Today we turn our focus to an event which, like a sequel of a bad movie, has been widely ignored. The dreaded Fiscal Cliff. For those who do not recall, the Fiscal Cliff is the moronic sequel of the 2011 flop “The Debt Ceiling Debacle.” You can read our review of the first film here:
Most of the actors in the first film, Obama, Boehner, Reid, and Bernanke, are returning for the sequel, although there are rumors that Obama may be replaced by Mitt Romney if Romney is chosen over Obama in a fan poll scheduled in November. Tim Geithner, who did a poor job acting as the voice of reason in the original film, is expected back as well, albeit in a severely diminished role. His appearance in the film is largely contingent upon Obama winning the fan poll.
The sequel picks up the story where the original left off with Bernanke, Reid, and Boehner accelerating their vehicle towards a cliff, presumably to plunge into the canyon a la Thelma and Louise. The sequel begins with a cloud of dust, which eventually settles to reveal that the trio has abruptly stopped the car just before taking the plunge. After a collective sigh of relief, they hold a meeting and decide the following:
1. Instead of plunging off of this cliff, they will look for a larger cliff to plunge off of somewhere down the road,
2. Bernanke will pay for the gas with the money he stole from US Dollar holders and,
3. Rather than taking the plunge themselves, they will force Obama and Geithner, or Romney and Geithner’s replacement, to drive off the cliff.
The fan poll in November should serve to make this moronic sequel somewhat interesting, but either way, the winner will be handcuffed to the wheel with the accelerator at full throttle.
Our advice? Don’t bother watching this moronic redux. Like the Expendables 2, it is a desperate attempt by the actors to cash in on past glories. Unlike the Expendables 2, anyone living in the US will need to purchase an advance ticket to NOT see the Fiscal Cliff. Tickets can be found at your local coin shop. Simply trade you US dollars and bonds for gold and silver and you can ignore this catastrophe.
Hurry, there is precious little time before the Fiscal Cliff’s December 31 debut.
As always, George Friedman, author of Strafor’s indispensable publication Geopolitical Weekly, provides clarity into what on the surface is a situation on the verge of erupting. A situation that, if poorly handled, has the potential to unleash chaos throughout the world.
In a world where Might makes right, striking a delicate balance between one’s rhetoric and actions is the statesman’s most important task. A task that would be rendered useless were we all to chose the better way.
Nonetheless, Friedman helps us to cut through the rhetoric to recognize both the motivations of and limitations on each of the actors in what has become a game of brinksmanship of epic proportions, and the stakes have never been higher.
We encourage you to review the full report which is reproduced below with the permission of Stratfor:
War and Bluff: Iran, Israel and the United States
By George Friedman
For the past several months, the Israelis have been threatening to attack Iranian nuclear sites as the United States has pursued a complex policy of avoiding complete opposition to such strikes while making clear it doesn’t feel such strikes are necessary. At the same time, the United States has carried out maneuvers meant to demonstrate its ability to prevent the Iranian counter to an attack — namely blocking the Strait of Hormuz. While these maneuvers were under way, U.S. Secretary of State Hillary Clinton said no “redline” exists that once crossed by Iran would compel an attack on Iran’s nuclear facilities. The Israeli government has long contended that Tehran eventually will reach the point where it will be too costly for outsiders to stop the Iranian nuclear program.
The Israeli and American positions are intimately connected, but the precise nature of the connection is less clear. Israel publicly casts itself as eager to strike Iran but restrained by the United States, though unable to guarantee it will respect American wishes if Israel sees an existential threat emanating from Iran. The United States publicly decries Iran as a threat to Israel and to other countries in the region, particularly Saudi Arabia, but expresses reservations about military action out of fears that Iran would respond to a strike by destabilizing the region and because it does not believe the Iranian nuclear program is as advanced as the Israelis say it is.
The Israelis and the Americans publicly hold the same view of Iran. But their public views on how to proceed diverge. The Israelis have less tolerance for risk than the Americans, who have less tolerance for the global consequences of an attack. Their disagreement on the issue pivots around the status of the Iranian nuclear program. All of this lies on the surface; let us now examine the deeper structure of the issue.
Behind the Rhetoric
From the Iranian point of view, a nuclear program has been extremely valuable. Having one has brought Iran prestige in the Islamic world and has given it a level of useful global political credibility. As with North Korea, having a nuclear program has allowed Iran to sit as an equal with the five permanent members of the U.N. Security Council plus Germany, creating a psychological atmosphere in which Iran’s willingness merely to talk to the Americans, British, French, Russians, Chinese and Germans represented a concession. Though it has positioned the Iranians extremely well politically, the nuclear program also has triggered sanctions that have caused Iran substantial pain. But Iran has prepared for sanctions for years, building a range of corporate, banking and security mechanisms to evade their most devastating impact. Having countries like Russia and China unwilling to see Iran crushed has helped. Iran can survive sanctions.
Visit our Iran page for related analysis, videos, situation reports and maps.
While a nuclear program has given Iran political leverage, actually acquiring nuclear weapons would increase the risk of military action against Iran. A failed military action would benefit Iran, proving its power. By contrast, a successful attack that dramatically delayed or destroyed Iran’s nuclear capability would be a serious reversal. The Stuxnet episode, assuming it was an Israeli or U.S. attempt to undermine Iran’s program using cyberwarfare, is instructive in this regard. Although the United States hailed Stuxnet as a major success, it hardly stopped the Iranian program, if the Israelis are to be believed. In that sense, it was a failure.
Using nuclear weapons against Israel would be catastrophic to Iran. The principle of mutual assured destruction, which stabilized the U.S.-Soviet balance in the Cold War, would govern Iran’s use of nuclear weapons. If Iran struck Israel, the damage would be massive, forcing the Iranians to assume that the Israelis and their allies (specifically, the United States) would launch a massive counterattack on Iran, annihilating large parts of Iran’s population.
It is here that we get to the heart of the issue. While from a rational perspective the Iranians would be fools to launch such an attack, the Israeli position is that the Iranians are not rational actors and that their religious fanaticism makes any attempt to predict their actions pointless. Thus, the Iranians might well accept the annihilation of their country in order to destroy Israel in a sort of megasuicide bombing. The Israelis point to the Iranians’ rhetoric as evidence of their fanaticism. Yet, as we know, political rhetoric is not always politically predictive. In addition, rhetoric aside, Iran has pursued a cautious foreign policy, pursuing its ends with covert rather than overt means. It has rarely taken reckless action, engaging instead in reckless rhetoric.
If the Israelis believe the Iranians are not deterred by the prospect of mutually assured destruction, then allowing them to develop nuclear weapons would be irrational. If they do see the Iranians as rational actors, then shaping the psychological environment in which Iran acquires nuclear weapons is a critical element of mutually assured destruction. Herein lies the root of the great Israeli debate that pits the Netanyahu government, which appears to regard Iran as irrational, against significant segments of the Israeli military and intelligence communities, which regard Iran as rational.
Avoiding Attaining a Weapon
Assuming the Iranians are rational actors, their optimal strategy lies not in acquiring nuclear weapons and certainly not in using them, but instead in having a credible weapons development program that permits them to be seen as significant international actors. Developing weapons without ever producing them gives Iran international political significance, albeit at the cost of sanctions of debatable impact. At the same time, it does not force anyone to act against them, thereby permitting outsiders to avoid incurring the uncertainties and risks of such action.
Up to this point, the Iranians have not even fielded a device for testing, let alone a deliverable weapon. For all their activity, either their technical limitations or a political decision has kept them from actually crossing the obvious redlines and left Israel trying to define some developmental redline.
Iran’s approach has created a slowly unfolding crisis, reinforced by Israel’s slowly rolling response. For its part, all of Israel’s rhetoric — and periodic threats of imminent attack — has been going on for several years, but the Israelis have done little beyond some covert and cyberattacks to block the Iranian nuclear program. Just as the gap between Iranian rhetoric and action has been telling, so, too, has the gap between Israeli rhetoric and reality. Both want to appear more fearsome than either is actually willing to act.
The Iranian strategy has been to maintain ambiguity on the status of its program, while making it appear that the program is capable of sudden success — without ever achieving that success. The Israeli strategy has been to appear constantly on the verge of attack without ever attacking and to use the United States as its reason for withholding attacks, along with the studied ambiguity of the Iranian program. The United States, for its part, has been content playing the role of holding Israel back from an attack that Israel doesn’t seem to want to launch. The United States sees the crumbling of Iran’s position in Syria as a major Iranian reversal and is content to see this play out alongside sanctions.
