LP Nominates Johnson and Weld

The Libertarian Party has just selected its presidential and vice-presidential candidates in Orlando.  Gary Johnson was nominated as the candidate for president, while William (Bill) Weld was nominated as the candidate for vice-president.

Johnson barely missed the nomination in the first round of voting, falling just short of the needed majority.  He easily beat Austin Petersen (21 percent) and John McAfee (14 percent) in the second round of voting.

It was similar with Bill Weld.  He came up just short in the first round of voting, but then won a majority in the second round.  Weld was Johnson’s pick for VP, so it is little surprise that the vote was similar.

I am not a huge Johnson fan, but he really does seem like a decent guy.  He is no hardcore libertarian and does not understand the issues in depth as many libertarians do.  Unfortunately, with Johnson going out of his way to promote Bill Weld as his running mate, he goes down a few more notches in my book.

Weld is a former governor of Massachusetts.  Johnson, being a former governor of New Mexico, claims this makes a strong ticket.  The problem is that Weld is a Republican hack.  It would not surprise me if the “Never Trump” crowd of the Republican establishment helped Weld behind the scenes.

Weld has supported the past Republican presidential nominees including Romney, McCain and Bush.  He actively campaigned for Romney.

“The past is the past”, you say?  Weld endorsed John Kasich in the 2016 Republican primary.

This guy, who is a member of the Council on Foreign Relations, is the Libertarian Party’s nominee for vice president.

I think I would prefer Trump.

You can’t get much more “Republican establishment” than Bill Weld. It is disappointing that the delegates ultimately chose him.  It is disappointing that Gary Johnson had him as his first choice for a running mate.

Unlike some hardcore libertarians, I am not against voting in its entirety.  I am not even completely against voting for the lesser of evils, as long as the lesser evil is somewhat close to where I want to be.

If Johnson had preferred an actual libertarian as a running mate, perhaps I would have considered voting for him just as a protest vote.  But with this support for Weld, there is no way I can do it now.

The most important issue to me is foreign policy.  It may not directly impact me in the short run, but I believe from a moral standpoint, it is the number one issue.  We should advocate an end to murder and suffering from U.S. foreign policy.

This is also the one issue that the president can have the greatest impact, assuming he survives long enough to do it.  The president can withdraw all of the troops from overseas and bring them home for a purely defensive stance.

As a bonus, ending all of the wars and interventions would save hundreds of billions of dollars per year.  This would also help the economy, assuming it weren’t wasted elsewhere.

On the issue of foreign policy, I actually trust Donald Trump more than I do Gary Johnson and Bill Weld.  Johnson says he is not an interventionist, but he still doesn’t say it with the same authority as someone like Ron Paul.  Johnson sometimes sounds more like Rand Paul than Ron Paul.

I have no idea what Trump would do as president.  He has been inconsistent with his message.  But his inconsistency on foreign policy is better than the horrible consistency of the interventionists, which includes Hillary Clinton and all of the other previous Republican candidates who went up against Trump.

At least with Trump, there is a chance for a less interventionist foreign policy.  If Johnson gets in, then Weld gets in.  If Weld gets in, then  the Republican establishment gets in.

It is terribly disappointing for me.  I have been active locally with the party in previous times.  The Libertarian Party has not had a really strong (and libertarian) candidate since at least 2004.  Michael Badnarik (2004) may not have been the best candidate, but at least he stood on principle.  In 1996 and 2000, there was Harry Browne, who was great.

Since 2004, it has been a disaster with Bob Barr in 2008 and now Johnson in 2012 and 2016.

Johnson is saying that he needs Weld so that they have a chance to win the election.  He has absolutely no chance of that.  He is playing spoiler in favor of Hillary.  The Republican establishment wants Hillary Clinton because they don’t want Donald Trump.

I hate it when LP candidates say they can win.  That should not be the point of running a LP presidential candidate.  The point should be to educate and inform others of a libertarian message.  Harry Browne used his candidacy for many interviews to spread his message.  These were interviews that he would not have otherwise had.  He never had any illusions of winning.

I could have easily attended the convention in Orlando this year.  Unfortunately, there was nobody I was excited about.  I miss Harry Browne.  I miss when Ron Paul was running for president.  Right now, there is nobody to convey the libertarian message from a political platform.

I will probably not be voting in the general election.  If I could be nearly certain that Trump would stop the wars, then I might consider him as the lesser of evils.

Will the Swiss Get a Guaranteed Income?

In June, the Swiss will vote on a referendum that would set a guaranteed minimum income.

Although the details are not spelled out – which is rather strange considering it is an initiative to be voted on soon – the campaigners have generally been calling for an income of 2,500 Swiss francs per month for adults, and 625 Swiss francs per month for children.

The U.S. dollar is currently around par with the franc, so this would be about $2,500 and $625 respectively.  This would mean a guaranteed income of about $30,000 for a single individual without a family.  A family of four would be looking at $75,000 per year.

The first thing to note is that apparently socialists (or some variant) infect every livable corner of this entire planet.  If this can happen in Switzerland, it can happen anywhere.  We’ll see what happens with the actual vote, but just the fact that this is an initiative  that will be voted on is saying something.

