Mises and Madison

"With respect to the two words 'general welfare,' I have always regarded them as qualified by the DETAIL of powers connected with them. To take them in a literal and unlimited sense would be a METAMORPHOSIS of the Constitution into a character which there is a host of proofs was not contemplated by its creators." -April 20, 1831 Letter from James Madison (dubbed Father of the U.S. Constitution for his role in drafting of the text; see also The Federalist Papers, published on behalf of the American system as one of limited government of by and for the people of A Free Republic)~

"MODERN CRYPTODESPOTISM, which arrogates to itself the name of liberalism, finds fault with the negativity of the concept of freedom. The censure is spurious as it refers merely to the grammatical form of the idea and does not comprehend that all civil rights can be as well defined in affirmative as in negative terms. THEY ARE NEGATIVE AS THEY ARE DESIGNED TO OBVIATE AN EVIL, NAMELY THE OMNIPOTENCE OF THE POLICE POWER [OF GOVERNMENT], AND TO PREVENT THE STATE FROM BECOMING TOTALITARIAN." -Ludwig von Mises in chapter 21, The Theory of Money and Credit~

Prov. 11:3 - If the foundations be destroyed, what shall the righteous do?

Friday, July 29, 2011

WORKING PAPER/under construction

Dear readers, friends and interested parties,

This investigation is a work in progress, unfolding and developing as the evidence permits. I’m trying to trace the politics and economics of the free market approach as well as the socialist view and see where the two come together and what from each perspective may help us understand things as they are and guide us to better decisions.
I agree with the view that Kevin Williams holds which is that socialism by any other name is still socialism. And communism is simply the same thing taken to its logical conclusion, to the natural point, that socialism leads to, which is what Karl Marx was advocating without realizing, understanding or perceiving the full error and consequence of his historical interpretations and prescription which turned out to be incredibly poisonous and deadly to unimaginable numbers of human beings.
Communism is the open, naked, and full blown progression of the heart and soul of the socialist vision; it is the natural evolution of socialist economic logic when push comes to shove and it is time to decide whether or not the role of government is to command and order man with regard to his own property, labor and person "for the greater good." If the greater good THEORETICALLY demands that view, then your life, and much more so your liberty, has now been fundamentally transformed into something which does not really belong to you. The difference is not as much theoretical as it is one of development and subjectivity because the difference between the Communists and "Democratic" Socialists is in that the former were much less squeamish about the level of human destruction, suffering, oppression and waste that they were/are willing to "bear" in the name of half-baked ideas which I wish to address and identify for those who may be looking into for the first time or seeking more information and material about. 
Here I wish to show and prove the REALITY that freedom works and that, as Kevin Williamson has argued, in his Chapter 2 of the Politically Incorrect Guide To Socialism, "Yes, 'Real Socialism' Has Been Tried - And It Has Failed,": "Utopias exist only in the imaginations of political idealists and stoned poli-sci undergraduates."
Williams, as I do here as well, asked, is it possible that we can "operate under the radical theory that socialism is what socialism does, not what socialists would like socialism to be"???

"But the idea that the USSR, Cuba, Venezuela, Vietnam, China, and others have failed socialism - not that socialism has failed them - persists. And it persists at relatively high levels of intellectual discourse, as in left-wing patron saint Noam Chomsky's shameful defense of the genocidal Khmer Rouge."
 I was involved in a public disagreement with someone on YOUTUBE in which I made the following statement, which I have modified and adapted to post onto a single separate blog entry, and now here as well:

"If Democrats or Republicans had tenure you couldn't fire them.

If you can't fire anyone -ever- but you have to pay them anyway, pretty soon what you receive from them is going to be more and more defective product or whatever they want to give you, which will be mostly 'orders' and lies which they will bark at you and you will not be able to get away from them because socialism is the ultimate monopoly and economic corruption. Be prepared to have your economy and your back broken, IF YOU CAN'T FIRE THEM.

Free markets, not free loaders."
That's what I tried to communicate to YOUTUBE user "lmdslam" through my account, "thexcount," over here, in comments about the uploaded video titled "Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis" by user "NakedEmperorNews," which as of now has 3,807,149 views. 
 Poverty is one manifestation of the problem and general, natural and universal phenomena of scarcity. It also involves, for lack of a more polite term, human defects and ills. Mental problems, drug abuse, natural and economic disasters, bad luck and a line of unfortunate events. Now, at least in the disaster scenario one can still recover because the world offers opportunity as well as misfortune. The question is not whether we should help, but HOW we should do it.

I believe that the most honest aspect of the socialist critique of capitalism, the limited government and free market approach, is its overly simplistic characterization of capitalism as an uncooperative arrangement while ignoring the extremely important line that is drawn by negative-rights protection for individuals and the broader community, and yes, even economy. 

