The Enforcement Arm of the Robber State

Tie him to the Whipping Post: Mendocino County Sheriff Tom Allman apparently sees nothing amiss in sending his thugs to steal the life savings of a seriously ill, law-abiding elderly couple.


As the economy collapses, credit lines become constricted, and tax revenues are choked off, we can expect local representatives of the parasite class (commonly called "government") to become perversely creative in finding new ways to extract money from productive people. For parasites looking to feast on the wealth of others, the liberty-devouring fraud called the War on Drugs offers a particularly rich menu of possibilities.



As we've discussed before, Police and Sheriff's departments in many jurisdictions are robbing people blind in the name of civil asset forfeiture, an officially sanctioned form of robbery in which cash or property is deemed "guilty" of involvement in narcotics trafficking.


It's not necessary to prove that a crime has been committed, or even to arrest or charge an individual with a criminal offense. All that is required is for an officer to assert some "nexus" between the coveted money or property, and then a civil procedure begins in which the onus is placed on the victim to prove that both he and his property are innocent.



Law enforcement bodies across the nation are engorging themselves on the corrupt proceeds of such plunder. Tom Allman, Sheriff of California's Mendocino County, recently advanced this depraved science by devising a way to seize both property and the money belonging to people who have explicit government permission to cultivate and use marijuana for medical purposes.



Allman, it must first be understood, insists that even though "a marijuana plant that's legal looks just like a marijuana plant that's illegal," his Sheriff's Department carefully discriminates between the legal cultivation of medical marijuana, and that grown for illicit "commercial" use. He also claims that "I have friends who benefit from medical marijuana."


Allman also takes offense when his department is accused of exceeding its mandate by seizing medical marijuana. "The Sheriff's Office focuses its eradication efforts on commercial marijuana operations," Allman insisted in an essay-length letter published in the October 10 Ukiah Daily Journal. "We do not target legitimate medical marijuana patients or their caregivers."


In fact, Sheriff Allman continued, his department actually protected legitimate medical marijuana crops from violent criminals who would poach them and sell them illegally: "Recently our office arrested eight Sacramento area young people who drove to Mendocino County for the sole purpose of stealing marijuana. All eight were arrested within an hour of the crime. Investigation into a series of violent marijuana robberies on the Coast has resulted in the arrest of more out-of-county criminals."


"The citizens of Mendocino County can be proud of the work our detectives put into these cases," concluded Allman in the kind of self-congratulatory plug that's de rigueur in official communiques from the governing class.


To be fair, the September 19 marijuana robbery was a serious property crime, in which six large plants -- each of which was valued at $3,000 -- were stolen at gun point from 57-year-old Laytonville resident Richard Weaver, who cultivated them for medical use. This was an example of that rarest and most unexpected of things, a government agency actually acting in defense of an individual's person and property.


However, Allman's heroic deputies didn't bestir themselves to solve an even more egregious armed robbery involving medical marijuana that took place in Philo the following Wednesday. That crime involved the seizure of 17 marijuana plants and over $80,000 in cash. As was the case with the Laytonville heist, the victims of the second crime had legally cultivated their plants for their personal medical needs.


Where Mr. Weaver was a sick man on the wrong side of 50 confronted by eight armed, college-age men, the victims in Philo were Lester and Mary Smith, both of whom are in their ninth decade and suffer from a variety of afflictions, from severe arthritis to heart disease.


Mary is confined to a wheelchair, and Lester, a World War II veteran, is immobilized by two bad hips and suffers from frequent chest pains that make it nearly impossible to breathe. The pitiless thugs who attacked the Smiths on September 24 not only took away their indispensable pain medication -- for which they had obtained the appropriate prescription, and the necessary growing permit -- but stole their life savings as well.


It's difficult to conceive of a personality so utterly surrendered to criminal appetites that it would commit such an act. Since Sheriff Allman is so eager to throw laurels at the feet of his intrepid detectives, one might expect him to deploy them in pursuit of the fiends who assaulted Lester and Mary Smith.


"Let every brush be beaten; let every stone be capsized; let no clue elude your vigilant gaze," one imagines Sheriff Allman commanding his eager detectives, assuming that he favors the over-ripe diction typical of a hero from a 19th Century Penny Dreadful serial. "Darken not the door of this Sheriff's Office again until you hold, within the unyielding grasp of incarnate Justice, those responsible for reducing this venerable couple to their present undeserved state of penury!"


One would expect Sheriff Allman to issue a command of that sort to his detectives, albeit in less florid language. One would be wrong. You see, the perpetrators who robbed the Smiths at gunpoint were Allman's deputies, so having the detectives build a case about them would pose some interesting problems in workplace etiquette.


"Four of these guys [the deputies] came in here, big as barnyard bulls, hollering real loud, accusing us of growing marijuana to sell," Lester Smith told Pro Libertate in a telephone interview. "They do everything they can to scare you and get you frustrated." Smith lives near three grandchildren who rent properties from him. One of them is his 31-year-old granddaughter Yolanda, who was the victim of a lengthy, abusive harangue by one of the heroic deputies.


"The trailer is nearby, and I could hear him yelling at her," Lester recounts. "He kept screaming at her, `Your grandpa gives you pot to sell for money!' and she kept telling him that I don't. This went on for a long time, and he eventually made her cry and even throw up. She told me that she was convinced that if she just told him what he wanted to hear, he'd leave her alone, so she eventually said `yes.' But I never did anything of the kind; we have a prescription, my daughter got the permit, and we grow marijuana here only to use as medicine."


The only "legal" justification for seizing anything from the Smiths would necessarily involve some kind of criminal charges. Yet neither Smith nor his wife, nor any of their children or in-laws, has been charged with a crime. So even by the terms of what Sheriff Allman calls the "law," this incident is nothing more than felonious armed robbery, carried out under the color of supposed authority.


