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There is an article in The Salon today regarding Bernie Sanders:

A new socialist movement is cohering in the US, thanks in large part to the popular class politics of Bernie Sanders. But as that movement grows and progresses, it is bound to run into dangerous obstacles and thorny contradictions. The new US socialist movement is without a single “line” or monolithic political position. That’s a strength of the movement, since none of us has all the answers. Still, many people in the movement, ourselves included, feel strongly about certain approaches to strategy. One approach we feel strongly about is what we call “the democratic road to socialism,” or the idea that we need to make good use of the democratic structures and processes available to us (and to improve and expand them) in order to advance our cause.

A country like the United States has both a well-developed capitalist state, beholden to the capitalist class and armed to the teeth, and mechanisms for democratic participation in that state that allow people to exercise some measure of control over their representatives. Even though their choices are limited, their representatives are bought off by the rich, and the capitalist class holds the entire system hostage with the threat of devastating economic retaliation if things don’t go their way, the system does have some basic democratic elements that its citizens largely affirm and occasionally participate in.

This is a tricky situation to navigate. If the democratic capitalist state were less developed, it might be possible to convince people to simply storm the gates, tear up the old rules, and start fresh in a socialist society. This is what socialists tried to do in Russia in 1917: the state was weak and after centuries of autocratic rule it didn’t have much legitimacy in the eyes of most Russians, so revolutionaries could get popular support for scrapping it and starting over.

The United States is hardly an exemplary democracy, and socialists must push to further democratize elements of the state. But even if people are unhappy about much of our corrupt political system today, it does hold a strong degree of legitimacy in most citizens’ minds. Despite Republicans’ continued efforts to restrict the franchise, most people can vote, and they see the results of elections as basically lawful and valid. People often (rightfully) feel dejected and cynical about US electoral politics, but they don’t consider the system so illegitimate that they’re willing to risk their lives to destroy it anytime soon.”

This illustrates very well what Bastiat wrote about in the Law. This writer obviously sees a “capitalist class”, which has power over the “capitalist state”. What makes this author think doing the same thing with a different group of people, “a new socialist movement”, will be an improvement? The problem is those “elected” are above the law. This is what makes them dangerous and why elections in the U.S. are so hotly contested. Here is Bastiat:

I know what might be said in answer to this; what the objections might be. But this is not the place to exhaust a controversy of this nature. I wish merely to observe here that this controversy over universal suffrage (as well as most other political questions) which agitates, excites, and overthrows nations, would lose nearly all of its importance if the law had always been what it ought to be. In fact, if law were restricted to protecting all persons, all liberties, and all properties; if law were nothing more than the organized combination of the individual’s right to self defense; if law were the obstacle, the check, the punisher of all oppression and plunder — is it likely that we citizens would then argue much about the extent of the franchise?

Under these circumstances, is it likely that the extent of the right to vote would endanger that supreme good, the public peace? Is it likely that the excluded classes would refuse to peaceably await the coming of their right to vote? Is it likely that those who had the right to vote would jealously defend their privilege? If the law were confined to its proper functions, everyone’s interest in the law would be the same. Is it not clear that, under these circumstances, those who voted could not inconvenience those who did not vote?

This author said, “By engaging in mass democratic politics, and electing politicians faithful to our movement who can spearhead the fight for real reform (including democratizing the current state), we can tip the balance of power in favor of the working class.

How on earth does he propose to guarantee “electing politicians faithful to our movement”? If the outcome of the election were guaranteed, it would not be an election and it would not be democratic. I don’t think this author realizes that a truly free market (we do not have one now), would be the most democratic institution possible. Everyone would “vote” every time they made a purchase. I think what the author really wants is for the state to relinquish control over the issue of bank notes/credit. That would be the first step toward making the government beholden to law and that would wrest control of the “capitalist state” from the “capitalist class”, because the “capitalist class” would no longer be able to create money and debt out of thin air.