Underlying Israel’s hesitancy about whether it will attack has been the question of whether it can pull off an attack. This is not a political question, but a military and technical one. Iran, after all, has been preparing for an attack on its nuclear facilities since their inception. Some scoff at Iranian preparations for attack. These are the same people who are most alarmed by supposed Iranian acumen in developing nuclear weapons. If a country can develop nuclear weapons, there is no reason it can’t develop hardened and dispersed sites and create enough ambiguity to deprive Israeli and U.S. intelligence of confidence in their ability to determine what is where. I am reminded of the raid on Son Tay during the Vietnam War. The United States mounted an effort to rescue U.S. prisoners of war in North Vietnam only to discover that its intelligence on where the POWs were located was completely wrong. Any politician deciding whether to attack Iran would have Son Tay and a hundred other intelligence failures chasing around their brains, especially since a failed attack on Iran would be far worse than no attack.
Dispersed sites reduce Israel’s ability to strike hard at a target and to acquire a battle damage assessment that would tell Israel three things: first, whether the target had been destroyed when it was buried under rock and concrete; second, whether the target contained what Israel thought it contained; and third, whether the strike had missed a backup site that replicated the one it destroyed. Assuming the Israelis figured out that another attack was needed, could their air force mount a second air campaign lasting days or weeks? They have a small air force and the distances involved are great.
Meanwhile, deploying special operations forces to so many targets so close to Tehran and so far from Iran’s borders would be risky, to say the least. Some sort of exotic attack, for example one using nuclear weapons to generate electromagnetic pulses to paralyze the region, is conceivable — but given the size of the Tel Aviv-Jerusalem-Haifa triangle, it is hard to imagine Israel wanting to set such a precedent. If the Israelis have managed to develop a new weapons technology unknown to anyone, all conventional analyses are off. But if the Israelis had an ultrasecret miracle weapon, postponing its use might compromise its secrecy. I suspect that if they had such a weapon, they would have used it by now.
The battlefield challenges posed by the Iranians are daunting, and a strike becomes even less appealing considering that the Iranians have not yet detonated a device and are far from a weapon. The Americans emphasize these points, but they are happy to use the Israeli threats to build pressure on the Iranians. The United States wants to undermine Iranian credibility in the region by making Iran seem vulnerable. The twin forces of Israeli rhetoric and sanctions help make Iran look embattled. The reversal in Syria enhances this sense. Naval maneuvers in the Strait of Hormuz add to the sense that the United States is prepared to neutralize Iranian counters to an Israeli airstrike, making the threat Israel poses and the weakness of Iran appear larger.
When we step back and view the picture as a whole, we see Iran using its nuclear program for political reasons but being meticulous not to make itself appear unambiguously close to success. We see the Israelis talking as if they were threatened but acting as if they were in no rush to address the supposed threat. And we see the Americans acting as if they are restraining Israel, paradoxically appearing to be Iran’s protector even though they are using the Israeli threat to increase Iranian insecurity. For their part, the Russians initially supported Iran in a bid to bog down the United States in another Middle East crisis. But given Iran’s reversal in Syria, the Russians are clearly reconsidering their Middle East strategy and even whether they actually have a strategy in the first place. Meanwhile, the Chinese want to continue buying Iranian oil unnoticed.
It is the U.S.-Israeli byplay that is most fascinating. On the surface, Israel is driving U.S. policy. On closer examination, the reverse is true. Israel has bluffed an attack for years and never acted. Perhaps now it will act, but the risks of failure are substantial. If Israel really wants to act, this is not obvious. Speeches by politicians do not constitute clear guidelines. If the Israelis want to get the United States to participate in the attack, rhetoric won’t work. Washington wants to proceed by increasing pressure to isolate Iran. Simply getting rid of a nuclear program not clearly intended to produce a device is not U.S. policy. Containing Iran without being drawn into a war is. To this end, Israeli rhetoric is useful.
Rather than seeing Netanyahu as trying to force the United States into an attack, it is more useful to see Netanyahu’s rhetoric as valuable to U.S. strategy. Israel and the United States remain geopolitically aligned. Israel’s bellicosity is not meant to signal an imminent attack, but to support the U.S. agenda of isolating and maintaining pressure on Iran. That would indicate more speeches from Netanyahu and greater fear of war. But speeches and emotions aside, intensifying psychological pressure on Iran is more likely than war.
Adin Ballou dedicated 50 years of his life to spreading the doctrine of non-resistance.
Leo Tolstoy, in his great Christian-Anarchist work “The Kingdom of God is Within You,” pays homage to Adin Ballou, an American preacher who was a colleague of William Lloyd Garrison, the great American Abolitionist. Ballou devoted 50 years of his life advocating for the doctrine of non-resistance.
The following is a version of the Catechism of Non-Resistance that Ballou created for his followers. The last paragraph is especially moving, so much so that we consider it required reading for all human beings:
Q. Whence is the word “non-resistance” derived?
A. From the command, “Resist not evil.” (M. v. 39.)
Q. What does this word express?
A. It expresses a lofty Christian virtue enjoined on us by Christ.
Q. Ought the word “non-resistance” to be taken in its widest sense–that is to say, as intending that we should not offer any resistance of any kind to evil?
A. No; it ought to be taken in the exact sense of our Saviour’s teaching–that is, not repaying evil for evil. We ought to oppose evil by every righteous means in our power, but not by evil.
Q. What is there to show that Christ enjoined non-resistance in that sense?
A. It is shown by the words he uttered at the same time. He said: “Ye have heard, it was said of old, An eye for an eye, and a tooth for a tooth. But I say unto you Resist not evil. But if one smites thee on the right cheek, turn him the other also; and if one will go to law with thee to take thy coat from thee, give him thy cloak also.”
Q. Of whom was he speaking in the words, “Ye have heard it was said of old”?
A. Of the patriarchs and the prophets, contained in the Old Testament, which the Hebrews ordinarily call the Law and the Prophets.
Q. What utterances did Christ refer to in the words, “It was said of old”?
A. The utterances of Noah, Moses, and the other prophets, in which they admit the right of doing bodily harm to those who inflict harm, so as to punish and prevent evil deeds.
Q. Quote such utterances.
A. “Whoso sheddeth man’s blood, by man shall his blood be shed.”–GEN. ix. 6.
“He that smiteth a man, so that he die, shall be surely put to death…And if any mischief follow, then thou shalt give life for life, eye for eye, tooth for tooth, hand for hand, foot for foot, burning for burning, wound for wound, stripe for stripe.” –Ex. xxi. 12 and 23-25.
“He that killeth any man shall surely be put to death. And if a man cause a blemish in his neighbor, as he hath done, so shall it be done unto him: breach for breach, eye for eye, tooth for tooth.”–LEV. xxiv. 17, 19, 20.
“Then the judges shall make diligent inquisition; and behold, if the witness be a false witness, and hath testified falsely against his brother, then shall ye do unto him as he had thought to have done unto his brother…And thine eye shall not pity; but life shall go for life, eye for eye, tooth for tooth, hand for hand, foot for foot.”–DEUT. xix. 18, 21.
Noah, Moses, and the Prophets taught that he who kills, maims, or injures his neighbors does evil. To resist such evil, and to prevent it, the evil doer must be punished with death, or maiming, or some physical injury. Wrong must be opposed by wrong, murder by murder, injury by injury, evil by evil. Thus taught Noah, Moses, and the Prophets. But Christ rejects all this. “I say unto you,” is written in the Gospel, “resist not evil,” do not oppose injury with injury, but rather bear repeated injury from the evil doer. What was permitted is forbidden. When we understand what kind of resistance they taught, we know exactly what resistance Christ forbade.
Q. Then the ancients allowed the resistance of injury by injury?
A. Yes. But Jesus forbids it. The Christian has in no case the right to put to death his neighbor who has done him evil, or to do him injury in return.
Q. May he kill or maim him in self-defense?
A. No.
Q. May he go with a complaint to the judge that he who has wronged him may be punished?
A. No. What he does through others, he is in reality doing himself.
Q. Can he fight in conflict with foreign enemies or disturbers of the peace?
A. Certainly not. He cannot take any part in war or in preparations for war. He cannot make use of a deadly weapon. He cannot oppose injury to injury, whether he is alone or with others, either in person or through other people.
Q. Can he voluntarily vote or furnish soldiers for the government?
A. He can do nothing of that kind if he wishes to be faithful to Christ’s law.
Q. Can he voluntarily give money to aid a government resting on military force, capital punishment, and violence in general?
