe what costs are involved, but when it’s too much. What we perceive as money today is an illusion as the damn thing keeps changing every day as it circulates through the revolving door of the debt created. In 1831 a French diplomat was sent to the young US to write about what he observed, such as:

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Alexis de Tocqueville

“It is a popular delusion that the government wastes vast amounts of money through inefficiency and sloth. Enormous effort and elaborate planning are required to waste this much money.” P. J. O’Rourke

Decades before Americans heard about DOGE, P. J. O’Rourke’s NY Times bestseller, “Parliament of Whores”, hilariously and irreverently described how the US Government functioned in its waste, fraud and abuse of taxpayer’s money; this is even more true today than it was back in 1991. The last time anything like DOGE was attempted was under the Clinton administration, to some extent successfully, producing a balanced budget and even a surplus. If DOGE does anything comparable it will be sorely needed, but even should that happen, it may be too little too late. While we should have no delusions about the extent of corruption DOGE has found so far, neither should we have any regarding the dire situation created by the resulting debt.

O’Rourke will not be around to see if DOGE will deliver what has been promised as he died in 2022, but we can hope that it will provide something of lasting value as it pursues its mandate. Hope as they say is not a plan, and campaign promises seldom become action; I was not hopeful that Trump’s would be any different. However, based on what has been found so far, we have both dismay as to the extent of the waste, fraud and abuse Doge has found, and encouragement that things are being done about it. The curious negative reactions about DOGE sent me running to O’Rourke’s book to find just this very quote, because the second sentence of it is the most important – we should not be fooled that such reactions aren’t a fear of exposure more than a concern for the corruption involved.

This corruption has as its motivation power, and as its justification moral leadership; the American people have been asked by many administrations to have faith in this virtuous concept called democracy, a delusion to disguise a vast insatiable bureaucracy making the people dependent on benefits created by the wealth it takes from them. Delusion leads to confusion, which inevitably leads to desperation; when an electorate reaches that point, it is forced to reconsider the premise of the delusion, and that is a tipping point that leads to polarized partisanism. In this last election that became a choice between two movements, Progressivism and MAGA; the former represented socialism disguised as some new form of democracy, the latter a populism of overt patriotism.

As a libertarian I can never support socialism, but I am aware that patriotism can be manipulated to support policies conducive to socialism. According to the most recent polls, many from organizations not exactly friendly to Trump, his administration enjoys high approval ratings, while the Democratic Party is adrift, wallowing in hysterical denunciations of just about everything. There are examples of things that Trump has said that are patently outrageous regarding the Associated Press, tariffs, Canada, Ukraine, Greenland…and it’s a safe bet there will be plenty more; this is Trump, a narcissistic grifter given to self-adulation and unrelenting deprecation of all who criticize him, but that’s who he’s always been. What’s more important than the personality of a president is his policies, and so far he has delivered on his campaign promises, something I didn’t expect he was capable of.

H. L. Mencken once observed that “Politics, as hopeful men practice it in the world, consists mainly of the delusion that a change in form is a change in substance.” It’s only been a month since Trump’s inauguration, so there’s four years to go before any intelligent and objective assessment of his second term can be made; will it be merely a change in form, or something of substance? True patriots will ignore the rhetoric of political pundits and parties, and ask the same question four years from now that Trump did during his campaign– are we better off than we were four years ago?

“Now is not the time to pine for the days of agreeable politics. In recent decades, the US has gone through radical political and cultural transformations that are making the country progressively ungovernable. Any kind of national election from here on out will be viewed as illegitimate by the losing side due to the perceived high stakes of these affairs. No longer do America’s partisan coalitions treat each other as respectable competitors, but rather as existential threats that must be vanquished at the ballot box. As America’s social fabric continues withering and polarization intensifies, it’s only a matter of time before this kind of tension turns violent.” Walter Williams

I opened this post with an exceptionally long quote by an American economist that likely few people know about; I did so because this quote summed up very well where we are now. Williams died soon after the 2020 presidential election which eerily represented what he described. It was also uncharacteristic of a man who was such a positive and forward-thinking force but who so clearly described the prevailing nihilism. What began as a professed campaign by the Democratic Party to heal the divide Williams described ended in its own demise for its administration’s failure to not only do what it promised, but to make it even worse.