Ludwig von Mises explained that the purpose of negative rights was and is as the obviation of "an evil, the omnipotence of the police power [of government], and to prevent the state from becoming totalitarian."

 And then there is the critique of inequality, wealth, obscene profits, exploitation, the predatory society, etc., etc.

The fact that some individuals attain great amounts of monetary benefits, reaping enormous sums of profit, is seen as coming at the expense of others and causing the demise of others which then provides the rationale behind government becoming the arbiter of what is too much for someone to have, how much they are allowed to grow economically, as if such growth in and of itself causes others harm. This suggestion is one of the errors which comes with counterproductive implications and activities, such as the divisive, obnoxious and petty ax grinding of class warfare which is far more expensive and misdirecting of energy and resources to address, than actually improving the human condition efficiently and effectively, such as by direct local charity and focused generosities and labors. The expansion of government and its ever-expanding ever self-justified self-supporting meddling and constraints in our lives actually takes from our labors to sustain mroe and more bureaucratic and inefficient arrangements which manifests itself in the decreased productivity and increased economic troubles that is repeated again and again in socialist projects.

The bottom line in that this subliminally envious approach is that it is a destructive and counterproductive attitude and premise to build a philosophy and political campaign upon.


I believe that capitalism and socialism are twins in that they were born at the same time as economic theories and concepts, having a sort of ying-yang dichotomy in terms of opinion and intellectual doctrine and that "there is nothing that could mitigate the conflict between those two principles," as Ludwig von Mises proves in Middle of the Road Policy Leads To Socialism.

See also On "Third Way Economics" which I link to over at https://sites.google.com/site/freemarketcircle

But more on that point later.

Henri De Saint Simon, born in 1760, known as the father of French Socialism, and who apparently coined the term socialisme, was a dreamer like John Lennon of "Imagine" fame.

He was one of the critics of issues which become very pronounced in such periods such as during the time of the Industrial Revolution as well as the French Revolution. Big human issues, such as inequality and poverty.

Historically, people have always asked whether or not there might be "a better way," and in revolutionary France, this aristocrat theorized and formulated his opinons, which those such as Karl Marx shared and carried on with.

One of the apparently systematic problems of capitalism is this "hyperproductivity" or "surplus" material overabundance and waste (which is closely related to the boom bust cycle).

It can be seen on a large scale when too much of something is produced beyond the point at which there really is no more natural (i.e. market) demand or need for it. This can be seen on the micro level, where 5 meat patties, a few onion rings are "left over" and thrown out when a vendor or his employees closes shop, having overestimated the need of the day’s potential customer needs or demands. This will cause protest from the socialist camp, providing a kind of ammunition against the system which allows for such a thing to happen.

But this "problem" is much preferable to the aggravation of the problem of scarcity and mediocrity which is what socialism through its monopolistic and distorted views of economics causes.

I wish to contribute something more to the points that have already been made in response to the socialist critique (the development and formulation of capitalism) of a system such as that intended and secured by the U.S. Constitution. Ludwig von Mises is one of those who have responded. Even if it is simply to promote these long neglected and needed arguments!

The Future of Liberty -GEORGE REISMAN, PhD

and:Socialism: An Economic and Sociological Analysis -LUDWIG VON MISES http://mises.org/books/socialism/contents.aspx

Christopher Sufle
07/29/2011 Working Paper Update. Still under construction:

I offer this paper to the average concerned and interested citizen as much as I do to the professional (that is payed and career) intellectuals/philosophers in order to promote the best case for free trade and free market economics and limited government, which to be so, must remain fixed in place within specifically defined and codified boundries.
To promote the view, espoused by Thomas Jefferson, and expanded upon in depth and great breadth within the Federalist Papers of "a wise and frugal government, which shall restrain men from injuring one another, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned."

What should those boundries that I speak of be and why should we consider that the free market economic system is the key to this question of what form of government benefits humanity the most if taken up?

Well, I would begin with the premise offered by the author of An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith, who argued in the 1700s that "the property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable."

In his Theory of Money and Credit, F.A. Hayek's predecessor, Ludwig von Mises highlights this finding, that "private ownership of the means of production tends to shift control of production to the hands of those best fitted for this job and thus to secure for all members of society the fullest possible satisfaction of their needs."

This is a major contradiction to the idea that government planners, politicos and bureaucrats, should be directing, planning, and (yes) manipulating the economy and the citizens who form it as if it were some sort of destructive force or natural disaster and disorder and as if the people were sheep to be herded and prodded in this direction or that.

