Power & Market

Why Aren’t People Working?

08/23/2022Robert Aro

Federal Reserve Governor Michelle W. Bowman gave a speech entitled Working Women in the Pandemic Era, where she talked about the challenges women face in the labor market. The surprising parts occurred when she deviated away from this subject and instead focused on outlining ways in which government intervention can harm the labor market. She begins with her own experiences working as a community banker in Kansas in 2009 when:

At that time, many in the community received benefits from well-intended programs created to provide assistance, which often made it very difficult for small employers to find employees. This was often because, as I learned when trying to hire employees at our local chamber of commerce, the benefit from taking a job was much less than the benefit one could receive from the government at that time while not working. 

Finding that hiring was difficult because when faced with the choice of getting paid by the government not to work, or accepting employment at a paying job, many people choose the former option. She continued:

This is one major similarity between the current experience and the last recession, except that in this episode, the benefits many received were far in excess of what they could earn from working.

The thing about central bankers is that every time they say something agreeable, they have a way of following it up with something which is most definitely not agreeable. Being incentivized to refrain from seeking employment is bad enough, but instead of critiquing market intervention or the effects of increasing money supply, they’ve turned the narrative upside down by considering the government largesse as an increase to personal savings. As explained:

So much so that the benefits provided to a large number of Americans resulted in a significant increase in savings, which is only recently beginning to decline and likely leading many who had not yet decided to re-enter the workforce to find work.

With a national debt at $30.7 trillion and interest rates only recently on the rise, it’s difficult to believe that America has become a nation of savers, or that these higher rates won’t cause a systematic problem soon enough.

This concept of increase in savings is always troublesome, since the cost of living is still on the rise and asset prices remain elevated, so even if people were saving more, given that their money buys less and less each passing day, is anyone really saving?

The article does contain some good takeaways however, such as:

One study conducted before the pandemic found that when both parents work, women spend 50 percent more time on childcare than men.

But in the conclusion, the mystery behind labor force participation returned:

There is no magic wand that will draw workers back into the labor force, especially when generous government benefits programs are provided for those who are capable of working.

The article then looks to investigate the issue further to determine how more people can enter the labor force.

…there are some lessons to draw from experience and research regarding approaches that encourage people to work.

As much as they may not like to admit it, the reality is that when given the opportunity to get paid not to work, many will take it. There are other countless reasons for people to avoid seeking gainful employment, including government shutdowns and the corresponding push to keep people indoors, government spending programs, and the increased cost of living which can further discourage and disenfranchise people from seeking work. Time will tell, but the higher the rate of currency debasement, the more people will become desperate and in turn look for alternative ways to obtain money that may keep them out of the labor metrics. 

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Who Reads the Fed’s Annual Report?

08/12/2022Robert Aro

The Federal Reserve recently released its 2021 Annual Report for Congress. This 200+ page document aims to encapsulate the annual financial and operating affairs of America’s Central Bank. One must wonder, like all bills passed through Congress, how many state representatives actually read these documents and what pertinent information is contained therein?

It begins almost with a disclaimer:

The Federal Reserve was created by an act of Congress on December 23, 1913, to provide the nation with a safer, more flexible, and more stable monetary and financial system. In establishing the Federal Reserve System, the United States was divided geographically into 12 Districts, each with a separately incorporated Reserve Bank.

Having 12 districts is as questionable as the belief that the Fed created a safe, flexible and stable monetary system. Yet, over 100 years after Congress granted the Fed a monopoly on the US dollar, and failure after failure, the Fed is stronger than ever.

There are “five functional areas” the Fed is responsible for, per the bulk of the report. The first: Conducting monetary policy and monitoring economic developments. This section covers common concerns, the dual mandate, inflation, employment, consequences of their easy money policies, of course, without acknowledging their culpability:

Supply chain bottlenecks have plagued the economy for much of the past year. Against a backdrop of robust demand for goods, global distribution networks have been strained…

Unfortunately they fail to attribute the increase in money supply to the “robust demand for goods,” so, it omits crucial economic theory.

The second functional area: Promoting financial system stability. Various vulnerabilities and financial concerns, such as overvalued assets and excessive leverage, are mentioned as being monitored. They also included:

…climate change as an emerging and increasing threat to financial stability in the United States.

Other than reducing regulation and the regulatory burden, consideration as to just how much a central bank can do to fight climate change should be given. Since the Fed’s power largely boils down to its ability to decrease rates and increase the money supply, the positive influence this would have on climate change is questionable.

Supervising and regulating financial institutions and their activities is the third area. This deals with examinations, enforcement and related activities to ensure everyone is abiding by the law. Unless buried in the notes, nothing regarding insider trading at the Fed was noted.

Area four: Fostering payment and settlement system safety and efficiency deals with the mechanics and logistics behind the monetary system. The inevitability of Central Bank Digital Currency (CBDC) can be seen through various projections the Fed is currently working on such as “Project Hamilton,” a collaboration with the Federal Reserve Bank of Boston and MIT to form a:

…multiyear research project to research retail CBDC designs and gain a hands-on understanding of a CBDC’s technical challenges and opportunities.