And that leads to a second point.  You would think Switzerland would be the last place on earth to consider something like this.  Not only does the country have a long history of liberty (relatively speaking), it is also a very decentralized country.  This is probably one of the main reasons it has been able to maintain neutrality in foreign affairs and stay relatively free.  Decentralization tends to work in favor of liberty.

But what are the possibilities of such a program being enacted, not just in Switzerland, but also the United States?  There have not been any serious proposals in the U.S., such as pending legislation, but there have been suggestions about a guaranteed national income.

There may be, at least in one sense, some libertarians who would actually be sympathetic to the proposal.  To be sure, there probably aren’t many libertarians advocating it in Switzerland.

The one aspect that could be attractive to libertarians is the hope that it would do away with the rest of the welfare state.  If you are a family of four making $75,000, what justification is there for subsidized housing or food stamps?  Why would you need government healthcare, when you should be able to easily afford insurance at that point?  Of course, this is assuming minimal price inflation.

And what about the minimum wage?  If a single person is guaranteed $30,000 per year in the U.S., there is no need to have a minimum wage, even if it actually did “work”.  Someone could go out and make $5 per hour ($10,000 per year) and still have an income of $40,000 at that point.

Unfortunately, as libertarians, we also know that it wouldn’t work this way.  You can’t get rid of the lobbyists that easily.  You can’t get rid of the vote-buying that easily.  There will always be someone with a “need”.  There will always be inequality that constitutes an injustice to somebody.

The other factor, as mentioned above, is inflation.  How would the Swiss (or Americans) pay for such a scheme?  The tax money doesn’t magically appear out of thin air.

A family of four might get $75,000 per year, plus whatever regular income they make, but they also might find the average house price in the U.S. to be over a million dollars.  They might find gasoline going for $12 per gallon.  They might find a casual lunch out to cost $50.

And that is the key here.  We know that there is no magic.  Wealth is produced based on the savings and investment that go into production.  The most wealth is produced when we live in a society that upholds property rights and allows voluntary individuals to engage in peaceful economic activity.  If there is a magic formula, this is it.  You don’t get rich by shuffling around bank accounts and printing gobs of money on a computer screen.

Ultimately, I don’t think such a proposal would fly in the United States.  There are too many special interests who do not want a change to the current system that we have now.

For the sake of the Swiss, let’s hope this referendum fails overwhelmingly.  If for some reason it does pass, it would make for an interesting experiment.  Then again, Venezuela is an interesting experiment right now, which is translating into massive suffering for millions of people.

Is the Democratic Nomination Still in Question?

Bernie Sanders won’t go away.  Despite Hillary Clinton’s lead in the race for delegates, Sanders refuses to drop out.  Some say he wants to grow his donations and mailing list based on California, even though he knows he can’t win.

I am wondering if Sanders is just hanging around just in case.  Sanders himself is not that big of a threat to Clinton, at least in terms of the Democratic nomination.  But Hillary Clinton has other problems that might make Sanders the default nominee.

It is interesting that the media has not been all that warm to her.  It is certainly not an all-out attack as we see on Trump, but networks other than Fox News have actually been somewhat critical, as well as other so-called mainstream media outlets.

I think the establishment does not really want Hillary Clinton as the nominee.  They probably don’t want the baggage that goes with her and her husband.  It is not that they care about her immorality or anything like that.  It is just that they don’t want the whole system to be questioned as more Americans learn how bad she really is.

I have been saying for a while now that Sanders is her third biggest threat.  The first two are a possible FBI indictment over the email scandal and an economic recession.

I now push Sanders into fourth place amongst her major threats.  Donald Trump has moved into the top three.

I wrote in an earlier post about the possibility of bringing up the crimes of the Clinton family.  I specifically mentioned the “suicide” of Vince Foster, as well as the many other suspicious deaths that surround the Clinton family.

While Trump has gone there yet, he has already invoked Juanita Broaddrick, who claims she was raped by Bill Clinton.  I have seen her in several interviews and she does not seem like one who craves media attention.  I believe what she is saying and I think many others would do the same if they knew about her.  It is hard to believe that many Americans do not know the story of Juanita Broaddrick, or who do not care enough to look into it.

Trump is already running an ad against Clinton which invokes the story of Juanita Broaddrick.

I think the next step will be to link Bill Clinton with the pedophile Jeffrey Epstein.  Clinton has taken repeated trips on his private jet.  Personally, I would be surprised if Bill Clinton isn’t a pedophile.

That will be stage two for Trump.  He just has to mention it and it becomes an elephant in the room that the media can’t ignore.  They can call him crazy, but you know millions of people will hit “Google” and read more.

It is hard to believe that the allegation of rape is in third place in terms of serious crimes.

In first place is Vince Foster and the other mysterious deaths.  I think Trump should wait until a debate to bring this up.  This would catch Hillary Clinton flat-footed.  Again, millions of people would be on Google looking up the story.  I think she would be destroyed if the majority of people had any doubts.

Hillary Clinton really wouldn’t know how to respond.  The best she could do is say that Trump is a conspiracy theory nut.  But she won’t be prepared.  Do you think Hillary’s debate-prep team is asking her questions about Vince Foster?

