Thursday, March 29, 2012

What War Really Is

Freedom Betrayed, by Herbert Hoover

Hoover asks the question, “Shall we send our youth to war?” in an article prepared for the August, 1939 issue of the American Magazine, he writes:

First, let me say something from this experience of what war really is. Those who lived in it, and our American boys who fought in it, dislike to recall its terribleness. We dwell upon its glories – the courage, the heroism, the greatness of spirit in men. I myself should like to forget all else….Amid the afterglow of glory and legend we forget the filth, the stench, the death, of the trenches. We forget the dumb grief of mothers, wives, and children.

War is hell. We are told this whenever we mention the atrocities committed, as if this pithy little phrase justifies the tragedy. Hoover here sees that war IS hell, however he sees this as reason to avoid entering in every way possible.

There is a scene in the movie “The Americanization of Emily.” This movie stars James Garner as Charlie Madison, an American officer in England during WWII, and Julie Andrews as Emily Barham, a British war widow – also having lost other family members to war.

The scene has Charlie Madison visiting the home of Mrs. Barham, Emily’s mother. Mrs. Barham is in great denial regarding the many deaths that war has brought to her family – her husband and son among others. She still acts as if her husband is alive, and Emily goes along with this denial.

When Mrs. Barham exclaims that after the war, it will be all the generals and statesmen writing books saying how it could have been avoided, Charlie explains that he doesn’t blame the generals and statesmen. He blames the mothers! The mothers make heroes out of their dead sons; they are the first to walk in the parade. Charlie explains that his own mother did this regarding Charlie’s brother. And now Charlie’s youngest brother can’t wait to enlist.

The clip is about ten minutes long, and I highly recommend spending the time. It can be found here:

In describing those who fought in the trenches in the First World War, Hoover writes:

Theirs was an inspiring heroism for all time. But how much greater a world it would be today if that heroism and character could have lived.

Some people (tragically too few) count the cost of war. Cost in lives, cost in injuries both physical and mental, cost to the family, cost in wealth destroyed. But what of the cost of the unseen? We are regularly told that those who go overseas to fight the wars are the best and the brightest of America’s youth. If so, what of the cost of what those same youth are NOT producing while fighting overseas – or worse, if they are killed or permanently injured?

In words that are as applicable today as when Hoover wrote them, he writes (regarding the First World War):

It has cost us 40 billions of dollars. And that represents more than just dollars. Today we have a quarter to a third of the American people below a decent standard of living. If that 40 billions of wealth had remained in America, these people would not be in this plight.

Forty billion dollars spent during WWI is the equivalent of something over $500 billion today. Estimates range regarding the costs of US wars over the last decade – somewhere between $1 trillion and $4 trillion. Over 15% of Americans live in poverty. Again, 15% receive food stamps. Official unemployment is reported at approximately 9%, but according to John Williams at Shadowstats is actually above 20%. Inflation, officially reported at approximately 3% is reported by Shadowstats at approximately 6%. To paraphrase Hoover, if those trillions of wealth had remained in America, these people would not be in this plight.

Hoover goes into self-examination regarding his support for America entering the WWI:

…I reluctantly joined in the almost unanimous view of our countrymen that America must go into that war. We had been directly attacked…I believed that with our singleness of purpose we could impose an enlightened peace; that we could make it a war to end war. I believed we could make the world safe for the spread of human liberty. If experience has any value to nations, there are in the wrecking of those hopes a thousand reasons why we should never attempt it again….

Several things strike me about these paragraphs. First, that Hoover believes the US was innocent in being attacked as provocation to enter the war. From Wikipedia:

Unknown to her passengers but probably no secret to the Germans, almost all her hidden cargo consisted of munitions and contraband destined for the British war effort. Lusitania departed Pier 54 in New York on 1 May 1915. The German Embassy in Washington had issued this warning on 22 April 1915.[41]


Travellers intending to embark on the Atlantic voyage are reminded that a state of war exists between Germany and her allies and Great Britain and her allies; that the zone of war includes the waters adjacent to the British Isles; that, in accordance with formal notice given by the Imperial German Government, vessels flying the flag of Great Britain, or any of her allies, are liable to destruction in those waters and that travellers sailing in the war zone on the ships of Great Britain or her allies do so at their own risk.

Imperial German Embassy

Washington, D.C. 22nd April 1915

This warning was printed adjacent to an advertisement for Lusitania's return voyage. The warning led to some agitation in the press and worried the ship's passengers and crew.