Last, area five: Promoting consumer protection and community development, also deals with examinations of financial institutions but looks at fairness, inclusion, equality, etc… It handles complaints, of which 5,814 were made in 2021. Of these, 93% are now considered closed. The stats are as follows:

In 44 percent of investigated complaints against Federal Reserve regulated entities, evidence reviewed did not reveal an error or violation. Of the remaining 56 percent of investigated complaints, 12 percent were identified errors that were corrected by the bank; 5 percent were deemed violations of law…

Ultimately, it’s clear this central bank system is designed not for the prosperity of “the People,” but for the prosperity of “the State.” The apparatus is entrenched within society, with a complicated history and deep vested interests at hand, forming the foundation of Wall Street. If the annual report is useful to anyone on Main Street, it’s to serve as a reminder just how little those on Main Street matter to those at the top.


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Will the Fed Bring Back That 70's Show? Stay Tuned

07/27/2022Nicholas Baum

Those who don’t learn from the past, as the old adage goes, are doomed to repeat it. Even in the realm of something as seemingly abstract and technical as economic policy, this saying holds true. Prices are soaring in all areas of consumption, from the grocery store aisle to the pump, with the United States experiencing its highest rate of inflation since 1981.

Yet this, in turn, brings up the question of what caused inflation to be even higher over forty years ago. The reason why inflation was so high back then is the same reason behind why we’re experiencing similar levels of it today. That is, an incredibly loose monetary policy employed by the Fed, often as the result of political pressures from the White House.

As we’ll see, however, history also provides a solution to the problem of inflation, but it will require a sense of bravery and resilience particularly in Fed Chairman Jay Powell in a manner that has not been seen in forty years, under then-Fed Chairman Paul Volcker.

Paul Volcker and The Great Inflation

If today’s inflation seems bad, consider the years between 1965 and 1982, a period when inflation averaged 6.7% a year and became so unbearable that the era became known as “The Great Inflation.” This nearly two-decade long spell of soaring prices was certainly the product of many factors, yet the first and most prominent undoubtedly being an excessively loose, and misguided, monetary policy.

Consider the graph below, taken from the Federal Reserve Economic Database:

The blue line shows percent growth in the money supply while the red line shows the rate of inflation, measured every half-year. Clearly, there’s a general correlation where changes in inflation follow changes in the money supply. The correlation may not be very tight at times, but keep in mind that economists believe that it takes up to six months for inflation to reflect changes in the money supply.

Given this information, it’s clear that the Great Inflation was largely motivated by monetary policy, reflecting both the incompetence and flawed incentives of central banking. Take the beginning of the crisis for example; future Fed Chair Alan Greenspan writes:

In 1964, (President Lyndon B. Johnson) bullied the Federal Reserve into keeping interest rates as low as possible at the same time as delivering a powerful fiscal stimulus by signing tax cuts into law… the combination of tax cuts and low interest rates began to produce inflationary pressure.

Indeed, inflation grew from 4.77 percent annually between 1960 and 1963 to 7.82 percent from 1964 to the end of the decade, yet the outlook only worsened. The large spike in money supply growth starting around 1970 was largely due to President Richard Nixon’s similar tactics of pressuring the Fed into cutting interest rates, especially in the buildup to his re-election in 1972.

The Nixon tapes record several conversations of the President with then-Fed Chair Arthur Burns. These recordings include the President laughing about Burns’ claim that the Fed is independent and exclaiming that “(many elections) have been lost on the issue of unemployment. None has been lost on the issue of inflation.”

Matters were made worse when Nixon readied a series of anonymous leaks about the Fed, including plans to increase White House control over the central bank and even a false story that Burns wanted a pay raise when he actually suggested a pay cut.

Burns caved into this pressure. Interest rates fell from 9 percent at the start of 1970 to 3.8 percent by the first Presidential primary in March 1972, and the money supply grew at an average of 9.7 percent per year. Of course, while Nixon and Burns neglected it, inflation grew from 7.13 percent in 1970 to 10.6 percent in 1973.

As the 1970’s progressed, inflation worsened as it continued to mirror high money supply growth, as the graph confirms, with its height towards the end of the decade reflecting nervous incompetence at the Fed. By 1978, the Fed Chair was G. William Miller, widely regarded to be the worst Fed Chair in history, who barely moved interest rates and allowed money supply growth to continue around 8 percent annually while inflation reached around a staggering 11.5 percent during his tenure.

By the turn of the 1980’s, it had become evident that soaring inflation was both caused and continued by a loose monetary policy, and that something had to have been done to address the situation. Against this backdrop came the revolutionary Fed Chair Paul Volcker, who would provide the ultimate solution to the inflationary problem.

The solution, of course, was rather simple; raise interest rates and decrease the money supply. This piece of Econ 101 logic was certainly known to Volcker’s predecessors at the Fed, but they simply couldn’t go through with it because of sheer political pressure to keep interest rates low.

The previous Fed Chairs, fearing for their jobs and the future of their agency, were essentially forced into neglecting inflation. Soaring prices, of course, is a huge problem to the average voter, but as Nixon reminded Burns, many elections “have been lost on the issue of unemployment. None has been lost on the issue of inflation.”