Now as most of my readers know, I’m not a Trump fan and have never voted for him; I do understand why some of my fellow libertarians did so as I understand those that didn’t, but what we all have to understand is that he is doing what he said he would do, so why anyone is surprised about this is odd. Further, one of his character traits is also to say sensational and headline grabbing radical stuff, what I call “Flash Bang Politics”.  A “flash bang” is slang for a non-lethal but loud and bright light grenade whose purpose is to disorient and distract people. 

Radical reforms are rapid political, social, and economic changes that are fundamentally transformative. Such reforms are often championed by what political pundits call “Populism”, an approach that appeals to ordinary people who feel that their concerns are disregarded by established elite groups; MAGA is a populist movement, and contrary to what many people think, can’t be by definition positioned in the left-right political spectrum that pervades the comfort zone of mass media analyses and narratives. Further, populism has no guaranteed results or where it will lead, as it’s a very “fluid situation”.

Most intelligent political scientists understand what populism is and accept the fact that such movements can’t be defined in any politically orthodox way because they arise historically in so many different contexts that each needs to be understood in its own time and place; simply identifying MAGA as a right wing or Donald Trump phenomenon shows a lack of political intelligence that often leads to the demise of its critics, such as happened to the Democratic Party in the 2024 election, and inexplicably continues and likely will do so throughout this administration.

Take for example Trump’s recent proposal to take over Gaza. On face value I found this to be not only a very stupid idea considering his promise to avoid US involvement in foreign conflicts that have historically caused us so much pain, but beyond the realm of a realistic solution; but then I remembered who he is, so now I think this is just more flash bang…or at least I hope so. Maybe it will wake-up the Saudi regime whose existential enemy is Iran who could very well grow back like the cancer it is in a region the Saudis view as theirs, but hope is not a plan.

An example of how populism can sometimes cause reform that is contrary to intent is Trump’s proposal to end birth right citizenship. The understanding of the constitution’s definition of citizenship has always been inclusive of this right, although admittedly there’s a case for interpretation, but why throw a flash bang at this which only distracts from the desperately needed enforcement of our immigration laws? I am hopeful that this will not be an issue for his administration to die on the hill for.

What is heartening to see in this populist regime is its protection of women’s rights in the arena of sports; how anyone can support such a stupid idea as having biological men compete against women reminds me of George Orwell’s quote that “Some ideas are so stupid that only intellectuals believe them.” The same goes for this racist and sexist fabrication known as DEI; to actually use bigotry as a metric in evaluating human beings is beyond stupid, its evil.

What this populist movement consistently promised was to address inflation; the first place to start is effectively attacking the source, which is the US Treasury’s and the Federal Reserve’s policies of monetary and fiscal mismanagement. Inflation has not gone away, it’s only hiding behind the squawk about interest rates and some strange fixation with a 2% inflation rate; that doesn’t reduce the inflated costs that have eviscerated American pocketbooks, and tariffs will only make things worse. Maybe the tariff threats as in the case with Mexico and Canada have been nothing more than flash bangs that got their attention, but they aren’t going to work with the 800 pound gorilla in trade as China will likely just laugh and retaliate as they care little for what it will do to their people. Tariffs are a tax, which is a flash bang that detracts from the goal of tax and inflation reduction.

The other big MAGA promise involves energy, which affects just about every economic activity. The Green New Deal has been exposed as little more than pork barrel politics that sacrifices economic stability and individual welfare as an ideology; renewable energy on face value is a great idea, and hopefully as we become more technologically intelligent will become plausible, but at this point it is unreliable, resource-intensive, and environmentally destructive in material extraction. Further, energy demand is increasing exponentially so we need every source available if we are to progress, grow and provide economic opportunities.

