President Trump has repeatedly bragged about “his” economy, talking about economic growth in glowing, hyperbolic terms. To hear the president tell it (or tweet it as the case may be) Americans currently enjoy the best economy in the history of forever. But Trump’s boasting doesn’t hold up, even to a cursory examination of the data.
Economic growth over the last two years, as measured by GDP, comes in at basically the same rate as it did during the best two years of the Obama administration.
And if you dig deeper into the numbers, you will find that it’s all smoke and mirrors. The entire economy is nothing but a house of cards built on a shaky foundation of spending and debt.
The Commerce Department recently released second-quarter GDP data. Although it slightly beat expectations, growth came in at a relatively tepid 2.1 percent.
Along with releasing Q2 data, the Commerce Department also revised numbers from previous quarters. As it turns out, the economy actually grew slightly faster during Obama’s two best years (2014 and 2015) than it has during the first two years of the Trump administration.
The best year for GDP growth during the Obama era was 2015 when the economy grew by 2.9 percent. That’s identical to the 2.9 percent growth in 2018. In 2014, GDP was 2.5 percent. That compares with 2.4 percent in Trump’s first year.
In a nutshell, the data reveals very little difference between the Trump and Obama economies.
Nevertheless, Trump wasn’t discouraged about the lackluster Q2 number. He tweeted that growth was “not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck.”
Trump’s tweet actually misses the truth by about 180 degrees.
The Federal Reserve has certainly had a major impact on the economy, but not in the way Trump would have you believe. In fact, the Fed’s easy money policy with its low interest rates have driven what little economic growth we’ve seen. Federal Reserve policy isn’t a millstone wrapped around the economy’s neck. It’s a hydraulic jack propping it up.
The Fed cut interest rates to zero in the wake of the 2008 crash and held them there for seven years. In December 2015, the central bank began to “normalize” rates. But it only managed to push rates to 2.5 percent (nowhere near “normal”) before the stock market began to tank in December 2018. To stop the air from coming out of the bubble, the Fed put normalization on hold. Powell and company are now set to begin cutting rates again.
These abnormally low interest rates were intended to “stimulate” the economy by incentivizing borrowing and spending. It certainly worked, as the most recent GDP report reveals.
The most important part of GDP – gross private domestic investment – was down 5.5 percent in Q2. That represents the weakest quarter since Q4 2015. Non-residential business investment was also down 0.6 percent. Residential investment fell 1.5 percent. That category has been down six straight quarters, the longest span since 2009 — during the Great Recession. Net exports saw the biggest drop in a decade last quarter.
In a nutshell, the economy supposedly grew by 2.1 percent, despite a decline in business investment, decreasing imports and falling corporate profits.
So, what drove the growth?
Borrowed money.
Consumer spending increased by 4.3 percent and accounted for nearly all of the GDP growth. That may lead you to believe that the U.S. workers have plenty of money in their pockets.
You would believe wrong.
Consumers are digging deeper and deeper into debt to pay for this spending spree. Consumer debt has risen to a record-setting $4.9 trillion. That does not include mortgages. Americans owe over $1.07 trillion in credit card debt. Credit card balances rose by $7.2 billion in May alone.
The other big boost to GDP in Q2 came in the form of government stimulus. Federal spending was up 5 percent. That added 0.85 percent to the overall GDP. Non-defense spending was up a whopping 15.9 percent in Q2. The last time government spending grew that much in a single quarter was 21 years ago. The U.S. endured two recessions in that timespan – including the Great Recession.
In other words, government spending rose last quarter by more than it did in any quarter during either of those recessions. Think about that. Trump keeps complaining that he’s not getting as much monetary stimulus via low interest rates as Obama did. But he’s getting more fiscal stimulus.
When you shatter the mirrors and blow away the smoke, you discover the truth about the supposed success of the Trump economy (and the Obama economy too for that matter) — it has nothing to do with industry or business. The consumer and the federal government spent more borrowed money.
That’s it.
This raises the $22 trillion question. How long can an economy built on debt continue to grow?
Michael Maharrey [send him email] is the Communications Director for the Tenth Amendment Center. He proudly resides in the original home of the Principles of ’98 – Kentucky. See his blog archive here and his article archive here. He is the author of the book, Our Last Hope: Rediscovering the Lost Path to Liberty. You can visit his personal website at MichaelMaharrey.com and like him on Facebook HERE
Everyone who studies the Constitution knows it grants to agencies of the federal government and a few other entities only enumerated (listed) powers. Sometimes, though, it is not obvious whether a particular function is included in an enumerated power. For example, is authority to inspect goods within Congress’s authority to “regulate Commerce?”
When the American people were considering whether to ratify the Constitution, the principal argument of its opponents (Antifederalists) was that the Constitution would grant too much power to the central government. The Constitution’s advocates (Federalists) countered that the central government’s authority would be strictly limited.
To reinforce their position, the Federalists promised a bill of rights that would remove some subjects—such as religion—entirely from federal jurisdiction. They also publicized lists of functions that, if the Constitution were adopted, would remain solely within the spheres of the private sector and of state governments. It is doubtful whether the Constitution would have been ratified if the Federalists had not provided the country with those representations.
History well remembers the Bill of Rights. But despite their importance, the lists of enumerated non-federal functions were long forgotten. In 2003, however, I researched and wrote a scholarly article, The Enumerated Powers of States.
It re-published the Federalists’ list of powers exclusively within the private and state sphere. It also showed how their representations were at the core of the constitutional deal. Under the terms of that deal, the federal government was to have little or no authority over many subjects onto which it has since intruded: manufactures, real estate, the criminal law, civil jurisprudence, health care, most infrastructure projects, and many others.
Of course, the “prestige” law journals refused to seriously consider my article. But a newer publication, Nevada Law Journal, agreed to publish it. The Enumerated Powers of States has become one of my all-time most-cited writings.
Last summer, I published a supplemental survey in the Federalist Society Review. It included information not in the original article. Now the same publication has released a third essay in which I discuss still more founding-era evidence—this evidence only newly brought to light. This material reinforces the conclusion that the Founders understood the Constitution to place outside federal control many functions the central government has appropriated.
Liberal law professors have long floated innovative—and rather far-fetched—claims about the Constitution designed to show that the document somehow authorizes the welfare and regulatory state. The latest essay discusses two of the most recent assertions of this kind. My essay shows that both the Constitution’s text and the latest evidence flatly contradict these assertions. You can find my latest article here.