Second, that Hoover naïvely and arrogantly believed that somehow his was the generation that could do what was never done before: win everlasting peace by fighting the next war.

Third, as discussed by Charlie Madison in the abovementioned video clip, it is the statesmen (in this case Hoover) who always write afterwards about what a mistake it was to go into the war that they previously advocated entering.

Finally, at least one can say Hoover has seen a glimpse of the light. From his past arrogance and blunders, he has concluded that a little humility and caution is in order.

Afghanistan and Iraq were not the first wars entered into by the US government on shifting and ever-changing causes and justifications.

And right before our eyes the game shifts. We were originally going to quarantine dictators and again save democracy. Today we have two or three dictators on our team….

…we can hold the light of liberty alight on this continent. That is the greatest service we can give to civilization…

Wonderful counsel given by Hoover in this 1939 article. It is unfortunate that this was not followed. Hitler and Stalin could have had a great time pummeling each other. It is more unfortunate that Hoover did not come to this view prior to the US entering WWI. Absent the involvement of the US, the next thirty years would likely have been far different in Europe. Different for the better, as events could not have transpired any worse.

Wednesday, March 28, 2012

The Trojan Horse of ObamaCare

As is widely known, the Supreme Court is weighing arguments about the Constitutionality of the legislation popularly known as “ObamaCare.”

Of course, to anyone with even a basic understanding of the intent of those who defended and Ratified the Constitution, spending more than two minutes deliberating this issue would be laughable.

But this is not my focus. At his Tea Party Economist website, Dr. North suggests that the compulsory insurance portion of the legislation would be declared unconstitutional:

The vote will be 5 to 4….The fact that four justices will vote for it is indicative of just how far we have moved down the road to tyranny.

I will suggest that the fact than the swing vote of ONE judge can make such a difference to the lives of over 300 million Americans is the better measure of how far America has moved down the road to tyranny, but here too, I digress.

I do not know enough about the politics of this court or this case to comment on whether or not I agree with Dr. North’s assessment. However, I have long believed that the health care portion of ObamaCare was always was the Trojan Horse for something more valuable to government.

“What?” you say. “How can the health care portion of health care legislation be secondary, or be unimportant? That was the entire point.”

I believe the entire point was the tax increase – an increase that is certain to survive, no matter what the court decides regarding the insurance and no matter who is elected in November (except, of course, you know who). However, it isn’t just a tax increase, but a new tax on a new source of income.

As part of the legislation, Medicare taxes will be applied in a new way as explained in this Wall Street Journal piece:

This new ObamaCare bargain would for the first time apply the 2.9% Medicare payroll tax to "interest, dividends, annuities, royalties and rents," so-called passive income that we are told includes capital gains, though the latter wasn't explicitly mentioned in the proposal. This antigrowth investment tax would apply to singles earning more than $200,000 and joint filers over $250,000 and comes on top of the Senate's 0.9-percentage-point increase in the payroll tax, which would bring the combined employee-employer share to 3.8%.

This tax, for the first time, applies Medicare taxes to income earned on capital – a 3.9% increase applicable to those earning over $200,000 / $250,000. As with all newly introduced taxes, rest assured the rate will slowly go higher while the threshold will grow lower (either in nominal, but certainly in real terms).

Such creep has happened quite often in the past. Consider the income tax introduced in 1913. This tax applied to incomes of couples exceeding $4,000, as well as those of single persons earning $3,000 or more, were subject to a one percent federal tax. The maximum rate was 7% on incomes of over $500,000. To put these figures in perspective, $4,000in 1913 is equivalent to $92,000 today; $500,000 is equivalent to $11.5 million today.

Or consider the AMT, originally intended to capture high-income earners that paid little tax due to large deductions. Due to lack of inflation indexing, more and more have found themselves subject to this tax – originally designed to only tax the rich:

Although the AMT was originally enacted to target 155 high-income households, it now affects millions of middle-income families each year. The number of households that pay the tax has increased significantly in the last decade: In 1997, for example, 605,000 taxpayers paid the AMT;[49] by 2008, the number of affected taxpayers jumped to 3.9 million, or about 4% of individual taxpayers.[50] A total of 27% of households that paid the AMT in 2008 had adjusted gross income of $200,000 or less.[51]

The primary reason for AMT growth is the fact that the AMT exemption, unlike regular income tax items, is not indexed to inflation. This means that income thresholds do not keep pace with the cost of living.

Rest assured, whatever the Supreme Court decides, this new surtax will remain. Once in place, the rate will only increase and the income thresholds will only decrease (likely only due to lack of inflation indexing, although even if indexed, the government index always understates true inflation).