In the long run populism often evolves into other than why it arose to begin with; what we don’t know yet is where MAGA will lead, but what we do know is that four years is its political horizon to deliver on its promises or to die on its failures to do so. It is important to track what it actually accomplishes more than what it promises, especially when led by a flash bang politician. More to come…for four more years…maybe longer!

“The real division is not between conservatives and revolutionaries but between authoritarians and libertarians.” George Orwell 

Orwell’s 1944 review of F. A. Hayek’s “The Road to Serfdom” was both complimentary of this libertarian work on political economy, and critical of socialism as authoritarian; many political scientists have labeled Orwell as a “libertarian socialist”, which is odd considering the context of his popular books, like “Animal Farm” and “1984”, and the satirical style he wrote them which was inconsistent with the principle tenets of socialism, and therefore totally incompatible with authoritarianism.

It is understandable that there is some confusion about the term libertarianism given the varied definitions as to what it means, including a form of socialism or anarchism. There isn’t even clarity on the origin of the word; the philosopher William Belsham wrote metaphysically about libertarianism and the French political theorist Joseph Déjacque used the term in a political context promoting communism. Some say it was John Locke, but he used the word liberalism, as did Thomas Paine, but at that time liberalism meant the opposite of conservatism, as in loyalty to the monarchy, the ultimate authoritarianism.

The common core principles of libertarianism are that all human beings own themselves, and that the use of coercion or initiation of aggression is forbidden, known as the Non-Aggression Principle (NAP). This is essentially 18C liberalism as espoused by the Enlightenment with such thinkers like Locke and Paine, but today the term liberalism has become more perceived as an earlier form of progressivism. While there is a Libertarian Party, many independents who espouse libertarianism do not belong to it and historically vote for either of the two main parties. It has been said that libertarianism is like Buddhism, more a philosophy of life than a religion, more a philosophy of society than politics.

Currently the term “progressivism” has been used to mean so many things that it is hard at times to follow any coherent principle, except a belief in what’s best for everyone else, an elitist hubris that ignores the fact that there are those that don’t agree and have the right not to be compelled to follow policies that do not represent their interests. Self righteous virtue signaling is not benign when it leads to political action for coercive compliance to another’s world vision, the very definition of authoritarianism.

We should not fall into the trap that progressives are the same as Democrats or vice versa as that would ignore the fact that there are both Democrats and Republicans who are NeoCons; this was a political movement by liberal hawks in the 1960s known as Neoconservatism, which supported interventionism both in foreign and domestic affairs. A current example of this is Liz Cheney. Then we have the term populism, which can mean whatever appeals to those who feel disregarded by those in power; such a political approach can’t be described within the left–right political spectrum as both left and right populisms exist; Trump is a good example of this.

Historically political labels devolve, depending on the time and context as the terms often have little or no relation to the definitions of the words comprising the label. This is apparent if we consider the evolution of the two main American political parties from things quite different from where they began; one thing they both have in common today is as fractional coalitions searching for a clear division politically. In perhaps even more simpler terms for political divisions is Robert A. Heinlein observation that “The human race divides politically into those who want people to be controlled and those who have no such desire.” Both Orwell and Heinlein expressed much clearer political divisions than the useless analysis of “left versus right” and can best define the difference without the confusion with partisan affiliations.

Historically in politics, to be successful one needs to promote a vision to sell the electorate; it needs to sound bold but non-specific so as to create an illusion of virtue without the need to define specific policies. Inherently, like political labels, visions are intellectually deceptive; the goal is to create a perception to disguise their actual purpose. It is evident with the last few presidential elections that this paradigm has been called into question as the party that expressed the clearer message won. This makes what the winner actually does that much more relevant as an asset or a liability in the next election.

We will soon have the inauguration of our 47^th president, a populist who rose from the political ashes of his own failures to lead a movement with a vision known as MAGA, “Make America Great Again”; what that will mean is just about anything that his administration will make of it, but he has stated some very specific policies that he must deliver on or, like many populists movements, it can become just another vision that becomes an illusion.

