Saturday, November 23, 2013

All Roads Lead to Nashville

"All roads lead to Nashville, it's never far away..."

Such would be the theme of a proposed "Red State" Convention. The site would be Music City. The theme: "redefining or replacing the modern Republican Party."

The party has become too fractured. Maybe it's due to a base that wasn't around at the time of the party's inception. The origin and history of the GOP is not the subject of this post. Of greater concern is "where are we now and where are we going from here?"

It begins with defining an America that most of us want. It has nothing to do with party. Democrats as well as Independents would be welcomed, literally urged to attend the convention. The goal: "to finally undermine an order that has gradually and systematically stolen our country from us." It begins with a platform that includes the following 15 planks:

1)Term limits for Congressmen and Senators. Two, six-year terms for Senators. Six, two-year terms for Congressmen.
2)Repeal of the 17th Amendment
3)Actual ratification of the 16th amendment.(The amendment was never ratified by 3/4 of the states).
4)Elimination of all federal employees(non-military) from pension rolls. Elected officials would be included. They would pay into and receive Social Security like the rest of Americans. They would be given 401ks like the private sector. The overall Federal non-military wage would be made consistent with the current private sector average.(It is currently 60% higher)
5) Congressional pay would be cut in half, the jobs made part time.
6) Elimination of the Departments of Education, Energy and Commerce. E.P.A. would be returned to it's original focus, the staff reduced to 1975 levels.
7)Obamacare would be replaced with a "half-penny" national sales tax that would be used solely for the creation of a catastrophic fund. The fund would be only accessible if a claim reached $10,000. This would be done in conjunction with (a) the removing of location restrictions(allowing insurance companies to cross state lines) and the (b) implementation of "loser pays" tort reform.
8) Adoption of English as official language and accompanying measures as outlined in my book.
9)Instigation of a federal land sell-off to Americans. The revenues would be used to pay down the federal debt.
10) Full repeal of Dodd-Frank and all measures adopted since 2008.
11) Reduction of corporate income tax to 15%.
12) Elimination of Capital Gains tax for families making less than $500,000 per year
13) Elimination of Department of Homeland Security
14) Adoption of an immigration reform plan that would target young, well educated applicants, already fluent in English. Applicants from N.A.T.O. countries would be given a preference. Those in America through "no fault of their own" would be given a "probationary path" to citizenship.
15)Fully invigorating NASA with short and long term objectives for space exploration. An emphasis would be placed on public/private sector ventures that would include international partners.

The ideology behind all 15 measures is relatively simple: "To reduce the size, scope and cost of the federal government." Individual ingenuity would return to the forefront. A premium would once again be placed upon American immagination and creativity. A less menacing federal hand would spawn enhanced innovation.

Nashville symbolizes all of these ideals. Could we not think of a better city to begin our journey?

This isn't a Republican "wish list." A lot of Republicans would have problems with many of the measures. The question becomes, "are there sufficient Republicans willing to embrace them as a whole?"

Should the the answer be "80% of the party," it will then become a question of "how many" Democrats and Independents will move over. If not, then a "replacement party"(I call them "Jeffersonians" for illustrative purposes) will send the Republicans the way of the Whig party.

In actuality, all these positions epitomize the American Dream. Anyone wanting to share in the dream is welcomed. But, it is a frightening illusion for the status quot. Over time, they have constructed an American nobility. At stake is power and control. Losing that by reducing the size, scope and cost of government would be a direct flight ticket to their demise.

Saturday, November 9, 2013

An Economist's Perspective on the Civil War

The American Civil War is one of the most storied topics in history. It was, as the late T. Harry Williams described, "a tragic clash of perceptions."

The war's actual cause has been debated. Southern historians describe it as a "battle for states rights." The typical New England response then and now is "a war to emancipate those held in bondage." Mainstream America eventually concluded that it was "wrong for the South to secede and it paid the price for it."

The question still not totally answered amounts to "why would the South risk economic ruin on a principle?" Or, was it merely a principle.

Another perception is rendered through a journalist, who happens to have taken the study of economics to a different realm. G. Edward Griffin is not a Southerner. He was born in New Jersey. He received his undergraduate degree from the University of Michigan and later did graduate study at the University of Denver. Today, he resides in Westlake Village, California.

In Griffin's eye opening book, "The Creature from Jekyll Island," he recounted the primary cause. He writes:

"The South, being predominantly an agricultural region, had to import practically all manufacturered goods from the Northern states or from Europe, both of which reciprocated by providing a market for the South's cotton. However,many of the textiles and manufacturered items were considerably cheaper from Europe, even after the cost of shipping had been added. The Southern states, therefore, often found it to their advantage to purchase these European goods rather than those made in the North. This put considerable competitive pressure on the American manufacturers to lower their prices and operate more efficiently.

"The Republicans were not satisfied with that arrangement. Theydecided to use the power of the federal government to tip the scales of competition in their favor. Claiming that this was in the "national interest," theylevied stiff import duties on almost everything coming from Europe that was also manufactured in the North. Not surprisingly, there was no duty applied to cotton which, presumedly was not a commodity in the national interest. One result was that the Europeon countries countered by stopping the purchase of U.S. cotton, which badly hurt the Southern economy. The other result was that manufacturers in the North were able to charge higher prices without fear of competition, and the South was forced to pay more for practically all of its necessities. It was a classic case of legalized plunder in which the law was used to enrich one group of citizens at the expense of another."