This may be the reason that the media is ok with letting her fall now. They probably hope for an indictment by the FBI so that they can force her to step down.

At that point, Sanders may or may not be the nominee.  He hopes he would be the nominee, but it would make it easier for the establishment to call in Joe Biden or someone else.

So while the bets are on Hillary Clinton to win the nomination, and even the presidency, I still have my doubts.  Maybe it is wishful thinking.  If someone is bold enough to bring up Hillary Clinton’s shady past, it is Donald Trump.  He is already doing it.

Phil Mickelson Not Guilty of Insider Trading

It is alleged by the SEC that golfer Phil Mickelson is guilty of insider trading.  Mickelson profited $931,000 from a stock trade after supposedly receiving a tip from a sports gambler to whom Mickelson allegedly owed money.

Mickelson has avoided criminal charges and has agreed to pay back all of the gains, plus interest.

First, it is important to remember that just because he has agreed to pay back the money he made from the stock transactions, it does not mean he is guilty of anything.  We hear about plea deals all of the time, but it doesn’t mean the person is guilty.  The lawyers just know the risk of going to trial, even if their client is completely innocent.

In the case of Mickelson, he makes millions of dollars from his golf winnings.  He makes tens of millions more per year from his endorsement deals.  He would rather pay approximately one million dollars to the federal government rather than risk going to jail.  Even if his lawyer thought he had a 95% chance of escaping jail time, it would make sense to pay the money rather than risk the 5% chance of going to jail.

Second, it is important to distinguish between what is written in law (or federal regulations) versus what the law should actually be.  Just because there are insider trading laws, it does not mean that it should actually be illegal or even that it is immoral.

This is a point that was made by some libertarians when Martha Stewart went to jail.  She actually ended up going to jail for supposedly lying or obstructing justice.  But it all originated over allegations of insider trading.

Of course, politicians get away with insider trading all of the time.  They are writing the laws.  And we can be sure that bankers are getting a major advantage due to their inside knowledge.  And by the way, does anyone remember that Hillary Clinton made $100,000 trading cattle futures?  Is Hillary Clinton that much of an investment pro?

Insider trading should not be a crime.  As it stands now in the legal system, it is a victimless crime.  There is no victim.  Mickelson will pay the government about $1 million.  It isn’t going to anyone who was actually hurt by his actions.

When somebody acts on inside information, it is actually bringing information to the marketplace.  It means that stocks and other assets are more accurately priced given reality.  You could say that it hurt people who were selling the stock, but that isn’t even true.  They were going to sell anyway.  If anything, the insider trader is giving them a better price than what they would have sold for anyway.

It is also interesting to note that inside information doesn’t always work.  There are many people who act on tips where it turns out to be untrue.  Or, even if it was true, maybe the market didn’t react the way it was expected.  Someone could tell me what the Fed will do at its next meeting, but even with that information, I probably couldn’t tell you with any certainty how stocks would actually react.

The whole notion of insider trading is rather ridiculous because we all have unique knowledge.  Otherwise, what would be the point of reading about any companies or any economic news?

I may have had a bad experience shopping in a particular store.  From that, I may decide not to ever buy that company’s stock because I saw first-hand how it treats its customers.  Maybe this was just a rare experience for this store.  Maybe it is widespread.  But someone else may not have had that same experience and bought the company’s stock.  I didn’t buy the stock because I had “inside information”.

In terms of the financial industry, it tends to be self-regulating.  It is actually the presence of the SEC and other agencies that provide some moral hazard.  People think they are safer than they actually are because of these agencies.  Just think about the failure of the SEC in regards to the Bernie Madoff scandal.

Most companies don’t want a reputation of having their employees trading stocks based on inside information.  If I knew that someone was trading a stock before making trades for their clients for that same stock, then I would surely not do business with that company.  It is not because of government regulation that most companies run a tight ship in keeping their employees from trading individual stocks around the same time as making trades for clients.

Since there is no victim involved, insider trading should not be a crime.  I don’t believe it is immoral in many cases either, but that is for the marketplace to decide.

With regards to Mickelson, I will say that he was rather stupid for doing what he did.  He may have a gambling problem, but I really don’t know.  Still, the guy earns tens of millions of dollars per year.  He has absolutely no need to buy any individual stocks.  At most, he should buy an index fund as part of a well-balanced portfolio that would also include other asset classes.

But stupidity is not a crime.  Otherwise, most of us would be criminals.

I hope that Mickelson learns his lesson and stays away from trading individual stocks.  He received good advice from his lawyer in agreeing to pay back the money rather than face a criminal trial.

More so, I hope the American people stop listening to the media and start thinking for themselves.  They should demand an end to these victimless crimes and this injustice.

Who Will the Libertarian Party Nominate?

The Libertarian Party National Convention is coming up on Memorial weekend.  Unlike the two major parties, there are no Libertarian primaries.  The presidential nominee is determined at the convention.

I have been a registered Libertarian (capital L) since 2002.  I switched my registration to Republican in late 2007 in order to vote for Ron Paul in the Republican primary in Florida.  The day after the primary election, I switched back to Libertarian.