Not long ago, Mary Smith received a $52,000 inheritance. And roughly a year ago Lester started to withdraw money from his bank accounts in anticipation of the economic catastrophe now in full flower. When Congress passed the Plutocrat Bailout and Economic Dictatorship Act two weeks ago, Lester cashed in his CDs. When the Sheriff's deputies arrived to conduct their little robbery, the Smiths had $81,000 in the family safe, and then tore up another $51,000 in medicinal marijuana plants.










Casing out fresh victims? Officers from the Mendocino County Sheriff's Department prowl the rural highways of beautiful northern California.

This is a total haul of $132,000, which is pretty impressive for just a couple hours' worth of government "work." Lester and Mary have to wait until next March 3 to begin the long, painful, and expensive process of trying to recover the money Allman's department stole from them.


Both of them are approaching ninety years of age and in very poor health, which makes it exceptionally unlikely that they will ever get their money back. This suggests the thugs who robbed them must have cased out their target very carefully. It wouldn't suprise me to learn that they got a heads-up from a spitzel at the local bank. (When I suggested this possibility to Lester, he dismissed it right away.)


Interestingly, Allman and his homiez at the DA's office didn't attach the Smith's minuscule checking account, which they could have done had they really believed that the elderly couple were "drug peddlers." But with their savings now being used to keep the Sheriff's Department supplied with donuts, Lester and Mary now have nothing but their Social Security checks and the $600 he gets from renting properties to his three grandchildren.


The Smiths are a couple who had saved nearly everything they earned that wasn't spent on necessities. They are children of the Great Depression, who were making preparations to deal with the Greater Depression (Lester indicated to me that he was planning on buying gold).


Stricken with years and left helpless by disease, they were an easy target for a predatory law "enforcement" agency. This kind of thing is going to become very commonplace.


Sheriff Allman, you'll recall, admits that he can't tell the difference between a "legal" marijuana plant and an "illegal" one. Clear-headed people will have exactly the same problem in trying to find a moral distinction separating the gang of private sector thugs who robbed Richard Weaver, and the government-authorized gang that terrorized and robbed Lester and Mary Smith.


The gang that attacked Weaver behaved very much like a police unit: They gathered intelligence about Mendocino County's legal marijuana gardens, coordinated their movements via radio, and carried firearms to compel their victims to submit. As far as I can tell, the only substantive differences between these two robberies were, first, that the crooks who robbed Weaver had a much smaller take, and second, their heist was unsuccessful, because it was foiled by the intervention of a much larger, better equipped, and more ruthless gang.















Sheriff Bubba's new toy: Georgia's Cobb County Police Department recently paid $45,000 -- anybody wanna bet that the funds came from an asset forfeiture fund? -- to refurbish this $500,000 "Peacekeeper" light armor vehicle, which was donated -- anybody wanna bet through the Pentagon's LESO program? -- to the department.


Once again, we're driven to contemplate the wisdom of Albert Jay Nock from his magisterial book, Our Enemy, The State:


"Everyone knows that the State claims and exercises [a] monopoly of crime ... and that it makes this monopoly as strict as it can. It forbids private murder, but itself organizes murder on a colossal scale. It punishes private theft, but itself lays unscrupulous hands on anything it wants, whether the property of citizen or of alien.... Of all the crimes that are committed for gain or revenge, there is not one that we have not seen it commit – murder, mayhem, arson, robbery, fraud, criminal collusion and connivance."


In ways too numerous to chronicle (I'm doing my best, and falling behind badly), the local police in our country are rapidly becoming the most serious criminal threat we face. This is because common crooks, when repelled, will retreat and seek other victims, but criminals in State-issued costumes will summon sufficient force to visit exemplary violence upon those who resist.


This is not an argument against righteous resistance, but rather a sober tactical assessment of the enforcement arm of an Enemy that has dropped any pretense of acting on behalf of the public good.


A personal note....

Recently, in reply to a very kind inquiry about Korrin's health and our family's circumstances, I described at length some of the challenges we have recently experienced.

In response I've received an enormous outpouring of kindness from many of you who take the time to read what I publish in this space.

I earnestly wish there were words adequate to convey my gratitude for your concern, your prayers, and also the many acts of generosity that have been made toward me and our family. Thank you, all of you, very much.




More timely than ever, and it's available now.











Dum spiro, pugno!

Slouching Toward Bedlam

The global financial storm encircles remote, beautiful Iceland.


If one favors poetry over precision, Iceland could be described as a frozen island sitting atop a huge volcano. Its economy in recent years was similarly poised for a meltdown, and the inhabitants of that remote but beautiful land were too busy enjoying the transitory pleasures of soap-bubble "prosperity" to pay attention.


Now that their banking system has collapsed and their imports have been cut off, Icelanders are too busy emptying supermarket shelves to ponder the disastrous errors that led to their national disaster.


Embodiment of a hearty people: Iceland's Jon-Pall Sigmarsson (1961-1993) was a four-time World's Strongest Man. He died in the gym attempting to dead-lift the equivalent of a small continent. There are worse ways for a man to go.

Iceland was settled by Norwegian explorers in the ninth Christian Century, and for most of its history the country's economy was wedded to fishing, a cyclical market that taught the nation's inhabitants to value strength, perseverance, thrift, and relatively modest living.


Other migrations brought Danes, Irish, Scots and Swedes to Iceland. A vigorous and attractive people flourished in splendid isolation. And it's no surprise that Iceland, in recent years, distinguished itself by producing some of the strongest men and most beautiful women known to humanity.


Like too many other countries, however, Iceland fell prey to the peddlers of debt-based financial "products" whose terms were impenetrably abstruse and whose connections to actual productivity were distant and dubious. The tiny nation's banking system became deeply involved in repackaging international investment instruments, and with its minuscule population (roughly 300,000), Iceland vaulted to fifth place on the list of the world's wealthiest nations as measured by per-capita GDP.

Northern Colossus: The wonderfully named
Magnus ver Magnusson, another four-time
World's Strongest Man from Iceland,
seen here in a typical event.

The illusion of prosperity was dispelled a little more than a week ago, when Iceland's entire financial system imploded. For months ahead of that cataclysm, Icelanders, under the pressure of economic necessity, had begun to rediscover the virtue of frugality. But their economy had already passed the Event Horizon.