Volcker resisted, however, and even as President Jimmy Carter publicly criticized his tight policy and President Ronald Raegan’s Chief of Staff James Baker privately pressured Volcker into giving up, the Fed Chair tightened interest rates from 10.94 percent at his arrival in August 1979 to an unprecedented 19 percent by the turn of 1981.

Volcker demonstrated a sense of bravery and commitment never before seen at the Fed, resisting political pressures and nerves to address rampant inflation. Consequently, inflation began its gradual decline, by some estimates reaching healthy levels of around 3 percent by 1983.

Jay Powell and Inflation Today

In the words of famed economist Milton Friedman, “Inflation is always and everywhere a monetary phenomenon.” What the brief history lesson of the US’s last encounter with high inflation shows is that the primary culprit behind soaring prices is the Fed itself, and not necessarily because Fed officials don’t care about inflation or don’t know how to fix it, but because they fear the political repercussions of addressing it.

All it took was one brave Fed Chairman, Paul Volcker, to finally put an end to the dilemma, but since then inflation has obviously reappeared. The Fed’s response to the brief recession triggered by government lockdowns saw the injection of over $4 trillion in additional money into the economy, and an almost 20 percent increase in the money supply in 2020 alone. High levels of inflation have, of course, followed this.

Now, it’s up to Fed Chair Jay Powell to right the wrongs of his leadership two years ago. Although the logic is simple, raising interest rates and choking inflation is no easy task, and Powell will certainly be on the receiving end of pressure both from Biden and Congress.

This makes the present moment all the more critical as the US faces the possibility of an inflation-induced recession. Jay Powell will need to replicate the bravery found in Paul Volcker forty years ago.

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Why Stop at the States? A Republican Form of Secession

07/19/2022James Anthony

American Colony governments were experiments in and innovators in freedom, but state governments haven’t been, and have been even less so in the Progressives’ century-plus since 1894. Here’s a fix for that.

Hyperlocal Secession

Network effects create employment opportunities in metro areas. Within a given area, a person can commute to his job from different kinds of residential areas.

The people who favor the candidates who are the most-constitutionalist that are available have turned out to mostly choose to live in rural areas, exurbs, small suburbs, small urban cores, and large suburbs, and mostly choose to not live in large urban cores.

In more general terms, in every area except in large urban cores the majority of voters currently support the Constitution. Supporting the Constitution essentially means supporting being left alone by governments, by keeping governments constitutionally severely-limited in scope and impact.

The people currently in our governments, though, defy the Constitution, leaving our governments not limited. Majorities of such Progressives are kept in place by the current parties, whose rules and practices strongly favor Progressives.

This impasse would be broken if constitutionalists would separate themselves from the voters currently in the large urban cores and from the representatives currently in the state governments. This could be accomplished by having most of the county representatives in a given state ratify a new county-region constitution that would replace the current state constitution in that new county region.

This would be a surgical approach. Each county’s current legislators would choose whether or not to secede from the state government to institute what would effectively be a new state government of republican form.

A state government of republican form has long been guaranteed by the Constitution to (the residents of) each state and therefore to the residents of each county. But the individual state governments have never delivered on this guarantee, and the national government has never enforced this guarantee.

To deliver on this guarantee, county-region constitutions would need to very-closely follow the archetype given by the Constitution. Having the Constitution as the model would also greatly expedite action.

Choose, Then Observe

Resolutions, ordinances, or laws in support of the Second Amendment have gained political support and passed in 62 percent of counties. County-region constitutions would be a mechanism by which voters could leverage such political popularity to make representatives enact more-comprehensive law that has substantial enforcement power and impact.

To visualize how a county-region secession would play out, consider my state, Missouri. Missouri has a median level of urbanization; it’s the 26th-most-urbanized state. Voters supported Trump over Biden In 97 percent of Missouri counties, with 65 percent of Missouri’s population. These counties include metro St. Louis’s St. Charles County, Jefferson County, Franklin County, Lincoln County, and Warren County, and metro Kansas City’s Clay County, Cass County, and Platte County.

In each of these 97 percent of Missouri counties, voters would likely support breaking through the impasse produced by our Progressive parties and forming a new Constitution-supporting county-region government. (The last county representatives likely to ratify a new county-region constitution might well be those in my own county, St. Charles, in metro St. Louis; large metros’ governments are relatively Progressive.) This would create a sea of freedom.

The only counties and separate city whose voters would likely support remaining in the legacy state government would be metro St. Louis’s St. Louis County and St. Louis City, metro Kansas City’s Jackson County, and college town Columbia’s Boone County. These areas would remain islands of socialism, at first.

Once constitutionalist counties would leave the legacy state government by instituting a new constitutionally-limited county-region government, a genuine experiment would commence. Moves within a metro area are far easier to make than moves from one state to another or moves from one metro area to another. Metro residents would suddenly be able to readily vote with their feet.

Each resident could choose to live either in the new county region or in the legacy state government’s counties. Further, each resident in the legacy-state counties would be able to pressure his state, county, and city governments to limit their scopes or to supply services more efficiently, to compete with the new county region’s considerably-lower taxes and considerably-greater freedom.

This experiment would have not only real teeth and real legs but also real impact. State and local governments together spend about as much as the national government. In the aggregate, this republican form of county-region secession from state governments would quickly restore Constitution-support and constitutional limits to a sizable fraction of our current government. And since this change would make a real alternative available to people in metro areas, this initially-sizable fraction would keep growing. It’s always government people who choose coercion. We the people ourselves always choose freedom.