I have had my criticisms of the LP, but it is not hard to find common ground at an LP meeting.  I was involved in my local chapter until a few years ago when the local chapter decided to take a break.  I probably could have kept it going, but it would have required more time than I was willing to give up.

When I joined the LP, Harry Browne had been the most recent nominee.  I attended the Libertarian Party state convention in 2004 and heard a debate between the 3 major candidates.  The candidates for the nomination were Michael Badnarik, Aaron Russo, and Gary Nolan.

I was able to meet all three candidates and talk to them.  There were a few things about each one of them that I really liked, as well as a few things where I disagreed.  Aaron Russo (RIP) may have been the least libertarian, but also the one with the most connections (from Hollywood).  There is usually a debate between fame vs. principles.  Still, Russo was probably more libertarian than many of the candidates since that time.

Nolan and Russo kind of went at it.  The two of them thought the race was between them.  Badnarik came out of nowhere, standing on principle, to snatch the nomination away from the two of them at the convention.

Since then, it has been mostly a disaster.  Bob Barr was the nominee in 2008.  He was terrible for the party and the movement.  He was nothing more than a Republican who wanted some notoriety.  He may have slightly leaned libertarian on a few issues.

It is too bad, because 2008 was a year for opportunity.  Ron Paul had just drawn the attention of millions of people who did not want to vote for McCain or Obama.  Mary Ruwart ran for the nomination that year and lost to Barr.  She would have been a great spokesperson for the cause of liberty that year and I believe Ron Paul probably would have endorsed her.  I think she would have easily gotten a million votes, but probably far more.

In 2012, Gary Johnson was the nominee.  He did not have much competition.  R. Lee Wrights was in the running.  He was probably the purist of the Libertarians, but he isn’t someone with much name recognition or connections.  It is tough to compete against a former governor.

I like Gary Johnson.  He really seems like a decent guy to me.  Still, he doesn’t impress me all that much on the issues.  He is definitely better than most Republican politicians, but he is not libertarian enough for me.  If someone is going to vote third-party, that person is already a little different.  They are looking for someone different.  You don’t have to be “Republican-lite” when you are running third-party.

Johnson had the highest vote total ever for a Libertarian candidate with nearly 1.3 million votes.  Still, I think this total could have been higher if it had been Ron Paul, or even someone who Ron Paul could enthusiastically endorse.

Johnson is running again now.  He has taken some really bad positions for someone who is supposed to be a libertarian.  He is apparently against the freedom to associate.

He just announced who he wants as a running mate.  It is William Weld, a former governor of Massachusetts.

I am not familiar with Weld, so I looked him up on Wikipedia.  Without doing much research, I already don’t like him, at least for being an LP candidate.  He is a member of the Council on Foreign Relations.  That right there should put up more than a red flag for everyone.

Weld helped George W. Bush prepare for debates in 2004.  If it had been 2000, maybe we could have excused the action.  In 2007, he endorsed Mitt Romney and actively campaigned for Romney.  That should be enough said.

But just think if some state actually ever had a hardcore libertarian governor.  Even with a tough legislature, you would expect some major reforms that would be noticeable.  It would include not just major budget cuts and tax cuts, but also a reform of the criminal code.  If there were ever a hardcore libertarian governor, you would know about it.

I would have considered throwing a vote to Gary Johnson in the general election, but I don’t think I will even consider it now.  I don’t trust him on foreign policy any more than I would trust Donald Trump.  I would trust Trump more to stand up to the special interests and the war lobby than I would trust Johnson at this point, especially with a CFR guy as his running mate.

Scott Lazarowitz recently wrote an article for LewRockwell.com in which he analyzed some of the LP candidates this year.  The only candidate he was able to praise was Darryl Perry.  “Who?”, you say.  That’s the problem.  He is considered one of the minor candidates, but you never know what can happen.

The other major candidates at this point, aside from Johnson, are considered to be Austin Petersen and John McAfee.  Petersen is probably the most libertarian of the “major” candidates at this point, although he apparently only wants to cut 1% per year from the federal budget.

McAfee, if you didn’t figure it out by his name, is the founder of the McAfee virus software program.  The best way to describe him is probably a left-libertarian.  He stresses civil liberties and foreign policy.  If I actually thought he would stand strong on a non-interventionist foreign policy, I might consider voting for him because that is the one issue where the president can really have an impact.

Still, overall, I am not too impressed with the current crop of candidates.  The LP is wasting opportunities, as many Americans are craving something different.  I wish Ron Paul had run on the LP ticket this year.

I live in Florida, and I remember hearing the convention would be in Orlando in 2016 a few years ago.  It would be easy for me to go there, but I am not making the trip.  The problem is that I just can’t get excited over the presidential candidates.

While I don’t hold out hope for an LP victory in the presidential race (or any other major race), I believe it is a great opportunity to spread the message of liberty and to educate others.  That is what Harry Browne did so effectively in 1996 and 2000.  He admitted he had virtually no chance of winning.  But he used the platform to convert others to the libertarian message.  Unfortunately, we are probably not going to have a good educator in 2016.