The authors also discussed using capital controls to keep money from leaving America. Once again, honest money would cure these ills. In addition, what did we witness in the Soviet Union between 1917 and 1991? Do we really want to repeat that?

Fredric Bastiat wrote in his essay, “The Law“:

What, then, is law? It is the collective organization of the individual right to lawful defense.

Each of us has a natural right — from God — to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two.

Today we read this in USA Today:

Frustrated by liberal policies, some Oregon residents are petitioning to leave the state –by moving the border with Idaho westward.

The movement has secured initial approval from two counties and aims to get enough signatures to put the proposal on local ballots in November, said the group Move Oregon’s Border for a Greater Idaho.

If the group succeeds, voters in southeast Oregon may see a question on whether their county should become part of Idaho by redrawing the border.

“Rural counties have become increasingly outraged by laws coming out of the Oregon Legislature that threaten our livelihoods, our industries, our wallet, our gun rights, and our values,” Mike McCarter, one of the chief petitioners, said in a press release. “We tried voting those legislators out but rural Oregon is outnumbered and our voices are now ignored. This is our last resort.”

Today state jurisdiction is largely superfluous, thanks to Federal supremacy, so no one should resist this desire to “secede”.

Mr. Bastiat wrote in his essay that if legislators were limited by law, people would have little interest in elections, because elections would no longer be a route to plunder fellow citizens and they would not be needed any longer for an attempt at blocking plunder. If this country really had “the rule of law”, as it pretends, there would be no excitement at election time and there would be no agitation to secede.

Have you ever heard of the Cantillon effect?

The Cantillon Effect:

Richard Cantillon first suggested in 1755 that money is not as neutral as we think. He argued that money injection—what we could consider inflationary policies—may not change an economy’s output over the long-term. However, the process of readjustment affects different sectors of the economy differently. This analysis, known as the Cantillon Effect, serves as the foundation for the non-neutrality of money theories.

In recent history, the Fed injected enormous amounts of bank credit/money into the country’s banks. The banks were the first receivers of this new “money”. In a nutshell this means that some groups receive the new money first and they take some action with it, which changes prices in some market or markets, and as a result other economic participants change their behavior. Here is the importance of understanding this:

The next two chapters explore two of the more controversial topics, from the mainstream perspective. The first, chapter eight, analyzes the impact of new money on income and wealth. It is shown here that there are winners and losers from new money. For example, the Fed’s monetary expansions tend to help the wealthy, banks, big corporations, and the financial industry more generally. Subsequently, as prices rise, the Fed’s policy hurts retirees, those on fixed incomes, and wage earners who receive the new money last, if at all. This is one reason why the Fed and most mainstream macroeconomists vigorously deny the existence and importance of Cantillon effects and adopt the assumption of neutral money. Tragically, they often get away with this ruse because the theft cannot be directly seen, except in the final result.

In a nutshell, the Fed’s monopoly (granted by your wonderful Congress) on “money” creation allows one group of people to plunder another group of people. Without the physical force behind our “law”, this group would be powerless to do this, because people could switch out of Fed “money” much more easily (also known as a bank run). The law should be preventing this plunder. Unfortunately, it does the opposite. It facilitates it.

Some people ask why I am against fiat currency. My answer in the smallest nutshell possible is that it is theft.

Fiat currency divides the population into two classes. One class can create currency out of nothing and create “debt” and the other class must work to pay off that “debt”. The first class does not have to work – only create money. There is a Master/Slave relationship between the creators of “money” and the consumers of “money” or debtors.

I know that everyone is watching the stock “market” and thinking it is going up, so all is well. What is really happening is the purchasing power of USD (the garbage that you and I need to live) is going down. If its purchasing power goes low enough, all the USD you think you have stored up in the stock “market” won’t do much for you.

Mike Maloney explains this well in a video that you will find here. Fast forward to 11:05 and listen till 15:40. The part where he really lays into the Central Banks begins at 14:16.