We have it well within our power to form a more-perfect union. A constitutional optimal path is by seceding from state governments.

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Why Prices Have Gone Up

06/22/2022Robert Aro

Central bank “stimulus” is a nonsensical policy approach which caused prices to surge over the last two years. Look at the charts below:

The Fed’s balance sheet is currently at $8.9 trillion:

Since January 2020 it has increased by nearly $5,000,000,000,000, meaning the central bank created 5 trillion dollars so the world could “buy more stuff.”  The $8.9 trillion balance is not money in the Fed’s bank account; rather, entities such as large banks and financial institutions owe this money to the Fed (i.e., accounts receivable). Typically, the new money raises the prices of stocks, bonds and real estate first.

Also consider M1 and M2, as they are the most commonly used measures of the money supply.

The above is the M1 money supply, currently at $20.6 trillion. Part of the large spike is due to a revision of the definition of M1 occurring in May 2020. However, since then, M1 increased by over $4 trillion dollars, still a large amount.

From January 2020, the M2 money supply increased by over $6 trillion, per below:

Included in these trillions of newly created dollars are various Fed/Government programs, such as the Paycheck Protection Program, which has forgiven over $700 billion of “loans” to business owners. As I wrote in April of 2020, they were literally “paying people not to work.”

There were also several stimulus check programs congress approved that approached $1 trillion.

It cannot be stressed enough, these trillions of dollars were created “out of thin air,” and given to people across the country. A large portion of the money went into the traditional inflationary channels such as big Wall Street firms to inflate asset prices, but several trillions of new dollars also went to pay individuals on Main Street. The money received by individuals could have been spent anywhere: crypto, gold, guns, gambling, drugs, alcohol, eating out at restaurants, clothes, or on Austrian economic books.

The thought of receiving “free money” from the government may initially sound appealing. But eventually the money mirage stops and society discovers these government giveaway programs carry grave consequences such as currency debasement, and therefore, more poverty. Ironic because the stated aim of these policies is to help society; yet the result is the exact opposite.

The COVID monetary relief schemes couldn't have been more poorly timed as large swaths of the economy were shut down in 2020. Imagine the unsurprising result: increasing the money supply (via stimulus checks) increases the cash balance for millions of people, enticing recipients to spend more money. But shutting down the economy decreases the amount of goods available to purchase. In such a world, prices invariably rise.

Removing the closure of the economy from the equation, the problem with central bank stimulus still exists. If the government gives $1,000 to enough people, this new money enters the economy, increasing demand for goods. One of the many factors mainstream economists fail to include in their models are the stages of production. In the real world, production takes time. It is not instantaneous. It also carries a cost. Even if the economy were running “smoothly,” entrepreneurs could not automatically increase the supply of goods to meet the new (monetary induced) demand. To increase production, they’d have to incur more upfront costs, drawing upon savings, credit or obtaining alternative financing methods.

Shutting down the economy while giving stimulus checks only added gasoline to the dumpster fire. Forget about Trump or Biden. The Powell era of central banking must stand as one of the worst, if not the absolute worst, eras of American economic history. Increasing a nation’s money supply to stimulate demand historically impoverishes nations. Yet, that is precisely what they did.

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Wholesale Prices Rise More than 10 Percent, Pointing to Continued Price Hikes

06/14/2022Ryan McMaken
Listen to the Audio Mises Wire version of this article.

The US Bureau of Labor Statistics released new Producer Price Index (PPI) data today, and it’s not good news for consumers.

The PPI is a measure of prices at the production phase of goods and services, and is often an indicator of where consumer prices are headed. Prior to 1978, the index was known as the Wholesale Price Index.

This May, year-over-year PPI growth came in at over 10 percent for the sixth month in a row, reaching 10.8 percent. This was a small drop from April’s year-over-year rate of 10.9 percent, but continues to suggest ongoing upward pressure in prices. The month-over-month change for May was 0.8 percent, which was up from April's month-over-month change of 0.5 percent. Movement remains upward, and from a very elevated base.

Year-over-year changes in the PPI have been over 7 percent for twelve months.


As with the Consumer Price Index, the narrative among optimistic analysists was that PPI measures would moderate significantly in May and signal a downward turn. That does not appear to be the case so far. Indeed, consumer prices showed few signs of moderating in May, as CPI inflation surged near to a forty-one-year high of 8.6 percent. Continued growth in the PPI points toward ongoing growth in consumer prices as well. 

Changes, of course were not uniform, and the AP reports today:

 A 1.4% jump in the prices of goods accounted for nearly two-thirds of the rise in the PPI. Goods prices, which rose 1.3% in April, were driven by soaring costs for energy products.

Wholesale gasoline prices rebounded 8.4% after falling 3.0% in April, making up 40% of the rise in the costs of goods. Jet fuel increased 12% after shooting up 14.8% in April. There were also increases in the cost of residential natural gas, steel mill products and diesel fuel.