This is the Trojan Horse. Everyone was looking at the wrong walnut shell.

Monday, March 26, 2012

The Road to Totalitarianism

Freedom Betrayed, continued….

In 1938, Hoover took an extended trip to Europe, visiting leaders of many of the countries on the continent – including a visit with Hitler. Upon his return to the United States, he made several addresses in regards to this trip and his views of the situation.

These included addresses in New York, San Francisco, and Oklahoma City. I offer the following, from his address in Oklahoma City:

Not one of those 14 totalitarian [Communist or Fascist] nations started with the intention to surrender liberty. They started by adopting panaceas to cure slumps or overcome economic difficulties….In variable doses they undertook credit and currency manipulation, price fixing, pump priming, and spending with huge deficits and huge taxes….they had the illusion that…[there] was a middle road between Fascism on the right and Socialism on the left.

Many will read these words and look to recent times in the United States, exclaiming that this is exactly what is happening in the U.S. today. Some wrongly point to this turn as having begun with Obama. Others see Bush as the culprit. There can be no denying the parallels.

However, the roots go back much further. I have referenced before “The Revolution Was” , but it seems appropriate to refer to it again here. In 1938, Garet Garrett wrote, regarding Roosevelt’s New Deal, that we should look in the rear view mirror for the revolution:

The Great Depression as it developed here was such an opportunity as might have been made to order. The economic distress was relative, which is to say that at the worst of it living in this country was better than living almost anywhere else in the world. The pain, nevertheless, was very acute; and much worse than any actual hurt was a nameless fear, a kind of active despair, that assumed the proportions of a national psychosis.

Seizures of that kind were not unknown in American history. Indeed, they were characteristic of the American temperament. But never before had there been one so hard and never before had there been the danger that a revolutionary elite would be waiting to take advantage of it.

This revolutionary elite was nothing you could define as a party. It had no name, no habitat, no rigid line. The only party was the Communist Party, and it was included, but its attack was too obvious and its proletarianism too crude, and moreover, it was under the stigma of not belonging. Nobody could say that about the elite above. It did belong, it was eminently respectable, and it knew the American scene. What it represented was a quantity of bitter intellectual radicalism infiltrated from the top downward as a doctorhood of professors, writers, critics, analysts, advisers, administators, directors of research, and so on — a prepared revolutionary intelligence in spectacles. There was no plan to begin with. But there was a shibboleth that united them all: "Capitalism is finished." There was one idea in which all differences could be resolved, namely, the idea of a transfer of power. For that a united front; after that, anything. And the wine of communion was a passion to play upon history with a scientific revolutionary technic.

The prestige of the elite was natural for many reasons; but it rested also upon one practical consideration. When the opportunity came a Gracchus would be needed. The elite could produce one. And that was something the Communist Party could not hope to do.

Now given — (1) the opportunity, (2) a country whose fabulous wealth was in the modern forms — dynamic, functional, non-portable, (3) a people so politically naive as to have passed a law against any attempt to overthrow their government by force — and, (4) the intention to bring about what Aristotle called a revolution in the state, within the frame of existing law — Then from the point of view of scientific revolutionary technic what would the problems be?

They set themselves down in sequence as follows:

The first, naturally, would be to capture the seat of government.

The second would be to seize economic power.

The third would be to mobilize by propaganda the forces of hatred.

The fourth would he to reconcile and then attach to the revolution the two great classes whose adherence is indispensable but whose interests are economically antagonistic, namely, the industrial wage earners and the farmers, called in Europe workers and peasants.

The fifth would be what to do with business — whether to liquidate or shackle it.

(These five would have a certain imperative order in time and require immediate decisions because they belong to the program of conquest. That would not be the end. What would then ensue? A program of consolidation. Under that head the problems continue.)

The sixth, in Burckhardt's devastating phrase, would be "the domestication of individuality" — by any means that would make the individual more dependent upon government.

The seventh would be the systematic reduction of all forms of rival authority.

The eighth would be to sustain popular faith in an unlimited public debt, for if that faith should break the government would be unable to borrow, if it could not borrow it could not spend, and the revolution must be able to borrow and spend the wealth of the rich or else it will be bankrupt.

The ninth would be to make the government itself the great capitalist and enterpriser, so that the ultimate power in initiative would pass from the hands of private enterprise to the all-powerful state.