As John Taylor, in his Introduction to Austrian Economics, shows:

"Decreased interest rates in the early stages of THE CREDIT EXPANSION emerge as FAULTY SIGNALS to entrepreneur-producers about the real savings AVAILABLE for business investment purposes. Business decisions are made as if the ratio of present (consumer) goods to future (capital) goods has dropped, when in actuality no such change has occured. Additional investments in capital goods broadening and lengthening the structure of production are spurred as a business boom gets underway. Resources are diverted into the production of capital goods, and the prices of such resources are concomitantly bid up in the process. Yet the cue that the entrepreneur-producers have followed, the interest rate, has been FALSIFIED by the effects of THE CREDIT EXPANSION. From the point of view of the general public it would be better that such resources not be misdirected in this fashion. Real savings appropriately available for additional capital goods formation has not increased. Under the conditions of a short-lived credit expansion, the boom can be only be temporary."

But who knew and who could understand that this approach would be a short-term false fix???

Going further, Taylor expounded that under such interference, "the demand for consumer goods has not dropped, and the impropriety of enlargening and lengthening the production process as if it had is revealed once the credit expansion has terminated. THE COSTS INVESTED ARE SEEN AS UNJUSTIFIED because the longer waiting time to complete and implement the additional capacity to produce is inappropriate in view of the unaffected demand for consumer goods. Production expansions cannot be finished, AND THE STRUCTURES OF PRODUCTION, WHICH INVOLVES NUMEROUS LINKS IN THE LENGTHENED PRODUCTION CHAIN, IS THROWN OUT OF SMOOTH RUNNING ORDER. Liquidations and rearrangements of production are necessary in order to correct the undesirable and ‘unforseen’ effects of the malinvestments. The ACTUAL CONSUMPTION-SAVINGS RATIO is once again able to dictate the balance between shorter and longer or more roundabout approaches to production. The correction or adjustment process is what is commonly referred to as a recession or depression. If the duration of the credit expansion is not short, then the extent of malinvestments is compounded and the inevitable and eventual correction process is intensified."

Well, that brings us to the financial crisis and great recession which kicked off in 2008 when 27 MILLION risky and subprime loans, half of all mortgages in the U.S. (according to The American Spectator in May 2011 issue, What Hath Government Wrought by Peter Wallison) were involved in the government’s GSE housing bubble bust and policy disaster which even president Bush encouraged under the theory that it was the government’s role to promote home ownership. Just for the record, I was a Steve Forbes supporter during the Republican primaries for the 2000 presidential election because he had a better grasp and understanding of the workings and policies which are more compatible with free market economics, limited government which permits, without interference and arbitrary bureaucratic mandates and counterproductive structures, hard work, education and intelligence to form the basis and core of the American engine of innovation, prosperity, scientific and material progress. Not the nanny state government dependency serf subject master model.

Although, I would also say, that president Bush was a vastly superior president to Obama if we just compare their economic records. I will post my comparison between the two administrations in another paper at another time.

As far back as April 2001, in its 2002 budget request, the Bush administration pointed out that the GSE (government sponsored enterprises) Fannie Mae and Freddie Mac could "cause strong repercussions in financial markets." In 2003 the White House referred to the Fannie Mae and Freddie Mac set up as "a systemic risk that could spread beyond just the housing sector."

On February 17, 2005, Alan Greenspan, Chairman of the Federal Reserve , in a hearing of the House Financial Services Committee regarding Fannie Mae and Freddie Mac, he emphatically warned that "we are placing the total financial system of the future at a substantial risk." At another hearing he argued, "IF WE FAIL TO SEE GSE REGULATION WE INCREASE THE POSSIBILITY OF INSOLVENCY AND CRISIS."

And here we are today.

Thats why the Bush administration and friends in Congress fought to get regulations, supervision and oversight over these GSEs to ensure "the safety and soundness of their financial activities" but Democrats who were in charge of Congress hyperventilated, demagogued, blocked and prevented the same prudential rules and regulations that apply to private lending and financial organizations/firms in the name of suspending economic law and common sense via the foolish socialistic government activities that basically crashed the economy and caused the recession which has been prolonged by even more foolish and counterproductive socialist policies which unrealistically rest on the impossible and unrealistic notion and promise that some day, if we give up our liberty to some higher order of superiorly autonomous empowered human being and class of intellectually superior nobles with subjective, undefined and uncontrolled desires, which are somehow going to replace and abolish or ‘equally’ distribute the need for the means of exchange and resource allocation (money) in place of adults and civilians with desires and plans of their own -for their own lives and communities- then we will all live in harmony , peace and progress.

See Crime Punished And Unpunished POWERLINE
and also : Shocking Video Unearthed Democrats In Their Own Words
And also:

But these people haven’t learned anything, they must be stopped and defeated politically because they are clearly not learning the lessons of history or learning from their mistakes and we are all paying for it. All of us, even those who trusted and voted for them. The broken and silly promise of socialism is not worth the price payed in human liberty, wasted potential and energy.

