Free kibbles

FREE SPEECH:

Numerous online services such as Hulu and CBS TV are blocking access to Google TV. How much do you want to bet the companies blocking these services support net neutrality?

FEDERAL RESERVE:

A brief history of the debasement of money highlights principles understood for thousands of years, but as fresh and destructive when central banks do them today as they ever were.

"Croesus soon learned that his wars were more easily funded when he debased his coins, allowing him to create more currency than his supply of precious metal would otherwise allow. In the process, Croesus illustrated two rules of money creation that would appear repeatedly in world history. First, entities charged with the coining of money—including Lydian rulers, medieval goldsmiths, and modern central bankers—have an inherent tendency to inflate its production, and they will almost always do so unless limited by institutional factors, such as the existence of competing currencies or the establishment of a strong metallic standard. Second, when money creation is a state function, its abuse will benefit the expansion of the central state, facilitating the redistribution of wealth to the special interests of the political class and the financing of wars that citizens are unwilling to finance voluntarily."

But Ben thinks it'll be different because he's the one debasing the dollar. It won't be.

"The results for Nero were the same as in contemporary times. Prices rose, because increases in the money supply do not magically increase the store of real wealth, so that when the new money is spent, prices are bid upward. Those groups in society that are not favored by the political class pay for such lavish spending in the form of higher prices, thus promoting divisions in society that otherwise would be less acute."

Sound familiar?

"Oresme noted that one of the trade-offs that results when the prince debases the currency to enrich himself and his court is a general decivilizing of society. Since prices rise when debased money circulates, individuals face higher levels of scarcity than would otherwise be the case, thus hindering the development of the division of labor and the societal interdependencies that it engenders. Since trades necessarily decrease, we witness a decline in social cooperation."

Debasing the currency also debases the society. We've sure seen plenty of that. One obvious consequence is people blaming producers for their "greed" instead of putting that blame on the king where it belongs.

"Taxation amounts to a wealth transfer forced on present generations, while debt amounts to a wealth transfer forced on future generations; given the political resistance to such transfers, inflation becomes the preferred form of redistribution for at least two reasons. First, when the new money reaches the politically preferred groups in society that get to spend it, prices have not yet risen. They will eventually rise in response to increased demand for goods and services that result simply because the new money is in circulation. This allows the government to grow without risking an immediate political cost. Second, the rise in prices is equivalent to an increase in taxes, with the difference being that while taxes affect disposable income at the time they are imposed, monetary inflation affects disposable income at whatever point in the future it causes prices to rise. This form of finance—economists call it “inflation as a tax”—is preferred because people often do not make the connection between the increase in prices and the previous monetary inflation. In fact, they often blame “greedy” businesses for raising prices, when those businesses are simply adjusting to increases in demand. The lag between the initial money creation and the increase in prices makes their relationship less obvious.

That one class benefits from inflation while another is forced to finance that benefit creates divisions in society which, in the extreme, can lead to revolutions, such as in France in 1789. The effects of monetary inflation also explain the rise of the Jacksonians in the United States of the 1830s."

That should sound frightening familiar to Americans today as well.

"The creation of the Fed may have been a defining moment in the centuries-long debate over money creation, as central banking has been a feature of nearly all twentieth-century monetary systems. However, recent events suggest that the creation of the Fed was not the last word, as a movement spurred by the financial crisis of 2008 has taken on almost Jacksonian proportions, calling for an end to the Fed or at least the emergence of some institutional constraints on the Fed's ability to inflate the currency at will. The crisis had the salutary effect of making the relationship between money creation and the politically preferred groups in society who profit from it obvious."

Boy is that an understatement.

This claim that 100 percent reserve banking wouldn't work during Christmas is just silly. People would save money before Christmas. They have Christmas accounts for that sort of thing.

POLICE STATE:

Invading police electrocute to death yet another innocent American.

"Lancaster County District Attorney Craig Stedman informed the local press that the county medical examiner will perform an autopsy on Neill, which will inevitably find that something other than the repeated taser assaults — perhaps coronary artery disease, a drug overdose, or “excited delirium” – was the chief cause of the 61-year-old’s death. It’s not that the police killed him, you see: He just happened to die while being electrocuted by the scrum of armed tax-feeders who were, after all, only there to help."

The phrase "to protect and serve" is accurate: they protect and serve their political masters at our expense.