Dispelling the insufficient quantity of gold myth

This post will be necessarily incomplete. The topic of money, of a medium of exchange, of how money comes to be, what transforms a good into a medium of exchange (or money, these words are interchangeable) etc. is not something that is taught or understood by most, and I can not give it a proper treatment in one blog post. I do want to attempt to address one specific fallacy, namely that a gold standard would not work because there is not enough gold available, or it does not grow rapidly enough to support our modern economy.

The quantity of a good is totally irrelevant (within reason) to it being feasible as a medium of exchange. Especially given the technology of the present day, quantity is even less relevant than it was previously. All that is necessary to deal with a static supply of money and an ever growing economy (and the corresponding goods & services that it produces) is the use of a decimal point. If today 1 gram of gold ($60) is sufficient to buy a week’s worth of groceries, with a growing economy and a frozen supply of money, over time the cost of goods fall. Or to say the same thing, the purchasing power of money rises. So instead of needing 1 gram, let’s say in 50 years time it only costs 0.1 gram to buy the same amount. And so on.

By the way, this is what led to the advent of silver as a money alongside with gold. As the supply of gold is much smaller than that of silver, it has significantly greater exchange-value as money than does silver. For our purposes let us say that silver has 0.01 the value of gold. This pushes the decimal point back in the sense that a good that costs 0.01 grams of gold can now be purchased with 1 gram of silver. Or a good that costs 0.0001 grams of gold, a more manageable 0.01 gram of silver gets the job done. But all these physical problems of chopping an amount of gold or silver to a small enough level to deal with daily purchases as the price level continues to decline, due to a static supply of money, are immediately eliminated with the technology available to us today.

Naturally, in physical transactions it is likely that gold certificates (or paper dollars) would most likely be used, as opposed to carrying the actual gold around with you. So banks or gold warehouses could store the bulk of your gold and you could issue paper gold receipts in any denomination you like, which that party can exchange for gold from the warehouse. Online transactions make things even easier and to demonstrate the application of this theory, you need only visit http://www.goldmoney.com/ which facilitates the use of gold as money – all digitally.

We tend to have a hard time visualizing this because we have all lived under an aggressively inflationary monetary policy that continually increases the supply of money faster than the corresponding demand for cash balances and/or economic growth. This has produced the continual and perpetual rise in prices year in and year out. Or again, has decreased the purchasing power of our money. The more dollars created, the less value each one has. The less goods and services one can obtain when trying to exchange these recently-diluted dollars. For roughly the first 150 years or so this country was on a gold standard, the price level tended to remain stable, despite occasional fluctuations. This is because the supply of gold is not frozen, it actually grows by about 2-3% a year, which offset the decrease in prices a growing economy bestows upon the people, and resulted in a roughly stable price level.

I mean to really drive the point home, we can imagine everything as the same. Forgot gold, let’s keep everything in US dollars. The only difference is the printing-press is permanently broken, or even better, 90% of all dollars disappear overnight! And there is no way to increase the supply of dollars. (Yes I know this is crazy, but it will demonstrate my point) So in this scenario where the supply of money has literally been decreased by 90% and there is no way to increase it, how will dollars function as a workable medium of exchange going forward? Well, all that has happened with this tiny stock of money is that each unit has increased its purchasing power by a factor of 10. So pennies (which is just another way of saying 0.01 dollars) will have the purchasing power of what dimes did the night before.

Let’s fast forward 100 years and the economy has grown so much more but our tiny supply of US dollars hasn’t grown one bit since that night we destroyed 90% of all dollars. Well as economies grow, they get more efficient at producing stuff and prices fall. So now we are in a situation where let’s say pennies have gained so much more purchasing power they are equivalent to what $100 can buy today. So how will someone buy something small, like say a bottle of water that costs only the equivalent of $1 today? They’d simply pay 0.01 pennies. Perhaps they would create a new denomination of dollars called “super-pennies” that instead of being worth 0.01 dollars, are worth 0.0001 dollars, instead.

All we are doing is going the opposite direction of needing a $10 bill to buy what $1 could 20 years ago, or a billion dollars to buy what a million could 50 years ago. So hopefully, I’ve demonstrated that with either a commodity money (gold) or a fiat money (US dollars) the total stock of money does not have any bearing on whether or not it makes for a suitable money. I mean if gold was workable as a money for 5000 years before computers and electronic banking made possible a virtually limitless ability to produce ever smaller and smaller denominations, whether or not you are in a favor of a return to gold, or a free market in money more generally (much better choice), one argument that can not be used against gold as a medium of exchange is that there simply isn’t enough of it to go around.

(I would be remiss to not include resources for a proper explanation of money. It is one of the most important and most misunderstood concepts in society today. The greatest thing ever written on money remains Ludwig Von Mises’ The Theory of Money & Credit. As that work is rather difficult to approach, I would recommend What Has Government Done to Our Money? by Murray Rothbard as a more suitable introduction.)

Tyrannical regime continues to terrorize non-criminals

The federal government continues its war on peaceful people indicting Bodog.com founder Calvin Ayre on money laundering charges with a penalty of up to 20 years in federal prison. There is no clearer example of how unconcerned with providing justice a system of government-law is, you need only look at the comparison of penalties for real crimes like assault and rape, compared with the non-crimes of operating illegal business and conspiring to commit money laundering. For a detailed academic work that reaches the same conclusion please see, The Pursuit of Justice: Law and Economics of Legal Institutions.