Rob Natelson In private life, Rob Natelson is a long-time conservative/free market activist, but professionally he is a constitutional scholar whose meticulous studies of the Constitution’s original meaning have been repeatedly cited in U.S. Supreme Court opinions and published or cited by many top law journals (See: https://i2i.org/author/rob/) He co-authored The Origins of the Necessary and Proper Clause (Cambridge University Press) and The Original Constitution (Tenth Amendment Center). He was a law professor for 25 years and taught constitutional law and related courses. He is the Senior Fellow in Constitutional Jurisprudence at Colorado’s Independence Institute.
And in the New York ratifying convention, Melancton Smith said he’d only support his party “as far as is consistent with propriety,” letting other members know that his primary goal was to stand for his principles.
In short, if you’re dedicated to a politician or a political party rather than a foundational principle, you’ll always be led on the wrong path and help set foundation for what Washington called a “more formal and permanent despotism.”
In 1763, a young John Adams noted that “in every age” many of the best writers and speakers had wasted their skills in “foolish, deluded, and pernicious flattery” of one party, while engaging in “furious, prostitute invectives against another.”
Today, our view at the Tenth Amendment Center matches his rejection of this partisanship when he wrote:
“I would quarrel with both parties, and with every individual of each, before I would subjugate my understanding, or prostitute my tongue or pen to either.”
A recent decision by U.S. Supreme Court not to take up a gun rights case demonstrates that all too often, the high court does not act in a way that protects individual liberty. It also demonstrates further why our right to keep and bear arms will only be secured through local action and nullification by states willing to defy federal overreach.
It is clear based on a plain and logical reading of the Second Amendment that it prohibits the federal government from passing any restriction on the right to keep and bear arms. Yet since the 1930s, the three branches of the federal government have repeatedly violated it in the form of executive orders, legislation, and court rulings. A prime example is the National Firearms Act, which requires a person to get permission from the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) before purchasing a suppressor. The process is much more intrusive and thorough than federal background checks – also unconstitutional – and usually takes several months.
In 2013, the Kansas legislature passed the Second Amendment Protection Act and Governor Sam Brownback signed it with Attorney General Derek Schmidt as one of the witnesses. The bill originally required the Kansas Attorney General to prosecute any federal agent who committed the felony of acting against the law but it was watered down to say that he “may” prosecute federal agents. In effect, the bill legalized the manufacture and sale of firearms and firearm accessories in Kansas without any federal licensing or restrictions so long as that firearm is not sold outside of Kansas.
In 2017, a federal judge sentenced Shane Cox and Jeremy Kettler under federal law – Cox for manufacturing and selling a silencer and other firearms without paying the federal license/tax and Kettler for possessing and using that silencer. Kansas Attorney General Derek Schmidt refused to take action against the federal agents and refused to intervene in the federal court case despite the urging of Kansas Secretary of State Kris Kobach and many others.
Cox and Kettler argued that the policy violated their right to keep and bear arms and that they should have been shielded by the state law. Their appeal went all the way to SCOTUS, which declined to hear the case.
In the ideal world with judges truly faithful to the true meaning of the Constitution and the Bill of Rights, the case would have been taken up by the high court and used as an opportunity to declare all federal gun control laws or regulations null and void. Instead, we have judges sitting on the high court that refuse to even consider the matter.
The rights of a free people will never be preserved in the most unlikely of hands – a small group of unelected people who have enough difficulty reaching their position by straying the slightest from what Tom Woods refers to as the “3×5 index card of allowable opinion.”
TJ Martinell is an author, writer, and award-winning reporter from Washington state. His dystopian novel The Stringersdepicting a neo-Prohibition Era in the city of Seattle is available on Amazon.
I recently took a trip that required me to fly. I was filled with a sense of dread as I got ready to head to the airport, which is sad because I used to really enjoy flying.
You see, I love airplanes. I have since I was a little kid. I actually worked in the airline industry for about 7 years. I’ve flown a lot. But the TSA has ruined flying for me.
The last time I flew, a TSA agent at LAX grabbed my crotch.
We’re all safer now.
You’re welcome for my service.
I loathe the TSA. I honestly hate it more than any other federal agency.
Oh, I know there are greater threats to my liberty. I should hate the IRS more. Or maybe the NSA. Perhaps the Pentagon. But the TSA — I guess that it’s just such a tangible violation of my rights and the Constitution. I can literally feel it running up and down my leg.
We’ve all heard the stories of TSA agents groping cancer patients, grandmothers and little kids. Of course, they do it for “security.” But it doesn’t even serve its advertised purpose. Like I said, I worked in the airline industry. I can assure you that the TSA mostly engages in “security theater.” Does anybody really believe it necessary to grope grandma in order to protect airplanes?
But even if it actually did make us safer, the federal government lacks the constitutional authority to serve as airport security, and many of its actions clearly violate the Fourth Amendment.
Still, many Americans defend the TSA, and they primarily advance one argument: if you don’t like it, you don’t have to fly!
But you know what? I do have to fly. The trip I am about to make wouldn’t be possible without air travel. And regardless, I find this argument absurd.
Why do I have to make a choice between convenient transportation and having my rights violated?
How about this: the TSA quits violating our rights and then if you don’t like it, or if you feel frightened by the lack of peek and grope security theater, YOU don’t have to fly. *********************************************************************************
Michael Maharrey [send him email] is the Communications Director for the Tenth Amendment Center. He proudly resides in the original home of the Principles of ’98 – Kentucky. See his blog archive here and his article archive here. He is the author of the book, Our Last Hope: Rediscovering the Lost Path to Liberty. You can visit his personal website at MichaelMaharrey.com and like him on Facebook HERE
One of the most difficult issues for the originalists on the Supreme Court has been state sovereign immunity.
While these originalists usually argue against interpretations that do not derive from the constitutional text, in the area of sovereign immunity they have written and joined opinions that strangely rely on techniques that bring to mind Griswold v. Connecticut’s “penumbras and emanations.” In other words, these originalists appear to be acting in a hypocritical manner.
The challenge for originalists is whether they can justify state sovereign immunity using originalist interpretive techniques.
I tried my hand at this 20 years ago. In 1999, I wrote an article entitled “Reconciling Textualism and Federalism: The Proper Textual Basis of the Supreme Court’s Tenth and Eleventh Amendment Decisions.” The article argued that the reasoning of the sovereign immunity decisions (as well as other state immunity decisions, such as those prohibiting commandeering) was inconsistent with textualism and originalism. But I argued there was an originalist way to justify those decisions—by rooting them in the term “State” in the Constitution.