When skittish British depositors began pulling their funds from Icesave, an on-line affiliate of Iceland's Landskanki, Reykjavik responded by imposing what amounted to a limited bank holiday. This prompted the British government to employ a "counter-terrorism" law to freeze Icelandic deposits in British banks.



So we were treated to the fascinating spectacle of one NATO ally treating another as a terrorism-sponsoring "rogue nation." This picture became a touch surrealistic when Iceland's government, having nationalized the banking system and desperate to prevent a permanent system-wide collapse, turned to Moscow for a multi-billion-euro emerency loan.



Three years ago, Iceland was ranked second (after its Mother Country, Norway) on the UN's Human Development Index. Now, its currency is dead, its banking system is in hospice care, and its government -- in a role familiar to juntas ruling many indigent societies so charmingly referred to as "developing" nations -- is playing the mendicant at the International Monetary Fund, pleading for an international bailout. It is the first "developed" nation to request such help since pre-Thatcher Britain did so in 1976.



Irony is plentiful in the story of Iceland's descent from Nordic economic titan to bankrupt international panhandler. But Americans aren't entitled to so much as a second of smugness, given that we're following exactly the same trajectory.



American tables are not as dependent as Iceland's on imported food. But for the past several years, we have imported more food than we have produced. And now that short-term commercial credit has frozen, getting imported food to supermarkets and other retail outlets has suddenly become much more difficult. The effects of this development are yet to be felt, but they will be manifest in due time.


Icelanders are denuding supermarket shelves of basic household needs, from fresh produce to canned items to light bulbs. This is as close as that island's small, tranquil, and relatively homogenous population comes to an outright riot.



When Americans face the same circumstances -- and we will -- we can expect to see localized eruptions of Bedlamite violence that will make the 1992 L.A. Riots look like a series of mild high school pranks.



I'm cynical enough to think that our rulers, who eagerly seize power under the pretext of crises,
are counting on an upheaval of this kind in order to propel us into the "New Bretton Woods" global financial system now being openly discussed.


Evil designs: John Maynard Keynes (left) confers with Harry Dexter White at the 1944 Bretton Woods Conference.


Eventually this would be an updated and fully realized version of the Bretton Woods system as originally envisioned by the detestable John Maynard Keynes and his comrades, which would be built around a world central bank and a world fiat currency (Keynes suggested that it be called the "bancor"; Keynes' comrade Harry Dexter White wanted to call it the "unita").



This was seen as a bit too ambitious in 1944. In 2009, this proposal may be embraced by many as the only alternative to the complete collapse of the world economy. And the political class both here and abroad is doing its part by enacting policies that are certain to fail.


There is already a de facto global financial system in operation, as the United States and the governments of the various European Union states implement exactly the same policies on both sides of the Atlantic: Socialize the bad banking assets, and nationalize any good ones that remain. This amounts to a global race in which the finish line is economic oblivion. The U.S. may not be the nation that breaks the tape, but we'll ge there eventually.


The Triumvirs assemble: While the Bushling (off-camera) recites his scripted lines, Henry Paulson works on his Mussolini impression and Bernanke channels Lenin.


Yesterday, Commissar Paulson, head of the Directorate for Protection of Plutocratic Assets, summoned the CEOs of nine "healthy" banks to announce that the Regime is taking a controlling interest in each of them. Eventually, the Regime will take control of thousands of smaller banks and financial institutions.


As Megan McArdle of The Atlantic observes, the Regime is first recapitalizing the big, "healthier" institutions, rather than the sicklier ones, in order to defer, for as long as possible, public disclosure of the condition of the banking system: "In this case, the government is specifically fighting to keep the market from getting information about whose balance sheets are shakiest [and] ... recapitalizing only the weak ones would send a message about their balance sheets that might trigger the run he is trying to prevent."


This morning (October 14), the withered little simian in the White House, who has a little less than 100 days left to ruin whatever still works in this country, emerged from his lair, squinted the eyes from which the light of intelligence has never shone, rummaged around in the cranium in which wisdom has never dwelt, and then spoke another of the lies that come so easily to his sneering lips:


"The government's role will be limited and temporary. These measures are not intended to take over the free market but to preserve it."


Bush was flanked by the other two members of the Regime's de facto ruling Triumvirate, Commissar Paulson and Commissar for Currency Destruction Bernanke.


Paulson struck an authentically Stalinist note when he declared: "The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it." Down with "hoarders," those self-fixated wreckers who react to an economic downturn by intelligently choosing thrift over profligacy! Who ever heard of a bank saving money, rather than pissing it away in bad loans to government-favored recipients?


But here's the point: Now that the banks are receiving "capital" from the government, and under government control, they will operate on the basis of political priorities, rather than the needs of the market and the interests of their shareholders.


Bernanke, who really deserves to be beaten savagely with the nearest available object (especially if that object is either Paulson or Bush), announced, in effect, that the "temporary" measures described by Bush will be in place in perpetuity: "We will not stand down until we have achieved our goals of repairing and reforming our financial system and thereby restoring prosperity to our economy."


Given that the course being pursued will result in the destruction of our currency, what Bernanke was really saying is that the Triumvirate will not "stand down" until it has finished destroying our economy, or until the new global banking system is in operation, or both.


For as long as they can get away with it, everyone who benefits from this deception will play along. With the dutiful but palpably doomed earnestness generally displayed by adherents of a suicide cult they will assure themselves, and the rest of us, that we really can magically heal mortally crippled financial institutions through the laying-on of authoritarian hands.



Last Friday, reacting in shock as markets around the world were in free-fall, one London trader exclaimed, "It's like someone cancelled gravity."



Actually what we saw last week, and will see in the future, is the equivalent of gravity pitilessly asserting itself.


Massive liquidation of some kind simply has to occur. It should take the form of vast, painful settlement of bad debts and the shuttering of terminally stricken financial enterprises. Instead, we're going to see the annihilation of the fiat dollar and the liquidation of the American middle class.