Ayre hits the nail on the head in his official statement when he writes,

I see this as abuse of the US criminal justice system for the commercial gain of large US corporations. It is clear that the online gaming industry is legal under international law and in the case of these documents is it also clear that the rule of law was not allowed to slow down a rush to try to win the war of public opinion.

What those who rail against big corporations fail to recognize is how much corporate power and influence directly benefit from the state apparatus. In a purely free market environment the only way to displace a rival in business, or become successful in the first place, is to make those around you richer. Be it by creating products that consumers value more than the selling price (free trade is a positive sum, win-win game) or by offering a better quality product, at a lower price, than currently exists on the marketplace. Sometimes, both of these things are very hard to do. So the same greed motive that incentivizes firms to produce wealth for those around them (and reap the profits for efficiently doing so), also results in the realization that co-opting the State can be a cheaper and more effective means of obtaining industry dominance.

In addition to this story exemplifying the perverse and twisted system of US criminal law, a system that is concerned primarily with protecting the State’s interests first, and perhaps, on rare occasions, providing justice later; this story is just one more example of the unimaginable power corporations can achieve under government as compared to a laissez-faire capitalism system.


I decided to check out the Las Vegas Mob Museum

My friend Katie and I were on our way over to the “Mob Bar” for some food and drink the other night and decided to check out the newly opened, $42 million taxpayer funded Las Vegas Mob Museum, which had just opened a few days prior. Although there were only two parties ahead of us on the only available ticket line, (the other three ticket windows were closed) a good fifteen minutes went by while the several employees behind the window were still occupied with the same person they had been dealing with since we arrived.

Despite the differences in d├ęcor, and the employees dressed in different garb, I instantly remembered where it was that I found myself – inside a government-run operation. But, of course! The sights and sounds were different, but you can’t mistake that good ol’ fashioned bureaucracy feel!

At that point I made the obligatory comments about government inefficiency and how the Mob would never let money walk out of the door like this, and we decided to head over to the Mob Bar, instead. Upon arrival, we were promptly seated and served by the courteous staff whom seemed genuinely interested in making us feel welcome. As I had my first sip of a deliciously prepared Blood in the Sand cocktail I couldn’t help reflecting on the irony between the two experiences. Say what you will about the Mob, but one thing they never had any difficulty with (which is arguably the most important aspect of any business) is taking the customer’s money in a timely and orderly fashion! I think its time for another one of those cocktails…


End the War on Drugs, End the War on Terror. You can keep the promise of safety, I'll take my liberty instead!

I have noticed a rather disturbing trend lately in the federal government’s efforts in the various “wars” on drugs and terror. The first thing we should notice is that neither one of these “wars” are against specific targets. Terrorism is an action; by definition this war is unwinnable as the uncertainty of the future will always allow for a condition in which future terrorist actions are possible. The war on drugs is similarly misnamed as the target is really the people who use drugs, not drugs themselves. The latter is a classic example of the government functioning to protect their citizens from themselves, while the former is designed to protect them from what may happen in the inherently uncertain future.

I’ve written a bit already on the consequences of tasking government with objectives that are, by definition, impossible to achieve. I mainly focused on the inevitable growth of government and commensurate loss of freedom that comes with it. However, there are two examples that recently came to my attention that suggest there are additional harmful consequences to these policies, as well. It would appear the self-interested rational actors who comprise these various government agencies (FBI, DHS, TSA, etc.) function to produce results, no matter the cost. So while at first glance that might sound fine and dandy, what happens if there are no legitimate terrorist threats and your entire function is to arrest terrorists?

What if all that taxpayer money ostensibly designated to “keep us safe” is, instead, spent on creating terrorists where there were none before? Or if the NYPD focused its efforts more on illegal spying on Muslim students in the hopes of catching a potential threat, as opposed to protecting the people, and their privacy rights they once believed they were entitled to as citizens of a free America. In such a scenario it would seem entirely reasonable to suggest that the so-called war on terror has actually become a war on civil liberties and freedom. If those who supported the war on terror did so because they believed in its stated goal of keeping the world safe for democracy and protecting our way of life (freedom), at this point, wouldn’t the most effective action one could take to achieving those most worthwhile goals (mainly the freedom part, but I digress) be to call for the immediate abolition of the DHS as well as the “wars” on drugs and terror more broadly?

Lest one think this is limited to the preferred target of the “war on terror” – Muslims, and as non-Muslims you are safe from such a tyrannical, un-American, aggressive government, similar tactics are being employed in the Drug War. An attractive 25 year-old female undercover office was sent into a high school in Florida to conduct an operation to bust drug dealers. After weeks of flirting and building a relationship with an 18 year old student, who had no criminal record and didn’t even deal or smoke marijuana, the undercover officer asked the student, Justin, to obtain some marijuana for her. He was unable to do so initially, but after repeated requests he was finally able to obtain a small amount for his new “friend”. Upon delivery, the cop attempted to pay him $25 for the marijuana, to which he refused and said he got it for her as a present. The results?