Would a President Trump Default on the National Debt?

Donald Trump has gotten in trouble for saying a lot of things.  He doesn’t get in trouble with his supporters, but the media pundits come out in full strength when they think they’ve got him on something.

One of the more recent things happened when Trump was interviewed on CNBC.  He said that, as a businessman, he is used to dealing with creditors.  He said that, as president, he could renegotiate the terms of the U.S. government’s debt.

Some were quick to jump on him, saying that he wants creditors to take a haircut.  Unfortunately, Trump backtracked on his statement and said that he wants to restructure new debt with lower interest rates, or something to that effect.  It doesn’t really make any sense because the government is going to issue new debt and roll over maturing debt at the lowest rate it can.

If Trump becomes president, I think there is almost no chance that he will allow a default on the national debt.  If anyone would, it would probably be him.  But I still see the chances as slim.

The popular and acceptable opinion is that the U.S. government just could not possibly default on the national debt, or even give creditors a haircut, meaning they would get back less than promised.  The whole notion is just supposed to be ridiculous and even childish to think such a thing.

But why is default such a ridiculous notion?  From a libertarian standpoint, default makes sense.  Of course, if we lived in a libertarian society, then there wouldn’t be a national debt in the first place.

The main objection is that it would not be right to break a contract.  Making interest payments and paying back the principal on the debt is a promise that was made to people who lent their money to the government.  People say it would be morally wrong for the government to go back on its word.

But why is it ok for people and businesses to declare bankruptcy?

People and businesses are not the same thing as the government.  However, if it is morally wrong for anyone to not pay back debt, it is businesses and individuals.  It is actually the opposite with government.

Murray Rothbard wrote an essay on this subject in 1992.  His view was that it is immoral for the government to keep paying on its debt at the expense of taxpayers (and holders of dollars).

When the government promises to pay back money that it borrows, it is not a valid contract.  It is because the government doesn’t have the money to pay it back except by extracting it from others with the use of force or the threat of force.

If I make a contract with Al to borrow his money and pay him back a certain amount with interest at a later date, there is no problem there.  I should fulfill the contract.

But what if I make a contract with Al to borrow his money.  In the contract, I state that the loan is backed by the full faith and credit of Bob.  Bob is my neighbor and I will steal his money in order to pay back Al.  If that is the only way I can pay back Al, then it is more morally sound to not steal from Bob and not pay back Al than it is to steal from Bob in order to pay back Al.

All of the people invested in U.S. government debt are no more entitled to the money than the taxpayers from whom the money will be taken.  If anything, it is the fault of the creditors for making such a deal with the devil.

I understand that there are many pensions and 401k plans invested in government bonds.  It is not just the Chinese and Japanese.  But again, why is that the responsibility of everyone?

One of the other major objections is that a default would wreck the credit rating of the U.S. government.  I see this as a great reason for default.  I want the credit rating to get wrecked so that nobody will lend money to the U.S. government ever again.  Aside from the central banking equation, this would force a balanced budget.

Such a default would obviously wreak havoc on the financial system. It would mean a redistribution of wealth, with those who have a stake in government bonds being the losers.

In the long term, most everyone would win, except the politicians and bureaucrats and those who depend heavily on government corporate welfare.  It would mean immediate relief of at least a couple hundred billion dollars per year in interest payments from the federal budget.  It would also essentially force a reduction in government spending in other areas.

The less that government spends, the more prosperity that we get.  It means fewer resources are being misallocated.

We could lessen the blow to creditors by treating this whole thing as a bankruptcy.  When a company goes bankrupt, its assets are sold off and the money collected is used to pay off creditors.  The shareholders usually end up with nothing.

In the case of the U.S. government, it could sell off millions of acres of land including forests and national parks.  It could also sell many of its government buildings.  Maybe the U.S. Treasury office could downsize significantly.

The sale of the assets could be used to partially pay off bond holders.  We would also get the benefit of privatizing more land and buildings.

I understand this is not going to happen.  I know Trump didn’t make a lot of sense and ended up backtracking or contradicting himself.  But at least he is bringing up issues that otherwise wouldn’t be touched.

Trump said that the debt can always be paid off because we can just print the money.  Hey, at least he is honest.

And that is really the big key here for anyone protesting a default on the debt.  This shouldn’t be breaking news, but the government is defaulting on its long-term debt almost all of the time.  People get paid back with currency that has depreciated.

If you buy a 30-year bond and the price levels double over that time, then you are only getting back half of your money in real terms upon maturity.  So everyone can cry and wail all they want about suggesting a default, but there is going to continue to be a default in some form one way or another.

It is virtually impossible for the U.S. government to fully make good on its promises to pay the debt without resorting to monetary inflation.  And the monetary inflation itself is a form of default.

A president Trump would not likely default on the national debt in nominal terms.  But at least he has brought up the discussion about the debt.

Obama Sells Homeschooling

President Obama is now likely to be the number one salesperson for homeschooling.  For the last 8 years, he has already been the number one salesman for guns and ammunition.

