Author: Redactor

Categories
free trade & free markets insider corruption national politics & policies

The Clipping and Culling Crisis

I just came across a paper on an old bout of hyperinflation — the “Kipper- und Wipperzeit” financial crisis in 17th century Germany — worth studying, considering that today’s smart money is on the radical debasement of today’s already-​undermined dollar.

The Kipper- und Wipperzeit hyperinflation started out as a government program to bilk the people of wealth, but got out of hand. It became a free-for-all. 

Back before credit money and fiat money, governments made special deals with miners and minters and the like, to coin money to spec. Those insiders put less metal into the coins than before, but called the coins the same. Debasement, pure and simple: Theft — fraud, to be exact. 

It helped make a few major fortunes, fund some wars and the like.

But apparently moneylenders caught on, and began “clipping” the coins. Minters employed subcontractors to look for better-​quality coins in circulation, paying for them in clipped coins. Soon everyone was clipping coins, and then culling them (hence the term “Kipper- und Wipperzeit” — “clipping and culling time”) to hoard the highest-​value coins (with the most metal) and pawn off into the general circulation the lowest-​value coins (with the least). Gresham’s Law in action led to spiraling prices and the breakdown of trade.

A great example of calculated, “clever” government policy spilling into the general population, leading first to rampant moral corruption and then ruin.

Something to remember, as clever folks contemplate “monetizing” today’s sovereign debt.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall

Creating a New Crime

California is wild and crazy, fruity and nutty. Not in Hollywood, but in Sacramento.

The state’s enormous prison population — so large that the Feds recently ordered California to release overcrowded prisoners — feeds an otherwise expensive prison system, straining the state’s strapped budget. 

So what did Golden State solons go and do?

They created a new crime.

Almost. Senate Bill 168 has passed both houses of the state’s General Assembly and sits on Governor Jerry Brown’s desk.

The bill would make it “a misdemeanor for a person to pay or to receive money or any other thing of value based on the number of signatures obtained on a state or local initiative, referendum, or recall petition.…”

The penalties are up to a year in jail or a $25,000 fine or both.

What is the compelling reason to criminalize paying people for being productive and gathering more signatures, rather than less?

Fraud. Or so supporters say. 

But instances of fraud on initiative petitions in California have dropped a whopping 78 percent over the last decade. Moreover, there’s no evidence that paying people on the number of signatures they gather induces fraud.

The Sacramento Bee urged Governor Brown to veto SB-​168 and prevent it from “raising the cost of qualifying measures, freezing out less wealthy groups, and making direct democracy more of a captive of well-​heeled interest groups.”

If you live in California, call the Governor’s office at (916) 445‑2841 and respectfully ask him to veto SB 168.

This is Common Sense. I’m Paul Jacob.

Categories
crime and punishment ideological culture

Becoming What You Oppose

A bombing, then a shooting. Norwegians reel from the Oslo and Utoya massacres. The casualty count has hit the nineties.

Early reports mentioned jihadist terrorism, but the malefactor appears to be Norwegian, white, and Christian. “It’s not just that Anders Behring Breivik is not a jihadist,” wrote Jesse Walker at Reason​.com. “It’s that he hails from the wing of the right that defines itself by its opposition to jihad, and to the leftists that it sees as jihad’s enablers.”

Like so many examples of jihad in the Mideast, Breivik’s “anti-​jihad jihad” is as puzzling and self-​defeating as was the anarchist “propaganda by the deed” of just over a century ago, as pointless as it is horrific. 

What’s worth noting is the demonstration of that too-​human propensity to adopt the tactics of one’s enemies. Desperate, hate-​filled zealots of Islam commit horrible crimes, indiscriminately killing innocents. Everyone with a lick of sense opposes such horrible actions (including most Muslims). But some people really worked up about this decide not only that “some have got to pay,” but that terrorism itself is worth emulating.

Human history is filled with such irrational over-​reaction: feuds, vendettas, even wars. 

Norway’s prime minister immediately assured everyone that his government’s reaction will be “more democracy, more openness.” “More democracy” might be vague, but he foreswore naivety, and besides, the sentiment is spot on. We who oppose violence must never resort to matching the criminals’ criminality.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

A “Progressive” Reform

The money’s running out; the government is on a timeline. Something must be done before going into default.