“Good luck is what is left over after intelligence and effort have combined at their best. Negligence or indifference are usually reviewed from an unlucky seat. The law of cause and effect and causality both work the same with inexorable exactitudes. Luck is the residue of design.” Branch Rickey

Branch Rickey is best known in his role as the owner of the Brooklyn Dodgers who signed Jackie Robinson, breaking the racial barrier in Major League Baseball. He was also a baseball player himself, and went on to manage various teams, and was the leader in developing MLB’s minor league farm system; that and his role to integrate the league were two of the most important developments for the long term success of the sport.

This is not a post about baseball; it’s about the recent California fires. Unlike Rickey, the leaders of California failed to understand the laws of cause and effect. While like Rickey they had a vision, they lacked intelligence and effort, which led to their inability to prevent or deal with the event. Historically California has been susceptible to brush and forest fires, so more the reason to plan and take action to prepare in the event they occur. The causes and circumstances of some of the more recent fires provided warning signs that should have been addressed.

There was uncleared underbrush in the 1991 Oakland Hills fire, dry hydrants, high winds and insufficient containment. The cause of the 2017 and 2018 fires in various parts of California were reported to be a result of severe draught exacerbated by unsustainable overpopulation, failing electrical infrastructure, uncleared underbrush, high winds and insufficient firefighting manpower and equipment.

There are some consistent elements in these fire events for lessons learned, but instead politicians leaned on the mantra of climate change; the population of California did outpace the development of its infrastructure, but instead of addressing infrastructure for the safety and security of a growing population, you got more environmental regulation that worked against that.

There is a forestry management protocol called controlled burns; this is supposed to be done on a regular basis to clear the underbrush and dead plant debris in wooded areas to prevent the spread of a fire, which may occur especially in dry regions like California.  Unfortunately, when the Forest Service applies to the state of California for permission to do so, they need to wait four to seven years for an environmental review for approval, which is sometimes denied; in the meantime, you are literally adding fuel to the fire.

Then there’s the issue of water management, an essential part of life in western America even before Europeans explored the region; native Americans built dams and reservoirs before the large westward immigration of settlers. Early on through long term planning and construction of dams and reservoirs by the various states in the region, including California, and despite the explosion of populations there was adequate water supply, although there were times of restricted use during droughts. Starting in 2023, California removed scores of dams essential for water retention in reservoirs as they were not considered natural or environmentally beneficial. The end results were predictable.

California, like some other states, has been hostile toward insurers. When the 2017 fires occurred, premium rates understandably went up. Insurance is an actuarial business assessing risk to determine costs of coverage, so if you suppress that legislatively insurers will simply stop insuring in high risk areas, and that happened. California’s response was to create state insurance, called FAIR; predictably it’s nearly insolvent, and it has been sued often for failure of coverage.

When you ignore proper forestry and water management, and economic reality, which has been the sad story of California politics for quite some time now, and combine that with a natural event like high winds, you have the disaster in the Palisades area of Los Angeles, and spreading. It’s not that California and other parts of the Western US are not prone to brush and forest fires, which makes the absence of proper planning that more egregious, but the actual contrarian efforts detrimental to the safety and security of its residents is bewildering.  

The focus on this disaster should not be that the mayor of LA was out of town, or that the governor and president elect are shooting political darts at each other, but that the people of California need to understand that the real environmental threat they face is the toxic political policies of those they have elected. When fire fighters initially reported that they were finding dry hydrants, and Governor Newsome and Mayor Bass called that misinformation, Californians need to realize that the boots on the ground had no reason to lie, whereas incompetent politicians are addicted to denial even when engulfed in flames.

What we should expect to hear from these same politicians that helped fan the flames of this disaster are the usual trite messages of hope, but as the old sayings go, hope is not a plan, and action is more important than words. That action should start with the people of California at the polls electing candidates who understand the problems their predecessors created, and supporting policies to correct them; careful planning is more valuable than lofty ideas.