Get it, read it, and get ready.












Dum spiro, pugno!

...Its Hour Come Round At Last... (Important Update)

**

"When Black Friday comes

I'll stand down by the door

And catch the grey men when they

Dive from the fourteenth floor

When Black Friday comes

I'll collect everything I'm owed

And before my friends find out

I'll be on the road

When Black Friday falls you know it's got to be

Don't let it fall on me."



A little more than a week ago, emissaries from the Power Elite fanned out on Capitol Hill to bribe, brow-beat, and threaten congressmen into passing the Economic Dictatorship Enabling Act.


The Boot: Headquarters of the Bank of International Settlements in Basel, Switzerland.


We were told that the last argument they deployed to break down the resistance of recalcitrant representatives took the form of a terrorist's ultimatum: Either give us what we want, or economic misery and armed violence will ensue, in the form of a global market meltdown and troops on the streets of American cities.



I suspect that the truth is even more sinister than what we were told, that the actual threat took the form of the rapist's instructions to his victim: "It's going to happen anyway, so you might as well stop resisting and get it over with."


The basis for that suspicion is found in the fact that passage of the "rescue" package that would supposedly obviate a market meltdown was followed immediately by the most dramatic market plunge in history, eclipsing even the worst decline that took place during the Great Depression. So we managed to get both the creation of an economic dictatorship and a fully realized market collapse.


It is entirely likely that we will likewise see overt martial law measures put in place in the near future, as well.



If, as some very capable analysts anticipate, the short-term commercial credit system were to seize up, one immediate result would be shortages at grocery stores and gas stations. [See the Update below; this process is already underway.]



Our just-in-time commercial supply system runs on just-in-time financing, after all. And most American households, which are operated on a paycheck-to-paycheck basis, are woefully unprepared to deal with the shortages and dislocations that would result if store shelves were suddenly denuded, and gas station fuel tanks went dry.



If, as we have reason to fear, municipal and state governments start to default on their debts, then the teeming hordes of public employees may be left without their share of official plunder. We're being advised that crime rates among the, ahem, common people tend to soar during times of severe economic hardship.



What would be the result were widespread unemployment suddenly to hit the huge and ever-growing population of tax-feeders -- who are often people with an exceptionally well-developed sense of entitlement, and accustomed to a living based on coercive extraction, rather than mutually beneficial free commerce? To what extent would their hardships translate into an upsurge in (private) crime? We don't know; we've never confronted this problem before.



With the cognoscenti of the G-7 and IMF now meeting in Washington, there is open discussion of a possible global "market holiday" in order to retro-fit a new rule set into the global financial markets.



The rules for the "new Bretton Woods," according to the G-7's latest communique -- a document that manages to wed brevity and opacity in such a way as to communicate nearly nothing of value, a remarkable bureaucratic accomplishment -- will be based on the recommendations of the Financial Stabilization Forum (FSF), an obscure group whose secretariat has its headquarters at the Bank of International Settlements in Basel, Switzerland.



That boot-shaped edifice was seemingly designed to reflect Orwell's description of the totalitarian future -- a "boot stamping on a human face, forever."


The chief author of the guidelines for what Commissar for Plutocratic Redistribution Henry Paulson calls the "international regulatory response" to the global market convulsions is an all-but-unknown Italian banker by the name of Mario Draghi, Chairman of the FSF. The G-7, according to Paulson, is "committed to tackling the next steps laid out by Chairman Draghi to be done by the end of this year...."



Surely -- you're thinking -- this enigmatic Mr. Draghi is the epitome of independence and sober objectivity! Surely, he is untainted by conflicts of interest that might detract from his ability to devise a wise and equitable regulatory scheme!



Surely, you jest.



Mr. Draghi's brief but informative vita, circa 2004, proudly notes that he "joined Goldman Sachs as a partner in January 2002 and is Vice Chairman and Managing Director."



That's the same Goldman Sachs once headed by Chief Commissar Paulson, of course. It's the same outfit to which Paulson directed a huge portion of the $85 billion lent to AIG so that their top echelon management could continue their lives of exemplary asceticism and self-denial. It's the same talent pool from which Paulson selected the new Sub-commissar for financial stability, 35-year-old former Goldman Sachs executive Neel Kashkari. And it's the same entity in which Herr Paulson continues to have extensive investments, as well.


At the hub: Mario Draghi, Chairman of the Financial Stabilization Forum at the Bank of International Settlements.


But what's going on right now is not just a hugely amplified version of the same State-enabled crony capitalism that precipitated the present crisis.


Yes, the Nomenklatura is taking care of its own, and using unimaginably huge amounts of plundered wealth to do so.


But the real story here is the creation, under the pressure of an unprecedented financial crisis, of a global apparatus of wealth redistribution larger and more powerful than anything ever conceived by Lenin's diseased brain.


As Ambrose Evans-Pritchard of the London Telegraph points out, Washington "has taken over the entire credit system ... surpassing Roosevelt's New Deal. The US has guaranteed the $3.5 trillion money market funds. It has nationalized the $5.3 trillion pillars of the mortgage market, Fannie and Freddie. The Fed is accepting any junk as collateral at its lending window. This week it went the whole hog after panic hit the $1.6 trillion market for commercial paper. It is now offering loans without any security at all."



"The US government has become a bank," concludes Evans-Pritchard. "Yes, this is US socialism. What is the alternative?"



The alternative, of course, would be for our economy to absorb the terrifying shocks made inevitable by decades of government-abetted fraud, and then proceed in exactly the opposite direction from the one we're headed.














(K)neel before Goldman Sachs, peasants! Newly appointed sub-commissar for "economic stability" Neel Kashkari (left),who should not to be confused with either the evil Raza from the Summer blockbuster Iron Man (below, left), or the endearingly self-enraptured Sam the Eagle from The Muppet Show.



This would mean radical reductions in government spending -- beginning with an immediate end to the wars in Iraq and Afghanistan. That one policy change alone could still conceivably save our economy.