When the operation concluded at the Florida high school, "the police did a big sweep and arrested 31 students -- including Justin," according to the Alternet article. Justin has been convicted of selling pot inside a school, a felony in Florida. He is no longer eligible to join the Armed Forces as he had planned to do upon graduation and is now attending community college. [emphasis mine]

This horrifying example (of which it is merely one of many) embodies the dominant theme - a government obsessed with justifying its continued existence at any cost, even if it has to create the very “threats” it is tasked with thwarting. The Drug War will never be ended by those who benefit and are employed by such a policy. And this is precisely the problem with straying from a government which is tasked with its only legitimate function – the protection of property rights – to one tasked with providing inherently unachievable goals, such as safety. As long as the goals are kept vague and indefinable, there are no limits to what government can do. Any previously unimaginable expanse of authority or violation of liberty can always be justified as necessary in the name of “fighting terrorism!”, for instance, precisely because there is no identifiable way of measuring whether or not such an action is necessary or helpful. When the enemy is uncertainty, there are no measures that can not be justified as being necessary for the Big Brother-like role of keeping you safe, even (or especially?) if that means keeping you safe from yourself. This, by the way, is one of the most compelling arguments for a government limited to providing for the protection of private property rights and nothing else.

Despite the mountains of evidence demonstrating its colossal failure, (is there any other issue today that has such a unanimous consensus from all ends of the political spectrum?) the Drug War continues to thrive. The only two groups whom benefit are the government agents it employees, as well as the drug lords who profit from an artificially inflated price of illegal drugs. Wouldn’t it be crazy if these two groups worked together at some point? 

In addition to the first in the world prison population of non-violent criminals, the fundamentally anti-freedom nature of criminalizing personal behavior, the increasing rates of crime and murder associated with prohibition, and the staggering economic costs, I pray the legalized entrapment and incarceration of innocent people (turned felons!) is finally the straw that breaks the camel’s back and results in a mass outrage that will not cease until these “wars” are finally ended.

Regardless of their stated purpose, or even the intentions of those who defend them, the reality is clear – these wars are waged primarily against American citizens and the very essence of the American way of life. These policies continue not because it is in the best interest of the people, they continue because they are the lifeblood of the police state. They are the necessary pillars of fear and intimidation to provide the foundation for the continual expansion of the State and the corresponding diminution of the sphere of liberty that comes with it. They are un-American and should be vehemently opposed by all those who believe in the American way of life and the freedom it once represented.


The Fed's latest attempt to further conceal the impoverishment it creates

I knew I was in store for a doozy when I came across this Bloomberg Businessweek article entitled, "Inflation is Still Too Low." Yet, I was still unprepared to see the following:

Bernanke has said that he chose to base the Fed’s inflation target on the PCE because it’s a better reflection of the changes in people’s purchasing habits. One of the big blind spots of the CPI is that it doesn’t capture how people adjust to fluctuating prices by substituting cheap goods and services for those that grew more expensive. [emphasis mine]

The Fed has been revising the statistics used to report price inflation for decades now, with every revision having the same effect of resulting in lower inflation reporting. In fact, economist John Williams has made a living and runs a website dedicated solely to reporting more accurate inflation metrics  for businesses who found the revised government statistics to be too far detached from reality to be reliable.

The statistic the government uses to monitor the rate of price inflation is the Consumer Price Index (CPI). However, even after all the methodological tweaks, it still was reporting too high (or in Fed-speak, unstable) of a number, so recently we have been told to focus only on core-CPI; a stripped down version of the CPI which reports price increases on all goods, minus food and energy. So given that a monetary policy of inflation disproportionally harms the lower and middle classes, whom are very likely to spend a significant portion of their income on food/energy, because you know, you need these things to survive, critics like myself view the core-CPI statistic as being almost completely useless as an indicator of the effects of inflation on the average middle to lower class citizen.

Yet, somehow even this wasn't enough! Now we are being told that we should focus on the personal consumption expenditures price index (PCE), instead. Which, once again, produces an even further muted picture of price inflation. What blew my mind was the justification for this change. The perceived flaw in the CPI that was it stubbornly reported people who were unable to afford their regular good of choice due to rising prices, and consequently substituted it with a cheaper alternative, as an example of price inflation. As it should! This is the very essence of the ill effects of inflation. Prices go up faster than our incomes, and thus we are forced to either spend more money for the same thing or substitute it with a cheaper version.

The PCE, by contrast, can produce this even lower rate of inflation by "incorporating the changes in people's purchasing habits". Which is to say, gloss over the very wealth destruction their policy causes that results in individuals no longer being able to afford their original, preferred good of choice. Is this not the definition of wealth destruction? To report that no price inflation is occurring because those who regularly spent $25 dollars for steak (and can no longer afford to do so if the price rises to $50), because they now are buying $25 worth of hamburger (substitution good) obscures the very essence of what inflation metrics are designed to report!

Yes, hamburger provides a similar function as steak. But it is precisely the result of the Fed's relentless inflation that strips the consumer of being able to indulge in that luxury purchase of steak over hamburger. To create statistics that are specifically designed to obscure this continued rise in prices and the subsequent impoverishment of all those whom are stuck using US dollars is just one more Orwellian hallmark of a government gone mad.