The article argued that at the time of the Constitution, the term state referred to an independent country with full sovereignty. The term had been used that way in the Constitution itself as well as in other founding documents, such as the Declaration of Independence. Thus, we should understand that the Constitution used the term to indicate entities with sovereignty. Of course, the Constitution had taken away certain sovereign privileges from the states in a variety of ways, such as denying them the power to make war and allowing the federal government to pass laws that governed their citizens. But the Constitution should not be understood as depriving the states of core notions of their sovereignty, especially if the language of the Constitution did not expressly or at least clearly indicate such sovereignty was eliminated.
One way of understanding the argument is that the Constitution contained potentially conflicting terms—the powers of the federal government and the meaning of the term “state.” When provisions conflict, traditional interpretive canons require that one reconcile the provisions so as to do the least damage to their respective meanings. One way of doing that is to respect the explicit or clear powers of the federal government, while continuing to respect the core notions of state sovereignty when they otherwise conform to the structure of the Constitution. My article argued that respecting certain traditional state immunities, including sovereign immunity, was the correct way of reconciling these conflicting provisions.
In the recent case of Franchise Tax Board of California v. Hyatt, the Supreme Court once again wrestled with sovereign immunity. While there is much to criticize in Hyatt, one happy result is that the Supreme Court is improving the textual basis for its decisions in the area. In Hyatt, the Supreme Court appeared to adopt my use of the term “State” as a basis for sovereign immunity. After discussing the immunities that states enjoyed at the time of the Constitution, Justice Thomas wrote:
“In short, at the time of the founding, it was well settled that States were immune under both the common law and the law of nations. The Constitution’s use of the term “States” reflects both of these kinds of traditional immunity. [emphasis added] And the States retained these aspects of sovereignty, “except as altered by the plan of the Convention or certain constitutional Amendments.”
Thus, the Court employed the Constitution’s use of the term “States” as a textual indication that the states continued to enjoy certain traditional immunities.
Unfortunately, the Court did not cite my article, which they certainly knew about since it was quoted and cited in one of the amicus briefs arguing for constitutional sovereign immunity. When I wrote the article back in the late 1990s, I was not sure whether I thought it was the correct original meaning of the Constitution or simply the best argument for the Court’s decisions. Over time, I have moved closer towards the latter interpretation.
But even at the time I wrote the article, I believed that the strongest argument for the results in those cases would come from a combination of the term “State” and the Necessary and Proper Clause.
Will Baude has recently developed an argument for sovereign immunity based on the limits of the Necessary and Proper Clause. Baude argues that sovereign immunity was part of the general common law at the time of the Constitution and the federal government does not have the authority to displace such sovereign immunity under the Necessary and Proper Clause. Baude contends that the Necessary and Proper Clause cannot be used to exercise a great power (as opposed to an incidental or lesser power) and abrogating state sovereign immunity might be a great power.
The argument for state sovereign immunity based on the Necessary and Proper Clause, however, would be made even stronger by the proper understanding of the term “state.” If the Constitution recognizes the sovereignty of the states, then that makes it more likely that only a great power could eliminate a key aspect of that sovereignty. Moreover, one might conclude that Congress does not have the authority to eliminate state sovereign immunity even if doing so is not a great power. If one needs to reconcile the Necessary and Proper Clause and the term “State,” one might conclude that reading the former not to authorize abrogations of state sovereign immunity was the best way of reconciling them.
While I find these arguments about the Necessary and Proper Clause to be quite plausible, unfortunately the Court’s decision in Hyatt does not involve that Clause. Instead, the case involved the question whether one state had to recognize the sovereign immunity of another state in the first state’s courts. The Necessary and Proper Clause was thus not implicated. And Will Baude and Steven Sachs argue that the Constitution leaves this question to the states decide on their own. One way, if not the only way, to protect state sovereign immunity in this context is through the term State and thus it may not be surprising that the court invoked it here.
Professor Rappaport is the Darling Foundation Professor at the University of San Diego School of Law, where he also serves as the Director of the Center for the Study of Constitutional Originalism. His principal areas of interest are originalism, separation of powers, federalism, and supermajority rules. He teaches Administrative Law, Constitutional Law, Constitutional History, and Legislation.
“Adolf Hitler is alive and well in the United States, and he is fast rising to power.”—Paul Craig Roberts, former Assistant Secretary of the Treasury, on the danger posed by the FBI to our civil liberties
Despite the finger-pointing and outcries of dismay from those who are watching the government discard the rule of law at every turn, the question is not whether Donald Trump is the new Adolf Hitler but whether the American Police State is the new Third Reich.
For those who can view the present and past political landscape without partisan blinders, the warning signs are unmistakable: the Deep State’s love affair with totalitarianism began long ago.
Indeed, the U.S. government so admired the Nazi regime that following the second World War, it secretly recruited Hitler’s employees, adopted his protocols, embraced his mindset about law and order, implemented his tactics in incremental steps, and began to lay the foundations for the rise of the Fourth Reich.
Sounds far-fetched? Read on. It’s all documented.
As historian Robert Gellately recounts, “After five years of Hitler’s dictatorship, the Nazi police had won the FBI’s seal of approval.” The Nazi police state was initially so admired for its efficiency and order by the world powers of the day that J. Edgar Hoover, then-head of the FBI, actually sent one of his right-hand men, Edmund Patrick Coffey, to Berlin in January 1938 at the invitation of Germany’s secret police—the Gestapo.
The FBI was so impressed with the Nazi regime that, according to the New York Times, in the decades after World War II, the FBI, along with other government agencies, aggressively recruited at least a thousand Nazis, including some of Hitler’s highest henchmen.
All told, thousands of Nazi collaborators—including the head of a Nazi concentration camp, among others—were given secret visas and brought to America by way of Project Paperclip. Subsequently, they were hired on as spies and informants, and then camouflaged to ensure that their true identities and ties to Hitler’s holocaust machine would remain unknown. All the while, thousands of Jewish refugees were refused entry visas to the U.S. on the grounds that it could threaten national security.
As if the government’s covert, taxpayer-funded employment of Nazis after World War II wasn’t bad enough, U.S. government agencies—the FBI, CIA and the military—have fully embraced many of the Nazi’s well-honed policing tactics, and have used them repeatedly against American citizens.
Indeed, with every passing day, the United States government borrows yet another leaf from Nazi Germany’s playbook: Secret police. Secret courts. Secret government agencies. Surveillance. Censorship. Intimidation. Harassment. Torture. Brutality. Widespread corruption. Entrapment. Indoctrination. Indefinite detention.