Evans-Pritchard and other communicants in the Church of Keynes insist that the only way to deal with the global depression into which we are sinking is to emulate the behavior of FDR during the period to which history will someday refer as the "Lesser Depression." In fact, we could do worse than to adopt some elements of the neglected 1932 Democratic Party Platform.



That document, in some ways, actually criticized the Hoover Administration from the right. It called for "a federal budget annually balanced on the basis of accurate executive estimates within revenues" (although the engine of revenue was to remain the Marxist abomination called the progressive income tax).



The Democrats called for restoration of "a sound currency," preferably to be backed by silver; the "removal of of government from all fields of private enterprise except where necessary to develop public works and natural resources in the common interest," thereby at once invoking a sound principle and nullifying it through proposed action.



The platform also repudiated foreign aid in principle by opposing cancellation of foreign debts to Washington, and foreswore an interventionist foreign policy by pledging to pursue "peace with all the world" and "no interference in the internal affairs of other nations...."



Granted, the platform was burdened with a generous amount of left-populist nonsense, and was entirely disregarded by FDR once he had used it to climb to power. But it attests to the fact that in 1932, amid near-universal economic ruin and inescapable despair, there was still widespread understanding of the fact that recovery would require radical reduction in the size, expense, and intrusivess of government, and eschewing foreign adventurism. FDR and his cabal, having marketed themselves to the electorate on those terms, proceeded in exactly the opposite direction, thereby exacerbating and prolonging the Depression.



The Standard Narrative of the Great Depression, as Dr. Robert Higgs of the Independent Institute points out, is based on three phases: The Great Decline of 1929-1933; the "Great Duration" until the outbreak of World War II; and the "Great Escape" as productivity and prosperity supposedly returned by way of the definitive government enterprise, war.



As Higgs reminds us, it was the end of the New Deal and the abolition of the war economy that lifted our economy out of the depression. "The year 1946, when civilian output increased by about 30 percent, was the most glorious single year in the entire history of the U.S. economy," Higgs writes. "By 1948, real output was back on its long-run growth trend, and during the decades that followed, the economy was spared the sort of deep and long debacle that a congeries of wrongheaded government policies had caused during the 1930s."




That blessed interval came to an end in August 1971, when Richard "We Are All Keynesians Now" Nixon de-coupled the dollar completely from the gold standard, in tacit acknowledgment that waging war in Asia while building a domestic welfare state had rendered Washington bankrupt. Thanks to the petro-dollar entente with Saudi Arabia, which preserved the dollar's status as the world's reserve currency, we've been able to avoid the consequences of national bankruptcy.



Until now.



As the song says, when Black Friday comes, "you know it's got to be." There has to be a Day of Reckoning. It can be deferred, but not forever. Herr Paulson and his comrades have generously arranged for the rest of us to suffer the consequences of their corruption and cupidity. After all, they can't be distracted from the task of building a new global economic order based on the same practices and policies that have led our nation to ruin.


UPDATE -- It's Already Begun....

"The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses," reported Canada's National Post last Wednesday (October 8).

"Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money," continued the Post. "But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said."

Bill Gary, President of the Oklahoma City-based Commodity Information Systems, confirms that this developing crisis is a product of the accelerating disintegration of the banking system: "There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit.... The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."

This is just one of several potential cataracts in the supply system, which depends in large measure on independent truckers who are likewise going to find it difficult to get short-term credit.

"We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse," warns Vancouver-based grain industry analyst Anthony Temple.

"What some companies are saying is we can't pay you until our customer pays us, so it becomes a question of who bares [sic] the financial risk and the cost," adds Jason Myers, head of the Canadian Manufacturers and Exporters trade association. "We're hearing about it more and more."

The credit crunch may prove to be as devastating as a trade embargo, which wouldn't be a problem for the United States if we still had a self-sufficient market economy. It's worth noting at this point that the United States -- once the breadbasket of the known universe -- recently became a net importer of food.

On sale now!










Dum spiro, pugno!

What Rough Beast... (EXTREMELY Important Second Update, 10/8)

The October Revolution of 2008 will prove to be at least as consequential as the one that occurred in Russia in 1917.



Beginning immediately after 9-11, George W. Bush and the cabal he represents began the controlled implosion of the hollowed-out shell of our once-sturdy republic. Last week the final phase of that demolition project got underway.



By using monetary inflation as a sapping device, the FED is knocking down the few federalist pillars that, at least in theory, separated the various layers of government. It is also preparing to nationalize key segments of the commercial economy. All of this is being done through the FED's New Deal era "emergency powers" to extend "credit" to any entity it chooses, whether governmental, commercial, or "public-private partnership."

The "Lenin" of America's October Revolution: Chief Fed Commissar Ben Bernanke

The revolution of 1913-1933, which inflicted the Federal Reserve, income tax, and the New Deal apparatus upon the United States, left us with a system Mussolini described as a "corporate state," more commonly known as Fascism.



Admittedly, the American version was milder than most, at least domestically. The Revolution of 2008 is consolidating the elements of that system into a monolithic, unitary State of the sort Lenin and his heirs would applaud, were they not busy suffering for eternity in hell.


The creation of the Federal Reserve in 1913 was a partial enactment of the fifth plank of the Communist Manifesto, which called for creation of "a national bank with State capital"; last week, with the creation of a de facto economic dictatorship under the Secretary of the Treasury, Congress implemented the other key element of that plank, "centralization of credit in the hands of the state."



Approval of the new economic dictatorship was the irreducible purpose of the so-called Economic Stabilization Act, which -- true to the measure's pedigree of grandly named government interventions -- has summarily failed to stabilize the economy.



The $700 billion disbursed by the bill was a trifle, in light of the magnitude of the debt flood to be "bailed out" and the ability of the FED to create what it's pleased to call "money" in any amount it chooses. But that relatively trivial amount was enough to create a constituency for the bill not only on Wall Street, but also in statehouses, city halls, and wherever else the Horseleach's Daughters convene.
