A. No, unless the money is destined for some special object, right in itself, and good both in aim and means.
Q. Can he pay taxes to such a government?
A. No; he ought not voluntarily to pay taxes, but he ought not to resist the collecting of taxes. A tax is levied by the government, and is exacted independently of the will of the subject. It is impossible to resist it without having recourse to violence of some kind. Since the Christian cannot employ violence, he is obliged to offer his property at once to the loss by violence inflicted on it by the authorities.
Q. Can a Christian give a vote at elections, or take part in government or law business?
A. No; participation in election, government, or law business is participation in government by force.
Q. Wherein lies the chief significance of the doctrine of non-resistance?
A. In the fact that it alone allows of the possibility of eradicating evil from one’s own heart, and also from one’s neighbor’s. This doctrine forbids doing that whereby evil has endured for ages and multiplied in the world. He who attacks another and injures him, kindles in the other a feeling of hatred, the root of every evil. To injure another because he has injured us, even with the aim of overcoming evil, is doubling the harm for him and for oneself; it is begetting, or at least setting free and inciting, that evil spirit which we should wish to drive out. Satan can never be driven out by Satan. Error can never be corrected by error, and evil cannot be vanquished by evil.
True non-resistance is the only real resistance to evil. It is crushing the serpent’s head. It destroys and in the end extirpates the evil feeling.
Q. But if that is the true meaning of the rule of non- resistance, can it always put into practice?
A. It can be put into practice like every virtue enjoined by the law of God. A virtue cannot be practiced in all circumstances without self-sacrifice, privation, suffering, and in extreme cases loss of life itself. But he who esteems life more than fulfilling the will of God is already dead to the only true life. Trying to save his life he loses it. Besides, generally speaking, where non-resistance costs the sacrifice of a single life or of some material welfare, resistance costs a thousand such sacrifices.
Non-resistance is Salvation; Resistance is Ruin.
It is incomparably less dangerous to act justly than unjustly, to submit to injuries than to resist them with violence, less dangerous even in one’s relations to the present life. If all men refused to resist evil by evil our world would be happy.
Q. But so long as only a few act thus, what will happen to them?
A. If only one man acted thus, and all the rest agreed to crucify him, would it not be nobler for him to die in the glory of non-resisting love, praying for his enemies, than to live to wear the crown of Caesar stained with the blood of the slain? However, one man, or a thousand men, firmly resolved not to oppose evil by evil are far more free from danger by violence than those who resort to violence, whether among civilized or savage neighbors. The robber, the murderer, and the cheat will leave them in peace, sooner than those who oppose them with arms, and those who take up the sword shall perish by the sword, but those who seek after peace, and behave kindly and harmlessly, forgiving and forgetting injuries, for the most part enjoy peace, or, if they die, they die blessed. In this way, if all kept the ordinance of non-resistance, there would obviously be no evil nor crime. If the majority acted thus they would establish the rule of love and good will even over evil doers, never opposing evil with evil, and never resorting to force. If there were a moderately large minority of such men, they would exercise such a salutary moral influence on society that every cruel punishment would be abolished, and violence and feud would be replaced by peace and love. Even if there were only a small minority of them, they would rarely experience anything worse than the world’s contempt, and meantime the world, though unconscious of it, and not grateful for it, would be continually becoming wiser and better for their unseen action on it. And if in the worst case some members of the minority were persecuted to death, in dying for the truth they would have left behind them their doctrine, sanctified by the blood of their martyrdom. Peace, then, to all who seek peace, and may overruling love be the imperishable heritage of every soul who obeys willingly Christ’s word, “Resist not evil.”
We recently subscribed to Gary North’s latest project, a site called “The Tea Party Economist.” To be clear, we have no political interest nor affiliation. It is our feeling that government, in its current state, is best ignored and avoided rather than confronted. It will go away on its own.
To draw on a well known analogy, the Tea Party, like the Republican and Democratic parties, are all fighting for control of the steering wheel of the Titanic after it hit the iceberg. Rather than fight it out on the control deck, we at The Mint realize that the only ones who survived the Titanic were those who found a lifeboat or other means to stay afloat.
Despite our distaste for all things political, we respect Mr. North and have greatly enjoyed and benefited from what he shares. We suspect that the use of “Tea Party” is more of an attempt to attract his target audience than any endorsement of the Tea Party.
Today, Mr. North shared an article at Forbes which made us gasp. It was written by Jerry Bowyer and as we read through it, one thought passed through our mind: Has our manner of thinking really gone mainstream?
Mr. Bowyer points out a number of examples of a general decline in voluntary compliance with things the government increasingly uses its superior force to mandate, such as taxes and environmental laws. The irony is that as a government’s power grab via rules and regulations accelerates, voluntary compliance, from which all forms of government derive their power, declines.
If Mr. Bowyer is correct, then it would appear that Americans are taking the idea of Atheism with regards to government to heart.
It is clear, yet seldom acknowledged, that the absence of voluntary compliance is the most effective type of revolution which can be waged.
Mr. Bowyer also makes an important distinction. The lack of voluntary compliance is not a form of civil disobedience or act of aggression towards a government. Rather, it is the conscious choice to stop believing in the government and live one’s life as if it does not exist as anything more than a lethal nuisance to be avoided. Mr. Bowyer eloquently describes this phenomenon via an amoeba metaphor:
Amoeba Ordinatio
“It’s not civil disobedience that I’m talking about. It’s the opposite: Civil disobedience is meant to be noticed. It is a price paid in the hope of creating social change. What I’m talking about is not based on hope; in fact, it has given up much hope on social change. It thinks the government is a colossal amoeba twitching mindlessly in response to tiny pinpricks of pain from an endless army of micro-brained interest groups. The point is not to teach the amoeba nor to guide it, but simply to stay away from the lethal stupidity of its pseudopods.”
“The amoeba does not get smarter but it does get hungrier and bigger. On the other hand, we get smarter. More and more of our life takes place outside of the amoeba’s reach: in the privacy of our own homes, or in capital accounts in other nations, or in the fastest growing amoeba avoidance zone ever created, cyberspace. We revolt decision by decision, transaction by transaction, because we believe deep down that most of what government tells us to do is at bottom illegitimate.”
You can read the entire article here at Forbes.com:
Everyday, more and more people are recognizing the insanity of attempting to comply with the onslaught of rules and regulations which allegedly protect them against others. They are realizing that the Rules are building a prison in which they themselves are incarcerated.
We conclude today’s Mint with a quote from Ayn Rand which seems appropriate when considering an amoeba like government:
“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”
While we may have no confidence in government, we make up for it in an abundance of faith in God and our fellow men and women. Are you ready to come out of Babylon?
For the few who missed it, Spain handily defeated Italy yesterday, proving Moody’s wrong once again and making us 1-0 on Euro cup calls here at The Mint. The Spanish national team, which has won each Euro and World Cup since 2008, will now go down as one of the greatest national teams of all time.
Spain downs Italy as The Mint goes 1-0 on its Euro 2012 prediction
The continent will now turn its weary eyes to the Olympic games, while those who can afford it prepare for their constitutionally guaranteed summer vacation (no kidding, the EU high court has held it as such).
Unfortunately for footballers and vacationers alike, Europe is operating in a perpetual crisis mode, and it is possible that vacationers will return to a Europe that is quite different than the one they left just 30 days before. One in which their options are limited and their ATM card doesn’t work.
Yes, what started as a minor Hellenic financial problem has predictibly mushroomed into a political crisis at the highest level of the EU. Voters, fed up with the bailout/austerity approach to banker welfare, increasingly exercise what is left of their sovereign right to vote out relative conservatives and/or moderates and vote in technocrats and/or populists as their fearless leaders.
Here is another prediction, for what its worth, the populists take Germany in the fall of 2013, Europe’s version of Mega Maid will have turned all the way from suck to blow. The path of austerity that they are currently on will be but a faint memory as the ECB and policy makers move from bailing out the bankers to bailing out any and every political ally.
{Editor’s note: A populist, for our purposes, is a socialist who no longer masquerades as a conservative or moderate, they are out of the closet, as it were.}
Yet for all the drama and human suffering that is unfolding, we can’t help but think that this is all simply a high priced publicity stunt to get the doomed Euro currency some air time.
For many of the European peoples, the Euro currency has served as nothing more than an unwanted crash course in math and an agent of larceny on the grandest of scales. The average Jacque, Giorgos, Jorge, or Giovanni would have been better off in the long run had the Euro never been dreamed up.