These are not tactics used by constitutional republics, where the rule of law and the rights of the citizenry reign supreme. Rather, they are the hallmarks of authoritarian regimes, where the only law that counts comes in the form of heavy-handed, unilateral dictates from a supreme ruler who uses a secret police to control the populace.
That danger is now posed by the FBI, whose laundry list of crimes against the American people includes surveillance, disinformation, blackmail, entrapment, intimidation tactics, harassment and indoctrination, governmental overreach, abuse, misconduct, trespassing, enabling criminal activity, and damaging private property, and that’s just based on what we know.
Whether the FBI is planting undercover agents in churches, synagogues and mosques; issuing fake emergency letters to gain access to Americans’ phone records; using intimidation tactics to silence Americans who are critical of the government; recruiting high school students to spy on and report fellow students who show signs of being future terrorists; or persuading impressionable individuals to plot acts of terror and then entrapping them, the overall impression of the nation’s secret police force is that of a well-dressed thug, flexing its muscles and doing the boss’ dirty work of ensuring compliance, keeping tabs on potential dissidents, and punishing those who dare to challenge the status quo.
Whatever minimal restrictions initially kept the FBI’s surveillance activities within the bounds of the law have all but disappeared post-9/11. Since then, the FBI has been transformed into a mammoth federal policing and surveillance agency that largely operates as a power unto itself, beyond the reach of established laws, court rulings and legislative mandates.
Consider the FBI’s far-reaching powers to surveil, detain, interrogate, investigate, prosecute, punish, police and generally act as a law unto themselves—much like their Nazi cousins, the Gestapo—and then try to convince yourself that the United States is still a constitutional republic.
Today, the FBI employs more than 35,000 individuals and operates more than 56 field offices in major cities across the U.S., as well as 400 resident agencies in smaller towns, and more than 50 international offices. In addition to their “data campus,” which houses more than 96 million sets of fingerprints from across the United States and elsewhere, the FBI has also built a vast repository of “profiles of tens of thousands of Americans and legal residents who are not accused of any crime. What they have done is appear to be acting suspiciously to a town sheriff, a traffic cop or even a neighbor.” The FBI’s burgeoning databases on Americans are not only being added to and used by local police agencies, but are also being made available to employers for real-time background checks.
All of this is made possible by the agency’s nearly unlimited resources (its minimum budget alone in fiscal year 2015 was $8.3 billion), the government’s vast arsenal of technology, the interconnectedness of government intelligence agencies, and information sharing through fusion centers—data collecting intelligence agencies spread throughout the country that constantly monitor communications (including those of American citizens), everything from internet activity and web searches to text messages, phone calls and emails.
Working through the U.S. Post Office, the FBI has access to every piece of mail that passes through the postal system: more than 160 billion pieces are scanned and recorded annually. Moreover, the agency’s National Security Letters, one of the many illicit powers authorized by the USA Patriot Act, allows the FBI to secretly demand that banks, phone companies, and other businesses provide them with customer information and not disclose those demands to the customer. An internal audit of the agency found that the FBI practice of issuing tens of thousands of NSLs every year for sensitive information such as phone and financial records, often in non-emergency cases, is riddled with widespread constitutional violations.
Much like the Gestapo’s sophisticated surveillance programs, the FBI’s spying capabilities can delve into Americans’ most intimate details (and allow local police to do so, as well).
In addition to technology (which is shared with police agencies) that allows them to listen in on phone calls, read emails and text messages, and monitor web activities, the FBI’s surveillance boasts an invasive collection of spy tools ranging from Stingray devices that can track the location of cell phones to Triggerfish devices which allow agents to eavesdrop on phone calls. In one case, the FBI actually managed to remotely reprogram a “suspect’s” wireless internet card so that it would send “real-time cell-site location data to Verizon, which forwarded the data to the FBI.” Law enforcement agencies are also using social media tracking software to monitor Facebook, Twitter and Instagram posts. Moreover, secret FBI rules also allow agents to spy on journalists without significant judicial oversight.
Much like the Gestapo’s ability to profile based on race and religion, and its assumption of guilt by association, the FBI’s approach to pre-crime allows it to profile Americans based on a broad range of characteristics including race and religion.
The agency’s biometric database has grown to massive proportions, the largest in the world, encompassing everything from fingerprints, palm, face and iris scans to DNA, and is being increasingly shared between federal, state and local law enforcement agencies in an effort to target potential criminals long before they ever commit a crime. This is what’s known as pre-crime. Yet it’s not just your actions that will get you in trouble. In many cases, it’s also who you know—even minimally—and where your sympathies lie that could land you on a government watch list. Moreover, as the Interceptreports, despite anti-profiling prohibitions, the bureau “claims considerable latitude to use race, ethnicity, nationality, and religion in deciding which people and communities to investigate.”
Much like the Gestapo’s power to render anyone an enemy of the state, the FBI has the power to label anyone a domestic terrorist.
As part of the government’s so-called ongoing war on terror, the nation’s de facto secret police force has begun using the terms “anti-government,” “extremist” and “terrorist” interchangeably. Moreover, the government continues to add to its growing list of characteristics that can be used to identify an individual (especially anyone who disagrees with the government) as a potential domestic terrorist. For instance, you might be a domestic terrorist in the eyes of the FBI (and its network of snitches) if you:
Much like the Gestapo infiltrated communities in order to spy on the German citizenry, the FBI routinely infiltrates political and religious groups, as well as businesses.
As Cora Currier writes for the Intercept: “Using loopholes it has kept secret for years, the FBI can in certain circumstances bypass its own rules in order to send undercover agents or informants into political and religious organizations, as well as schools, clubs, and businesses…” The FBI has even been paying Geek Squad technicians at Best Buy to spy on customers’ computers without a warrant.
Just as the Gestapo united and militarized Germany’s police forces into a national police force, America’s police forces have largely been federalized and turned into a national police force.
In addition to government programs that provide the nation’s police forces with military equipment and training, the FBI also operates a National Academy that trains thousands of police chiefs every year and indoctrinates them into an agency mindset that advocates the use of surveillance technology and information sharing between local, state, federal, and international agencies.
Just as the Gestapo’s secret files on political leaders were used to intimidate and coerce, the FBI’s files on anyone suspected of “anti-government” sentiment have been similarly abused.
As countless documents make clear, the FBI has no qualms about using its extensive powers in order to blackmail politicians, spy on celebrities and high-ranking government officials, and intimidate and attempt to discredit dissidents of all stripes. For example, not only did the FBI follow Martin Luther King Jr. and bug his phones and hotel rooms, but agents also sent him anonymous letters urging him to commit suicide and pressured a Massachusetts college into dropping King as its commencement speaker.