Update: The American Institute for Economic Research has just released their "everyday price index" (EPI), which shows the inflation rate of everyday purchases at 8%


The best article on Ron Paul you are likely to read this week

From "Ron Paul and his Enemies" by Scott McConnell of The American Conservative:

Foreign policy is a different matter. Paul’s skepticism about American military interventionism—the Iraq War, the Afghan War, the war Israel and the neocons are trying get America to fight with Iran—resonates far more among foreign-affairs specialists, the military, the intelligence community, and the Republican rank and file. Paul’s campaign has the potential to begin bringing that skepticism into the inner reaches of the GOP—where the interlocking web of big donors and neoconservative-run think tanks and media have managed to keep the doves, realists, and other skeptics at bay.
This may be recorded as neoconservatism’s most singular achievement: to have their disastrous strategies enacted in Iraq, see them thoroughly discredited, and yet nonetheless retain their spots as the Beltway arbiters of “responsible” conservative opinion, with the power to exclude those who dissent. But the neoconservatives understand better than anyone how tenuous is this hold on the Washington discourse, how necessary it is to crush dissident movements before they can grow beyond the cradle. Thus a septuagenarian congressman who is an outlier in his own party must be treated as a mortal threat, his ideas not debated or refuted, but obliterated, presented as so far beyond the pale that no sane person could entertain them. [emphasis mine]

It's great to see attention being given to this fact that for so long the GOP has either willfully ignored or deliberately suppressed. And that is Ron Paul's foreign policy is widely supported by those with expertise in foreign policy affairs. He receives more support from military troops (both active and retired) than any other presidential candidate, as well as being the only one to receive endorsements from top CIA intelligence officials. It seems impossible to reconcile the idea of "supporting our troops" while ignoring the message our troops are sending to us - that Ron Paul is right on foreign policy.

In the nanny state that is modern America, do parents have any rights left?

From the LRC blog:

"A preschooler at West Hoke Elementary School ate three chicken nuggets for lunch Jan. 30 because a state employee told her the lunch her mother packed was not nutritious.

The girl’s turkey and cheese sandwich, banana, potato chips, and apple juice did not meet U.S. Department of Agriculture guidelines, according to the interpretation of the agent who was inspecting all lunch boxes in her More at Four classroom that day."

The child was forced to eat processed chicken nuggets - after all, they meet the federal dietary guidelines! - in place of the lunch her mother chose for her.

The issue here is not simply of this one incident in which the system fails to achieve its own stated goals and, instead, ends up producing the exact opposite of its intended purpose - to require all students eat a healthy lunch. The issue, (as it always seems to be around here) is the system itself. The very notion that it should be the role of the state, not the parents, to determine what a child can or can not eat is appalling. Once you concede that premise, (regardless of how innocuous whatever form the original proposal assumes) the practical application and consequences that must follow, in this case, state agents rifling through the lunchboxes of 4 year-old children, are already incorporated within and are merely the logical continuation of the policy in action.

The ends do not justify the means. They cannot. The goal of creating a healthier society is a laudable one. So, too, are the efforts to create a more charitable society, or a thoughtful, or caring, or compassionate one. And so on. None of these goals justify the use of force, as a means in which to achieve them. You can not craft a more just, healthier, or fair society by employing an immoral method for doing so. A starting point of denying the rights of some, so that many may prosper, is incompatible with a free society and is the hallmark of tyranny. There is nothing moral about using force to have others behave in a more charitable manner. There is certainly nothing just in using force to deny parents' their natural rights to provide for children as they see best, which erodes the very core of the human experience. If the parent-child relationship is no longer deemed off-limits to government control, what realm of human life is?

If we wish government to function not as the protector of private property rights and provider of just law, but instead to create a "better" society, where it provides for the safety and well-being of its citizenry, where is the logical stopping point? If the government is tasked with keeping our physical body safe and healthy, what is to stop it from expanding towards the mind and soul? As Mises wrote in Human Action:
 "...why limit the government's benevolent providence to the protection of the individual's body only? Is not the harm a man can inflict on his mind and soul even more disastrous than any bodily evils? Why not prevent him from reading bad books and seeing bad plays, from looking at bad paintings and statues and from hearing bad music?
...If one abolishes man's freedom to determine his own consumption, one takes all freedoms away."
Liberty is not just the highest political end, it is the only political end. The subjective nature of concepts such as safety, health, or happiness precludes them from being ends in which government may be tasked to provide. Government force and law are only legitimate when used to provide for the objective concept of justice - the enforcement and protection of private property rights. The admirable goals of helping others to make healthier choices becomes deplorable when choosing the scythe of government force as the means in which to carve out this "healthier" society. Peaceful communication and voluntary cooperation are the only means possible for affecting change in a manner fit for a free society.

While the case for liberty rests and must exclusively reside in purely philosophical grounds, ie. natural rights, sadly, much debate over the role of government tends to occur within an utilitarianism context. It is worth noting, then, that even on these grounds government rarely produces a desirable outcome. The above example perfectly illustrates this. Clearly, even those in favor of this policy regulating the food parents provide to their children for lunch, would agree that this example was an unfortunate incident which failed to deliver the desired goal of providing healthy food for children.