Rising Populism in Europe to test the ECB’s commitment to elasticity
However, the continued use of the Euro is an extremely high priority to for a select few with addreses on Wall Street, in The City, and anywhere in Germany. As such, the current tack for the doomed Euroship is for it to be spoken of in the same context as climate change or terrorism, which invariably involves an increasingly illogical and alarmist rhetoric.
The question of whether or not something should be done is glossed over in favor of handing supreme power to a body who demands that something be done. The only rhetoric that is allowed beyond fear mongering is a discussion of what the supreme power should do.
And so it is with the Euro.
There will be a number of elections over the coming months in the Eurozone, and not one of them will matter. The tone in Europe is turning decidedly populist, as George Friedman eloquently describes in his recent Geopolitcal Weekly report via Stratfor:
A colleague from our grad school days in Barcelona recently contacted us from Madrid with an exciting project he and a partner are developing. As such, we are unwittingly trying our hand at the emergent Natural Cosmetics Market.
While Spain and Europe in general appear to be falling apart at the seams, his company is experiencing a boom. As with most smaller enterprises, all it lacks is some well guided investment to transform this mini-boom into a supersonic boom. “El Empujon”, we call it. The big push to get them over the hump, to open new markets, scale production, and create countless jobs in the value chain.
It is just this sort of thing that Governments in the West espouse in word but make nearly impossible in deed.
While the products are all natural, they may be subject to FDA approvals. Then, once the governmental hurdles are cleared, we face a fiercely competitive market where access to the final consumer is tightly controlled by what amounts to a monopoly or at best, an oligarchy, in the cosmetics world. Then there are patents, customs, and any number of mines in the field which must be avoided or diffused to successfully bring the products to market.
How shall The Mint attack this Goliath? We are working on a strategy, which we call, the “Heart of the Beast.” The details of which, for obvious reasons, we shall keep a well guarded secret for the moment.
More on this to come.
In our last correspondence, we presented a hypothesis for dealing with government. Now, we must move the hypothesis down a level. How, then would one test the hypothesis by embracing anarchy, or atheism with regards to government, in a place like Oregon?
Oregon is a State which places a relatively large amount of faith in its political system and, by extension, the power of the government to solve social problems.
The approach seems to work for most. The territory is home to an abundance of natural resources and a great number of people who are willing to go along with the government’s program. In these conditions, the idea and mechanisms of government are tolerated and to an extent championed, for it is possible to live in Oregon and enjoy a relatively high standard of living despite the waste inherent in governmental activities.
Disarming the State is as simple as changing and then using one's mind
However, one can only wonder as to what may be possible here in the great Northwest were the government not to hyper regulate every industry or confiscate 9% of the wages earned by those who labor in its borders (on top of the roughly 21% that the Federal government lays claim to).
Is the average citizen better off living on 70% of his wages? Or, put another way, does the average citizen derive enough benefit from being “governed” that he or she would value it at roughly one third of his or her income?
There are burning questions, fellow taxpayer, that every citizen would do well to ask themselves from time to time. If the mechanism of government were to go away, or be reduced to the spheres where it paradoxically does add value to the economy (note that, were this the case, it would technically cease to be government and become yet another capitalistic enterprise operating in the anarchic surroundings), would it not hold that everyone, including those who work in the unproductive areas of government, would be better off on a relative basis?
The answer, of course, is yes, unless one finds themselves in a position which relies upon the government being able to confiscate a certain amount of resources or the privileges which the mechanism of government may grant them.
However, even this minority would be better off once they adjusted to the reality of life without the idea of government.
What about the Disaster aid, Police and Fire Departments? Aren’t they at least necessary?
Of course they are! And for that very reason, private organizations would quickly spring up to fill these vital roles. In fact, they already exist. They are commonly known as Security and Insurance companies. In Anarcho-Capitalist theory, the array of companies which would arise are called “Private Defense Agencies.” Anyone skeptical about what would arise in a purely anarchic system to replace functions currently delegated to the Nation State is encouraged to study this theory.
For in some ways, the Nation State is simply an over diversified and poorly run Private Defense Agency.
As with any failing capitalistic entity, when a Nation State has gone from being a servant of the people to active enslavement, its lack of popularity invariably shows up in its deteriorating financial condition. This fact alone is proof that Anarchy is the context in which the Nation States of the world today act and operate. On this basis alone it is proper to constantly question the relevancy of the State with regards to its utility against viable alternatives.
Yet despite the failure and bankruptcy of nearly all of the Nation States that have existed and the presence of well developed theories which offer alternatives to these failures, the mechanism of the Nation State remains in place and retains for itself a monopolistic power over defense, welfare, as well as the right to generally meddle in all of the affairs of its subjects at whim.
When living within geographical boundaries of a failing Nation State, it is wise to be prepared to live as if it did not exist, which means that functions vital for one’s existence must be secured by the individual or a cooperative independant of the failing Nation State, for it has been observed throughout history that the authorities of a failing Nation State have a tendency to pillag…we mean, relieve their subjec…we mean, citizens, of their means of sustenance by the most expedient means available.
What is the most expedient means possible? If the Nation State controls the money supply, they simply print money and acquire resources, which is more the rule than the exception circa 2012.
Once a Nation State has begun to relieve their citizens of their wealth in this way, it is possible that those who understand what is going on will convince all to resist by way of armed conflict. However, this is rarely effective, for it tends to replace one form of tyranny with another. These methods rely upon might to make right, which most thinking persons are keenly aware is a losing proposition.
Persons and Nation States, especially those that are desperate and have resorted to robbery, rarely give up their arms willingly or peacefully, so it is up to the individual to peacefully disarm it. This is best done by using a tactic that is not coincidentally very effective against the school yard bully.
Avoidance.
How can one do this? For practical purposes, we have compiled a brief list of steps which one could take to avoid and thereby peacefully resist a Nation State which has failed:
1.Money, trade what you want to: Conduct trade in a currency other than the one used to pay the tax. For it is proper to give to Caesar what is Caesar’s. While it may be inconvenient at first to trade using alternative currencies, one may find that it is often not obligatory to use Caesar’s money.
2.Rely on Common sense: Ignore laws and excessive regulations and respect the free will of those you work with. If someone is willing to work for you for less than minimum wage, allow them to work, do not deprive them of a job to comply with an arbitrary wage set by a bureaucrat. Make no conscious distinction between contract workers and employees, for both are freely performing work.
3.An important caveat to this is to not brag about flouting unreasonable laws and regulations. Assume that if you are breaking a legitimate labor law, for example, both you and the employee will know of it and have dealt with it long before the government will deal with it. It is the false hope that government is regulating untenable working conditions that gives rise to untenable working conditions in the first place.
4.Come out of Babylon: If you live in a place where the microscope of government regulation is unavoidable, move until you can freely live a safe distance from it.
5.Cross borders: If language is not a barrier and your trade or profession is not location specific, there should be no resistance from either government to crossing national borders in search of better opportunities, for all stand to benefit from this.
6.Sell what consumers want, not what the government allows you to sell. The greatest test of a product (food included) is public opinion. Government approval of products, like labor laws tend to give the population a false sense of security.
As we have stated above, if the Nation State’s intentions are pure and in harmony with Natural Law, there should be no resistance from them to an individual who chooses to take these steps.
If, on the other hand, the bankrupt Nation State begins to pass and enforce laws against these actions, restricting freedom and by default, trade, in a vain effort to pillage its subjects to pay the politicians’ debts, it then shows itself to be predatory.
Anyone who has attempted to take any the steps above has likely encountered some sort of resistance to taking these actions. What may come as a surprise is that the resistance may not have come directly from the government itself, for the government of a failing Nation State, or any Nation State for that matter, does not have the resources to enforce all of the rules that they put on the books.
Rather, resistance, more often than not, comes from well meaning but misguided fellow citizens who are unwittingly trained by the government’s education system to deter these brave souls on the questionable moral basis of simply obeying the rules, no matter how unreasonable they may be.
As Vladimir Putin takes the reigns once again (in truth, he never really gave them up) as Russia’s President, he faces a new European landscape, one in which He will navigate without the benefit of the personal alliances which were the core of his European strategy during his first two terms. Read more in this fascinating analysis by Stratfor:
“I am an atheist with regards to the world’s government, for I have chosen to live in the Kingdom of God”
Yesterday at The Mint, we took quite a ride through Portland’s plastic bag ban, bisacksuality, the virtues of non-violent protest, anarchy, atheism, and the imaginary construct of government.
If you missed it, we encourage you to give it a read as it will aid greatly in understanding today’s installment. Of course, if your prefer to jump cold turkey into today’s Mint, by all means, carry on.