Just as the Gestapo carried out entrapment operations, the FBI has become a master in the art of entrapment.
In the wake of the 9/11 terrorist attacks the FBI has not only targeted vulnerable individuals but has also lured or blackmailed them into fake terror plots while actually equipping them with the organization, money, weapons and motivation to carry out the plots—entrapment—and then jailing or deporting them for their so-called terrorist plotting. This is what the FBI characterizes as “forward leaning—preventative—prosecutions.” In addition to creating certain crimes in order to then “solve” them, the FBI also gives certain informants permission to break the law, “including everything from buying and selling illegal drugs to bribing government officials and plotting robberies,” in exchange for their cooperation on other fronts. USA Todayestimates that agents have authorized criminals to engage in as many as 15 crimes a day. Some of these informants are getting paid astronomical sums: one particularly unsavory fellow, later arrested for attempting to run over a police officer, was actually paid $85,000 for his help laying the trap for an entrapment scheme.
When and if a true history of the FBI is ever written, it will not only track the rise of the American police state but it will also chart the decline of freedom in America, in much the same way that the empowerment of Germany’s secret police tracked with the rise of the Nazi regime.
How did the Gestapo become the terror of the Third Reich?
It did so by creating a sophisticated surveillance and law enforcement system that relied for its success on the cooperation of the military, the police, the intelligence community, neighborhood watchdogs, government workers for the post office and railroads, ordinary civil servants, and a nation of snitches inclined to report “rumors, deviant behavior, or even just loose talk.”
In other words, ordinary citizens working with government agents helped create the monster that became Nazi Germany. Writing for the New York Times, Barry Ewen paints a particularly chilling portrait of how an entire nation becomes complicit in its own downfall by looking the other way:
“In what may be his most provocative statement, [author Eric A.] Johnson says that ‘‘most Germans may not even have realized until very late in the war, if ever, that they were living in a vile dictatorship.’’ This is not to say that they were unaware of the Holocaust; Johnson demonstrates that millions of Germans must have known at least some of the truth. But, he concludes, ‘‘a tacit Faustian bargain was struck between the regime and the citizenry.’’ The government looked the other way when petty crimes were being committed. Ordinary Germans looked the other way when Jews were being rounded up and murdered; they abetted one of the greatest crimes of the 20th century not through active collaboration but through passivity, denial and indifference.”
Much like the German people, “we the people” have become passive, polarized, gullible, easily manipulated, and lacking in critical thinking skills. Distracted by entertainment spectacles, politics and screen devices, we too are complicit, silent partners in creating a police state similar to the terror practiced by former regimes.
Had the government tried to ram such a state of affairs down our throats suddenly, it might have had a rebellion on its hands.
Instead, the American people have been given the boiling frog treatment, immersed in water that slowly is heated up—degree by degree—so that they’ve fail to notice that they’re being trapped and cooked and killed.
“We the people” are in hot water now.
The Constitution doesn’t stand a chance against a federalized, globalized standing army of government henchmen protected by legislative, judicial and executive branches that are all on the same side, no matter what political views they subscribe to: suffice it to say, they are not on our side or the side of freedom.
From Clinton to Bush, then Obama and now Trump, it’s as if we’ve been caught in a time loop, forced to re-live the same thing over and over again: the same assaults on our freedoms, the same disregard for the rule of law, the same subservience to the Deep State, and the same corrupt, self-serving government that exists only to amass power, enrich its shareholders and ensure its continued domination.
“As political and economic freedom diminishes, sexual freedom tends compensating to increase. And the dictator (unless he needs cannon fodder and families with which to colonize empty or conquered territories) will do well to encourage that freedom.”—Aldous Huxley, Brave New World
Power corrupts.
Anyone who believes differently hasn’t been paying attention.
Politics, religion, sports, government, entertainment, business, armed forces: it doesn’t matter what arena you’re talking about, they are all riddled with the kind of seedy, sleazy, decadent, dodgy, depraved, immoral, corrupt behavior that somehow gets a free pass when it involves the wealthy and powerful elite in America.
In this age of partisan politics and a deeply polarized populace, corruption—especially when it involves sexual debauchery, depravity and predatory behavior—has become the great equalizer.
But then there are the extra-ordinary men, such as Jeffrey Epstein, who belong to a powerful, wealthy, elite segment of society that operates according to their own rules or, rather, who are allowed to sidestep the rules that are used like a bludgeon on the rest of us.
As the Associated Press points out, “The arrest of the billionaire financier on child sex trafficking charges is raising questions about how much his high-powered associates knew about the hedge fund manager’s interactions with underage girls, and whether they turned a blind eye to potentially illegal conduct.”
It doesn’t matter whether you’re talking about a politician, an entertainment mogul, a corporate CEO or a police officer: give any one person (or government agency) too much power and allow him or her or it to believe that they are entitled, untouchable and will not be held accountable for their actions, and those powers will eventually be abused.
We’re seeing this dynamic play out every day in communities across America.
A cop shoots an unarmed citizen for no credible reason and gets away with it. A president employs executive orders to sidestep the Constitution and gets away with it. A government agency spies on its citizens’ communications and gets away with it. An entertainment mogul sexually harasses aspiring actresses and gets away with it. The U.S. military bombs a civilian hospital and gets away with it.
Abuse of power—and the ambition-fueled hypocrisy and deliberate disregard for misconduct that make those abuses possible—works the same whether you’re talking about sex crimes, government corruption, or the rule of law.
It’s the same old story all over again: man rises to power, man abuses power abominably, man intimidates and threatens anyone who challenges him with retaliation or worse, and man gets away with it because of a culture of compliance in which no one speaks up because they don’t want to lose their job or their money or their place among the elite.
It’s not just sexual predators that we have to worry about.
For every Jeffrey Epstein (or Bill Clinton or Harvey Weinstein or Roger Ailes or Bill Cosby or Donald Trump) who eventually gets called out for his sexual misbehavior, there are hundreds—thousands—of others in the American police state who are getting away with murder—in many cases, literally—simply because they can.
The cop who shoots the unarmed citizen first and asks questions later might get put on paid leave for a while or take a job with another police department, but that’s just a slap on the wrist. The shootings and SWAT team raids and excessive use of force will continue, because the police unions and the politicians and the courts won’t do a thing to stop it.