“Presumption is our natural and original malady. The most vulnerable and frail of all creatures is man, and at the same time the most arrogant.” Michel de Montaigne

Montaigne is considered the one of the greatest of the French Renaissance writers; he used essays to express his ideas and observations, perhaps one of the first “bloggers”. Mark Twain was an avid reader of Montaigne, and we can see many similarities between them as he was also an essayist, one of America’s best and most admired. Both relied on syllogism, a method of logical discourse first introduced by Aristotle. I was first introduced to syllogisms both directly and indirectly in high school run by De La Salle Christian Brothers, a French Catholic order dedicated to education; classical Euclidean Geometry, and Logic were mandatory subjects, and have helped me to be a better critical thinker.

I am currently reading a very interesting book, “The Art of Deception” by Nicholas Capaldi and Miles Smit. They subtitle it “An Introduction to Critical Thinking”.  Much of the book is a technical review of syllogism, and then it goes on to examples of deceptions presented as facts that we are exposed to in everyday life by legacy and social media, politicians, government, corporations and even those that present themselves as experts in some scientific field. What the book shows us is how to recognize such deceptions through the syllogistic method. One of the red flags the book discusses to indicate that a deception may be at play is the presence of the “Begging the Question Fallacy”; this can be in the form of a discussion, proposal, or argument where the conclusion is an assumption found in the premises, often one that is not supported by evidence, and therefore erroneous, and if intentional, facetious.

What you may come to realize if you read this book is that much of it is simply common sense, but it is still important to understand syllogism because it is the basis of common sense. Note that Montaigne above links arrogance and presumption in the same expression about human malady. What we have today in much of America’s social discourse is an attack on common sense, most of which comes from elitist arrogance, a cultural and political ideology called “Progressivism”; this is not just an ideology that has evolved from modern liberalism as it also embraces what is called being “Woke”.  When I first read and heard some expressions of this malady, I actually thought it was more a mental disorder than a political ideology; as it turns out, it is both.

One of the maladies of being woke is the lack of common sense; not only are the woke consistently guilty of the “Begging the Question Fallacy”, but they also go further by presenting a conclusion and then attempting to prove it by altering facts to support it. The very basis of critical thinking, i.e., common sense, is to start with facts and using logic to arrive at a conclusion. The woke way is essentially a dead end as it can never understand which is real versus presumptions. We hear so much today about the rise of mental illness in our young people and its causes; in the woke bubble you are not only denied the truth but will be penalized or “canceled” for expressing it. Being woke is not conducive to mental health as it is based on subjective feeling, often hysterical and irrational, discounting reality and objective facts. As noted above, Mark Twain was an admirer of Montaigne and humorously paraphrased him when he wrote:

“I’ve lived through some terrible things in my life, some of which actually happened.”

“The budget doesn’t have much control over the government. Then again, the government doesn’t have much control over the budget.” P. J. O’Rourke

Imagine the reaction of a typical middle class family when they hear that the Republicans proposed a revised CR without a debt ceiling or cuts to bring down spending? Here they are trying to pay down debt on their credit cards and they are told that the government that collects their taxes doesn’t want limits on spending them; it may even be that they voted for the Republicans who promised to fix these very problems. Adding insult to injury, the Republicans and the Democrats spend more time blaming each other while proposing more of the same again and again.

It’s not the mystery drones in the news that should concern us more than the incessant droning of this wearisome debate on how we are going to be fleeced yet again; as if that’s not painful enough, we get to endure the spectacle of corruption live as the media swarms over this annual pork barreling event. The Democrats over the last four years have made such a mess of the economy with egregious spending, and now the Republicans want to make us believe that eliminating a debt ceiling will fix that; what are we missing?

The reality is that the debt ceiling was suspended on 06/03/23 until 01/01/25 as part of the Biden “Fiscal Responsibility Act of 2023”; how can anyone call that fiscal responsibility? Well, how can anyone call something the “Inflation Reduction Act” that created so much more inflation? Further, why would the President Elect ask for the debt ceiling to be suspended further when he was elected on the promise to reign in government spending? The CR that was passed only covers the period until 03/13/25, so this much touted deal to avoid a shut down is just another case of kicking the can down the road.

