Monthly Archives: July 2013
Modern day Keynesians (and Zeitgeist advocates) operate under this very absurd assumption; some proclaim it outright, but others say it indirectly. An direct statement of the above proposition that Money = Debt, and vice versa, goes like this.
Quote from Mr. Keynesian: “Money by its very nature is a claim on society; it is a token of a debt that someone in society owes. Even according to such crazies as Mises and Rothbard, money is proof that you have served your fellow man. If you performed Service A or sold him Commodity B, he pays you in money. Money isn’t good for anything else other than facilitating trade, and since it isn’t good for anything else, it is by its very nature a token of debt; an I.O.U., as it were. As one such insane bastard, Walter Williams, put it; when a man goes to a store to buy an item (let’s say a pound of beef for the sake of argument), the employee of the store asks the costumer, “Have you served your fellow man to the tune of $5” The customer replies back, “Yes, I have served my fellow man to the tune of $5, and here is the proof”, and thus the customer hands the cashier $5 and he receives the commodity. This entire exchange is, ultimately, nothing more than buying/selling debt in exchange for some tangible commodity; the store bought $5 worth of debt in exchange for a pound of beef, and the customer sold $5 worth of debt in exchange for a pound of beef. This is the fundamental reason why debts don’t really matter; money is, by its very nature, debt. Crack-pot Austrians love to talk about ‘real debt’ this, ‘real GDP’ that, but in reality the ‘real debt’ is completely incalculable. If we seriously liquidated all of the ‘toxic debt’ (an oxymoron, since the very foundation of exchange and thus society is debt), we would end up going back to primitive barter!”
This is a direct statement (and exposition) of the proposition that Money = Debt, and vice versa, and while this is an extreme example to be sure, you will find that the same underlying assumptions Mr. Keynesian makes in his above argument are built into virtually every Keynesian exposition of monetary theory.
The first big mistake that he makes is that he totally neglects to talk about how money came to be used. Money is a commodity, just like any other commodity; the only difference is that it is so widely demanded, it is the medium of exchange. There is nothing arcane or mystic about money; it is just that simple. Because money is nothing more than a widely demanded commodity, it can hardly be said to be a “claim on society.” If it were true that money is a claim on society, what does that say for the goods and services that exchange for money? It would be far better (though still very incorrect) to say that the goods and services that exchange for money are themselves claims on society, but a claim on society is by necessity an entitlement. If you are entitled to something, it is yours by law, but no one is entitled to any sort of good or service on the mere basis that he has money. A person with money must first find and convince various individuals to part with their goods and services in exchange for a given amount of money. If they indeed part with these goods and services in exchange for the money, then assuming no sort of coercion took place, they did so because they valued the money they received more than the goods and services they parted with, and not because the person with money was somehow entitled to those goods and services.
The second big mistake that Mr. Keynesian makes is that he makes the assumption that money isn’t good for anything other than facilitating exchange. This mistake rests on a problem that we mentioned earlier; namely, the fact that Mr. Keynesian does not talk about how money came to be used in society to begin with. As I have pointed out before, money is nothing more than a widely demanded commodity, but why is it widely demanded? It is widely demanded because of its prior reputation. Money starts out as merely another commodity in a barter economy, but over time, individuals begin to favor certain goods over others. Why? Because the demand for those goods is higher than other goods, and thus it is easier to trade them off for the various goods and services that an individual in society may want. For example, it is easier to trade gold for lessons in economics than it is to trade dental services for musical lessons.
But, why is money so demanded? How did money (gold for instance) start from being just another commodity in a barter economy and then become a massive medium of exchange? Individual preference; people, for whatever reason, preferred gold to the other commodities available, thus the demand was higher, thus gold became a medium of exchange. You can come up with your own ideas as to the source of the original demand for gold. Like I said; money is not overly complex. It is not some arcane device that’s so intricate that the world’s smartest Ph.Ds and Nobel Laureates have a hard time understanding it.
So why do the world’s smartest Ph.Ds and Nobel Laureates have such a hard time understanding it? Because they make the above mistakes, and they make them in spades.
One of the most popular economic videos on YouTube are the “Peter Schiff was Right” videos. In them, Peter Schiff argued back in 2006-2007 that the economy was about to crash due to the Housing Bubble finally bursting. You will notice in these two videos that the pundits laugh there asses off at him for even thinking such nonsense!
Of course, Peter Schiff was indeed correct, and events folded out as he said that they would. But that hasn’t stopped the anti-Schiff crowd from taking up arms against him on YouTube with a constant bombardment of videos. On YouTube, I count no less than ten different channels all directed at discrediting Peter Schiff and Austrian Economics. One such channel, a user calling himself “Minethis1”, a YouTuber who I’ve sparred off against myself, is claiming victory on his YouTube Channel.