Wholesale food prices were unchanged after increasing 1.4% in the prior month as the cost of beef and veal fell 9.5%, offsetting an increase in processed young chickens. Excluding food and energy, goods prices rose 0.7% after increasing 1.1% for two straight months.

These numbers will put further pressure on the Biden administration and the Federal Reserve to "do something" about price inflation. It is unclear what this means for the Fed, however, which has signaled it is reluctant to depart from its ongoing policy of extremely timid moves toward slowly ratcheting up the federal funds rate and selling off Fed assets. Rather, the Fed is increasingly behind the curve. It is truly remarkable to have a CPI inflation rate of 8.6 percent while the federal funds rate sits at 1 percent and the Fed portfolio remains near $9 trillion in assets. 

The Fed will meet this Wednesday, and the consensus is that the Federal Open Market Committee will raise the target rate by 50 basis points. The Wall Street Journal even reported yesterday that there is growing evidence that the FOMC could raise rates by 75 basis points. If this happens, we'll be in uncharted territory, since the Fed will then be raising rates just as the S&P500 (a leading economic index) enters a bear market, and as the yield curve is showing signs of inversion and flashing warning signs for a recession. On the other hand, if the Fed elects to do nothing, it will have no room to maneuver as economic conditions continue to worsen. That is, the Fed routinely cuts the target rate by more than 200 basis points going into recessions, but the Fed will be in negative territory if it cuts even 100 basis points, given the current target rate. One could now easily imagine a scenario in which the Fed raises the target rate by one or two percentage points midyear this year only to cut by the same amount later this year. This would follow the Fed's usual playbook of resorting to easy-money stimulus whenever the economy shows signs of slowing down. The problem the Fed now faces, however, is that price inflation will continue until the Fed truly scales back on its easy-money efforts—which will likely cause a significant downturn. 

There is no easy way out. No matter what the Fed does, the economy will still have to deal with the countless malinvestments and bubbles that have sprung up on the back of easy money over the past decade—and which accelerated in 2020 and 2021. Simply raising the target rate won't make this difficult adjustment go away. We must also acknowledge that the Fed cannot pick the "correct" target rate that will "fix" the economy. The only fix is for the Fed to altogether stop using open market operations to manipulate market interest rates and let the market set prices.

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What the Paleo Rebirth Outside the United States Actually Represents

Javier Milei is leading the polls as a precandidate for the 2023 presidential election in Argentina.

Let that sink in: Javier Milei, a libertarian economist, whose views in the past 10 years have shifted towards Austrian economics and anarcho-capitalism, a social media viral sensation, and for the last year, a congressman in the Argentinian Chamber of Deputies, elected as part of a conservative-libertarian coalition, is leading the polls as a precandidate for next year´s presidential election in his country, meaning he could potentially become its next president.

For anyone in the conservative and the libertarian spheres, both in the United States and overseas, this should be a huge surprise and an even greater cause for joy and hope for our political future.

It means our ideas have been successfully spread, and that their influence has expanded outside of what we could have thought was their natural environment in North America.

A lot of people and of institutions would like to claim Milei’s victory and his growing numbers of popular support in his country, as well as his popularity in other countries in the Latin American region, as a result of their work, their resources, and their lucky bet on a loud intellectual with crazy hair.

But the truth is that Milei’s case is nothing but the result of years and years of work, immense networks of people working to promote different ideas, a local tradition upon which to build a platform, the right opponents in the right circumstances, and of course, the internet.

A few years ago, for people outside the United States, Milei would have been nothing but another foreign right-wing politician, maybe aligned with the neoconservative elites in Washington DC, maybe another case of successful grooming of foreign elites as imperial prefects for the American government in their Latin American provinces.

But Milei is not part of the Argentinian traditional elites. He does not come from the same old families that have been involved in Argentinian politics for decades. He does not belong to the ruling Peronismo (in whatever form or shape it adopts, from left to right to woke), and furthermore, he actually has opposed the socialist Peronistas in government, as well as their ineffective opposition, represented by moderate right-winger Mauricio Macri (with who he has become close recently) for pretty much all of his fairly recent public life.

Milei did not have the chances of many other foreign politicians to study in the United States, and benefit from the funds and networks available to the client elites of America in their allied countries.

He got all his degrees in economics from local Argentinian universities, and yet, the Washington Post has articles about him published by their foreign press correspondents, and for many Argentinians, Milei could be their last political hope for a serious change, as their poverty rate, and their rage, continues to grow under the inflationary and price control policies imposed by the socialist and woke government of Peronista president Alberto Fernandez.

With all things considered, Milei’s success is probably the beginning of the Paleo revival outside of the United States, and for American conservatives and libertarians, this should be a real eye opener of what a good political strategy really meant for both movements back in the day and what it could actually mean today.

The thing about Milei is that he may be an Austrian and an anarcho-capitalist libertarian, but his platform and his main supporters come from all different backgrounds in the Argentinian right, from traditionalist Catholics and Nationalists, such as Juan José Gómez Centurión, a Falkands War veteran and candidate in the 2019 Argentinian presidential elections, who supported him in his 2021 legislative campaign, to anti-woke liberal conservatives, such as Agustin Laje and Nicolás Marquez, a duo of fellow social media influencers, known for their Ben Shapiro-esque pro-life rants against pro-abortion and radical feminist activists.