Most proponents of a welfare state fail to properly appreciate the nature of government. Remaining blissfully unaware of the true nature of the state they believe it will allow for seamless integration of their proposed "improvements" to society, in a virtually effortless manner. In reality. the state apparatus that is used to employ these changes is much like a wayward wrecking ball that carves a path of property-rights violating, unforeseen harmful consequence-causing, lobbyist beholden, intrinsically inefficient and incapable mayhem wherever it goes. If the would be reformer explored the true nature of the state, perhaps they would recognize employing a system that occasionally glitches and results in throwing out a parent-provided healthy lunch, in favor of processed chicken nuggets, is not merely an aberration, but indicative of the diseased bureaucratic system chosen to supplant their role as parents.

(Example of "lobbyist beholden" charge: food companies lobby Congress to classify frozen pizza as a vegetable so they can continue to be served in school lunches across the country.)

Update: A mother is being charged with 2nd degree child endangerment for having her 10 year old son walk to school. The article contains a must-see interview with the police spokesman who so clearly depicts the underlying mentality that it is the State that owns your children and crimes are now defined as behavior that they deem as being unsafe or potentially dangerous.

Update #2: Another case of a 4 year old's parent-provided lunch being thrown out in favor of processed chicken nuggets has just been reported by The Blaze. It occurred at the same school as the earlier incident, and appears to be part of a pattern, not an outlier as originally reported.


As Detroit's government collapses, private police firms meet the demand for security.

Almost on cue in response to my earlier post on private police comes this story from Detroit, "911 is a Joke." As the government collapses and the people are unable to rely on the Detroit PD for protection of for 911 to provide assistance in a timely manner, two things have occured. The first is that more and more people are buying firearms and weapons for self defense, and they are using them! Self-defense related justifiable homicides are up nearly 80% over the previous year and are a whopping 2,200% higher than the national average! In addition to resorting to self-defense as means of protection, private police firms have entered Detroit to meet the demand for security, and it seems like business is booming:
The city’s wealthier enclaves have hired private security firms. Intimidating men in armored trucks patrol streets lined with gracious old homes in a scene more likely seen in Mexico City than the United States.

That kind of paid protection can run residents anywhere from $10 to $200 per month, and companies say business is good.

“We’re booming,” said Dale Brown, the owner of Threat Management Group, which along with Recon Security patrols neighborhoods like Palmer Woods in black Hummers.

Threat Management Patrol Car

And after Kevin Early found himself held up at gunpoint right in front of his home, he decided he had enough:

...he was held up at gunpoint outside his home in the upper-middle-class Rosedale Park area. Neighbors called the police, but it was 25 minutes before an officer arrived.

Weeks later, Early packed up his home and left Detroit. He hired Threat Management to supervise the move.
For more on private police see my earlier post. Be sure to click on the embedded links within for more detail and context. Additionally, Professor Bruce L. Benson has authored one of the greatest works ever written on this subject, The Enterprise of Law, that expands its scope to courts and law, as well as law enforcement. I can not recommend it highly enough!


How the non-action against abusive cops creates a climate of fear and erodes our civil liberties

So I wrote earlier about a particularly gross display of police brutality in neighboring Henderson, NV that went virtually unpunished, as the offending officer is still employed at his previous rank of Sergeant. Randomly I came across this youtube video that demonstrates how to behave during a traffic stop, while still maintaining and asserting your Constitutional rights. One thing that struck me about the video was that the actor playing the cop did a pretty good job of being intimidating, yet the young man remained un-flustered and proceeded to repeat his rights and behave in an ideal manner. I think what bothered me was that the video does not take into account the level of fear one feels when placed in a real-life situation like the one they are trying to depict.

I wondered why should we feel fear in our encounters with the police. I remember being younger (pre-9/11) and not being particularly fearful of police, especially if I knew I was doing nothing wrong. I can't speak for anyone else, but for me personally, that is no longer the case. What has changed, then? The first thing that comes to mind is the knowledge that police can and do abuse people, and consequently face very little if any punishment for doing so. The empty words of Henderson Mayor, Andy Hafen, demonstrates this concept. Here, we are fortunate enough to have videotape proof of blatant police brutality, yet not only are no criminal charges filed, the offending officer remains on duty to this day.

That is scary. It sends a message - we can abuse you and get away with it. Knowing this to be the climate we live in, if I find myself in a confrontation with an angry officer whom is intent on making an illegal search or detainment or whatever, I am more likely to forfeit my rights than I otherwise would be. I am less confident of the effectiveness of the system in prosecuting police abuse appropriately, and consequently, because both I and the officer know this, there exists greater leeway for him to use excessive force and less incentive for him to be concerned with protecting my rights and treating me fairly.

Additionally, the ever increasing definition of what constitutes "resisting arrest" and thus authorizes the police officer to assault you, only makes matters worse. In this clip we see that merely saying "What are you going to do, shoot me? What are you going to do?" is enough to constitute a threat and the person is subsequently arrested. Living in a world where crimes are so vague, and police are legally allowed to assault you and, if necessary, use deadly force based on the increasingly vague  definition of what constitutes a crime has a very precise effect on the citizen, and society in general. It creates a climate of uncertainty and fear. Fear that you will be violently and brutally assaulted for failing to comply with a police officer's command, regardless of whether you are legally required to or not. Fear that they can claim your behavior or speech represented a threat and now they are legally entitled to violently assault you; an assault that if you resist, they are legally permitted to murder you, if necessary.