What’s really frustrating to anyone with a sense of fiscal intelligence and responsibility is the fact that in all three versions of the CR that were voted on, the amount of money never changed, just the number of pages it took to screw us; it’s not the number of pages that we should focus on, but that there were no spending cuts. It’s also notable that every Democrat voted for the CR, along with most Republicans; there’s that bipartisan deception working against us yet again.

Historically we’ve been subject to such deceptions for quite some time now; the first and last time the US paid off its debt was in 1835, and since 1939 the debt ceiling has been raised 103 times; if debt were a drug, we may very well be close to an overdose. Back in January 2023 the national debt stood at $31.4T, and as of the vote for this current CR, we are at $36.2T; we are told that under audit there are departments such as the DOD that can’t account for billions of their budget each year. As the famous financial guru Dave Ramsey often advises, “A budget is telling your money where to go instead of wondering where it went.”

What in fact are we missing? We are clearly missing having a government that practices sound budgeting and financial standards, the same that it insists corporations and banks follow under its regulatory agencies like the SEC and Fed. Despite this, we vote time and again for the same old political machine of legalized corruption and for whatever reason expect a different result; is this not Einstein’s definition of insanity? The new administration won the election with a lot of promises about how this will be different this time, and we should give them a chance before we judge what they’re doing; however, eliminating the debt ceiling doesn’t give us much confidence that they are serious about cutting spending.

We have seen how cutting taxes broadens the revenue base, but if tariffs become more than a bargaining chip, they are in fact a tax on Americans; they are also the cause for trade wars which often lead to conflicts. What we need now is a focus on the national debt, which starts with spending cuts, and then on to having a balanced budget, just like we expect mature adults to behave. What we are missing is that government as an infinite ATM machine is a myth; that’s our money they’re spending and then taxing us even more through inflation, tariffs and corruption.

“The budget is like a mythical bean bag. Congress votes mythical beans into it, then reaches in and tries to pull real ones out.” Will Rogers

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

If you listen to all the pundits and experts about the failure to pass the Continuing Resolution (CR), you would think the world ends at midnight tomorrow; what needs to end is proposing a bill that continues the fiscal irresponsibility of our government. There would be no need for a CR if Congress would do its job and pass a full budget, which hasn’t happened since 2009; since then, we have had to plod through this ridiculous CR process with huge omnibus proposals that include all sorts of corrupt appropriations, and this year’s 1,547 page edition is among the worst.

While politicians of both parties and the media blame Musk and some conservatives for the rejection of this current “pork barrel” version, what alarmed many in the House and Senate who took the time to read this massive tome was the discovery that little of it dealt with the fiscal issue of a budget; fact is, the budget was already blown, and the reason for CRs is to come up with a workaround  to appropriate even more money. To say that the current system isn’t working depends on your point of view – if you want more pork, it works just fine.

Per the Office of Management and Budget (OMB), approximately a $1T is added to the national debt every 100 days; as Robert Sowell said above, why even bother with this process if the reality is it doesn’t even matter? To make matters worse, the Federal Reserve announced today another rate cut, despite the latest reports of increased inflation. In listening to various financial news shows, there are three possible scenarios for how this situation will play out economically for the American people:

1. Soft Landing – the most optimistic that relies on the new administration cutting taxes and spending, reducing inflation and providing regulatory relief. Assuming all that happens, the theory is we will avoid a recession.
2. Recession – not very optimistic, but more realistic; the question is when and how bad.
3. Crisis – the most catastrophic and based on the very plausible occurrence of default on the national debt; it is so huge, and as noted getting bigger every few months, that UST bonds will be the least attractive asset the US market has to offer, resulting in a diminishing source of government funds, which ironically is the sale of even more debt. The Fed and the UST will likely make inflation catastrophic with even more money printing, adding fuel to this fire.