And onward we must toil, for this is exceedingly important.
Yesterday we offered that the best way to test the legitimacy of government, that is, its right to govern, would be to simply live as if the government did not exist and see where resistance came from.
If resistance were to come from a solid majority, then that would lend credence to the necessity of government. If resistance were to appear in the form of a minority relying on an imaginary framework to create and enforce a series of rules, imposed by one group on other groups in order to gain or maintain an unearned privilege, the legitimacy of the government should be questioned.
Not the legitimacy of those who are governing at the time, mind you, rather, the legitimacy of the apparatus which allows such rule by the minority at the expense of the majority.
For if a majority would be materially better off by simply shedding the illusion of government, why does the idea of government persist?
Let’s face it, it is nice to sleep at night with the idea that someone is watching over us and our assets. Even more comfort may be found in the idea that, were something to happen to ourselves or our assets, we would probably still be taken care of.
Yet these same promises are also the promises of the Almighty God! Why, then, if one were to believe in the God of the Bible, would it make sense to attribute the power of God to a government which is by definition an assembly of fallible men?
The answer, most would say, is that God is unseen, while men, while they may be fallible, can be observed to be acting. This logic is clear. Some may even take it a step further and claim that the government is God’s agent to provide protection and provision to His people. There is certainly support for this idea in scripture. However, it is important to watch how the men act before blindly ascribing supernatural powers to them.
In the case of government, the confiscation of n
The irony is this: To be an Atheist is to be an Anarchist, and to be an Anarchist is to live in the Kingdom of God
early 30% of a person’s income, which is what the average American may expect to pay in the form of Federal, State, and Local taxes, does not exactly fit with most peoples idea of the preservation of assets, nor does the idea of restricting the ability of one to own a weapon fit with the preservation of one’s life.
Yet it is clearly stated in the Bible that he who trusts in God shall be both protected and provided for.
How can this paradox be reconciled? For it is one thing to deny the existence of the unseen God.It is quite another to deny the existence of God on one hand, and on the other assign the attributes of the non existent God to an entity which consistently operates in a manner contrary to the self interest and freedom of the individual, which presumably would be the reason that an individual would deny the existence of God in the first place.
For the sake of consistency, then, the professing atheist must be a professing anarchist as well. If not, one would be at a minimum inconsistent and possbily insane to assent to most if not all of the actions of the government, for the sacrifices required by most governments on the earth far exceed those requested of humanity by the Living God.
Those who know God, on the other hand, would be inconsistent were they to declare that God is their provider and protector and then eschew what God asks of them in favor of fulfilling a requirement imposed upon them by the government when the two come into conflict with each other.
So what gives? Is it possible to be an atheist with regards to the world’s governments without living in defiance of nor toiling against them? Is it possible to simply deal with the inconveniences which appear as a result of a large part of the world’s population acting upon the belief that the government really exists?
In other words, is it possible to live in the world but not be of the world, as the apostle Paul alluded to? For to do so is to choose to live in the Kingdom of God.
The only way to know for sure is for both the atheist and the believer to peacefully and actively test the hypothesis of a government’s legitimacy by living their lives as if the government did not exist, and then patiently wait and see where any resistence to their chosen way of life came from.
Aslong as they are not stealing from of hurting anyone, they should be just fine, right?
There are certain questions which one encounters in everyday life which demand a shocking answer.
For example, the everyday grocery bagging inquiry “Would you like paper or plastic?” can be responded to with the customary preference. This is the routine response and requires no creativity whatsoever.
A prepared, slightly creative individual may think outside of the box and have their response prepared. “I don’t need a bag, I’ve brought my own,” which is interpreted to mean “I am saving the earth and thereby reject your greedy corporate attempt to deliberately pollute it by rudely offering me an already manufactured bag for my own convenience.”
Then there is the creative genius, the one who rises above the imaginary philosophical bickering and takes what is given to them while at the same time disarming the mythical compulsion which the slightly creative person above felt threatened by. What is their shocking response to this common question?
“I’ll take either one, I’m bisacksual.”
In the same way, when approached with the somewhat common question posed by an eager petitioner “are you registered to vote?” One can give the standard yes or no answer which the question requires.
The slightly creative person may turn the question into an opportunity to share their point of view. “That depends, what is the issue?” Depending upon the issue, they may either wholeheartedly lend their support and sign the petition or engage in a lengthy debate about the error in supporting the proposed legislation.
Enter the creative genius, as in the grocery check-out line, they rise above the imaginary philosophical bickering about what the government should or shouldn’t require everyone to do and at the same time disarm the mythical compulsion which caused the slightly creative person to enter into a lengthy and meaningless debate. What, then, is their shocking response to this common question?
“I’m an atheist with regards to government.”
This is dedicated to the creative geniuses.
At the moment, we are residing in Oregon, where plastic bags are frowned upon to the point that the City of Portland passed an ordinance intended to reduce the use of them. The result is that large retailers in Portland are now one sack outlets, which not only clashes with Portland’s tendency towards plurality in any number of spheres, it has noticeably diminished the quality of the paper sacks available.
The great irony in the ban on bisacksuality is that the same people seen at City Hall protesting the “forced” use of plastic bags are likely to be the same ones who will chain themselves to a tree when the increased demand for paper sacks resulting from this action (the butterfly effect, if you will) leads to the acceleration in the destruction of rainforests in the Amazon.
On the bright side, the plastic bag ban and resulting plea to save the rainforests should combine to help Oregon’s ailing lumber industry in the short term.
Yet all of this nonsense about plastic bags, the rejection of bisacksual Portlanders, and backdoor stimulation of the Oregon lumber industry serves to illustrate the effects that government actions have on the population and industry.
As Henry Hazlitt astutely observed in his classic “Economics in one lesson,” actions taken by governments have the exact opposite long term effect on reality as that which was intended. For this reason alone, all government mandates must be met with suspicion.
Yet none of these government actions and the resulting imbalances would be possible without an unwavering faith in the government on the part of the people, which is why the only hope for the world to escape the crazy cycles inherent in placing faith in the government is for the populace to become not militant, but agnostic towards the actions of their government as they would a well intentioned but clumsy sidekick.
Take the example of Portland’s plastic bag ban. Were the disenfranchised bisacksual population of Portland to violently oppose the plastic bag police (which, most certainly, do not exist), they would be wasting their time and resources only to perpetuate a system which promises nothing more but endless power struggles and the short lived thrill of victory or agony of defeat.
Even if bisackuality were to be legalized, no sooner would the ink be dry on the new ordinance than would a band of sacktivist warriors covered in plastic armor be organizing to take back their right to a paper only Portland. The bisacksuals would then organize and revolt, etc.
To be clear, we have no strong feelings one way or the other on the sack issue, we have merely chosen to shamelessly embellish upon the theme in order to make a larger point.
The point is that militancy breeds militancy, and violence breeds violence. Ghandi, and more recently Martin Luther King, understood that long term, permanent change could never come about by force of arms. Rather, they understood that the only way to test whether or not an idea was true or simply temporary public opinion was to live in peaceful defiance of the idea and tolerate whatever opposition they met with.
In the case of King, the good reverend was thrust into the civil rights battle in the Southern US. For those who may be unfamiliar with this piece of history, we will oversimplify it by saying that there were rules in the South which demanded that African Americans sit in the back of the bus.
Rosa Parks and thousands of other African Americans began to put this rule to the test, not by petitioning the powers that be for permission to sit in front of the bus, but rather, by sitting in front of the bus as if the rule did not exist.
Would some supernatural force come and move her to the back? Or would those who used the rule to gain privilege for themselves be the ones who would force her to the back of the bus or even deny her entry onto the bus in the first place?
The creative geniuses amongst us already know the answer.
The deeper question which must be addressed, then, is not whether or not each individual rule is necessary, but rather, is a government which imposes rules and forces those effected to put them the test, a necessity? Or is it merely an imaginary framework to erect a series of rules which are imposed by one group on other groups in order to gain or maintain an unearned privilege?
The only valid way to test this theory would be for one was to live their life as if the government did not really exist. What if one were to test this theory not by withdrawing from the government or fighting to change it, for both courses of action would be to acknowledge its existence, but by simply deciding not to believe in it?
In other words, what if one decided to stop attributing power to the government by simply changing their own mind about its existence and acting accordingly? What if the simplest path to freedom were to become a peaceful Anarchist? An atheist with regards to government, as it were?
These questions must burn until another day. Please share your thoughts below, as we are intrigued.