The most disturbing aspect of all of this is the ultimate result such a climate of fear has on a society. It creates an environment where civil liberties are eroded silently, preemptively. Where there still exists, on paper, the right to remain secure in your person and effects, but no longer does that right function in the tangible world.

This is, of course, by no means limited to Nevada law enforcement. It is a widespread trend across American and most aptly personified by the Federal Government's various police-state agencies such as the TSA and DHS. Still, it always smarts a bit more when you witness the government fail to provide its only legitimate duty - to protect the rights of the people - right in your own backyard. While I expect the road towards the de-monopolization of government-run police is a long one, I would think removing cops who display such abusive and criminal tendencies would be easily achieved. At the very least, the good citizens of Henderson, NV deserve a police force that does not condone and continually employ abusive officers. It would be nice to see the city, and the mayor, make some effort at providing them that service.


Henderson cop assaults man suffering from diabetic stroke, faces no charges and remains employed as a Sergeant.

The Las Vegas Review Journal has just published a story of 5 Henderson police officers assaulting a man who was suffering from diabetic shock. The article contains video of the incident which shows the police officers approaching the unarmed man with guns pointed at his face, throw him to the concrete ground, handcuff him, pile on top and throw several kicks to his head. The victim at no point ever made a hostile or threatening gesture. He, of course, was unable to comply with the police officers' initial verbal orders as he was in diabetic shock at the time.

My first response to this story, a story which happens much too often, on a disturbingly regular basis, was that this cop would have been immediately fired and facing criminal charges if we had a free market in policing services. Sadly and predictably, only one of the five police officers, Sgt. Brett Seekatz, faced any disciplinary action. To make matters even worse, the disciplinary that was taken was not released to the public and appears to have been extremely mild; the officer is still employed as a Sergeant, enjoying a hefty taxpayer-funded $110k a year salary.

As appalling as Sgt. Seekatz' behavior was, what is even more outrageous is the system in place that tolerates it. It is not the people that tolerate such behavior. I think we could all agree that the type of person whom approaches an unarmed man, handcuffed face-down on the ground, with three men forcibly holding him down, and decides the most appropriate course of action is to deliver several kicks to his head, is precisely the worst type of person to be employed as a police officer. While we can not change the nature of human behavior and guarantee such incidents will never happen again, we most certainly can change the system that tolerates and institutionalizes it.

The primary reason the Henderson PD can employ police officers whom their customers (citizens of Henderson) would overwhelming consider inadequate, or in this case, downright dangerous, is because of their government-provided monopoly status. Funded by taxation, they are immune from being penalized for failing to provide a valuable product, as the taxpayers are incapable of refusing to pay for the service, no matter how poor of a value they perceive it to be. As a government monopoly that is immune from competition, there is much less incentive to respond to the wishes of the citizens they are tasked to protect than there would be if those citizens were free to decide whether or not to continue paying for said service. On the contrary, if there were a free market in policing, it would be in the best interest of the private police agency to respond to the wishes of their consumers, which would almost certainly result in this officer's immediate termination. Any company that did not appropriately discipline officers found to be behaving in such an abusive manner, would be faced with an exodus of customers whom began looking for firms that were more reputable.

Having this mechanism in place results not merely in more appropriate disciplinary actions, but also acts in a preventive manner, as well. It is in the best interest of the police agency to employ honest, respectful, and professional officers so that they can enjoy the benefits that come with a positive reputation. Additionally, removing the government status from policing allows for the law to be applied equally. Just as private security guards and bouncers are held to the same criminal law as the rest of us, so too would the police officers be in a free-market setting. Removing the protective shield that currently exists (and is so painfully illustrated by this most recent example) in instances of police misconduct and abuse, would also serve as a deterrent to the individual officers from committing such acts in the future.

Traditionally we are told that policing is a good that is so important to society, it is too important to be left in the hands of the free market, and must instead only be provided by the government. In fact, it is often alleged that the very idea of private police is absurd and could never work. The first thing one must understand is that this claim is simply untrue. Private police not only works in theory, it works in practice as well. In 1847 the people of San Francisco found themselves woefully unprotected from the influx of those in search of riches as part of the Gold Rush, and in response established a merchant-based private police force! The San Francisco Special Neighborhood Police was so successful, it still exists today.

One of the oft-lobbied criticisms against competitive, privatized solutions, is that the providers are motivated by greed and self-interest and would fail to adequately provide for the poor. A full refutation of this fallacy is outside of the scope of this article, but I would warn against committing the Nirvana fallacy. It is not my contention that a free market in police would be perfect, merely pointing out the potential flaws is not enough to prove it is inferior than the existing method. The debate is not over how utopia can be achieved, it is over which system is more desirable than the other. The fact that poor neighborhoods have become synonymous with being unsafe should forcibly demonstrate that the current system of policing is woefully inadequate in this regard.

Additionally, the concern over the possibility that a private police force may act in a manner harmful to consumers is only magnified when placed in a monopoly setting devoid of competition! One would think the proponent of government solutions, in response to this perceived weakness of the free market, would recognize the contradiction in calling for a permanent monopoly (still occupied by the same human beings motivated by self-interest) as a solution. In fact, in the history of private police in America we see just this. It is the greed and self-interest of powerful political groups, such as police unions, that is responsible for, and has shaped the current system of police. The notion that our present system of policing services has evolved out of an altruistic motive to provide for the common good should be met with the same degree of skepticism one would treat a used-car salesman who claims his only interest is in providing you with the "right" car.