The war hawks who are making a profit by waging endless wars abroad, killing innocent civilians in hospitals and schools, and turning the American homeland into a domestic battlefield will continue to do so because neither the president nor the politicians will dare to challenge the military industrial complex.
The National Security Agency that carries out warrantless surveillance on Americans’ internet and phone communications will continue to do so, because the government doesn’t want to relinquish any of its ill-gotten powers and its total control of the populace.
Unless something changes in the way we deal with these ongoing, egregious abuses of power, the predators of the police state will continue to wreak havoc on our freedoms, our communities, and our lives.
Police officers will continue to shoot and kill unarmed citizens. Government agents—including local police—will continue to dress and act like soldiers on a battlefield. Bloated government agencies will continue to fleece taxpayers while eroding our liberties. Government technicians will continue to spy on our emails and phone calls. Government contractors will continue to make a killing by waging endless wars abroad.
And powerful men (and women) will continue to abuse the powers of their office by treating those around them as underlings and second-class citizens who are unworthy of dignity and respect and undeserving of the legal rights and protections that should be afforded to all Americans.
As Dacher Keltner, professor of psychology at the at the University of California, Berkeley, observed in the Harvard Business Review, “While people usually gain power through traits and actions that advance the interests of others, such as empathy, collaboration, openness, fairness, and sharing; when they start to feel powerful or enjoy a position of privilege, those qualities begin to fade. The powerful are more likely than other people to engage in rude, selfish, and unethical behavior.”
After conducting a series of experiments into the phenomenon of how power corrupts, Keltner concluded: “Just the random assignment of power, and all kinds of mischief ensues, and people will become impulsive. They eat more resources than is their fair share. They take more money. People become more unethical.They think unethical behavior is okay if they engage in it. People are more likely to stereotype. They’re more likely to stop attending to other people carefully.”
Power corrupts.
And absolute power corrupts absolutely.
However, it takes a culture of entitlement and a nation of compliant, willfully ignorant, politically divided citizens to provide the foundations of tyranny.
As researchers Joris Lammers and Adam Galinsky found, those in power not only tend to abuse that power but they also feel entitled to abuse it: “People with power that they think is justified break rules not only because they can get away with it, but also because they feel at some intuitive level that they are entitled to take what they want.”
We need to restore the rule of law for all people, no exceptions.
Here’s what the rule of law means in a nutshell: it means that everyone is treated the same under the law, everyone is held equally accountable to abiding by the law, and no one is given a free pass based on their politics, their connections, their wealth, their status or any other bright line test used to confer special treatment on the elite.
This culture of compliance must stop.
The empowerment of petty tyrants and political gods must end.
The state of denial must cease.
Let’s not allow this Epstein sex scandal to become just another blip in the news cycle that goes away all too soon, only to be forgotten when another titillating news headline takes its place.
Sex trafficking, like so many of the evils in our midst, is a cultural disease that is rooted in the American police state’s heart of darkness. It speaks to a far-reaching corruption that stretches from the highest seats of power down to the most hidden corners and relies on our silence and our complicity to turn a blind eye to wrongdoing.
If we want to put an end to these wrongs, we must keep our eyes wide open.
LITTLE ROCK, Ark. (July 24, 2019) – Today, a bill that reforms Arkansas’ asset forfeiture laws to prohibit the state from taking a person’s property without a criminal conviction in most situations went into effect. Arkansas has already taken a step to shut a loophole that would allow state and local police to circumvent the more stringent state asset forfeiture process by passing cases off to the feds.
Sen Bart Hester (R-Cave Springs) sponsored Senate Bill 308 (SB308). The new law specifically ends civil asset forfeiture in most Arkansas cases and replaces it with a criminal procedure. Under the law, prosecutors cannot proceed with forfeiture without a criminal conviction in all but a handful of cases.
“There shall be no civil judgment under this subchapter and no property shall be forfeited unless the person from whom the property is seized is convicted of a felony offense that related to the property being seized and that permits the forfeiture of the property.”
The Institute for Justice gave Arkansas former forfeiture laws a D- grade, calling them “awful.”
The House passed SB308 by a 93-0 vote. The Senate approved the measure 35-0. With Gov. Asa Hutchinson’s signature in March, the new law went into effect July 24.
NECESSARY
While some people believe the Supreme Court “ended asset forfeiture,” the recent opinion in Timbs v. Indianaended nothing. Without further action, civil asset forfeiture remains. Additionally, as law professor Ilya Somin noted, the Court left an important issue unresolved. What exactly counts as an “excessive” in the civil forfeiture context?
“That is likely to be a hotly contested issue in the lower federal courts over the next few years. The ultimate effect of today’s decision depends in large part on how that question is resolved. If courts rule that only a few unusually extreme cases qualify as excessive, the impact of Timbs might be relatively marginal.”
Going forward, opponents of civil asset forfeiture could wait and see how lower federal courts will address this “over the next few years,” or they can do what a number of states have already taken steps to do, end the practice on a state level, and opt out of the federal equitable sharing program as well.
FEDERAL LOOPHOLE
While the current asset forfeiture process in Arkansas desperately needed reforming, the state had already taken a step toward withdrawing from a federal program that allows state and local police to circumvent the state process. This is key now that SB308 has become law. And it’s particularly important in light of a policy directive issued in July 2017 by then-Attorney General Jeff Sessions for the Department of Justice (DOJ).
A federal program known as “Equitable Sharing” allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government through a process known as adoption. The DOJ directive reiterates full support for the equitable sharing program, directs federal law enforcement agencies to aggressively utilize it, and sets the stage to expand it in the future.
Law enforcement agencies can circumvent more strict state forfeiture laws by claiming cases are federal in nature. Under these arrangements, state officials simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds. However, when states merely withdraw from participation, the federal directive loses its impact.
Until recently, California faced this situation. The state has some of the strongest state-level restrictions on civil asset forfeiture in the country, but state and local police were circumventing the state process by passing cases to the feds. According to a report by the Institute for Justice, Policing for Profit, California ranked as the worst offender of all states in the country between 2000 and 2013. In other words, California law enforcement was passing off a lot of cases to the feds and collecting the loot. The state closed the loophole in 2016.
Arkansas law prohibits the transfer of property to the feds without judicial approval.
(1) No state or local law enforcement agency may transfer any property seized by the state or local agency to any federal entity for forfeiture under federal law unless the circuit court having jurisdiction over the property enters an order, upon petition by the prosecuting attorney, authorizing the property to be transferred to the federal entity.
(2) The transfer shall not be approved unless it reasonably appears that the activity giving rise to the investigation or seizure involves more than one (1) state or the nature of the investigation or seizure would be better pursued under federal law.