There is a branch of philosophy called agnotology, which is about ignorance as a social construct for use as a political tool. Most Americans don’t engage in philosophical debates as they’re too involved with making ends meet, but what they should realize is that they are being played by a cabal that relies on their economic and fiscal ignorance. Notice that when Powell said yesterday that there will be fewer rate cuts next year than were anticipated earlier, the major indices tanked; Wall Street is not Main Street where long-term growth and prosperity depends on a healthy economy, which is based on productivity, not consumption. The cabal of Wall Street, the Fed and government want cheap money, whereas Main Street needs sound money.

Metrics like GDP are misleading in as much as it is more a metric for consumption than production, and what we need for true growth is production; the latest labor reports don’t provide much hope for that as manufacturing jobs declined, and construction is lagging again. Where did all that money for all those government programs under the previous administrations go? Well why do you think such programs are called pork barrels? 

“All I know is just what I read in the papers, and that’s an alibi for my ignorance.” Will Rogers

“In comic strips, the person on the left always speaks first.” George Carlin

I was watching some old videos of George Carlin stand-ups and found this line a classical Carlin comic relief, taking the obvious and seemingly irrelevant and giving it a humorous context. We often need comic relief to release emotional stress, especially when faced with serious and tragic events. Of course, with Carlin you can always count on someone being offended as the content will usually carry the sting of sarcasm about someone’s behavior or beliefs, but if you can get beyond that, comic relief is a good potion for what troubles you.

I needed this recently to snap me out of a dark mood about some recent events like the Thompson murder and the Penny trial; no sooner had they caught Thompson’s murderer, and no sooner than Penny’s acquittal, we get some in the media and many progressives eulogizing the guilty and demonizing the innocent. While I was never a real comic book fan, I do remember “Bizarro World”, a fictional planet where the people are the opposites of DC Comic heroic characters; the reactions by some to these recent events seems like Earth is morphing into “Bizarro World”.

How did those people lose their moral compass to the extent that they do not understand the difference between a murderer and a defender, making excuses for evil and creating hatred for good? Both were tragic events that involved taking human life, one clearly premeditated, the other far from it; yet there are those that will introduce issues such as grievance and race as justifications or causes for such tragedies.

The killing of Brian Thompson was clearly premeditated murder and raises questions about how Mangione knew precisely where his victim would be and at what time. The trial of Daniel Penny is a bizarre miscarriage of justice that reeks of racism and partisan prejudice, not to mention ignorance as it’s a counterproductive warning to all those that may find themselves in a situation where they can help their fellow man. The narrative that Mangione was acting based on some grievance on a UHC denial of coverage was debunked when it was found that he was not a subscriber to that insurance coverage; even if he had been, that may have been a motive but hardly a justification for homicide. The narrative that Penny was motivated by Neely’s race was debunked by the black people on the subway who were threatened by Neely and testified in Penny’s defense; a white racist does not come to the defense of those he hates.

This post is not about the many details of either case as the issue is less to do with the facts and forensics than the disturbing reactions from a bankrupt radical culture in the American judicial system and legacy media incapable of differentiating right from wrong; thankfully we have a cold-blooded murderer in custody and the citizens of the Penny jury rejected the charges brought against a hero. Some call these cases a turning point in the cultural pendulum swings regarding crime and punishment; maybe that’s true but I reserve judgement on that until after Mangione’s trial.

A curious fact is that many of those in media and progressive groups who eulogize Mangione and demonize Penny are the same people; these narratives have been with us for quite a while and contrary to what some people think, I believe that these same groups of people are still quite large and becoming more strident. There’s a group think nature to them that George Carlin spoke very seriously about that doesn’t offer much comic relief but helps us understand the malignancy involved:

“The larger the group, the more toxic, the more of your beauty as an individual you have to surrender for the sake of group thought. And when you suspend your individual beauty you also give up a lot of your humanity. You will do things in the name of a group that you would never do on your own. Injuring, hurting, killing, drinking are all part of it, because you’ve lost your identity, because you now owe your allegiance to this thing that’s bigger than you are and that controls you.”