"Yes, we can!" Hey, guess what? Before Stalin became one of history's most prolific mass-murderers, he was a "community organizer," too! Here he helps mobilize support for the little exercise in idealism called the Bolshevik Revolution.


With both the corporatist and political elements of the parasite class enlisted to support the revolution, all that remained was the neutralize the productive class -- the common people, who found ourselves on the bad end of what the reliably perceptive Chris Floyd calls "one of the largest single redistributions of wealth since the Bolsheviks seized power in Russia in 1917."



Unanimity is, almost without exception, a bad thing in politics. The near-unanimity of the electorate in rejecting the Wall Street "bailout" measure is one of those incalculably precious exceptions. In the teeth of this near-unanimity, Congress -- led by the Senate, supposedly the more deliberative chamber -- took the rejected bill, an austere 3-page Enabling Act for the economic dictatorship, plumped it up with several hundred pages of bureaucratic boilerplate and undisguised pork, and passed it four days later.



Bribing a Congressman is generally about as challenging as seducing Catherine the Great. Getting the institution to surrender its institutional control over the public purse was a bit more difficult. Some Congressmen -- well, at least one, perhaps two or three others -- recalled their duty to their constituents, as well as their constitutional mandate to control the public purse, and held fast. Many others opposed the Enabling Act/Plutocrat Bailout because of simple terror over the prospect of immediate unemployment.



But in this case, bribery was coupled with undisguised official terrorism -- the use or threatened use of violence to achieve a radical change in the political system.



As Brad Sherman, a Democratic Congressman from California, testified in a remarkable address on the House Floor -- an address the likes of which will soon be punishable as sedition -- that representatives of the Regime candidly informed recalcitrant congressmen that refusal to pass the Enabling Act would result in nothing less than "martial law in America."







Subsequently, many people, including Rep. Sherman himself, sought to minimize the significance of those threats, describing them as manipulative hyperbole rather than a credible threat. This would be something on the order of a frantic lobbyist exclaiming that failure of the bailout would lead to real "Wrath of God-type stuff" -- the stock market collapsing, permanent constipation of the credit markets, shortages, troops on the streets, human sacrifice, dogs and cats living together, mass hysteria.



The jolly jokesters representing the White House and the Bankster Elite were just exaggerating for effect, you see.

The problem with that explanation, of course, is that the Bush Regime is actively preparing for martial law. So is the German government. So is the British government. Most likely, so are other governments throughout the Euro-Zone, and everywhere else central banks are still coupled to the rapidly disintegrating dollar.



There is no way we can honestly construe the comments reported by Rep. Sherman as anything other than a legitimate, credible threat to accomplish, through a coup de main, what Congress was being ordered to do: Surrender its power over the purse to an executive branch department that is an appendage of Wall Street.



This time, the mere threat of direct military action was sufficient. Next time, we may see putsch come to shove. But the real problem is this: The willingness of congressional majorities to be complicit in this betrayal most likely means there won't be a "next time" -- another occasion in which public outrage, coupled with the threat of quick voter retaliation, prompts Congress to act in the public good.


Go ahead and vote this November, if you can find national candidates unsullied by this consummate betrayal. But a higher priority should be to anticipate, and prepare for, the severe dislocations that are about to occur in our everyday life as the collapse accelerates and deepens.



As credit lines grow more constricted, shortages of gasoline and grocery items become more likely. Fill your pantry with non-perishable foods that don't require much preparation. Secure an adequate supply of drinking water. Network with informed family and like-minded friends and, if possible, keep an inventory of emergency supplies. If you can build a small fellowship of that kind, it's a good idea to have a designated meeting place to gather and pool resources in the event of a severe emergency. Toward that end it's also a good idea to keep your gas tank topped off, or nearly so, if this is economically feasible.



Don't confide in the idea that you will always have access to cash via an ATM, even if your deposits (like mine) aren't within a parsec of the new $250,000 FDIC limit. Owners of 401(k) accounts are learning in the worst possible way about the evanescence of virtual "wealth" as some two trillion dollars of that hypothetical commodity disappear into the ether.


For that reason, it's wise to keep a supply of tangible money. Yes, of course, that means silver -- particularly pre-1964 "junk" coins -- and gold. It also means keeping a supply of ready cash on hand in the form of the depreciating but still useable FRNs.* In the event of a "bank holiday," you won't be permitted to withdraw cash, and it's likely that debit cards wouldn't work. So keeping sufficient cash on hand for a month's expenses is a wise precaution.



It is my fondest hope that the advice offered in the foregoing paragraphs will prove to be the product of unwarranted alarmism.



I experienced exactly the same sentiment last March when I first suggested that "panic" of that variety was a perfectly rational course of action; I had the same desperate eagerness to be wrong last March 7, when -- citing analyses offered by much better minds than my own -- I predicted on Dr. Stan Montieth's radio program that the long-anticipated financial collapse would begin in late September or early October.



Maybe I'm entirely wrong now. May God grant that it be so. But don't count on it.



Update: Happy (Bank) Holidays...?


His Imperial Ineptness is going to convene an emergency international finance summit, most likely in Washington. With Iceland and Pakistan on the brink of national bankruptcy, and the contagion raging out of control, we may see an international bank holiday very soon.


Get liquid, right now.


And, as poster Dixie Dog reminds us (and I stupidly neglected to), this is an exceptionally good time to pray.


Second Update: "Regime Change" Through Inflation

When Thomas Jefferson famously warned Treasury Secretary Albert Gallatin that "banking institutions are more dangerous to our liberties than standing armies," this is the kind of thing he almost certainly had in mind:


"Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to restore confidence in the financial system."


The plan being discussed in the Olympian realm of the Power Elite is reportedly similar to the ongoing nationalization of Great Britain's banking system. At the same time, notes the New York Times, "investors are clamoring for the Fed to lower interest rates to nearly zero. Some are also calling for governments worldwide to provide another round of economic stimulus through expensive public works projects."