During all of these years, leading up to the current political moment, in which Milei has approximately 20% of the Argentinian population’s support for his presidential bid, ‘El Peluca’, as he is affectionally known for his uncombed hair, has adopted what could only be considered as Rothbard & Rockwell’s Paleo strategy from the 90s, incorporating right-wing populism into a dual conservative and libertarian platform, openly talking against the ruling Argentinian elites in his appearances in talk shows, and promoting their general despise as part of the same caste, even if they belong to different parties.

Milei’s case rests in contrast with Ecuadorian president Guillermo Lasso, who coincidentally, also comes from a libertarian background, and who only got elected in a population-wide effort to impede former president Rafael Correa’s protégé Andrés Arauz, a Keynesian economist with MMT affinities who actually proposed to de-dolarize the Ecuadorian economy and go back to printing money to be elected, as its election would probably have meant the end of the few market institutions present in Ecuador.

In his first year of government, Lasso’s brand of beltway libertarianism has proven to be ineffective to rule efficiently, given that Ecuador is currently under a national security crisis, represented by constant prison riots and massacres with increasing numbers of casualties, drug-related violence affecting the social structures of the country, and a political crisis, with a minority bench in the National Assembly, and compromise leaders, such as former Legislative President Guadalupe Llori, unseated and under impeachment threats by members of a coalition of parties that include the conservative Social Christian Party (which was kicked out of the coalition that got Lasso elected right after the election) and of course, the remaining majority of Rafael Correa loyalists.

Moreover, some of his most trusted advisors and high-ranking government officials, such as Aparicio Caicedo, a Cato Institute affiliated scholar turned public intellectual, or Bernarda Ordoñez, a known feminist activist, have been harshly criticized in local media for their lack of touch with the actual social and political situation in Ecuador: the first, for his apparent lack of empathy towards the poorer classes, and the second for her insisting promotion of hardly unnecessary progressive agenda, who recently renounced from her office as cabinet-ranking Secretary of Human Rights over her and Guillermo Lasso’s conflicting views over the ongoing national security crisis.

While Lasso has been characterized as a conservative by English speaking media in numerous occasions, especially for his personal pro-life stance in the abortion legalization issue, his policies have proven so far to be neither conservative, with his backing of nationally state-enforced rulings on same-sex marriage and even abortion itself, nor libertarian, with public spending and tax increases, in what many people think are his conflicting economic views, on one hand promoting free markets, and on the other brokering deals for IMF loans.

Lasso also got elected on an explicitly anti-populist platform, painting the Ecuadorian left as invariably populist, in what many other beltway libertarians in Latin America, such as Gloria Alvarez or Axel Kaiser have done in the past.

However, what differentiates Lasso from Milei is that the former, by adopting a mainstream, non-populist, establishment libertarian and right-liberal strategy has alienated himself from his country’s problems and even from his apparent personal political beliefs, whereas the latter, by adopting the culturally conservative aspects of Argentinian society, has got his popularity and his support, as well as the one of libertarian ideas he promotes, skyrocketing, to the surprise and fear of the elites in Argentina and in the United States.

Lasso’s decline is a textbook example of the retreat of beltway libertarians: once you get into power, you forget the ideal of freedom that got you into the fight, but Milei’s success is a reminder of what Lew Rockell said in his manifesto titled The Case for Paleo-Libertarianism:

If the American people continue to connect libertarianism with repellent cultural norms, we will fail. […] Do we want to remain a small and irrelevant social club like the LP? Or do we want to fulfill the promise of liberty and make our movement a mass one again as it was in the 19th-century? Culturally meaningful libertarianism has arrived during the greatest turmoil on the Right since the1940s. Libertarians can and must talk again with the resurgent paleoconservatives. We can even form an alliance with them. […] Together, we have a chance to attain victory.

If Milei gets elected to the Argentinian presidency next year, he will prove one again that right-wing populism was the correct strategy for the Paleo movement from the very start, and if that happens indeed, it will finally mean that Rothbard was right when he wrote in his essay Right-Wing Populism: A Strategy for the Paleo Movement that:

For sensible people and paleo-libertarians, the time has come to re-enter the real world, and to help forge a coalition that will create a successful right-wing populist movement which will, by necessity, be in large part libertarian.

To go over the heads of the media and political elites, to reach the working and middle class directly, to spread the ideas of liberty and the knowledge of how they have been oppressed, requires inspiring and charismatic political leadership. It requires, in addition to intellectual cadre, political leaders who will be knowledgeable, courageous, dynamic, exciting and effective in mobilizing and building a movement.

It requires leadership able to seize the moment to act, leadership with the moxie and the fortitude to surmount the slanders and smears that will inevitably be directed against it.

It requires ideological and political 'entrepreneurs’ in the best sense, leadership that is willing and able to forge a paleo coalition to split off heartland and paleo-conservatives from Official and neo-conservatives, to raise the banner and to build a real-world movement in which, as in the days of the Old Right, libertarians can play a valuable part.

And if paleo-libertarianism can be reborn outside the United States, it means it can be also reborn in the United States as well.

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What to Do with War Criminals, Foreign and Domestic

By now everyone has heard or seen it, the thirty-second video clip having been destined to go viral the moment it happened.