Every time Obama talks about guns or gives any hint of an executive order or any kind of legislation regarding guns, the sales go way up.  Sales of guns and ammunition have skyrocketed since before Obama even took office.  He speaks, and sales soar.

You almost have to wonder if Obama owns shares in gun companies. He is unable to actually implement anything significant, yet he keeps driving gun sales.

Now he is trying to do the same thing with homeschooling.  He will accomplish more than what the homeschool advocates have been able to do.

The Obama administration recently issued “guidance” to public schools.  The schools are being told to allow transgender students to use whichever facility matches their self-identified gender.

First, let’s discuss the issue of transgenders and bathrooms.  I believe that many believe oppose this policy not out of opposition to transgenders, but just out of opposition to the whole idea of people being able to self-identify.  Women aren’t worried about Bruce/ Caitlyn Jenner using the ladies’ room, at least in most cases.  They are worried about some pervert who decides he is going to self-identify as a woman that day so that he can access the ladies’ room.

This will be especially problematic with kids.  Imagine when the students get word of this.  It is not hard to imagine some middle school boys daring a friend to self-identify as a girl in order to use the girl facilities.  Are the adults at the school going to stop the boy, or will they be afraid of being accused as anti-transgender, or whatever the latest PC name is?

This whole issue of transgenders and bathrooms is all about political correctness and government control.  It is about setting up more group rights.  The problem is that when we talk about “rights” in this context, we are not talking about the right to life, liberty, and property.  It typically means rights in the sense of depriving others of their liberty.

In the case of the North Carolina law, the state government was not depriving rights.  It was the opposite.  They are saying that private owners may decide for themselves of the policies of their own property.  This is as it should be.  This was overriding certain local jurisdictions, so there is a libertarian argument for decentralization against the North Carolina law.  But other than that, it is completely compatible with liberty.  It is not depriving transgenders of any rights.

I think a majority of people do not agree with the politically correct position of the establishment.  Many will keep their mouths shut because they don’t want to be labeled as anti-transgender.  It may be a silent majority, although there are certainly some who are not silent.

Regardless of what you think of this whole issue, there is little question that Obama and his administration have completely overstepped their boundaries.  The entire Department of Education is unconstitutional in the first place.  Now he is pushing some kind of dictate from the White House, without even going through Congress.

It is still not clear if this “guidance” is enforceable at all.  It is basically a bribe, telling public schools they have to obey or else risk losing federal funding.  But isn’t it supposed to be Congress in charge of funding?

The governor of Texas said they would not submit based on bribes.  But that is what the entire Department of Education is, along with many other federal departments.  The states don’t have to adopt common core.  They really don’t have to follow any of the instructions of the federal government.  But they risk losing federal dollars.

If I were a state legislator, or even a local school board member, I would vote in favor of refusing federal money for education.  That frees up the system from the federal dictates.  It doesn’t take away from the fact that it is a state-run school that is run with taxpayer money, but at least it is an improvement.

What justification is there of taking taxpayer money and then not sending it back to one particular state or area because they refuse to follow the federal government’s instructions?

As a libertarian, I understand that taxing people is theft no matter what the money is spent on.  But I think a lot of non-libertarians will see things clearer if federal education money is not sent back to a particular area, despite those people having to still pay the same amount in taxes.

There is going to be a lot of rebellion over this latest Obama move.  We can only hope that some state will actually reject this and risk losing federal funding.

If Donald Trump were smart, he would come out and say that he is proposing to end the Department of Education and all of the crazy dictates that come with it.  He can propose a small tax reduction somewhere to offset this reduced expenditure.  I know that the budget is far from balanced and would still be far from balanced even with the elimination of this department.  But a commensurate tax reduction would be a great political ploy on his part.

It is ridiculous that these people in Washington DC are making policy for 320 million people.  One of the big focuses right now for libertarians should be on decentralization.  Who can argue with decentralization when it comes to something like this?

Overall, I am happy that Obama did this.  It will just outrage people.  I hope more parents hit their breaking point and pull their kids out of the public school system.  State-run schools deserve to die.  Taxpayers and our kids will be so much better off when the state does not control the thinking of our young minds.

Keep going Obama.  You have another 8 months to go for selling more guns and more homeschooling.

Don’t Blame the Austrian Business Cycle Theory

My blog is Libertarian Investments.  I discuss politics, economics, libertarian philosophy, investments, money management, and other related topics.  Sometimes I try to tie some of the different areas together.

I attempt to use my knowledge of libertarianism and Austrian school economics for the slightest advantage in investing, as well as living a more fulfilling life.

If you are sympathetic to socialism, or one of its many variants, I don’t see how you can be rich, unless you are just putting on a show.

As an advocate of the free market, I understand that the way to become wealthy in a free market is by providing value to others.  It is only in a non-free market where people get ahead by cheating and colluding with big government, or just by understanding and playing the rigged game.

If you are not using big government for special favors (or at least not advocating for such favors), and if you are not defrauding or stealing from anyone, then you can only gain wealth by providing for others.  Therefore, the more money you make, the more it is a symbol that you are helping others.  You are making a wealthier society, and your money represents that.  Instead of feeling guilty for the money you have, you should feel proud of it.