As the Tenth Amendment Center previously reported the federal government inserted itself into the asset forfeiture debate in California. The feds clearly want the policy to continue.
Why?
We can only guess. But perhaps the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness. After all, the federal government would find it nearly impossible to prosecute its unconstitutional “War on Drugs” without state and local assistance. Asset forfeiture “equitable sharing” provides a pipeline the feds use to incentivize state and local police to serve as de facto arms of the federal government by funneling billions of dollars into their budgets.
NEXT STEP
While current law does limit law enforcement’s ability to transfer forfeiture cases to the federal government by requiring a judicial order, it still leaves a loophole open to circumvent the requirement for a criminal conviction. There is no guarantee judges won’t rubber-stamp prosecutors’ requests. Arkansas should effectively withdraw from the federal equitable sharing program altogether. We can suggest the following language for a bill in the next legislative session:
A local, county or state law enforcement agency shall not refer, transfer or otherwise relinquish possession of property seized under state law to a federal agency by way of adoption of the seized property or other means by the federal agency for the purpose of the property’s forfeiture under the federal Controlled Substances Act, Public Law 91 513-Oct. 27, 1970, under the federal Controlled Substances Act or other federal law.
In a case in which the aggregate net equity value of the property and currency seized has a value of $50,000 or less, excluding the value of contraband, a local, county or state law enforcement agency or participant in a joint task force or other multijurisdictional collaboration with the federal government (agency) shall transfer responsibility for the seized property to the state prosecuting authority for forfeiture under state law.
If the federal government prohibits the transfer of seized property and currency to the state prosecuting authority as required by paragraph (1) and instead requires the property be transferred to the federal government for forfeiture under federal law, the agency is prohibited from accepting payment of any kind or distribution of forfeiture proceeds from the federal government.
Michael Maharrey [send him email] is the Communications Director for the Tenth Amendment Center. He proudly resides in the original home of the Principles of ’98 – Kentucky. See his blog archive here and his article archive here. He is the author of the book, Our Last Hope: Rediscovering the Lost Path to Liberty. You can visit his personal website at MichaelMaharrey.com and like him on Facebook HERE
The U.S. House recently passed a bill to gradually raise the minimum wage to $15 per hour by 2025. The move simultaneously taps into both constitutional and economic foolishness. In the first place, Congress doesn’t have any constitutional authority to legislate wages. This power is “reserved to the States respectively, or to the people.” More significantly, the “Fight for 15” obscures a more fundamental issue: The United States doesn’t really have a wage problem. It has a money problem.
CONSTITUTIONAL ISSUES Congress claims the authority to set a national minimum wage under the commerce clause. But this stretches the meaning of commerce far beyond its breaking point. Courts, politicians and pundits have redefined the meaning of commerce to encompass every conceivable economic activity. But during the drafting and ratification of the Constitution, commerce had a very specific and limited meaning. In a nutshell, commerce means trade — the act of exchanging goods. The power to regulate “interstate commerce” only empowers the federal government to make laws relating to the movement of physical goods – in commerce – across state lines. The Commerce Clause was never intended to give the federal government the power to regulate or control manufacturing, agriculture, labor laws, wages, healthcare or a host of other activities claimed by the federal government today. The framers wanted the federal government to possess the power to stop states from inhibiting trade through levying tariffs on neighbors. For instance, they wanted to be able to prevent Tennessee from slapping a fee on bourbon imported from Kentucky. It was a power intended to protect free and robust trade. The commerce clause also gave the federal government the authority to pursue a unified trade policy with other nations, as opposed to each state enforcing its own policy.
” It is very certain it grew out of the abuse of the power of the importing states in taxing the non-importing, and was intended as a negative and preventative provision against injustice amongst the states themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged. And it will be safer to leave the power with this key to it, than to extend it all the qualities and incidental means belonging to the power over foreign “
In simplest terms, the power to regulate commerce does not give Congress the authority to set wage floors. Under the original, legal meaning of the Constitution, the minimum wage bill is blatantly unconstitutional.
THE BIGGER PICTURE Even if Congress had the power to set minimum wages, current efforts to impose a $15 per hour wage floor ignore the more fundamental problem. In effect, a minimum wage is like putting a bandaid on a severed artery. The problem isn’t wages. The United States have a money problem. Government devaluation of the dollar over the years has stolen money from average people. But instead of dealing with the core issue, the “Fight for 15” centers around wage policy and offers a solution that will just exacerbate the problem because it’s based on shoddy economics. A recent study by the Congressional Budget Office confirms this. It projected that increasing the minimum wage would boost pay for about 17 million workers, but it would eliminate up to 3.7 million jobs. The median job-loss – the number you probably saw touted in headlines – was estimated at 1.3 million. The CBO concluded that the job losses would have the biggest impact on women, workers without high school degrees and part-time employees. According to a report published by The Hill on the study, the CBO estimated that a $15 minimum wage would reduce family incomes by $9 billion.
None of this should come as any surprise. The fundamental economic laws of supply and demand tell us that artificially raising the wage level will decrease the demand for low-wage employees. From this simple economic truth, we can safely say that employment levels for low-skilled workers will be lower with a higher minimum wage than it otherwise would have been. The CBO study confirms this reality. But we really didn’t need a study to tell us this. Raising the minimum wage might make for good politics, but it’s bad economics. As with any government policy, it will produce winners and losers. People who keep their jobs will benefit from higher wages. But some people will suddenly have their wages cut to zero. Advocates of government intervention love to highlight the winners, even as they sweep the losers under the rug. But economic illiteracy shouldn’t obscure the fact that minimum wage advocates do seek to solve a legitimate problem facing U.S. workers: their dollars buy less and less every year.
The money system is broken, and it needs to be fixed. The U.S. government’s monetary policy devalues our currency, and that means less purchasing power for you and me. Simply put, when the government effectively prints currency out of thin air, a dollar no longer buys the same amount of stuff it once did. In effect, Federal Reserve quantitative easing is like printing money. It debases the currency. The Fed has engaged in the practice for years. So, what does this have to do with wages? Well, consider this: in 1964, the minimum wage stood at $1.25. To put it another way, a minimum wage worker earned five silver quarters for every hour worked. Today, you can’t even buy a cup of coffee with those five quarters.
But the silver melt-value of those five quarters today stands at around $14.80 That’s getting close to your $15 per hour minimum wage. This vividly illustrates currency debasement. In terms of purchasing power, the value of the silver remains relatively stable, but the value of a dollar shrinks. The long-term rise in the price of silver reflects this reality. Now flip things around. Today, it takes 60 quarters to make up the $15 minimum wage advocates want. If you paid that in 1964 silver quarters, the value of the metal would be over $175.