Quote from the channel: “VICTORY! DOW MAKES NEW HIGHS! Silver, Gold Miners Collapse down 65%! LOL!”
He’s claiming victory, these ten people are quite literally the only people claiming any sort of victory, and yet, they continue to pump out anti-Schiff videos when Peter Schiff hasn’t said anything different from what he’s been saying. The Modus Operandi of these channels is rather straight-forward; they typically post 3 – 5 minute video clips of Peter Schiff in various interviews sparring with one of the hosts or another guest, then give it some snarky title like, “Peter Schiff’s idiocy gets destroyed by Person X”. On occasion, they’ll post longer videos of a person doing some sort of economic presentation, but these videos are rare in comparison to the number of 3 – 5 minute interviews with Peter Schiff that get put up, and they too have some snarky title to them.
Part of the actual “worth” of a video on YouTube is in how many views it gets, and not surprisingly, the videos on Minethis1’s channel have hardly no views even though they’ve been up for months. For example, as of this writing, Minethis1’s most popular video has been up for one year, and has 55,032 views. Peter Schiff’s channel, “SchiffReport” on the other hand, has videos that have been up for the same time period (even less actually, some being up for 10, 8, 6 months, etc.) that double/triple the videos that Minethis1’s most popular video has gotten thus far.
In fact, the only reason Minethis1’s video got so many views is because it is Peter Schiff’s predictions for 2012, supposedly proving him wrong, and yet Peter Schiff is more popular than ever. The ten channels that I mentioned earlier have, as of this writing, a grand total of 24,463 subscribers. In other words, 24,463 people are subscribed to all ten channels. Peter Schiff’s channel on the other hand has, as of this writing, 83,224 subscribers; 3.4 times the subscribers as ten different channels all dedicated to slandering and discrediting him, and bear also in mind that this is in light of whatever hits Gold and Silver have taken in the stock market.
Before I leave, however, I would like to mention one thing. These (and other) commentators are treating Gold and other precious metals as if they were like any other stock that you would buy and sell, when in reality they aren’t. If you’re buying Gold or Silver, you’re hedging against the currency, and that is Peter’s entire drive for Gold and Silver. What he is saying is that there will be a massive credit crunch in the future, and that the government isn’t going to let the crunch run it’s course. Instead, they’re going to try to stimulate; flood the banks with more currency in order to loosen credit up again. This will create inflation, and the price of Gold will go up.
This is his entire investment plan, and despite claims to the contrary, it is hardly unreasonable.
The language and tactics of the self-styled progressives of our age never cease to amaze me; it is utterly repulsive, hypocritical, ignorant, emotionally charged reactionist nonsense littered with Marxist diction, and yet it is embraced by so many people… precisely because it is just that.
John Stossel hosted an interview here recently with two guests, and the topic was grit.
He asks, “Whatever happened to grit?” to which both of his guests reply, “Government happened.” But it goes much deeper than simply the government, and I know of no better example of this than the way we are currently handling the whole “Bullycide” nonsense.
Back when it was a major news story, the “Bullycide victims”, i.e., the people who committed suicide because they were getting bullied at school, were considered to be heroes by many. Please forgive me for not sharing in this view, as I consider those who commit suicide due to being bullied worse than the bullies themselves. Only in a society where the goal is to create as many victims as possible is it politically correct or socially acceptable to make martyrs out of people who killed themselves because they were too weak to put a stop to their bully problems.
CartoonNetwork and Disney Channel have both been running anti-bullying campaigns, and they both have the same message; they denounce direct retaliation and then they tell the victims of bullying (or those who know someone is getting bullied) to “tell an adult.”
In other words, “Please save me Mr. Adult, for I am a victim who’s so weak that I am completely unable to help myself out of this current mess that others have placed me in. If you don’t, I will kill myself and put the school, and you, in the news!”
When I was going to school, you either smacked a bully down with words, or with your fists (usually both). Your parents understood the situation you were in and didn’t fault you for decking the asshole who was constantly giving you trouble, but the school was systematically indifferent to who was justified in hitting who (my schools, Quitman County Middle School and Lafeyette County High School, were anyway). They simply suspended both parties from school with the robotic message, “Fighting will not be tolerated.” Of course, they would ask about what caused the fight, but they only asked as a technicality. Once the details were in, both parties were immediately suspended.
From the time a kid enters into school to the time he gets out of school, he is indoctrinated with the message, “You are a victim. You need other people to help you. You cannot take care of yourself. You cannot do anything without our help.”, and it is no coincidence that the people who have been brainwashed the most by this nonsense are the biggest supporters of racist activists such as Jessie Jackson and Al Sharpton.
