Saturday, July 9, 2016

The Federal Reserve--A Conscious Conservative View

Image result for end the fed

A Special Guest Post From-

Stephen Lucas 

     I have been reading a book called 'Gold and Liberty' by Richard M. Salsman and re-acquainting myself with monetary policy. Between the 1820s and 1913 – inflation was relatively low because the dollar was linked to gold. Gold was $18.93 (HISTORICAL GOLD PRICES- 1833 to Present) for almost 90 years! (I didn’t take this at face value; I checked several different websites for historical prices of gold – true - some will say $20.65). There were minor recessions referred to as business panics during this time. This was the period known to practice what is called free banking. As a response to a business panic in 1907 when rumors led to run on some major New York banks, the Federal Reserve Bank was created in a practice known as central banking. During the time of the central banks (around the world) would de-link paper money from any metal primarily gold and silver; hence, the period of rapid inflation begins.
     In 1933, Roosevelt furthers the devalue of the dollar by making it illegal for Americans to own gold and making the dollar worth less gold. Then after WWII, the Bretton Woods agreement was signed where countries can have Special Drawing Rights (SDR) which would give other governments rights to US gold. This worked until France in 1971 would not accept a SDR, they wanted the gold. Nixon then delinked the dollar from gold and inflation has really taken off since. During times when governments seem to be pro-business (producer), gold will decline in comparison to fiat money (dollar); gold will increase in value when governments over-regulate, over borrow and in general act fiscally irresponsible. Therefore, the dollar is backed by the full faith and guarantee of the US government.
     The goods produced and services provided are still worth something. Look at the size of the US economy in terms of GDP of the US as a single pie when the pie is the GDP of the US, as we purchase and sell our G&S in US dollars. Let’s say there is $10 T that have been printed and is used to represent the GDP; now Obama recently had congress approve the debt ceiling by $1.9Trillion. Therefore, our current GDP must now support more debt in an environment that is not seen as friendly toward business. The increase in deficit spending will create more inflation, as the dollar is devalued (more dollars at the same GDP). A welfare state and/or a state that is at war (whether just or unjust) needs a central banking system to devalue it’s currency. This book sited examples from the 1600s through 1900s of how this has been done throughout history by governments. It is an added tax – unseen, yet felt by anyone who who tries to save, spend or invest in dollars.
     The dollar is monetized debt. The US government needs money; they create notes (accounting transaction) and send to the FED. The FED reissues the notes as bills. As the US government draws down on this loan ( US government is the first users of this new money). Then the government contractors and employees deposit these funds and more money is created through the fractional reserve banking system – the bank only needs to keep a fraction of this “new” deposit and loan the rest, creating more money. One of the functions of the central bank (FED) is to have policies that are to maximize employment. I have not checked, but from what I have read, under free banking unemployment rate never topped 25% ( NPR- Paulson Calls For More Financial Regulatory Power), like in the Great Depression (under the FED’s watch). I would draw a conclusion that free banking is more responsible and freer than central banking.

Sunday, June 19, 2016

Happy Juneteenth from A Consicous Conservative

     Conscious Conservatives are always ready to celebrate freedom in whatever form it comes.  Today marks the celebration of Juneteenth.  Here is a description of Juneteenth, from the website

     Juneteenth is the oldest known celebration commemorating the ending of slavery in the United States.  Dating back to 1865, it was on June 19th that the Union soldiers, led by Major General Gordon Granger, landed at Galveston, Texas with news that the war had ended and that the enslaved were now free. Note that this was two and a half years after President Lincoln’s Emancipation Proclamation - which had become official January 1, 1863. The Emancipation Proclamation had little impact on the Texans due to the minimal number of Union troops to enforce the new Executive Order. However, with the surrender of General Lee in April of 1865, and the arrival of General Granger’s regiment, the forces were finally strong enough to influence and overcome the resistance.

Sunday, June 12, 2016

What Happened to the Goldwater Republicans?

I am a Goldwater advocate (not Republican) and there still is a Goldwater Institute that studies and promotes his ideas.  There are Goldwater Republicans in the Republican Party, although many, like myself, have joined the Libertarian Party.  
A Goldwater Republican is somebody who believes in traditional conservative values of a smaller, constitutionally bound government.  They advocate a Free Market and personal responsibility.
They differ from most modern Republicans in both their religious and racial policies.  Goldwater was of Jewish ancestry and did not embrace the "Christian Nation" standpoint that became a feature of the modern Republican "Southern Strategy."  He was involved in the founding and expansion of Planned Parenthood.  He also was for racial equality.  He advocated an immigration policy that led to Mexican workers freely coming to the United States.  After the graduation of the Phoenix Union Colored High School, no venue in Phoenix would let the "Colored" students have a reception.  Barry Goldwater invited the entire class to his house.  He had sharp words for people that said it would hurt his political and business career.
Several Goldwater campaign workers became disillusioned with the politics of Richard Nixon and formed the Libertarian Party in the early 1970s.  Those that stayed with the Republican Party can still be found in the Republican Liberty Caucus and in support of candidates such as Dr. Ron Paul and his son Rand.

Sunday, June 5, 2016

A Conscious Conservative Solution to Workers' Rights

  A corporation is not a creation of the market.  It is a collectivist creation of the government.  Individual states allow groups to create corporations and provide special protection to  members of those groups (look here for information on those protections, C Corporation: A Definition).  Over time, the states have competed with each other as to how many protections they offer, with Nevada, New Jersey and Delaware leading the way.  For example, even though General Motors has traditionally had it's corporate headquarters and most of it's operations in Michigan, it is officially a corporation protected by Delaware.  Why?  Because Delaware offers more protection and lower taxes than Michigan.  