In a fascinating article published in 1982 by Reason Magazine titled, Cops Inc., we learn that despite a growing and successful movement of small towns outsourcing their police forces to private firms to deal with massive budget deficits, it was the police unions for government employees that demanded an end to the practice. Unfortunately they were successful in creating a prolonged (and expensive) legal battle that eventually eliminate their unwanted competitors. This part bears repeating. When several rural towns in the 1970s began employing private firms to handle their  police services, the result was remarkable savings to the town and increased protection. To put in perspective the level of savings, we can look at what happened when the police unions finally forced the private firms out. In 1981, the last year that the town of Oro Valley used a private police force, it cost the town $35,000 for the year. In 1982, the budget increased to $241,000. The private firms received no complaints and in one town, "the burglary rates dropped from 14 a month to 0.7 a month - and stayed at that level."

Yet these efforts at privatization failed, not because they were inadequate, clearly all the data demonstrates they were far superior to the previous government-run police force, but "only because of a legal technicality and the effort by a state agency to gun down a novel concept without serious consideration of how well it worked." [emphasis mine. Self-interest does not disappear when one enters the public sector and it is the strongest argument against government monopolies, not for them!] The move towards a more efficient, effective, and just system of policing was squashed not because it required the imposition of a government monopoly in order to succeed, but instead precisely because government police unions saw their enormously inflated salaries and jobs threatened by a free market that was ready and able to provide the service at a higher quality and a much lower cost.

This issue should not a be a political one. To further highlight the fact that this is not merely a matter of left vs right, or more government vs less, Switzerland (which is not exactly known for its love of free markets!) uses private policing extensively. Swiss Securitas was providing police services for over 30 Swiss villages and townships at the time of the Cops Inc. article's publication, and since then has only grown in both size and scope.

Justice is a human issue and something we all value deeply. We do not have to continue to witness acts of gross injustice go unpunished as the perpetrator remains free to enjoy a lavish salary and pension (at our expense, of course). Desensitizing ourselves to the disturbingly routine incidents of police abuse is no way for a free and just society to function. We have been told that this is the way it must be, that there exists no other alternative. I implore you to study the works referenced within and discover for yourself the validity of that claim. There is an infinitely more just, more efficient, and more humane alternative available to us. We need only to discover, and then, demand it.


We were not cheated, but we appear to be cheating ourselves.

Ron Paul performed very poorly in Nevada on Saturday, and consequently an uproar from my fellow Ron Paul supporters has erupted all over the Internet. There are several items that need to be addressed. First of which is that evidence of a poorly run, confusing, and unnecessarily cumbersome caucus system is not the same thing as evidence of voter fraud.

What is even more puzzling, is that nobody seems to be mentioning the fact that Ron Paul outperformed the polling expectations. A LVRJ poll that was released four days prior to the election had Ron Paul at 9% and the highly respected Public Policy Poll had him at 15% the night before the election. The actual election results had Ron Paul come in at winning 19% of the total vote. While this was severely disappointing, it would seem to make the cries of voter fraud difficult to reconcile with his better than expected showing.

Put another way, say Newt Gingrich polled at those numbers leading up to the caucus and then significantly outperformed them. I imagine more people would cry foul at his higher than expected numbers, not that he was robbed of his "true" number of winning the thing outright.

There is tons of evidence of a sloppy and poorly organized Republican Party of Nevada. There is no evidence of voter fraud against Ron Paul.

The people being turned away, the mistakes of people failing to sign in etc. are all symptoms of a horribly inefficient and confusing caucus process. This happened to all people, it did not happen specifically to Ron Paul supporters.

The "special" late-night caucus demonstrated this. Why did we win so overwhelmingly there if we are unfairly being turned away? Did Ron Paul supporters commit voter fraud there to rob Mitt Romney? Of course not, so how can it be that all of Ron Paul's victories are legitimate and his losses illegitimate and indicative of voter fraud?

Is voter fraud possible in such a confusing and messy system? Absolutely. Is there any evidence it took place against Ron Paul? Absolutely not. In fact, I and other Ron Paul supporters were overwhelmingly involved in running things. Because the Nevada Republican Party is so deteriorated, an overwhelming number of site manager and precinct manger positions were left unfilled. As a result, thanks to the fantastic efforts of the Nevada Ron Paul campaign, it was our guys who were running things! Even when I returned the votes from my voting site (which I ran) back to the Republican Party HQ, I found their offices filled with both Ron Paul supporters and official members of the Ron Paul campaign staff. Resorting to cries of voter fraud for our disappointing finish only harms us and the Ron Paul campaign. It shifts our focus away from focusing on why we polled, and then subsequently performed, so poorly in Nevada. That is what we should be focusing on.