The following is the final excerpt from our soon to be released free ebook. It will be offered for free through Smashbooks.com in all common ebook formats in the coming months. What does it all mean? Read on and let us know what you think!
What does it all mean?
At this point, we are forced to step back from the mud and ponder the events unfolding in the meadow and ask the questions that are raised in the parable, for they are of the utmost importance.
The parable highlights the subtle yet important difference between principles and rules. In the meadow parable, the activities and projects referred to as meadow improvement represent rules. Rules are made by those who either do not fully understand or do not desire to adhere to the principles of an activity and are generally imposed with the stated purpose of maintaining or “improving” the status quo.
Once a human institution, as the meadow was to represent, makes the subtle change from being guided by principles to being governed by rules, these rules fill the meadow with “cordoned off areas” and “canals” until no one can freely move about within them.
A glance at the following definitions will help us to better understand the conceptual difference between principles and rules. A principle, according to the Encyclopedia, “signifies a point (or points) of probability on a subject (i.e. the principle of creativity), which allows for the formation of rule or norm or law by (human) interpration of the phenomena (events) that can be created.” By contrast, a rule, according to dictionary.com, is “a principle or regulation governing conduct, action, procedure, arrangement, etc.” Making a clear distinction between principles and rules is confusing because the terms are often used interchangeably to define two concepts that could not be more different. This is why the change is subtle.
We must then attempt to compare and contrast these concepts in the following manner: Principles make things possible. Principles create. Rules govern conduct or regulate. Rules destroy. With this understanding, we can now postulate that, while principles tend to create rules, rules tend to destroy principles once the propagation of rules dwarfs the principle that created them. It is as if an invisible prison is constructed by the growing threat of going to a real one.
Does this mean that principles are bad because they create rules? By no means, in the same way, rules are not bad either, but principles must be held above the rules that they create in order for the principles to maintain their power to create and make things possible. Once rules are allowed to dominate, they thrust aside principles and a prison begins to quickly construct itself.
This is what our brilliant local CPA was alluding to in the GAAP Update seminar when he mentioned that the word “should” in of some of the pronouncements had been changed to “must.” For this careful choice of words is perhaps the clearest manifestation of this subtle shift in American society, circa 2012.
The word “should” bestows some glimmer of freedom of choice upon the hearer. As in “You should wear a jacket, its cold.” While the word should implies a strong suggestion that would do well to heed, it is understood that one is free to ignore it, albeit at their peril. Once the word “must” is placed in the same sentence, this freedom is removed and the only thing that remains is the expectation of punishment for non-compliance. It describes this subtle change from principles to rules that is happening in not only in GAAP but in many other areas of society as well.
This choice of words will only lead to resentment and violence in the meadow, where those guilty of stealing water rations for their parched fellow meadow dwellers and for crossing into a cordoned off area are either incarcerated, banished, or exterminated in an increasingly futile attempt to keep the meadow clean. While those dwelling in the meadow may gradually adjust to this dire state of affairs, it will be clear to all external observers that the once vibrant meadow has turned into a gruesome cross between a pig sty and a slaughter house.
Such is the fate of a society in which rules are employed to remove all semblance of freedom of its inhabitants. It is not a question of if, but when.
It is abundantly clear that the principles of liberty and self-determination are the only antidote to the poison of rules once they have overwhelmed the principles that gave rise to them.
And what of the deer who began all of the bounding in the meadow in the first place? Wouldn’t they have stayed around to ensure the freedom of bounding? It is perhaps the greatest of ironies that these deer, who so fervently loved bounding and whose activities attracted the very people who would stifle and destroy it, would simply bound to another meadow as the first restrictions on bounding were drafted.
For it is the very nature of true freedom to respect the right to freedom of others. Even if they choose to destroy the very freedom that has been accorded to them.
If you have enjoyed these musings, please share them with your friends and family via any means you deem appropriate.
In the case that you and feel mysteriously led to contribute financially to this author’s work. Please visit click on the “Donate” button on the upper right hand side of this page. All donations are accepted by The Wilcox Trading Company via Paypal, are considered sales of the book and, while given and accepted in a charitable spirit, may not be considered charitable donations by the IRS.
Thanks again and we wish you all the best, deer reader!
The once vibrant meadow and its subsequent demise can provide us with a metaphor from which to gain an understanding of the difference between principles and rules and what it means for us as persons as we navigate together this subtle yet incredibly important cultural change in our society.
We pick up the scene at our meadow in the aftermath ofWoodstock. It has become obvious to everyone in the meadow, both deer and persons alike, that the meadow is no longer the utopia that they had entered. The people become desperate to understand what went wrong and more importantly how to keep it from going wrong again in the future.
How will they go about this? First, they cordon off a bounding area, so that bounding may continue, albeit in a limited fashion. Other areas are then cordoned off and efforts are made to revive the grass in these areas. It is prohibited to enter into these areas until it has been deemed “suitable for bounding.” Next, they decide to construct a canal system in part of the meadow and allow the stream to “revive” itself within its new found confinements. Water from the stream and canals is then rationed, which, in turn, limits bounding. This limitation on bounding, as envisioned, seems to rejuvenate the meadow for a time.
At this stage, something peculiar; a paradox, if you will, begins to take place. The people in the meadow begin to see that, although bounding now has become a limited an increasingly coveted activity, and their other projects seem to have achieved their aims, the grass is growing and the stream is beginning to clear up. Heartened by their success, they begin to dedicate themselves more and more to “meadow improvement” and less to bounding.
There is now scarcely time or space for bounding anyhow, and “meadow improvement” is a much more worthy cause. Why just look! We have grass growing where no one can bound and our canal system now provides more rations of water for more people who are not bounding. What could be better?
The clear answer, though few people now recall, is the very reason that people began to flock to the meadow in the first place: The freedom of bounding in a meadow! Joyful, unadulterated bounding without water rations and cordoned off grassy areas.
Now, however, nobody dares to say these things out loud, because everyone knows that “meadow improvement” has become vital, and that bounding, while entertaining, must be done on an extremely limited and controlled basis, with a careful eye on the grass and the stream, lest the area be disturbed again and they find it in need of further improvement.
Of course the original, “genesis” deer and their principles, are now long gone, searching for another meadow in which to freely bound about. Some who remain in the meadow are still searching for these principles and long for the days when they will bound freely again.
However, since most of those who remain were either unaware of, or in some stage of disagreement with the original principles, the “why” of the boundless joy that they once beheld; “meadow improvement” continues and the deer and their principles are idolized, but rarely sought.
Why? A return to those principles would lead to too much bounding, of course. And, of course, too much bounding leads to ruined meadows.
So what is the point of this tale, “deer” reader? What can you and I learn from a humble accounting lecture, bounding deer, and “meadow improvement” projects? In other words, what does it all mean?????
Indeed, what does it all mean? For the answer, stay tuned for our final installment and Trust Jesus.
The following is another excerpt from our soon to be released ebook. It will be offered for free through Smashbooks.com in all common ebook formats in the coming months. Enjoy!
From Eden to Woodstock
We recently attended a brief seminar which was titled “GAAP Update.” This title, to anyone who is not an accountant, may sound like some sort of fashion show. While I had hoped to observe some of the latest models of pocket protectors, the only thing that any reasonable person (that is you and I, “deer” reader) could observe to be “in fashion” was a decreasing reliance on professional judgment and increasing scrutiny, oversight, and more rules in the accounting profession.
In order to properly understand the above observation, we must first attempt to understand what GAAP is. GAAP, while not addictive, should be taken in small doses. As such, I will proceed to administer it in as small of doses as possible so that we can avoid the common side effects of confusion, drowsiness, and its other less understood attacks upon the human psyche.
GAAP, for those of you who have been fortunate enough to avoid the acronym thus far, stands for “Generally Accepted Accounting Principles.” According to Wikipedia, “GAAP is the standard framework of guidelines for financial accounting. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.” Wikipedia goes on to list the principles by which GAAP is guided by as the principles of sincerity, permanence of methods, non-compensation, prudence, continuity, and periodicity.
The presenter at the seminar, a brilliant local CPA, alluded to what we are now calling the “subtle change from principles to rules” when he mentioned that the words “should” and “must” were now explicitly defined in the new accounting guidelines in such a way that it had all but eliminated professional judgment from his profession.
His statements referred to the new requirements which Statement of Accounting Standards 102, entitled “Defining Professional Requirements in Statements on Auditing Standards,” enjoined upon those condemned to his chosen profession. Where the word “must” appears, the accountant is to understand that the requirement is unconditional and must be performed. This is straightforward enough, and even highly trained professionals would have trouble arguing this definition.