Unfortunately, we don’t live in a free market environment.  Still, there is some semblance of a free market, so the above still generally holds true if you are not advocating for government favors.

Since we do have much interference from the government and central bank, I believe it actually provides a slight opportunity for an advantage for those who understand the system.

Don’t get me wrong here.  Almost all of us would be better off if we lived in a free market system with little or no interference from the state.  But since that is not reality, we can still find the advantages that are out there based on our knowledge.

Just understanding the workings of the Federal Reserve can help.  That is why most financial advisors won’t recommend gold, or at least any significant portion of it, for a portfolio.  They just don’t really understand or care to understand the real threat of a depreciating currency over time.  They say that stocks act as an inflation hedge and leave it at that.

I also find that a little knowledge can hurt people more than not having any.  I see many libertarians make mistakes with investing and money management.  They will go to the other extreme and invest everything in gold.  Or worse, they might stock up on bullets and other items in preparation for an apocalypse that may never come.

I have even seen a few libertarians justify going into high debt because they think the debts will just be inflated away.  I hate to break it to them that they are still going to be poor if they are paying debt back to a bank in depreciating currency, unless they used that debt to buy something with a really high return.

I won’t go into all of the ways I use my knowledge of economics to invest and manage my money.  It is not a get-rich-quick scheme.  It is more for wealth preservation if anything.  If you want to get rich quick, find a good business that will get you a high income.  Almost nobody gets rich just from investing itself.

As a student of Austrian school economics, I understand that human action is unpredictable in many ways.  We cannot predict the future with any certainty.  We may be able to guess at how humans will react to certain policies.  Taking these guesses and making good interpretations can give us an advantage at times.

Still, I would like to make the point that this is just part of my strategy.  Some other libertarians try to use their knowledge for an advantage too.  There are many non-libertarians who try to beat the market.

If I am wrong about my guesses, or if other libertarians are wrong about their predictions in the financial markets, don’t blame Austrian economics or free market ideas.

Some Austrian school economists may predict high gold prices.  Some may predict high interest rates in the near future.  Some already have and have been wrong so far.  But this isn’t an indictment of Austrian school economics.  It just means that some people got their guesses wrong.

Austrian school economics and other free market theories aren’t there to tell you how to invest.  It is the choice of some of us to attempt to use it that way at times.  Instead, it is there to tell us to have a free and voluntary market if we wish to have higher living standards.

If someone makes a prediction that is wrong, it doesn’t mean Austrian school economics is wrong unless we see a scenario where government gets dramatically smaller and our living standards decline over a significant period of time with it.  If we don’t see high price inflation or gold doesn’t go to $5,000 per ounce, it says nothing about Austrian school economics.  At most, it may tell us that someone is not using it correctly or is misinterpreting some data.

I will keep using my knowledge of free markets for any advantage I can get in terms of making money.  But this is a separate issue from advocating free markets for a more moral and prosperous society.

What Will Trump Do To Hillary?

Maybe this question should be turned around.  Donald Trump is a big threat to Hillary Clinton’s character.  Clinton may be a threat to Trump’s life.

While there are a lot of political positions Trump has taken that I vehemently disagree with, he has also said some great things.

He has been inconsistent on foreign policy, but I have already pointed out that inconsistency in this area is better than the consistent war making of the others.  The most important thing Trump has said is that Bush lied us into war.  It made it that much better that he said it right before the South Carolina primary.

His bashing of Bush on the Iraq War and his less belligerent foreign policy have not hurt him.  Maybe Ron Paul, who does not like Trump, helped pave the way.  Maybe there has just been a sea change in public opinion.  Maybe Trump supporters don’t really care what he says, as long as he remains honest.

A year ago, this presidential race was shaping up to be Bush vs. Clinton.  Where have we seen that before?  It would have been almost too obvious that we live in an oligopoly.  But the Republican voters put an end, at least for now, to the Bush family.

While some Democrats did turn out for Bernie Sanders, they are still going to end up nominating Hillary Clinton, who is perhaps the most power-hungry person in the human race.  She has been planning her way to the presidency since the last time she occupied the White House.  Obama put a bump in the road in 2008.  Now we’ll see if Trump is a bump in the road.

I was pleasantly surprised that Trump brought up the allegations that Ted Cruz’s father may have been working with Lee Harvey Oswald not long before the Kennedy assassination.  Is there Cruz ties to the CIA?

Maybe it is just coincidence that Cruz dropped out of the race shortly after this.  He did get crushed in Indiana.  Still, for Trump to say something like this makes him unique amongst presidential candidates.  Even Ron Paul wasn’t talking conspiratorial type stuff in his campaigns.

This is why Trump vs. Clinton could be such entertainment.  Will Trump bring up the Clintons’ past?  I am not just talking about infidelities.

John Kennedy Jr. was killed in a plane crash in 1999.  It was reported that he was getting set to announce his run for the Senate in New York.  But that seat was for Hillary Clinton.  It was her stepping stone to the presidency.  This was part of her plan.  JFK Jr. was probably the one person who could beat Hillary Clinton for that seat.  Did the Clinton’s play a role in the Kennedy plane crash?