By creating what is known as a "corporate veil" (What is corporate veil? definition and meaning) in legal terms, the principle decision makers of a corporation are protected financially and sometimes have limited criminal liability for their actions.  Even the CEO is merely an employee of the business.  An example of this is the recent meltdown of the banking industry.  None of the executives of the large banks lost their personal fortunes.  They were protected by the "corporate veil."  The banks were owned by individuals (sole proprietorship) or a group (partnership), the owners would have lost  their personal fortunes and could have been sued personally.  They might have even faced criminal prosecution.  Do you think they might have made different decisions if that was the case?
Back to the relationship with workers.  If the owner of a business does not have corporate protection, they become personally responsible for how an employee is treated.  If an employee was abused, the owner(s) would be held directly responsible, civilly and/or criminally.  If nothing else, the employee can leave and go work for somebody else.  Although there is a disagreement as to how big, there is agreement that companies cannot get megalithic without government protection and support.    
The combination of the lack of government protection for employers and the increased competition for labor from more numerous smaller companies should be more than adequate to protect individual laborers.

Monday, May 30, 2016

Saturday, May 28, 2016

A Consicous Conservative View of Economics

If you wish to know more about conservative economic theory, I recommend reading Wealth of Nations by Adam Smith, On Liberty by John Stuart Mill and The Law by Frederic Bastiat. End the Fed by Dr. Ron Paul is another good choice.
Probably the work that had the most influence on me was the introduction to an edition of The Communist Manifesto which was written by A. J. P. Taylor . Taylor led me to understand how the capitalism and the free market are not the same thing. He also left me with the impression that the only difference between a capitalist and a socialist system of government is which elite controls the economy.

Alan Greenspan is not a choice.

Wednesday, May 18, 2016

A Conscious Conservative View of Wealth Inequality

One way to fight wealth inequality is by fighting for sound money and an end to inflation.  When statistics are listed in regards to wealth inequality, they are usually measured in a currency, like the US Dollar.  Because of inflation, that creates the illusion of a growing wealth gap that doesn't exist. 
50 years ago (1966) a person who had a total net worth of $20,000 was considered solidly middle class.  In 1966, you could buy a modest house, a new car and have money left over with $20,000.  A person with a net worth of $200,000 was considered wealthy.  That is a $180,000 difference.  In today's (2016) dollars, the same people would have to have a net worth of about $150,000 and $1.5 million to have equivalent buying power.  People say "Wow! The wealthy person is now more than $1 million dollars richer than the middle class person.  Something must be done."  In terms of buying power, the ratio is still the same, about 10 times.
So a large part of the problem is not that actual inequality is growing, but that the measuring unit (dollar , pound, yen euro) is ever shrinking.  If we return to a sound currency, where the unit of measurement stays the same year after year, the inequality stops growing.

Saturday, February 13, 2016

A Conscious Conservative View of the Presidency

Presidential power has increased to unhealthy levels.  People should reject any presidential candidate that says what they are going to do.  The job of the president is to efficiently manage the government and execute the laws passed by Congress.  That is why he heads the Executive Branch.

Monday, January 18, 2016

Ted Cruz NOT as Conservative as His Supporter's Think

As of now, the press is lauding Ted Cruz as contender for the Republican Party nomination for President of the United States.  This leads us to wonder if Mr. Cruz’s views are conservative.  Let’s put him to our Conscious Conservative test.  How does Mr. Cruz score on the Conscious Conservative rating system.

---Does he respect private property?  It's hard to tell. He has made statements that he is in favor of private property, except when it gets in the way of oil pipelines.  0 POINTS

---How about the Income Tax?  Mr. Cruz falls in the “reform” camp.  He supports a "flat tax."  0 POINTS

---Where is Ted Cruz on inheritance tax?  He has doesn't specifically state on his web site.  However, it appears that in the past he has voted against increasing the inheritance tax and stated he supports eliminating it.  10 POINTS

--What are his beliefs about confiscating private property for public use?  He doesn’t appear to mind confiscating property for public use.  0 POINTS

---What about banking?  Ted Cruz appears to be firmly in the audit The Fed camp and has made statements against the US Import-Export bank.  He has not mentioned a plan to eliminate central banking..  5 POINTS

---Ted Cruz on free speech, assembly and travel-- Mr. Cruz makes a display about fighting for Christian speech, but it is doubtful where he would stand on more unpopular speech.  I’m also going to deduct some points because he wants to build a wall around the United States.  0 POINTS

---Is Mr. Cruz a Free Enterprise advocate?  He states he would like to get rid of several government agencies.  He does however seem to have supported subsidizing some industries in the past.  5 POINTS

---About Ted Cruz and the free exchange of labor and services—He appears to give at least lip service to small business deregulation.  10 POINTS

---What is Mr. Cruz’s record on freedom of living quarters?  He does appear to wish to get rid of HUD and some government housing restrictions.  10 POINTS

---Education-- Ted Cruz has pledged to eliminate the Department of Education.  He appears to want to return education to a decision that is made locally.  10 POINTS


That is a Moderate score that has him leaning towards Liberal views. 
How does he rank compared to other prominent politicians?

Ron Paul            90 POINTS
Rick Santorum  55 POINTS
Ted Cruz           50 POINTS
Newt Gingrich   50 POINTS
Mitt Romney     35 POINTS
Donald Trump  35 POINTS
Barack Obama  20 POINTS

Mr. Cruz is definitely not a Conscious Conservative.