When I had first heard of the Trayvon Martin case a while back, I did as I always do when I hear of some shooting or stabbing; I shook my head and reflected a bit on the sorry state of our society, that this sort of nonsense occurs constantly. I never attach myself to any of these cases, main reason being that I am not a party to the case in question. It is my adamant opinion that the Trayvon Martin case should’ve never made national headlines; whatever coverage the trial received should’ve been local or state. Why we were blasted with the day-by-day details of the trial in the national media I have yet to figure out, but then again, why were we so fascinated with OJ Simpson, Rodney King, Casey Anthony, etc.?
Such sensational trials do nothing more than crowd the truly important issues out of their appropriate places; the time spent pontificating on the Trayvon Martin case like a pack of raving lunatics is necessarily time that we don’t have to talk about foreign policy, fiscal policy, monetary policy, etc.. I had hoped that eventually the case would drop off of the national radar, but then, I saw it turn into a gigantic racial protest, and I found myself praying, “Please, let this trial hurry up and end so this can of worms can finally be closed.”
But, I should’ve seen that my hope that this sensation would’ve died off after the verdict had been handed down was naïve. Instead, when the NOT GUILTY verdict came down for George Zimmerman, it got worse. The media is having a field day with the news, proclaiming the cause to be racial injustice to anyone who’ll listen. To make the situation even worse, vigilantes are beginning to take the justice they feel Trayvon Martin was deprived of into their own hands, attacking innocent people while screaming, “This is for Trayvon!” Celebrities are even getting into the mix now; celebrities of course who, in their cushy lives, are not parties to the Trayvon Martin and wouldn’t know what justice is if it slapped them in the face. Bill Maher, for instance, had this to say about George Zimmerman getting his gun back, “I say if he gets a gun, Casey Anthony gets a baby.” (The former quotation starts at around 5:00 in the linked video).
I should mention that I am not interested in getting into debates with people over whether or not George Zimmerman is really guilty. In response to the question of whether or not he’s guilty, I will say this; if he is indeed guilty, he will pay for it in the afterlife. I am well aware of the fact that there are many atheists out there who will not accept such an answer and will attempt to say that it’s a cop-out, but quite frankly I don’t care. That is my answer, and I am sticking to it.
But, regardless of whether or not George Zimmerman is guilty, surely this sensation; this vigilante violence and race-stirring is completely unjustified. This does nothing more than drag innocent people into a war that they themselves did not create, and that they themselves do not benefit from, but a war that they will have to fight regardless because pundits and intellectuals are drunk on their power to influence and mold public opinion. They have decided once again to play God with people’s thoughts and emotions; they tell people what to think, how to feel, just to watch their fantasies play out in front of them like a well-rehearsed play. Quite frankly, such power is a sociopath’s wet-dream, and it makes you wonder if these people in the media are actually sane.
There is only one place where you can place the blame for this spectacle of insanity, and that is the media. Everyone in the national media should hang their heads in shame for the absolutely disgraceful manner in which they covered this case, and for the fact that they were so desperate for ratings and for the feeling of playing God with people’s emotions that they covered this case at all.
The media and the public at large have become (superficially) fascinated with defining fascism and labeling people at such. This is especially true of the last seven-eight years. The following are the ten signs that you are, without a doubt, an evil fascist who should be shot (or at least put through electroshock therapy).
1) You don’t blame all of Society’s ills on Wall-Street, Big Oil, Big-Pharma, and McDonald’s.
2) You don’t think that employers should be punished via taxation and regulation for making big profits, and consequently bettering the lives of all in society.
3) You don’t think that workers are being exploited so big corporate fat-cats can fly their lavish corporate jets to the Cayman Islands and skydive into a pool of chocolate pudding with their Golden Parachutes.
4) You don’t look at speculation in the markets as some ungodly act from the depths of Hell that has to be checked by the Heavenly presence of Big Government, Bureaucratic oversight.
5) You hold the inconceivable notion that the environment will survive without the sage-like wisdom of the EPA.
6) You’re silly enough to think that the laws created by our wise bureaucrats don’t actually stop corruption or stop the Wall-Street Bankers from pulling the wool over the public’s eyes. Oh the horror that in the light of the 2008 collapse and the Bernie Madoff scandal that people could believe such as this!
7) You don’t think the beloved, enlightened government can handle such tasks as global warming. Of all the nonsense!
8) You don’t feel the patriotic stirrings within you when you see the American Flag or hear the American Anthem.
9) You dare to accuse the government and the military industrial complex of rampant corruption.
10) You hold the fantasy notion that society can possibly function without government at all… I mean sure, It’s happened before, but not today in our civilized, enlightened world of exploiters, big bankers, Wall-Street, Big Oil, and Wal-Mart!