Each one of these problems would have two sides, one the obverse and one the reverse, like a coin. One side only would represent the revolutionary intention. The other side in each case would represent Recovery — and that was the side the New Deal constantly held up to view. Nearly everything it did was in the name of Recovery. But in no case was it true that for the ends of economic recovery alone one solution or one course and one only was feasible. In each case there was an alternative and therefore a choice to make.

What we shall see is that in every case the choice was one that could not fail:

(a) To ramify the authority and power of executive government — its power, that is, to rule by decrees and rules and regulations of its own making; (b) To strengthen its hold upon the economic life of the nation; (c) To extend its power aver the individual; (d) To degrade the parliamentary principle; (e) To impair the great American tradition of an independent, Constitutional judicial power; (f) To weaken all other powers — the power of private enterprise, the power of private finance, the power of state and local government; (g) To exalt the leader principle.

There was endless controversy as to whether the acts of the New Deal did actually move recovery or retard it, and nothing final could ever come of that bitter debate because it is forever impossible to prove what might have happened in place of what did. But a positive result is obtained if you ask:

Where was the New Deal going?

The answer to that question is too obvious to be debated. Every choice it made, whether it was one that moved recovery or not, was a choice unerringly true to the essential design of totalitarian government, never of course called by that name either here or anywhere else.

Hoover is describing how these 14 totalitarian states were not born in such a condition, but gradually evolved to fascism / communism. Garett describes in detail the process used to achieve the same result in the U.S. in the 1930s. Hoover believes none of these nations began with the intention to move to a totalitarian state. Garett sees things differently: he sees that there was an elite guiding these events and guiding the conclusions.

I would only (humbly) add that it cannot be mere coincidence that these transformations occurred in many states throughout the world at the same time.

Friday, March 23, 2012

The Founding Fathers’ Guide to the Constitution

The Founding Fathers’ Guide to the Constitution, by Brion McClanahan

In this book, Brion McClanahan documents the discussions, commentary, writing, and debate of those founders who were involved in Philadelphia in 1787, in the state ratifying debates, and in the public discussion during this time. He makes a basic claim – we all might have feelings about how the Constitution should be interpreted, yet what would seem important is how those discussing and debating the issue at the time between Philadelphia and ratification interpreted the document.

…a clear consensus can be gleaned from these debates. We know how the founding generation interpreted the various provisions of the Constitution because we can read what they said….the way proponents of the document defended it is the way it should be interpreted.

In my comments, I will set aside certain of my views, but I feel I must mention one of these up front:

Is it right that a document not voluntarily agreed to by an individual be somehow binding on that individual? How can an individual be bound to a contract to which he was not a willing participant? If one believes that an individual has a fundamental right to his life and property, the answer to the first question must be no, and to the second must be that he cannot.

There, I got that out of the way. Now back to the book. Regarding the debates in Philadelphia:

The end result was a document littered with compromises, the most important being one between the “small States” and “large States.” Everyone at that time, however, knew that those terms were nothing more than code words for a “national” centralized government versus a “federal” decentralized government….As the Constitution moved to the States for ratification, the great debate was whether we should have a national or a federal government.

It was the limits to a centralized government that were sold to a reluctant public. The author will go on to demonstrate that if the proponents of the Constitution had not clearly stated that the Constitution placed strict limits on the centralized government, it is highly unlikely that the document would have been ratified.

The author also clarifies the confusion, and in fact the improper application of the commonly used terms “Federalist” and “Anti-federalist.”

Opponents of the Constitution were never comfortable with the term “Anti-federalist.” They correctly pointed out during the ratification debates that what they wanted to retain was the federal system of the Articles of Confederation, and the proponents of the Constitution, instead of being federalists, were in fact nationalists bent on eliminating the State governments.

The Anti-Federalists clearly were not able to get the labels properly applied, and history has maintained this confusion. Perhaps this is the first example of the purposeful misapplication of labels for the purpose of aggrandizing the state and destroying the language available to those who favor smaller government.

Consider the terms associated with freedom, liberty, and limited government that are no longer available for general use: liberal, anarchy, conservative, and many others – even the terms freedom and liberty have been twisted. “How can one have freedom without a job?” if one understand the language, such use in nonsensical.

The author, instead of using the term “federal” to describe the government ultimately established by the Constitution, replaces it with “general” or “central.”

…it only had one “federal” component in the original document, the Senate. The government under the Constitution has always been “general” or “central,” but never “federal.”

Of course, the 17th amendment eliminated this distinction.

As I have done with other books, I will write further commentary on this book. I believe it brings value in understanding the Constitution as ratified and as understood and defended by those who were proponents. It seems reasonable that these factors are paramount in developing a proper interpretation of the document.