In an economy with stable money, prices tend to fall, not rise. That means more purchasing power to the poor, low-wage workers, those on fixed incomes, and savers. But the government currently debases the currency. Politicians and central bankers claim their policies stabilize economies and protect the people from currency debasement. But in truth, these policies only enrich the politically well-connected at the expense of you and me.
Minimum wage hikes only mask the problem. We need to fix the money. The only way to do that is through currency competition – encouraging the use of gold, silver and crypto to compete with Federal Reserve notes. Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it could create a “reverse Gresham’s effect,” drive out bad money, effectively nullify the Federal Reserve, and end the federal government’s monopoly on money.
“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.” Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level can move us in that direction.
The U.S. House recently passed a bill to gradually raise the minimum wage to $15 per hour by 2025. The move simultaneously taps into both constitutional and economic foolishness.
In the first place, Congress doesn’t have any constitutional authority to legislate wages. This power is “reserved to the States respectively, or to the people.” More significantly, the “Fight for 15” obscures a more fundamental issue: The United States doesn’t really have a wage problem. It has a money problem.
CONSTITUTIONAL ISSUES
Congress claims the authority to set a national minimum wage under the commerce clause. But this stretches the meaning of commerce far beyond its breaking point.
Courts, politicians and pundits have redefined the meaning of commerce to encompass every conceivable economic activity. But during the drafting and ratification of the Constitution, commerce had a very specific and limited meaning. In a nutshell, commerce means trade — the act of exchanging goods. The power to regulate “interstate commerce” only empowers the federal government to make laws relating to the movement of physical goods – in commerce – across state lines.
The Commerce Clause was never intended to give the federal government the power to regulate or control manufacturing, agriculture, labor laws, wages, healthcare or a host of other activities claimed by the federal government today.
The framers wanted the federal government to possess the power to stop states from inhibiting trade through levying tariffs on neighbors. For instance, they wanted to be able to prevent Tennessee from slapping a fee on bourbon imported from Kentucky. It was a power intended to protect free and robust trade. The commerce clause also gave the federal government the authority to pursue a unified trade policy with other nations, as opposed to each state enforcing its own policy.
It is very certain it grew out of the abuse of the power of the importing states in taxing the non-importing, and was intended as a negative and preventative provision against injustice amongst the states themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged. And it will be safer to leave the power with this key to it, than to extend it all the qualities and incidental means belonging to the power over foreign commerce.
In simplest terms, the power to regulate commerce does not give Congress the authority to set wage floors. Under the original, legal meaning of the Constitution, the minimum wage bill is blatantly unconstitutional.
THE BIGGER PICTURE
Even if Congress had the power to set minimum wages, current efforts to impose a $15 per hour wage floor ignore the more fundamental problem. In effect, a minimum wage is like putting a bandaid on a severed artery.
The problem isn’t wages. The United States have a money problem.
Government devaluation of the dollar over the years has stolen money from average people. But instead of dealing with the core issue, the “Fight for 15” centers around wage policy and offers a solution that will just exacerbate the problem because it’s based on shoddy economics.
A recent study by the Congressional Budget Office confirms this. It projected that increasing the minimum wage would boost pay for about 17 million workers, but it would eliminate up to 3.7 million jobs. The median job-loss – the number you probably saw touted in headlines – was estimated at 1.3 million.
The CBO concluded that the job losses would have the biggest impact on women, workers without high school degrees and part-time employees. According to a report published by The Hill on the study, the CBO estimated that a $15 minimum wage would reduce family incomes by $9 billion.
None of this should come as any surprise. The fundamental economic laws of supply and demand tell us that artificially raising the wage level will decrease the demand for low-wage employees. From this simple economic truth, we can safely say that employment levels for low-skilled workers will be lower with a higher minimum wage than it otherwise would have been. The CBO study confirms this reality. But we really didn’t need a study to tell us this.
Raising the minimum wage might make for good politics, but it’s bad economics. As with any government policy, it will produce winners and losers. People who keep their jobs will benefit from higher wages. But some people will suddenly have their wages cut to zero. Advocates of government intervention love to highlight the winners, even as they sweep the losers under the rug.
But economic illiteracy shouldn’t obscure the fact that minimum wage advocates do seek to solve a legitimate problem facing U.S. workers: their dollars buy less and less every year.
The money system is broken, and it needs to be fixed.
The U.S. government’s monetary policy devalues our currency, and that means less purchasing power for you and me. Simply put, when the government effectively prints currency out of thin air, a dollar no longer buys the same amount of stuff it once did. In effect, Federal Reserve quantitative easing is like printing money. It debases the currency. The Fed has engaged in the practice for years.
So, what does this have to do with wages? Well, consider this: in 1964, the minimum wage stood at $1.25. To put it another way, a minimum wage worker earned five silver quarters for every hour worked. Today, you can’t even buy a cup of coffee with those five quarters.
But the silver melt-value of those five quarters today stands at around $14.80
That’s getting close to your $15 per hour minimum wage.
This vividly illustrates currency debasement. In terms of purchasing power, the value of the silver remains relatively stable, but the value of a dollar shrinks. The long-term rise in the price of silver reflects this reality.
Now flip things around. Today, it takes 60 quarters to make up the $15 minimum wage advocates want. If you paid that in 1964 silver quarters, the value of the metal would be over $175.
In an economy with stable money, prices tend to fall, not rise. That means more purchasing power to the poor, low-wage workers, those on fixed incomes, and savers. But the government currently debases the currency. Politicians and central bankers claim their policies stabilize economies and protect the people from currency debasement. But in truth, these policies only enrich the politically well-connected at the expense of you and me.
Minimum wage hikes only mask the problem. We need to fix the money. The only way to do that is through currency competition – encouraging the use of gold, silver and crypto to compete with Federal Reserve notes.
Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it could create a “reverse Gresham’s effect,” drive out bad money, effectively nullify the Federal Reserve, and end the federal government’s monopoly on money.
“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”
Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level can move us in that direction.
Michael Maharrey [send him email] is the Communications Director for the Tenth Amendment Center. He proudly resides in the original home of the Principles of ’98 – Kentucky. See his blog archive here and his article archive here. He is the author of the book, Our Last Hope: Rediscovering the Lost Path to Liberty. You can visit his personal website at MichaelMaharrey.com and like him on Facebook HERE