Predictability offers some comfort, I suppose, in these turbid and troubling times, which is why there's something winsome and reassuring in the knowledge that people will still seek "solutions" from Keynes's syllabus of economic errors. Perhaps the "public works" in question would be, as Keynes suggested, hiring one body of men to dig holes, and another to fill them. Or our rulers might combine the expense and futility of that exercise with massive death, terror, and destruction and simply arrange a ripping good war, the public works project for which government has displayed a singular aptitude.


Indeed, as the Times points out in words that chill any perceptive person to the marrow, we've already reached the phase at which those who presume to manage our destinies are talking about the "moral equivalent" of war:


"Fed officials increasingly talk about the challenge they face with a phrase that President Bush used in another context: `regime change.' This regime change refers to a change in the economic environment so radical that, at least for a while, economic policy makers will need to suspend what are usually sacred principles: minimal interference in free markets, gradualism and predictability."


Reverse-engineering the FED's intention from that report, it's clear that we're in for maximal interference in, or abolition of, free markets, accomplished suddenly by people who exercise power capriciously.


In other words -- an October Revolution brought to us by the Banksters without their Bolshevik middle-men.


And by the way....


Imitation is the sincerest form of ... Birchism, I guess. Then again, if those folks hadn't done this, maybe they'd occasionally be on top of relatively significant developments, such as the terminal unwinding of the global financial system....


___
*FRNs = Federal Reserve Notes, the intrinsically worthless pieces of tastelessly decorated rag paper the Regime insists we refer to as "money."



It's more timely than ever, and it's on sale now.











Dum spiro, pugno!

The Immigration Bubble Collapses, The Garrison State Thrives (Updated, October 4)

The Waterloo Raid: Manacled illegal immigrants muster at an Iowa stockyard in the custody of Homeland Security personnel. As our economy collapses, immigration both legal and illegal is slowing down. Any guess as to the use to which the Homeland Security State will put its immigration control assets once the immigrant flood dries up?



It will be years before we can accurately assess the collateral damage done by the housing bubble's collapse. One likely consequence of the bust will be a sudden reversal of fortunes for a few cynical people making a living as immigration control demagogues as the tide of illegal immigration from Mexico and Latin America subsides. People earnestly concerned about "border security" will welcome this news. Those capitalizing on such sentiments will greet it with something other than unfettered enthusiasm.


A report released yesterday by the Pew Hispanic Center validates a prediction made by some observers -- most notably economist Mark Thornton of the Mises Institute: Unauthorized immigration from south of the U.S. border would taper off with end of the Federal Reserve's engineered housing boom.


According to Pew, the size of the illegal immigrant population "appears to have declined since 2007"; further, between 2005 and 2008 "the inflow of immigrants who are undocumented fell below that of immigrants who are legal permanent residents. That reverses a trend that began a decade ago. The turnaround appears to have occurred in 2007."



Pew admits that it's difficult to compile definitive statistics, given that we're dealing with an underground economy. But if the trends described in the study are accurate, they follow the contours of the FED's engineered economic boom and its inevitable subsequent bust (which happened no later than August of last year).



Significantly, the apparent decline in illegal immigration comes as economic growth stalls and reverses in the United States, while remaining steady in Mexico and other Latin American countries. Another tangible indication that there has been an abrupt decline in illegal immigration from Mexico can be seen in the volume of remittances -- money sent home by Mexican expatriates working in the U.S.



As the AP points out, "Mexicans living in the U.S. sent home 12 percent less money in August, the largest drop on record since the Bank of Mexico began tracking remittances 12 years ago.... The Bank of Mexico said remittances will likely continue to fall in the coming months because of the `difficult problems the U.S. economy faces."


In fact, remittances have declined by about 30% since 2005. And between 2005 and 2007, the number of Mexican illegal immigrants apprehended by the Border Patrol decreased more than 50%, which means that fewer people are trying to sneak across the border.



What this demonstrates is that Mexicans, like all human beings, are both rational economic actors and human beings with organic attachments to particular families, places, and fellowships. Most Mexicans would probably prefer to live and work in their home country, but prevailing economic circumstances made it irresistible to come north of the border -- with or without government permission -- in order to make a living. And with America's economy circling the bowl, Mexicans in greater numbers are choosing to stay home.



This same principle is at work in the small but growing phenomenon of Americans who are expatriating themselves -- even pursuing dual citizenship -- in search of economic opportunity. A few months ago the Palm Beach Post reported that the same slumping economy that is encouraging Mexicans to stay home has prompted Americans, in increasing numbers, to investigate the possibility of migrating to Europe.


An estimated 40 million Americans whose ancestors emigrated to the U.S. from a country that has been absorbed into the European Union would be eligible for dual citizenship, which would make them employable throughout the Continent. "With an EU passport, I can live and work in 27 countries," explained Florida resident Suzanne Mulvehill. "With a U.S. passport, I can live and work in one."


There are an estimated 8 million American "expats" living and working abroad, a population trend that spurred the recent creation of a congressional "Expat Caucus." A surprising number of American Expats have taken residence in Mexico. This is "surprising" on account of the difficulty involved in buying property in that country as a resident non-citizen, and because of the all-encompassing corruption of the Mexican Regime, which I despise nearly half as much as the one ruling us here.


Many American Expats in Mexico are retirees. At least some American retirees have taken up residence south of the border after trips to Mexico to take advantage of cheap but satisfactory dental and health care (which is cost-prohibitive under America's corporatist/fascist health system, an illustration of the collectivist nature of our supposedly "free market" economy). Others, ironically, moved to Mexico as refugees from the housing bubble who bought property and homes in Mexico because they didn't want to deal with artificially inflated home values here. That's another trend that may level out with the end of the bubble, particularly after the dollar collapses after Washington bails out the Housing Bubble Profiteers.



Obviously, in terms of Americans emigrating to Mexico or the new European Soviet, we're discussing a very thin trickle, not a gusher. And just as obviously, most Americans would prefer to live and work here -- just as most Mexicans would prefer to stay in their home country. In both cases, the urge to emigrate is driven by the economic consequences of government corruption and profligacy. And legal emigration of Americans to other countries isn't the same thing as illegal immigration from Mexico or other countries into this one.