Of course, the Executive Branch could prioritize spending, fiddle with accounts and still pay the interest on the federal debt as well as pay Social Security recipients — to year’s end. But it looks like the Obama Administration is just as committed to brinksmanship as the (heroic!) Tea Party folks who refuse to raise the debt ceiling.

And now the infamous “Gang of Six” re-​emerge with a cockamamie proposal to “solve” the problem, mostly by saying they’ll “cut in the future” but keep mum, for now, what those cuts would be. It’s the typical lily-​livered politician’s move.

The worst of the Gang of Six proposal, as fed-​spending watchdog Dan Mitchell noticed, is that the alleged spending cuts don’t actually cut spending overall, just (get ready for it…) cut spending over planned increases. 

We’ve been hearing this since the Carter era.

Something I haven’t heard from anyone (except my colleagues, of course — nothing from politicians, naturally) is a real cut that could substantially help. 

Since the government is running out of money, cut federal wages across the board.

And make the cuts “progressive.”

How? Take any current federal government salary. Exempt the first (say) $60,000. And then cut the remaining salary level above that by (say) 20 percent. The exemption makes the rate cut in effect progressive. The “rich” would face greater income reductions.

Progressives should like that, no?

This is Common Sense. I’m Paul Jacob.

Categories
media and media people national politics & policies

A Surplus of Slant

The Washington Post Metro section headline seems to tell a story: “Virginia taxes yield $311 million surplus.”

Odd, though: Virginia’s legislators didn’t raise taxes; they cut spending. The article, thankfully, reveals this, reporting that there was “no general tax increase” and “hundreds of millions of dollars in cuts.” 

But if you just read the headline and moved on, you might have been misled. 

Later that day, CNN charges Congresswoman Michele Bachmann with “again” characterizing “a settlement to black farmers as fraud.” No explanation as to why. Then CNN presents John Boyd (or Dr. John Boyd?), president of the National Black Farmers Association.

Boyd denies all talk of fraud. “I just don’t understand why people like Ms. Bachmann … have continued to criticize this settlement,” he explains, before figuring it might be to “divide and conquer America.”

Rep. Bachmann is shown saying 94,000 people were given settlement money even though the census showed only 18,000 black farmers. But CNN avoids that obvious math problem. CNN also neglects the testimony of Jimmy Dismuke, a black farmer who claims the lawyers told potential plaintiffs that “if you had a potted plant, you can be a farmer.”

Then CNN anchor Kyra Phillips asks, “Do you feel that she’s racist?”

Boyd responds, “She’s going to have a hard time proving to America that she’s not racist if she continues to make these kinds of comments.”

Media folks are going to have trouble proving to America that they don’t slant the news.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies

Who Wins With Faith-​based Money?

A fascinating Wall Street Journal profile of one of this age’s pre-​eminent investment advisors, Jim Grant, provides more than the usual “business interest.” Mr. Grant proves to be a very thoughtful man, not given following the Yes Men crowd. 

He notes, for example, how deflation fears have unhinged the minds in charge of the financial sector. “The Fed, in assaulting a phantom deflation, precipitated an actual one.”

And this “inflation/​deflation” problem is only the tip of a very large and scary monetary iceberg. He calls our fiat money system a marvel — “astounding,” in his exact wording — but that’s not necessarily a good thing:

That a currency of no intrinsic value is accepted as money the world over is an achievement that no monetary economist up until not so many decades ago could have imagined. It’ll be 40 years next month that the dollar has been purely faith-​based. I don’t believe for a moment it’s destined to go on much longer. I think the existing monetary arrangements are so precarious, so ill-​founded and so destructive of the economic activity they are supposed to support and nurture, that they will be replaced by something better.

Let’s hope so. 

But why has the system survived so long?

Mr. Grant has an answer: It serves Wall Street and “its supporting ‘interest group’” of “nimble, market-​savvy, plugged-​in folks.”

Exactly: Many of our biggest institutions don’t serve “the people” so much as the select few.

This is Common Sense. I’m Paul Jacob.