In an understandably rare public speaking event at the George W. Bush Institute at Southern Methodist University, the 43 president made a Freudian slip of almost unimaginable proportions: he admitted to being a war criminal.

The moment came at the end of an extended condemnation of Vladimir Putin, his regime, and his war in Ukraine. It was in his condemnation of the last of these that the younger Bush familiarly stumbled, saying out loud what critics of the Second Iraq War have said all along: criticizing the systemized stealing of elections and repression of critics, Bush indicated his belief that it was this system which had led to “the decision of one man to launch a wholly unjustified and brutal invasion of Iraq.”

Dead silence.

“I mean, of Ukraine,” Bush corrected himself.

He gave a laugh and so did the audience.

Bush continued: “Iraq too…Anyway.”

While some in the hypocritical corporate media were quick to express their own disapprobation and condemnation, this in the name of at a war they had screamed for and called traitors everyone who didn’t support it, the rest quietly observed Bush’s humble willingness, after 20 years, to admit that he had been responsible for the unnecessary and criminal deaths of thousands of American soldiers and hundreds of thousands—if not millions—of Iraqis. Together with his disastrous and unnecessary invasion and occupation of Afghanistan—we now know from Donald Rumsfeld’s own papers that the Taliban regime had offered to surrender Osama and itself within weeks of the initial US special operations beginning—the body count Bush Jr. is responsible for is likely some millions, to say nothing of the tens of millions of refugees.


And that is exactly how it looks.

In a country where the politicians are at least nominally carrying out the will of the people, they get to casually mention they destroyed the Middle East under false pretenses to a response of chuckles and collective ethos of “we don’t really care.”

Because it doesn’t matter to them, the political elites. And frankly, to any objective observer it didn’t and doesn’t seem to matter to the great majority of Americans. The American public would have let the war in Afghanistan go on forever, never mentioning the war in their pre-election priorities, and the corporate media collectively going months without even mentioning it. As for Iraq War Two, all the American public really objected to were the American casualties, though this could be attributable to the fact that the corporate media had obediently conjoined the two under the black and white rubric of the War on Terror—which was always an obvious lie, since Sadaam hated and killed every Islamist and Jihadi he could get his hands on.

This isn’t world leadership, not worthy leadership: it is criminal, and Bush has finally made a public acknowledgement of it. However late, however inadequate, it should do.

The path now is clear: charge and hand him over the International Criminal Court at the Hague. That is where war criminals belong - and if we're being completely honest George W. Bush isn't the only living US president of recent memory who should go. 

Whatever else it might do—from encouraging Russians to throw Putin in the docket, to keeping Xi patient over Taiwan—it would at least begin the process of trying to account for the great stain upon the nation George W. Bush and the Congresses that abetted him perpetrated during their time in office.

Of course, many of those who voted for the war are still in Congress—or like perma-hawk Hillary Clinton went on to be Secretary of State and the Democratic nominee for president.

And while Bush gave the order and so should take the blame, no one believes for a second that it wasn’t the decision of his advisors, especially his vice president, Dick Cheney. The fact that those same advisors suffered no great personal loss for their deceptions and miscalculations, but sit comfortably in think tanks, or appear on nightly television news broadcasts to tell us how to fix the current crop of messes their policies created in the first place, is a continuing reminder of the failure of the American people to fulfill what democracy says is its most basic function: public accountability.

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Will Abortion Rights Lead to Secession in the USA?

05/12/2022Peyton Gouzien

After the leaking of a draft opinion from the Supreme Court on “Dobbs v. Jackson Women’s Health Organization,” it seems clear that the precedent set in Roe v. Wade and upheld by Planned Parenthood v. Casey is being overturned. In the document, confirmed by Chief Justice Roberts, Justice Alito plainly says that the majority opinion is “that Roe and Casey must be overruled,” and that “It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.”. 

So, what does this mean for Abortion “rights”? Despite what liberal pundits' hysteria makes it look like, this does not mean that abortion is now banned in the entire United States. What it does mean is that the decision on whether it is banned is determined by each state’s government. 

Essentially, the power to legislate abortion has been handed from the federal government down to the states in a rare victory for states’ rights. Particularly on an issue that divides Americans more than nearly any other issue. 

Forty-nine percent of Americans identify as Pro-Choice and forty-seven percent as Pro-Life. Overall as well, thirty-two percent support abortion being legal in all cases and nineteen percent support abortion being illegal in all cases. Support or lack of it seems correlated to the region the state is in, as Pro-Life states tend to be in the South or Midwest, while pro-choice heavy states are in the Northeast and West coast. 

Twenty-three states already have laws that would trigger if the decision is made final that either impose restrictions on abortion they could not previously impose or an outright ban of abortion, all in either the South or Midwest. Conversely, sixteen states have laws that protect the “abortion rights” which are all on the Northeast and West coasts. 

The pre-existing divide between more rural, Southern, and Midwestern states and more urban, Northeastern, and West coast states is going to be furthered. The difference in policy, even among states that are generally pro-life or pro-choice, will create a new incentive for people in choosing where they live. One based around a moral issue. 

While what set of morals one wants to live under somewhat exists between the states in the varied cultures between them, abortion being a state issue gives an easy signaling device for them. It is a safe assumption that “what is their abortion policy” is a question people will ask when considering where to move.