It is the stated definition of the word “should,” which has from time immortal been the fallback for the imprudent when explaining why something was not done, which took the man aback. For the word “should,” from now to eternity, shall indicate a “presumptively mandatory requirement,” which for practical purposes, makes it just another spelling of the word “must.”
On the surface, this sounds like a simple and presumably necessary clarification made in the name of making the writings of accountants more accessible to the general public and the ethics of the general public more accessible to accountants.
The deeper truth, the one that our brilliant local CPA alluded to, is that trust in professional judgment has disintegrated and the need for specific, carefully worded instructions that remove the need for “flawed” professional judgment is taking its place. This should alarm us all, as the accounting profession is by no means the only field that this subtle change is taking place in.
[Editor’s note: If you would like to witness for yourself the alarming rate of the expansion of rules written by agencies of the Federal Government, a peek at regulations.gov at any given time will give you a general idea of the proliferation of rules in society.]
Any institution that is organized by human beings, such as a company, a religion, a government, or a football team, follows a pattern. Observe closely, “deer” reader, and see if you can pull an example from your own experience. These institutions begin with some sort of principle or set of principles. The person or persons, whom we will call the founders of the institution, understand the principles upon which they were founded and tacitly operate according to these principles.
When something is in its genesis, it is fresh and exciting. Possibilities bound about, like deer in a meadow in early spring. It is a thing to behold. People flock to this bounding, this life, to simply breathe it in and to somehow be a part of it.
“Let it always be this way!” they say, “I love this! How can I join?”
The founders may or may not have decided how one can join. In the beginning, at the genesis of the institution, it hardly matters. If people are not allowed to join formally, they will do so by imitation. Such is the charismatic nature of an attractive institution which is run on sound principles.
At this stage, whether formally invited or not, people flock to the institution in great multitudes. Everyone wants to bound with the deer, drink from the stream, to lie in the grass.
Then, something begins to happen. The people, who were not there at the genesis, do not understand why the deer are bounding. And when the deer try to explain this to them, the people may not understand or perhaps may disagree with the reasons given for their joyful bounding. In this miscommunication, the principles get lost or distorted.
Nevertheless, the people agree that the bounding must continue, and increase, by all means. They continue to flock to the meadow. Soon, because of the crowds, the bounding area becomes a mosh pit, the water in the stream becomes undrinkable, and the grass turns to mud.
Yes, the once fair meadow full of bounding deer has quickly turned into a scene from Woodstock.
Today we wish to take you, fellow taxpayer, on a brief trip back to where it all began, to one of the origins of the agitation which causes your author to pen his thoughts in an attempt to understand the world about him:The Subtle Change from Principles to Rules.
The Subtle Change from Principles to Rules
This collection of essays is more an observation than an explanation, which is why we so enjoyed writing it.Over the next few days we will be presenting to our faithful readers our soon to be released ebook.It will be offered for free through Smashbooks.com in all common ebook formats in the coming months.
It is the glory of God to hide things, and the glory of man to discover them.It is a beautiful, mysterious existence which we live in, and there is a tension between what is revealed to us and what is to remain a mystery.This tension is inescapable, and the best one can hope for is to find satisfaction within this tension.Clinging to mystery is to operate in darkness. Clinging to revelation is to live in the past as the future races by.
Thank you for joining us in our observation of what is happening all around us.
In the lazy summer days of 2007, the world appeared to be getting its groove back. Few, if any, were the signs pointing to the financial catastrophe that was about to unfold.
Yet despite the feeling of relative calm and optimism, it was clear that a deep and permanent change was occurring at the very base of society.Suspicion was beginning to replace trust and goodwill amongst men.
This brief book is a compilation of three essays that were written during the summer of 2007 and first published in October 2010. They deal with a revelation that was given to us as we were attending a breakfast presentation on upcoming changes to the US accounting standards. Instead of fighting off the drowsiness which usually accompanies listening to accounting jargon, we found ourselves grappling with a deeply disturbing truth that increasingly defines life in America to this day.
American society, which had built itself and created an unprecedented dynamism by operating on the basis of tacitly agreed upon principles, was now turning to the blunt instrument of rules as the basis for relationships.
An understanding of this subtle shift in American thinking will greatly aid one in understanding the seemingly inexplicable changes that they see all around them.
Clearly, rules have always been a part of life. They are nothing new. What was, and is new, is the power that is now being ascribed to rules. In America, it was often the case that a rule would be written and modified on the basis of an underlying principle. Rules for the sake of having them did not make much sense.
Now, circa 2012, the power is continuing to shift to the rules themselves. While the hallmark of principles is that they are flexible enough to adapt to constantly changing circumstances, rules tend to serve as a kind of concrete for society which, as they harden, completely paralyzes anything that finds itself trapped amongst them.
Societies based on rules are nothing new.In fact, they are sadly becoming the norm throughout the world.Perhaps the clearest high level distinction between a society that operates on the basis of principles and one that operates on a basis of rules is whether it finds its legal basis in English Common Law, which generally produces outcomes based on equity before the law and a reasonable standard; and Napoleonic Code with its strict adherence to written rules which often has little flexibility regarding the individual circumstance that is being examined
These essays deal with the shift, then, from America’s predisposition to operate on the basis of English Common Law to that of the rigidity of Napoleonic Code, and the inevitable consequences of making this shift.
The eternal question that we present here, “deer” reader, is whether or not one will stay in the meadow once as they see this shift occur.
Today we are taking a break en route to Bolivia. Breathing in La Paz is hard enough, let alone attempting to dissect what is occurring in the World economy. As such, we offer a look at things which we wrote about 14 short months ago which came to pass just 8 short months ago. A much ignored number which is peculiar to America, the debt ceiling.
Today, the number is mostly ceremonial but it is important to remember that the US is likely to breach the $16.2 trillion symbolic limit in the near future. Will we have repeat of the events we described? Enjoy!
1/18/2011 Portland, Oregon – Pop in your mints…
For some months now we have been wrestling with the notion that there will be a major collapse in the Bond Markets. We have speculated as to the causes and possible effects in these chronicles, comparing the coming events to the battle of Armageddon, famously prophesied by John in the book of Revelation, Chapter 16. Bondholders have been lured into a valley, and our guess is that they are about to get slaughtered.
When and how will this occur? This is the subject of our speculation today. Be forewarned, fellow Gambler, that we do not have any sort of inside information. Rather, we rely on our own wild imagination and questionable powers of deduction. Actual events may differ dramatically from what we imagine, and we pray that they will!
Our current speculation has its origin in digesting the reality of the upcoming Congressional vote as to whether or not to raise the debt ceiling. In the past, this would barely have been news. The government almost always, without fail, spends more money than it takes in. This is one of the few things that you can count on a democratically elected government to do. To cover the deficit, the government must issue debt. Since there is almost always a deficit and there is almost always interest to be paid on existing debt, the amount of debt owed by the government must always increase. This is the basis of our current insane monetary system.
But wait! Along comes a group of Congressmen and women that either don’t understand the game or are unwilling to play along any longer. They appear, at least from their rhetoric, to be set to vote AGAINST raising the debt ceiling (the total amount of debt that the US Government can officially borrow). In theory, this would mean that Government expenditures would have to be immediately reduced by $1 Trillion, the projected deficit for current fiscal year, and further reduced to give them the ability to roll over the roughly $3 Trillion dollars worth of US Treasury debt that is set to mature in 2011, even assuming that it can be rolled over at 0% interest. Both of these are plausible but highly unlikely scenarios.
As an aside, you can watch all of the dizzying US Debt statistics here. We advise you to take some Dramamine beforehand.
However, a “NO” vote on raising the debt ceiling would make these highly unlikely scenarios not only likely but absolutely necessary. A “NO” vote would likely trigger a sell-off not only in the US Treasury Debt Markets but also in every fixed income and equity market on the planet. This sell-off would lead to an unprecedented amount of cash chasing around a finite number of real goods.
In short, the end result of a “NO” vote would be a paralyzed Government and hyperinflation.
On the other hand, a “YES” vote is no picnic either. Many of these Congressmen and women were around the last time they had to vote on a measure with such broad reaching financial implications. Does the TARP Fiasco of 2008 ring a bell?