“Pardon is granted to necessity.” Cicero

When most Americans heard Joe Biden say that he would never pardon Hunter, they knew that he would; this wailing and shock expressed by media and politicians compared to the relatively clam acceptance by the public exposes a cynical complacency about the corruption of the political class. The fact that presidential pardons are even enumerated in our constitution is itself a corruption carried over from the English monarchy; they are limited to federal offenses and cannot affect an impeachment process.

Cicero’s quote above was principally about justifiable reasons for military action or refraining from doing so making a pardon a necessity. Joe’s pardon was less a necessity for Hunter than it was for the “Big Guy”; the most effective way for Joe to protect himself from further investigation into his influence pedaling scheme was to end Hunter’s liability for what the poor fool documented on his laptop. While the scandal will linger, the pardon will make further inquiry far more difficult; further, Joe still has time to issue more pardons, but without indictments there are no crimes to pardon. While Ford pardoned Nixon prior to an indictment, that precedent may not stand up constitutionally for Joe, and such pardons would imply that there are grounds for investigation of potential crimes.

Presidential pardons have historically been the subject of much criticism, with the abuse reaching its apex under FDR who issued over 3,600; during the waning days of the last Trump administration, Dan Rather humorously asked “Why is the Trump White House suddenly a very polite place to work? Everyone’s going around saying ‘pardon me.’”

Joe’s pardon of Hunter is not just a way to cover up the sins of the father, but illustrates what’s wrong with presidential pardons, and more broadly, the dangerous expansion of the executive branch itself. The former will require a constitutional amendment, a long and arduous process constructed to protect against chaotic and partisan erosion of original intent so prevalent in the constitutions of other nations; the latter is itself an issue of an unconstitutional evolution of the executive branch.

A major step to correct the abusive executive expansion was made this past June when SCOTUS ruled in Loper Bright Enterprises v. Raimondo, overturning the 40-year-old “Chevron Doctrine” which required courts to defer to an agency’s interpretation of ambiguous laws; that doctrine egregiously transferred legislative and judicial powers to the executive branch, giving its agencies the power to issue rules and regulations, in effect laws, bypassing the legislative process or judicial review.

Interestingly, the Trump initiative with DOGE will affect the executive branch more so than any other as it is not only the largest, but the most corrupt, wasteful, and abusive of the three. I seldom give credit to Trump, but his campaign promise to tackle the “Deep State” will, if effective, limit the powers of the administration he will soon head; curiously, the Democratic Party has become the biggest obstacle to that happening, and there are some Republicans who are also resistant. These reforms are long overdue, have the constitutional and electoral imperative to proceed, and present the best opportunity to reduce budget deficits and consequently the national debt; resistance to these reforms exposes the bad faith and deeply rooted corruption so often criticized but seldom addressed.

An even bigger abuse that requires reform is executive orders; while there’s no explicit provision in the Constitution for executive orders, it has been viewed as “implied” under the description of executive powers, but traditionally understood as only directives to employees within the executive branch to clarify their roles and responsibilities. Further, SCOTUS has held that all executive orders must be supported constitutionally, and further that executive orders are not laws as they are not the product of a legislative process; therefore, they are only applicable for employees of the executive branch and still subject to judicial review. This was clearly the intent of the main author of the Constitution, James Madison, when he said that, “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”

Pardon me if I seem irreverent, but I don’t even subscribe to the idea of a President as defined in our Constitution as it provides too much opportunity for the exercise of arbitrary and unchecked power; the biggest supporter of such a powerful entity as expressed in the Federalist Papers was Alexander Hamilton, a known monarchist and main instigator of the Constitutional Convention. Thankfully, there were more liberty minded founders like Madison to limit Hamilton’s influence, but his impact lives with us today with an executive branch that needs a radical makeover. Trump, and all who may follow him to the Oval Office, need to realize that what they do that contributes to the growth of executive power, regardless of their motives, has consequences that will inevitably and negatively impact our liberty.

“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