This is a continuation of the trend of people moving from state to state concentrating certain states on one ideology and culture that is becoming increasingly opposed to other ones. The obvious question that comes from observing this trend is, “Are we going to see secession from this?”

The answer to that question cannot be definitively answered till something happens, but we can draw parallels to the last time the U.S. saw States secede in the Civil War. Historian Alan Taylor describes the U.S. up to 1850 as “built on an unstable foundation of rival regions and an ambiguous Constitution”. 

There were many conflicts between the states before the Civil War and even full-on rebellions such as the Whiskey or Shay’s Rebellion. The States only continued the trend of division among themselves leading up to the Civil War culturally, economically, and politically. 

Slavery would become the issue that is credited with causing the Civil War, but, while playing a part, was not the only reason, nor does it explain all of the divides between the states. In some states like North Carolina, it was never clear whether the general population even cared about the issue as it was a relatively small slave population state. 

Additionally, several Union states kept slavery throughout the war, even after the emancipation proclamation, till it was outlawed by the 13th amendment. Although slavery was not the sole cause of the Civil War, it did become the issue that served as the face of the divide.

Similar conditions do exist today as leading up to the Civil War if you replace the issue of Slavery with the issue of abortion. States before this decision had already been engaged in legal fights with the federal government over abortion. Not only this, several states have made laws to re-enforce “abortion rights” and provide greater access to it. 

It is clear that before and now after the leak states are dividing along this line and it is coming to the forefront of the differences between them. Though we can see that many other divides exist between the states that are only being exacerbated, such as COVID 19-policies and approach to the economy. 

This provides quite substantial evidence for some kind of situation similar to the Civil War secession or a softer secession such as the USSR. One can only wait, but regardless if such a scenario happens Abortion will be at the forefront of the divide between states for the foreseeable future. 

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We Can Learn from Disney's Private Property Initiatives Even If We Learn the Wrong Lessons from the Company's Politics

05/04/2022Connor Mortell

I recently wrote a piece explaining that there is a libertarian case for taking away Disney’s Florida privileges. However, I am writing this to stress that while strategically that is the appropriate approach, we must not throw out the baby with the bathwater.

Granting Disney these special privileges but not to organizations that may have been more amenable to the ideas of liberty is most certainly one step forward and two steps back, but nonetheless the one step forward does warrant some analysis. During its time with these privileges, Disney served as a valuable case study for the concept of a private city.

Part of Disney’s responsibilities in exchange for self-governance was that it was now responsible for its own security. We as Austrians regularly point to the theories of Rothbard and Hoppe as they pertain to the privatization of security, but Disney has given much more concrete evidence of the possibility.

Disney’s private security has permanent Emergency Operations centers, utilizing the same system as law enforcement agencies, and extensive two-way radio systems with more than 1,200 “cast members” employed in security operations. Disney achieves this almost invisibly as the security members are trained to blend in and seem as if they have appeared out of nowhere when they are needed.

Additionally, Disney achieves this at a lower cost than government security. The average police officer is paid between $27 and $32 per hour. Meanwhile, at Disney, the average security guard is paid between $11 and $17 an hour. 

However, as Austrians we can recognize that that’s probably much more indicative of the natural price discovered through exchange. And despite paying so much less, Disney maintains equivalent security - if not better security - than just about anywhere else in the world.

Its security team additionally benefits from the fact that Disney has the strictest borders in the country - private borders. This fits exactly in line with what Hoppe has described of private cities:

No one is against immigration and immigrants per se. But immigration must be by invitation only.

And Hoppe goes on to say:

In a fully privatized libertarian order, there exists no such thing as a right to free immigration. Private property implies borders and the owner’s right to exclude at will.

This is exactly the position in which we find Disney. Disney’s borders had little to no discrimination. All that is required to receive the invitation that Hoppe insisted private borders is a payment of a little over one hundred dollars. With it came not only admission through the border but access to all the amenities their private city had to offer.

But from a security standpoint, Disney was able to screen every single resident (employee) and visitor of its private city. In their screening they even retrieve fingerprints, names, and contact information. This also allowed for more peaceful security at Disney because rather than having to resort to violence like a government security officer would, Disney security has the ability to simply remove from the premises those who had breached their rules.

For the sake of brevity, we cannot analyze every single benefit of the private city that is Disney World, but it is worth noting that it was not even close to limited to the benefits of private security enhanced by private borders. Disney’s famous Monorail served as just one of their private city’s answers to public transportation.

Disney has been responsible for its own sanitation and is - while not perfect - indisputably cleaner than any city of its size. Disney has its own fire department that has been exceedingly successful. Disney’s hurricane preparedness programs have led to it being named a StormReady® community. All this coupled with dozens of other examples that made Disney’s private community either competitive with or significantly better than any government run city.

Again, I stress that Florida was right to take away these privileges as they only catered to those who were enemies of further privatization and thus likely to detract from these benefits spreading. As a result, these benefits are not helpful in the long term when they are only allocated to organizations like Disney. However, I reiterate that we must not throw the baby out with the bath water as it is so important that we learn from and use the invaluable case study that is Disney and its private city.

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