Tag Archives: Money/Economy/Taxes

Local Currencies

The interesting part comes at about 4:50, when Susan Witt corrects the host. The U.S.S.A. requires local currencies to be exchangeable with federal fiat notes so that government may more easily confiscate a share of economic activity.

What excites me is that despite the requirement of backing local currency with federal fiat notes, this is still a step toward freedom.

Local US currency strengthens community “For years now, citizens of Ithaca have been able to solve a growing dilemma: people had needs, time, and skills, but a shortage of dollars, so the Ithaca hours solved this problem. Today, the Ithaca hours have moved from businesses to banks and even the Alternative Federal Credit Union in Ithaca finds ways to incorporate these paper hours. Local currencies gained ground during the Great Depression and then became less popular, but with the economy in a tailspin, local money is once again gaining momentum.” (Read more from inteldaily.com)

Communities print their own currency to keep cash flowing “Workers with dwindling wages are paying for groceries, yoga classes and fuel with Detroit Cheers, Ithaca Hours in New York, Plenty in North Carolina or BerkShares in Massachusetts.” (Read more from usatoday.com)

The PLENTY Relaunch! Tuesday, May 12, 2009, 9-5 (theplenty.org)

What Has Government Done to Our Money?

An excerpt from the book, What Has Government Done to Our Money?, by the great Austrian Economist Murray Rothbard (1926-1995).

“Government imposes price controls largely in order to divert public attention from governmental inflation to the alleged evils of the free market. As we have seen, ‘Gresham’s Law’–that an artificially overvalued money tends to drive an artificially undervalued money out of circulation–is an example of the general consequences of price control. Government places, in effect, a maximum price on one type of money in terms of the other.”

Me: Think of how, when the our government began debasing silver quarters in the 1960s, all the true silver quarters disappeared almost instantly.

“. . . With the name of the country’s currency now prominent in accounting instead its actual weight, contracts began to pledge payment in certain amounts of ‘money.’ Legal tender laws dictated what that ‘money’ could be. When only the original gold or silver was designated ‘legal tender,’ people considered it harmless, but they should have realized that a dangerous precedent had been set for government control of money. If the government sticks to the original money, its legal tender law is superfluous and unnecessary. On the other hand, the government may declare as legal tender a lower-quality currency side-by-side with the original. Thus, the government may decree worn coins as good as new ones in paying off debt, of silver and gold equivalent to each other in the fixed ratio.The legal tender laws then bring Gresham’s Law into being. . . .

Governmental control of money could only become absolute, and its counterfeiting unchallenged, as money-substitutes came into prominence in recent centuries. The advent of paper money and bank deposits, an economic boon when backed fully by gold or silver, provided the open sesame for government’s road to power over money, and thereby over the entire economic system.” (Read more from Mises.org)

Media Coverage of Tea Parties

Protesters / Liberty Lovers:
STOP TAKING OUR MONEY!!! WE WANT FREEDOM!!!

FOX:
They said stop taking their money.* (*for anything except war, empire, bank bailouts, domestic spying, homeland security, welfare, UN, IMF, World Bank, Israel’s occupation, the Federal Reserve . . .)

ABCNNBCBS:
They hate black people, those racist, tea-bagging, wacko red-necks!!!

See Also: Protesters confront bias CNN reporter.

See Also: The so-called Right’s hypocrisy.

Business–Government Collusion

By Eric-Charles Banfield • February 1995

“Back when first cutting my teeth on the concepts of free-market economics, I was impressed by the argument that business firms have to satisfy their customers to survive. Firms have strong, natural disincentives against performing poorly or acting immorally because they would risk losing customers and going out of business. For some time thereafter, I defended ‘business’ on those grounds. Business is not an evil, I argued; indeed, businesses are almost ‘slaves’ to the shifting and elusive passions of the sovereign consumer.

But over the years, I found myself forced to refine my views regarding business firms. Three lessons stand out. First, being ‘pro-business’ is not the same as being ‘free-market.’ Second, regulation, which presumably works ‘against’ business, goes hand-in-hand with special privileges and artificial protections ‘for’ business. Third, the phenomenon of active and routine collusion between business and government made the business world seem less than the pure and benevolent social agent I once perceived. In short, I began to recognize that the concept of ‘the corporate welfare state’ goes a long way to describe some of the problems we observe in the complex nexus between the market sector and the government sector. All too often, businesses lobby government for special privileges they would not have in a true, free market.” (Read more from thefreemanonline.org)

The worst thing that might come from this crises is a loss of faith in free markets because of business-government collusion.

Treasury won’t disclose bank bailout details to congressional monitor

“But ‘without a clearer explanation’ about parts of the program, ‘it is not possible to exercise meaningful oversight over Treasury’s actions,’ said Elizabeth Warren, a Harvard Law School professor who leads a special congressional oversight panel monitoring the TARP program. Her comments came in a Senate Finance Committee hearing on the bailout program.” (Read more from mcclatchydc.com)

Of course government can’t regulate Wall Street. Instead of giving them our money, just let them fail! The best (only) way to regulate Wall Street, is to expose banks to the consequences of their irresponsibility. The irresponsible/incompetent ones go bankrupt. Instead we’ve taken money from the competent and given it to the incompetent.

Missing the Point

Long time readers will know that I am a fan of Bill Moyers, but I humbly disagree with the thesis of this interview with William Black.

I agree that government regulations on Wall Street have been thoroughly, and blatantly scuttled. (Surprise, surprise.) In my humble opinion however, this observation misses the point.

As usual, they speak honestly, but from a certain set of assumption. William Black seems to take for granted that government needs to subsidize bad home loans. Think back to how Presidents Clinton and later Bush W. both bragged about how a record number of American’s “owned” a home.

If government insists on subsidizing bad loans, bailing out incompetent banks, etc., regulation is need. I agree, but that’s a big IF.

In a free market world where banks simply faced the consequences of irresponsibility, there would be self-regulation and investor-led-regulation more stringent than anything government bureaucrats would ever come up with. Irresponsible companies would go bankrupt.

Liberty works, but we need to give it a chance.