But the fact that there is measurable, economically inspired emigration from the United States to any degree is a striking illustration of just how collectivist, and cankered with official corruption, our economy has become. The effects of the economic downturn are being exacerbated by many of the punitive measures passed for the supposed purpose of controlling illegal immigration.

The demagogue and the Brownshirt: Arizona state legislator Russell Pearce with his close political ally, GOP precinct committeeman and neo-Nazi J.T. Ready. Not to put too fine a point on the matter, these guys aren't your typical immigration "reformers."



One splendid example is the imbecilic "employer sanctions" law that went into effect in Arizona last January 1st. Written and sponsored by state legislator Russell Pearce, an immigration monomaniac with some exceptionally pungent political alliances, the Arizona law imposes draconian sanctions on employers who don't winnow illegal aliens from their work forces. Offending business owners suffer the suspension of their business licenses on the first offense, and suffer permanent revocation of their licenses on the second offense.


Pearce has been clenched to the bosom of some "constitutionalist" organizations who, when the subject is anything other than immigration control, denounce government control of business owners through licensing and onerous regulation. The Arizona legislator insists that his law is intended to punish those who "put profits ahead of patriotism." But its actual impact has been to amplify the effects of Arizona's post-Bubble economic slide by driving employers to transplant their operations in other states -- or even, in an irony so acute it could serve as a guillotine blade, to Mexico.

Pearce's buddy in his natural habitat: Ready (second from right) and his National Socialist allies demand the Reich of way (see also below right).


As Barron's predicted as the Pearce-written employer sanctions law went into effect, the impact of the measure has been to curb illegal immigration by strangling the state's economy. This is a perfectly satisfactory arrangement for a government careerist like Pearce, who preaches "patriotic" sacrifice while living comfortably at taxpayer expense. But for people who own and operate businesses in the state that -- unlike government -- actually contribute to the public good, this transaction is hardly a bargain. Illegal immigration -- crossing a border to work without government permission -- has been a significant problem precisely because of government interference in productive society.


As the Mises Institute's Mark Thornton points out, the economic and social problems associated with immigration are actually a product of the welfare state and its subsidiary, officially sanctioned multiculturalism.


"The only national problem [as opposed to isolated regional problems] with immigration is government," writes Thornton. "Because immigrants are relatively poor they tend to pay less in taxes than their use of so-called government services like health care and education, and thus they increase the burden of taxation. We can therefore solve the immigration problem by simply eliminating government programs that provide [so-called] free services."


Earlier I referred to "demagogues" on the immigration issue. Such people can be easily identified as those who promote "limited" government in nearly every aspect of life except for "border control." For example: Such people can be heard denouncing our socialized health care and education system in one breath, and in the next be seen rending their garments and bewailing the fact that illegal immigrants "are ruining our schools, driving up our taxes, over-burdening our health care system, and ruining our economy."


Well, no: It is the government ruling us that is doing all of those horrible things through socialist intervention in the economy, with illegal immigrants (among many, many others) acting as clients of that system. And more recently, concern over the impact of illegal immigration has been exploited by that same government, in perfectly predictable fashion, to justify dangerous enhancement of its powers to regiment our lives and economy.


It is the government ruling us, along with its quasi-governmental appendage called the Federal Reserve System, that has wrecked our economy. A retreating tide can leave behind some very unpleasant debris. As illegal immigration subsides, the lingering residue will include a large movement of people poisoned with the kind of petty collectivist nationalism peddled by the likes of Russell Pearce (and abetted in the past, I am ashamed to say, by Yours Truly).


But the most important remnant of this period will be the sprawling apparatus of enforcement, detention, and harassment created in the name of immigration control, which will be devoted to new and even more unpleasant uses as our economic collapse accelerates.


A brief, predictable, and necessary update


To a reader identified as "Jay" goes whatever prize should be awarded for offering the comment I expected to receive, in more or less exactly the way I expected it to be expressed:

"So anyone who holds a degree of personal animosity towards any in the hordes of illegals invading this country is akin to a socialist nazi, is that it? Seeing how you just wrote an article decrying the use of the `threadbare trope' of labeling someone as Hitler, I'm a bit surprised you'd stoop to this tactic yourself."

That's not my belief, obviously, as the following statement from the very first paragraph of this article makes unmistakably clear:

"People earnestly concerned about "border security" will welcome this news [i.e., that the illegal immigrant "hordes" are thinning out and choosing to stay home]. Those capitalizing on such sentiments will greet it with something other than unfettered enthusiasm."

Jay, assuming that you're earnest in your desire to secure the border, lift up your head and rejoice: The "siege" is dying down. Now instead of directing your "personal animosity" at people who come here to work without government permission, you can direct it full-heartedly at the government that is destroying what remains of our liberty and prosperity, which is where it should be directed in the first place.

In addition to those sincerely concerned about the impact of illegal immigration, I mentioned opportunists of various kinds. The distinction I drew is explicit and impossible for honest people to ignore. My view has been that the "crisis" of illegal immigration is largely a result of government interventions in the economy and culture, and the facts I cite above seem to validate that view.

I should point out as well that I did not "label" T.J. Ready a Nazi. He did that to himself, for his own reasons. Likewise, I didn't choose Russell Pearce's political allies and associations for him. Nor did I compel Pearce and his political allies to impose that asinine "employer sanctions" law on Arizona, a law that is rooted in fascist assumptions (regarding the value of government control over businesses without outright confiscation of the same).

Video Extra: Who will "Trash Out" the U.S. Economy?

One growth "industry" in post-Bubble America will involve management of abandoned homes, both those formally seized through foreclosure and those abandoned by people who have sent "jingle mail" to their mortgage lenders. The scenes from California's housing bust depicted in the video below is going to be replicated all across the country: Contractors dispatching teams of "trash-out" specialists to remove and dispose of discarded personal effects inside abandoned homes.





On sale now!











Dum spiro, pugno!