In the end, the South wanted out.

German Chancellor, Otto von Bismarck observed that it was "high financial powers in Europe," who had "decided years earlier" that it would be "in their best interest" if the United States was divided into "federations of equal force." In truth, these European bankers were afraid of the United States. By staying together the U.S. could "upset their financial domination over Europe and the world."

There was no doubt that both England and France had their eyes on the conflict. Shortly after Fort Sumter, France had landed troops in Mexico. By 1864, having ended all Mexican resistence, the French Monarch installed Ferdinand Maximillian, Emperor.

At the same time England moved 11,000 troops into Canada.

The war became extremely unpopular in the north. Midwesterners coined the phrase, "a rich man's war and a poor man's fight." Abraham Lincoln was forced to use the military to quell riots in New York City. Only the beguiling genius of Governor Oliver Morton, kept Indiana from dropping out of the war in 1862. Farmers resisting the draft in Southern Illinois were hung without mercy, their property burned.

In the end, more Americans died in the Civil War than all other wars combined. Lincoln is said to have compromised the constitution in an effort to save the nation.People were arrested and thrown into prison without due process. Disenters were denied Habeas Corpus. They included Indiana Senator, Samuel Milligan, Ohio Congressman, Clement Valandinghm and Kentucky Associated Press Correspondent, Martin Barr.

There was also the question of banking and funding an unpopular war. Lincoln faced a dilemma: "How to not only convince Americans in the north to die for the war but to pay for it." This was an impossibilty in itself. As Griffin writes:

"During the year ending in 1861, expenses of the federal government had been 61 million. After the first year of armed conflict they were $475 million and, by 1865 had risen to one billion, three hundred thousand dollars. On the income side of the ledger, taxes covered only about eleven per cent of that figure. By the end of the war,the deficit had risen to 2.61 billion."

The solution: Greenbacks! In 1862 Congress authorized the Treasury to issue 150 million bills of credit and place them into circulation as legal tender. Their green printing earned them the name, "greenbacks." They could be used to pay private debts but not duties or taxes. At that time, Treasury Secretary, Salmon P.Chase called them an "indispenable necessity." Eight years later, as Chief Justice of the Supreme Court, he declared them unconstitutional.

During this time, the Rothchild consortium in Great Britain was consolidating their industrial holdings in the United States through their agent, August Belmont. It has been rumored that Belmont scheduled a meeting with Lincoln. It was then that he offered the president Rothchild money at 27.5 per cent interest. Lincoln exploded, allegedly throwing Belmont out of his office.

According to Griffin, "Lincoln objected to having the government pay interest to banks for money they created out of nothing when the government can create money out of nothing just as easily and not pay interest on it."

Of course, nothing is free. Americans on both sides paid for the war; through the backdoor tax of inflation. Lincoln ignored the fact that the Constitution explicitly forbids what ultimately amounted to "plunder-by-inflation."

A great number of Americans consider Abraham Lincoln our finest president. He certainly was willing to save the union, at any and all costs! The question becomes, "could the entire war have been averted to begin with?"

Evidence is overwhelming that the South was already anticipating paying freedman wages as they looked toward industrialization. There was an argument that immediate emancipation would result in the starvation of thousands of newly freed slaves. This did occur. The vaguely remembered "Corwin Amendment" passed in February 1861, making it illegal for the federal government to seize property of individuals. At no time did Lincoln state that he would free slaves if elected.

Lincoln certainly understood the realities of protectionism. His problem was the proponents were the men who rode him into office! In retrospect it is highly probable that the entire war would have been avoided had the Northern industrialists been more flexible and compromising. A strong case can be made for their "provoking" the South into secession.

An equally strong argument can be asserted that the firing at Fort Sumter was a matter of "defending ones territory," and that the North's invasion of the South was illegal. After all, the Constitution does not prohibit secession. In fact, it was never suggested by any of the framers that the union could be enforced by the use of arms!

From this perspective, reparations paid by the North to the South would be in order.

There is the other question that remains. What if the South had gained independence? Would it have been swallowed up by the France or England and their greedy European banking cartels? Nobody will ever truly know.

The Confederate Constitution called for one, six-year presidential term. It is almost a certainty that Robert E. Lee would have been elected President in 1867.In Stephen Mallory, the Confederacy had a "gem" of a Secretary of the Navy. The South enjoyed strong commonalities with Cuba. The island was rife with turmoil. Spain had earlier considered selling it to the United States in 1857. There would have been overwhelming support in the South for acquisition.

With thousands of miles of shared borders, it would have been easy for the South to have "liberated" the Mexican people from France, then annexing the entire country. We must remember that both Arizona and New Mexico had been claimed by the Confederacy. It should likewise not be forgotten that the "perfect society" theory prevailed in the Southern states. It is believed that many freed slaves would have been "funneled" into Mexico as John Tyler had predicted twenty-five years earlier.

It is also probable that some, if not all of the Midwestern states would have eventually joined the Southern states. By the middle of 1862, it had become clear that they were fighting to enrich banking and railroad interests in the Northeast.

Griffin concludes that there "is no reason to believe that the only way to save the Union was to scrap the Constitution. If fact, if the constitution had been meticulously observed from the very beginning, the Southern minority could never have been legally plundered by the Northern majority and there likely would have been no movement for secession in the first place.

"The result would have been, not only the preservation of the Union without war, but Americans would be enjoying far less government intervention in their daily lives today."