Consider the following: "Since World War II, America has endured a dozen recessions, each one followed by a quick recovery. Each one of those PREVIOUS EXPERIENCES - especially those with severe economic downturns - produced rapid and substantive rebounds. In the three years following the Reagan recession of the early ‘80s, our economy averaged 7% annual growth." (Michael Medved) SEVEN PERCENT, as opposed to 1.3% today!!! And NINE of those twelve recessions lasted no longer than one month, according to Michael Medved. What is going on here?!

In Chapter 21 of the 1980 edition of his Theory of Money and Credit, Ludwig von Mises reveals, to those who don’t already see it, that "private ownership of the means of production tends to shift control of production to the hands of those best fitted for this job and thus to their needs." This I quoted to another YOUTUBE viewer over at the following video: ""

Here is Congressman Ron Paul, who is a student of F.A. Hayek: "What Congress has done, and what the Fed has done, we’ve literally injected about $5.3 TRILLION DOLLARS and I don’t think we got very much for it. The national debt went up $5.1 TRILLION DOLLARS, real GDP [the economy] grew less than 1% so I don’t think we’ve gotten a whole lot. Unemployment hasn’t recovered... And one statistic that is very glaring is that if you look at how long people are unemployed, THE AVERAGE TIME USED TO BE 17 WEEKS, NOW ITS NEARLY 40 WEEKS they stay unemployed, so nothing there reassures me. And also, when we talk about prices, we’re always reassured there’s not that much inflation and we’re told they might START CALCULATING INFLATION DIFFERENTLY with a new CPI [consumer price index] - of course we changed our CPI a few years back. There’s still a free market group that calculates the CPI the old fashioned way and they come up with a figure, IN SPITE OF ALL THIS WEAK ECONOMY, the prices have gone up 35%, 9.4% every year and if you talk to the average housewife she’d probably believe the 9% rather than saying its only 2%. So I would say what we’ve been doing isn’t very reassuring with all this money expenditure.

"But my question is related to the overall policy. Spending all this money hasn’t helped and yet many allies that have endorsed so much what has been going on whether it’s the fed or the congress, they recognize that consumer spending is very very important AND THEY CONCENTRATE ON THAT. [Enter the Keynesian scam/socialist "stimulus" manipulation to poke and prod the sheeple in this direction or that]

"But the $5.1 TRILLION DOLLARS didn’t go to the consumers, it went to buying bad assets, it went to bailing out the banks, it went to buying bad companies and low and behold, the consumer didn’t end up getting this. They lost their job they lost their mortgages and houses and they’re STILL IN TROUBLE. And my question is, if you took that $5 TRILLION and said that consumer spending is good, you could have given every single person in this country $17,000 dollars. Why is it the program of both the congress and the fed to direct the money to the people who have been making alot of money instead of to the people if you argue that the consumer needs to spend the money -I obviously don’t advocate this but I would suggest that you know, maybe it could have worked better [...]"

He was talking to Treasury Secretary Ben Bernanke here, applying the reductio ad absurdum argument to the big bailout and the Keynesian prescription to the vexing and annoying matter of freedom. It is worth the pause to consider what it would mean for the economy and the government to actually handout the money like that which IS happening presently, through other programs and overinflated state pensions and benefits for government workers which are taxing the economy to the point right now at which as of today, July 29, 2011, the American economy has only grown 1.3% and the government is spending more than it is taking in, at risk of defaulting and going into further economic and fiscal distress, while the cost of living goes up for everyone. And all of this while the government grows, while the economy, productivity innovation prosperity and the individual shrinks.

And say that our ruling politicos were able to, in the direct way that Communism and Marx demanded, enact a direct redistribution of the economic "stimulus" program money to every individual in the country, rather than to more proximate parties involved financially in the situation? Then they would be right back at Communist square one: people would have money in their own hands again, and where would our political oligarchs be in this situation? Woops!

Fiat money + FDR + End The Fed RON PAUL

Many people hold misconceptions and bad ideas, but have good intentions. This is when reality and the truth should be introduced and considered, otherwise what do these people become other than extremists? As I like to say, false contentions poison innocent intentions.


[] US economy ‘has barely budged’: 1.3 percent growth in GDPRON SCHERER 07/29/2011http://www.csmonitor.com/Business/2011/0729/US-economy-has-barely-budged-1.3-percent-growth-in-GDP

[] The Problem is the Recovery, Not the Recession -MICHAEL MEDVED 06/06/2011http://mynorthwest.com/?nid=321&sid=493122

[] Keynes and the Reds -RALPH RAICO

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