We made a concerted effort to win Mormon votes. Exit polling shows us only garnering 5% of Mormon votes. I've worked side by side with members of the Ron Paul campaign and while I was not privy to the higher level discussions and strategy planning, I can tell you those individuals worked too hard to have been aiming for merely 5% of the vote. Did we do something wrong there, either in execution of the strategy, or in choosing that strategy altogether? Could we be doing things differently or better in some respects? Should we be listening to common sense and our volunteers that tell us spam calling our supporters the night before is causing them to not caucus for us? If we are serious about winning, these should be the questions we should be asking.  Our focus should be directed towards areas of our campaign strategy that need to be tweaked and/or improved.

I feel like I've entered The Twilight Zone when a group of liberty-minded, Austrian Economics oriented, supporters act like it is unacceptable to suggest there are areas of the Ron Paul campaign that are less than optimal. I thought this blindly following the leader thing was precisely what we revile in government and the drones whom uncritically accept their propaganda? Blindly following a losing strategy is not doing Ron Paul or the campaign any favors.

Ron Paul's strengths on housing and the economy were not emphasized heavily enough here. Half of Mitt Romney voters desperately want someone else to vote for. Numerous times I experienced genuine surprise and interest when I informed these Romney "supporters" of Ron Paul's strengths in this area. The phone banking program needs serious revisions. The strategy of spam-calling supporters the night before is deeply flawed. There are several efficiency issues outside of that specific program that can be improved as well.

I understand where everyone is coming from. We were definitely robbed in 2008 here in Nevada. And quite frankly, if we were in a position to win, I wouldn't doubt they would try and cheat us again. However, priority number one should be getting us in that position to actually win! We failed to do that in Nevada and that has nothing to do with voter fraud. The more time and energy that is spent chasing this ghost is less time spent focusing on what we need to do to give us the best shot of winning.

Nevada was winnable. We failed to do so, and unfortunately it has nothing to do with voter fraud. We all have poured so much of our time and energy into this campaign. We owe it to ourselves to honestly and critically evaluate our strategy so that we can produce the highest quality campaign (including grassroots) effort possible.


My reaction to the LA Times story on Ron Paul that I was interviewed for.

If you have not, please read the article first.

The story itself is not all that bad. Compared to the normal treatment of Ron Paul, it’s totally fine and is in no way out of the ordinary.

Yet knowing first hand the material she had, and what she chose to include and lead with, and what she chose to omit, is revealing.

We spent over an hour talking, during which she took pages of notes. She heard a story of a well-spoken, self-educated and compassionate person who believes in the message of freedom and the peace and prosperity it would bring. She heard that despite my never attending college or ever taking a single class of any kind in economics, exposure to Ron Paul’s message motivated me to become a student on my own volition. Devouring thousands of pages of articles and dozens of books on topics from political theory, economics, economic history, monetary history, libertarian philosophy, and the history of law, I became competent enough to place 1st in economic essay contests hosted by esteemed Professors at one of the nation’s premier economic universities, as well as engage in debate with established legal scholars and academic economists.

She heard a story of a young, single man in Las Vegas, who made a living in professional poker and spent his free time doing the above. That is interesting. It is atypical. In a climate where Ron Paul supporters are unfairly and inaccurately characterized as being on the fringe or young people who favor legalized marijuana, my story is a concrete example of something previously unreported. Still unreported. Still yet to be acknowledged.

I spoke of my friends from 40 year old lawyers and hedge fund managers, to college students and peers closer to my own age. All of whom have been profoundly effected by the message of liberty and began spreading that message to their friends and families as well.

I spoke of Ron Paul supporters, in general. The enormous feat of the organizational power that has spontaneously grown from Ron Paul’s grassroots support. How such grassroots support is quite literally more organized, more efficient, and better funded than most non-Presidential political campaigns! I spoke of the compassion, and passion, these individuals have that brings us together as a community.

I spoke of the reason why I believe in liberty. Why I fight for it. Why we fight for it. Fundamentally, my desire for liberty springs from compassion for my fellow man and the urge to see oppression everywhere and anywhere brought to an end. My frustration that those who suffer most under a system of big government, with its relentless inflation and regulation, are those who work hard and follow the script that they were given. The average middle class worker, who doesn’t have the time or effort to learn how rigged the game is against him, and potentially protect himself against it. It is these people, good people, honest, hard-working people, who have spent their whole lives playing by the rules, only to be penalized for it in the end.

I could go on. And I did. For over an hour. But somehow this story, which has never been given a voice in the media’s discussion of “Ron Paul supporters” was omitted from Maria’s final draft. This is not about whether or not my views are correct or if you agree with them. It is about acknowledging whom Ron Paul’s supporters actually are. And in this case, if nothing else, doing so would have been newsworthy. Simply because my type of story has never been reported on in the discussion of Ron Paul and his support base. And in my experience, my type of story is much more emblematic of the average Ron Paul supporter than that which is almost exclusively focused on and represented instead – a small minority that can be portrayed as fringe or extreme.

Maria unfortunately chose to continue this narrative in her piece, as well. Deciding to open with a few paragraphs focusing on the brothel workers’ support for Dr. Paul and a few particularly dramatic quotes from fellow supporter Dr. Carducci such as “"I'd give my left arm for the guy.", and, "It's either him or a further decline into tyranny." My segment was reduced to, “being exposed to Ron Paul has changed my life.” Which is quite true. I hope one day we are able to read a story that takes a deeper look as to who we are and why we are so passionate, as opposed to merely recording the extreme nature of the passion we have for Ron Paul and his message of freedom.