On the bright side, a “NO” vote would bring an abrupt end to the insanity of the present world monetary system. A system that is based on debt, not real money, which causes the productive forces of mankind to cannibalize themselves. After the initial shock, a “NO” vote would be a great thing for mankind. Do today’s politicians have the backbone to do this? Only time will tell, but here at The Mint, we believe that at this point a “NO” vote or a stall tactic (which is practically the same thing) may in fact be likely to occur this spring. We are not alone in this boat, as back in November former Treasury Secretary Robert Rubin alluded to this vote as a possible “trigger“ for a “rout in the Treasury Market.”
While all signs in the Bond Markets point to an implosion, either this spring or at some unspecified date in the future, all of our Key Indicators here at The Mint are continuing to point to Inflation. It is for this very reason that we observe them daily, to ensure that our hypothesis is correct. These are the “cards” the we hold as gamblers. Each one merits in depth study as to its economic significance but we will spare our fellow gamblers this depth for now and jump directly to the practical application.
At the end of every Mint, we present the Key Indicators. We encourage you to compare them with the Key Indicators from previous Mints. If the Key Indicators are generally higher (with three exceptions) than they have been in the past, we expect inflation, maybe a lot of it. If they are lower, we would expect deflation. The magnitude of the inflation or deflation depends upon the magnitude of the changes in the numbers.
The three exceptions, of course, are the “FED Target Rate”, the “MINT Perceived Target Rate”, and the “Inflation Rate (CPI).” In the case of these three indicators, if the number is lower than it has been in the past, we can expect inflation. If they are higher, we would expect deflation.
You may also click on each data point below for a link to its source to better perform trend analysis.
The timing of what is to come is a mystery. Based on recent data, inflation is walking up the drive but still a ways from the door. If we had to guess, we would expect inflation in full force by January 2012. If Congress pulls the trigger with a “NO” vote this spring, it could arrive quite a bit sooner.
As Kenny Rogers wisely said, “Know when to walk away and know when to run!”
Nearly 20 years ago, Jeff Foxworthy topped the comedy charts when he released his now famous album “You Might be a Redneck if…” While we have no illusions that today’s musings will attain the fame that Mr. Foxworthy’s have, today’s Mint is an entirely accidental homage to Mr. Foxworthy in which we present a series of one-liners which we hope will provide an invaluable service to the American public.
Namely, we aim to provide the public with comical assistance in helping one properly identify whether or not they are a Socialist. It is a handy, self convicting exercise which is meant to help all of us to identify and perhaps deal with our latent Socialist tendencies.
In other words, you may laugh heartily, knowing that the laughter, like the accumulated loss of capital in a Socialist society, is at the expense of the proletariat. Enjoy:
You might be a Socialist if… (with apologies to Mr. Foxworthy):
You default to the government when asked who should solve a social problem
You get a measure of self righteous gratification when passing through a body scanner
You believe in economic equality
You have attempted to define economic equality
You make special exceptions for yourself when defining your concept of economic equality
You still believe in economic equality after attempting to define it
You are a member of a labor union
You wish you were a member of a labor union
You wish you were an unemployed member of a labor union
You believe that tariffs save jobs
You believe that limitations on immigration save jobs
You believe that taxes create jobs
You believe that regulations create jobs
You vote for tax increases
You vote for a representative government which asserts authority over those who are not permitted to vote
You are entirely comfortable living in a world where the “end justifies the means”
You regularly give unsolicited advice to strangers
You get angry when such advice is ignored
You use a central bank issued currency as a savings instrument
You have attempted to describe the economic benefit of homogenized interest rates
You prefer a higher national GDP to a higher personal income
You believe that certain projects are so big that only the government is qualified to do them
You can say “government efficiency” with a straight face
You have ever defended TARP on the grounds that a nebulous “greater disaster” was averted
You’ve referred to “Cash for Clunkers” as good for the environment
You’ve referred to “Cash for Clunkers” as good for the economy
You’ve referred to war as good for the economy
You’ve referred to a natural disaster as good for the economy
You believe that there is a universally fair price for certain goods or services
You believe that said universally fair price should be a dictated by the government
You would feel guilty paying less than said universally fair price
You think you are saving money because an expense is tax deductible
You have uttered the words “necessary evil” as an explanation for a moral contradiction
You have uttered the words “the lesser of two evils” to explain an unpopular decision
You use the words “quality” and “equality” interchangeably
And finally, the last one we can think of for today, which, as you can see, if far from qualifying as a punch line:
Your list of inalienable rights extends beyond or excludes life, liberty, and property
If you have said “that’s me” to one or more of the above, you might be a socialist. If you find that you truly are a Socialist, take comfort in the fact that you form part of a large and vocal majority. The most logical response, if this is the case, is to fully embrace one’s socialist identity and to leave behind the inherent contradictions of calling oneself a “liberal” or “conservative.”
There is absolutely no shame in identifying as a Socialist. As Polonius urged his son so we urge you, fellow taxpayer, “To thine own self be true.”
However, if it disturbs you to have identified with any of the above statements, please continue to peruse The Mint, as all of us can aspire towards embracing True Capitalism, and move towards creating a future full of the blessings of real freedom for our children.
2012 has gotten off to a relatively uneventful start on all fronts. Stock and Bond markets continue on autopilot and are completely underwritten by central banks at this point. Commodity prices seem to be following the inflationary path that the central banks support of the stock and bond markets has set them on.Meanwhile, productivity, real output, appears stable and poised to climb, which should further fuel inflation as the money supply begins to overwhelm the supply of real goods and labor.
The assault on civil liberties continues. The United States surrendered its status as a free country when it approved the NDAA, assuring that they government could detain anyone, anywhere, for as long as they want, without ever having to produce charges.
Finally, widespread corruption continues unabated. Officials at MF Global are still loose after robbing $1.2 billion of client funds in a desperate attempt to stave off a margin call which brought down the firm as the CME washed its hands of the situation, leaving traders everywhere wondering if their univested brokerage funds are safe or even truly exist.
Now, from Switzerland, the bastion of financial morality, comes word that the wife of Philipp Hildebrand, now former Chairman of its central bank, made a substantial purchase of US Dollars just weeks before her husband and his colleagues shocked the world by surrendering the Swiss franc to the same fate as the doomed Euro. Coincidence? It would appear not.
The Swiss National Bank Courtesy of Baikonur
In short, there is nothing in the data to disprove the hypothesis that the world’s financial system and by default the nations which are currently charged with it are headed to hell in a hand basket.
This, fellow taxpayers, should be cause for hope. For only when it is acutely understood by all involved the incredible destruction which is being wrought every single day by the current, insane, “debt is money” financial system under which we live, can things finally begin to get better.
We hope and pray that the day of collective acute understanding is near, and that the transition to a new system passes peacefully.
Habeas corpus. It is more than a latin term which means “you may have the body.” It is more than a simple legal action where a lawyer may request that credible charges either be presented against the accused or that they be set free.
Respect for habeas corpus is what distinguishes a free society from a totalitarian regime. Naturally, the United States of America, the great defender of freedom and liberator of the world guarantees habeas corpus to all of its citizens, right?
Wrong. With the stroke of a pen on new year’s eve, President Obama snuffed out what remained of the great flame of freedom which founded this great country.
Habeas corpus, as an idea in English law, can be traced back to the Magna Carta in 1215. In the words of what many consider to be the genesis of free society, the concept is spelled out in the following manner:
“(38) In future no official shall place a man on trial upon his own unsupported statement, without producing credible witnesses to the truth of it.
+ (39) No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement of his equals or by the law of the land.
+ (40) To no one will we sell, to no one deny or delay right or justice.”
The Magna Carta enshrines Habeas Corpus
It was later affirmed by an Act of the English Parliament in 1679 and reaffirmed in Amendment IV of the United States Constitution in 1791. Some would say that the recognition of and adherence to this simple legal principle by a society or government is the very definition of human liberty.
Yet for the past 11 years, the United States of America has failed to observe habeas corpus in the name of fighting terror. Beginning with the Authorization for Use of Military Force (AUMF) signed into law by George W. Bush shortly after the September 11th attacks and continuing with current President Obama’s signing of the 2012 National Defense Authorization Act, habeas corpus is now no longer guaranteed to US Citizens.
While there is much to be said for increased general vigilance in the wake of the atrocities which took place in New York on September 11, 2001, it is a national tragedy that the quest for increased security measures in response to these attacks has now paved the way for the threat of indefinite incarceration of every American citizen.
Benjamin Franklin best summed up the current state of affairs when he penned the following words back in 1759:
“Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”
Liberty in America circa 2012 is in increasingly short supply, and the possibility exists that innocent citizens will not hear their lawyer or family claim the legal birth right of free men everywhere by asking “may I have the body?”
You must be logged in to post a comment.