It is amazing how many Clinton associates died from “accidents” or “suicides”.  It is almost statistically impossible.  Sure, they do know a lot of people, but some of these people were rather close associates. The most famous one is Vince Foster.

The big question is, will Donald Trump bring this up at any time during his campaign against Clinton, assuming that Trump is the nominee?  If he brings up these suspicious deaths, this could open up new investigations.

I absolutely despise the Clintons.  I despise the Bush family too, but that is in more recent history (the last 13 years).  I despised the Clintons back in the early 1990s when I was still a teenager.  I always knew there was something phony about Bill Clinton.  He seemed like a shyster to me then.  I couldn’t understand why people couldn’t see through him.

To be fair, I didn’t see through the Bush family.  It wasn’t until after George W. Bush became president and started the Iraq War that I came to despise him and his family.  That was the time I became more anti-war and a hardcore libertarian.  I fell for the lies of George H. W. Bush, and even the second Bush presidency a little bit at the beginning.

As far as Hillary Clinton, I really don’t think there is anyone worse.  The only good thing about her is that we may have some opposition to her in Congress if she is president.  At least there may be some gridlock, or about as much as we could expect.

Hillary Clinton is bad on virtually every single issue.  She is bad on war, on civil liberties, and economics.  She is a complete statist.  And then she is a liar and a criminal on top of all of this.

She is also very intelligent.  I don’t underestimate her.  At that same time, she doesn’t have the ability to charm people to the same degree as her husband once did.  So luckily she is not really charismatic.  That would be an even worse combination.

It is my hope that Donald Trump takes down Hillary Clinton.  I want her behind bars, but not just because of the email scandal.  I want her reputation ruined.  I hope much of her agenda gets ruined with it.

I can at least hope.  Meanwhile, if I were Donald Trump, I would be very careful.  He has already gone after the Bush family and now he is taking on the Clinton family.  These are two of the most dangerous families in existence.

Does Monetary Inflation Cause a Business Cycle?

Tom Woods – on his wonderful podcast – recently had Joe Salerno and Jonathan Newman on to discuss the Austrian Business Cycle Theory (ABCT).

Specifically, the three of them were responding to an article by Steve Horwitz that they saw as a criticism against the Austrian Business Cycle Theory.  I am not certain if the article was supposed to be an outright criticism of the ABCT, or if it was just to show its limitations.  There were parts of Horwitz’s article I agreed with, and parts I didn’t agree with.

A little before the halfway mark of the podcast, they discussed one particular claim from the article.  In discussing the Great Depression, Horwitz writes, “The theory’s adherents have argued that the recession that began in 1929 was the result of an unsustainable boom initiated by an excess supply of money at some point in the 1920s.”

On the podcast, Salerno was quick to disagree with this point.  He said that the excess supply of money doesn’t cause the business cycle.  He said that it is how the increase in the money supply is injected through the financial system, and thus lowering interest rates, that causes the business cycle.

Specifically, Salerno stated that an increase in the money supply that was used directly for war spending would not cause a business cycle.  He said, “That only causes a simple inflation.  It causes prices to rise.  It does not cause a business cycle.”

I believe Salerno gets this wrong.  An increase in the money supply to finance war spending (or anything else) is not just a simple rise in prices.  It is a misallocation of capital.  It is also a redistribution of wealth.

A correction – which is the bust phase – occurs when those misallocated resources get realigned.  So if you create new money to finance the military industrial complex and then that flow of new money comes to an end, there is going to be something of a bust with the war industry.  The makers of weapons will see higher unemployment.  Stock prices will probably fall.

The biggest bust of the recession in 2008 was housing.  And yes, this was largely due to the artificially low interest rates, also coupled with easy money.  But we can’t completely discount the government’s incentives of encouraging banks to lend and supporting the mortgage market through its government enterprises (Fannie Mae and Freddie Mac).

You could have an increase in the money supply that goes directly to the government, which then uses the money to help people make down payments on houses.  This would likely result in more demand for purchases of houses and a bidding up of prices.  It would likely cause a bubble in housing.  You don’t have to have an artificially low interest rate for the government to cause a bubble.  It certainly helps, and it certainly can exaggerate the situation, but it isn’t an absolute necessity.

Maybe Salerno would argue that an increase in the money supply would just cause misallocations in certain industries, limited to those areas where the government spends its money.  In his eyes, maybe this doesn’t constitute the business cycle because it is not widespread.

But in any bust phase, there are always certain industries that get hit harder than others.  Some industries are virtually untouched.  The housing bust was devastating because it is such a major asset and also because it impacted the banking system from all of the bad loans.

I know many Austrian school economists will disagree with me on this point, but I believe that an increase in the money supply can cause artificial booms and busts.

Usually the easy money and low interest rates go hand in hand.  So in today’s system, this internal debate may be somewhat moot.  But I hope that Salerno at least recognizes the fact that an increasing money supply misallocates resources.  And unless those resources continue to be misallocated forever, there is going to be some kind of bust.

That is one of the most devastating effects of an increasing money supply.  It distorts savings and investment and it misallocates resources.  This misallocation makes everyone poorer, except for the few beneficiaries who see the money first.