Bring On the Trillion Dollar Coin!

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Most Americans regard the federal deficit and the national debt as a single problem. In reality, they are two separate but related problems. Let’s decouple them and discover whether the widely disparaged idea of a “trillion dollar coin” would actually be an improvement over the practice of continuous borrowing to cover the federal government’s deficit.

Hard money is money backed by a tangible good, typically gold or silver. Fiat money is money backed only by the “good faith and credit” of the government issuing it. In the United States, fiat money comes in two flavors. The vast majority of US currency consists of Federal Reserve Notes and their electronic equivalents, backed by government bonds sold to the public and various central banks. These bonds pay interest that is booked as an expense within the government’s annual budget. For fiscal year 2016 interest payments on these bonds totaled $432 billion, or more than $2,800 for each income tax return filed.

Trump needs no additional congressional authority to mint the coin, since the enabling legislation is already in place.

The second type of US fiat money consists of all coinage and a small amount of paper money with the designation “United States Note” rather than “Federal Reserve Note.” This type of paper money, issued mostly in $2 and $5 denominations, circulated alongside Federal Reserve Notes until the 1970s, and is still occasionally found in circulation today. Coins and US notes are not backed by government debt and pay no interest.

A few years ago, when Republicans in Congress were refusing to raise the national debt ceiling, an idea was floated for minting a platinum coin with a face value of one trillion dollars. This was and still is technically legal, thanks to a 1996 law authorizing the minting of platinum bullion and proof coins. The law empowers the Secretary of the Treasury to strike platinum coins in any denomination that he or she deems appropriate. The idea was that the trillion dollar coin would be minted and deposited at the Federal Reserve, which would then credit the government’s account with a trillion dollars. The government could then spend this newly created money by “writing checks” on this account without having to increase the national debt ceiling or issue additional interest-paying bonds.

The idea died when Republicans caved in and agreed to raise the national debt ceiling. Fast forward to 2017, and now it’s the Democrats who are playing budget brinksmanship in an effort to force President Trump to restore funding for many of their pet causes, such as environmental projects and Planned Parenthood. Currently the fight is over the legislation needed to avoid a government “shutdown” by the end of April. Shortly thereafter, Congress must deal with raising the national debt ceiling. Many Democrats can be expected to oppose such an increase if Trump is unwilling to fund their most critical spending priorities. By teaming up with conservative Republicans who oppose on principle any increase in the national debt, congressional Democrats would likely have the votes to block any debt ceiling increase and thus threaten another government “shutdown.”

However, President Trump has the option to do an end run around the Democrats’ plan by dusting off the “trillion dollar coin” idea and actually implementing it. He needs no additional congressional authority to do so, since the enabling legislation is already in place. This would be a bold move with far-reaching consequences, most of them good.

More importantly, the “trillion dollar coin” would sever the link between mounting federal deficits and ever-higher interest payments on the national debt.

For starters, it would deprive the Democrats of their most potent legislative weapon in their drive to maintain and increase spending on programs that subsidize and empower their core constituencies. Defeating the Democrats’ plans would not eliminate the deficit, but it would lead to less government spending than any plan forged by a “bipartisan consensus.”

More importantly, the “trillion dollar coin” would sever the link between mounting federal deficits and ever-higher interest payments on the national debt. Freezing and then lowering these interest payments are essential to the nation’s economic health, as this interest is a substantial drain on disposable income and productivity.

All government-created fiat money is inflationary, and money backed by hard assets would be preferable. But fiat money backed by “trillion dollar coins” is neither more nor less inflationary than fiat money backed by interest-paying bonds. Of the two choices, the “trillion dollar coin” option is better for both taxpayers’ pocketbooks and the nation’s economic health.




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World Government, or Smaller Countries?

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Some believe that we are rapidly moving towards a world government. The European Union was one of the most visible expressions of this motion. NAFTA, ASEAN, and other trading blocks were seen as small moves in the same direction. The UN was the dream of the mushy-headed, those living on intellectual welfare with no real-life experience of how wealth is created.

A world government would be unsustainable if it ever came to pass, for the kind of people who work in governments always take pride at backstabbing one another, as well as their competitors in other governments. People’s lives have changed tremendously, given easy travel and high technology, but the structure of governments has not changed.

The world is becoming increasingly complex, but the institution of the state has remained mostly unchanged, making large governments very brittle.

Duty-free shopping exists in every country, for each of these governments competes to benefit itself by helping travelers avoid paying taxes to other governments. The US, the world's self-appointed chief policeman, is among the worst (or best) in this respect. While governments in the Caribbean islands and many smaller nations — mostly termed tax havens — get bad reputations for secrecy (and hence, my own respect), Miami, New York, and London are probably the world's capitals for secrecy and tax avoidance as long as you are not the milk-cow of the US or England.

One might even ask how is it that such a large number of properties are bought by Chinese, Ukrainians, and Russians in the US, Canada, Australia, and the UK. If these Western governments ensured that unaccounted money did not come from abroad, their hot property markets would crash.

The US makes almost no attempt to locate safety deposit lockers filled with US-dollar cash in jurisdictions outside the US. The government likes the convenience of interest-free loans in perpetuity from the cash holders. Using FACTA and all kinds of obnoxious enforcements on no other basis than American exceptionalism and its bullying power, the US gets the information it wants from other governments, but none dares to ask the US to reciprocate.

So far from world government being likely to happen, the future belongs to smaller states. But this will happen after a lot of turmoil.

Most banks comply with US bullying, although the cost of compliance is horrendous for financial institutions around the world. One day a breaking point will come and they will stop. Perhaps an alternative international currency will trigger this.

The US won’t be there forever

With every generation, glamour moves to a different jurisdiction. When I was growing up, it was France for fashion and snobbery, England for style, and Japan for the work ethic. A generation later, with all others having receded to the background, it became the US.

It is worth talking with today's teenagers in Asia. They follow Korean fashion, pop music, and soap operas. In sub-Saharan Africa, it is Indian music and movies. What the world looks up to will increasingly be Asia, while America recedes into the background.

If you find a Chinese girl with spectacles and no lenses in them amusing, you haven’t kept up with the fashion trends that originated in Korea or Japan. In Seoul, you will meet visiting teenagers from Malaysia who sing in Korean, and you can bet that they watch K-pop at home.

If you see girls wearing shorts that are a millimeter below the danger zone, but with the waist-band that does not end at the waist but much above the navel, you know where that fashion came from: from girls who worry about possibly having short legs. If you find men wearing tight pants, you know that the fashion is not from the West.

The bigger states will break

Before the world starts ignoring the diktats of the United States, America will become increasingly heavy-handed. Anything it doesn’t like will be considered "terrorism." For Americans, privacy will cease to exist. This is not based on prophecy, but on the history of how human civilizations have evolved and gone out of existence. The Roman Empire disappeared. So did the English and the French empires.

In other large countries — India, Brazil, France, the UK, etc. — the institution of government will come under huge amounts of stress, as heightened expectations of a populations hugely influenced by the modern-day welfare system can no longer be met. The world is becoming increasingly complex, with new technologies and cheap traveling, but the institution of the state has remained mostly unchanged, making large governments very brittle.

While all conventional religions are tribal in nature, they at least have elements of compassion, honesty, and other virtues. But statism thrives on hatred for other people.

To me the “Arab Spring” was the first visible sign of this. So was the democratic movement in Hong Kong. Behind the facade of higher vision and increased nationalism is indoctrination of a populace that is incapable of critical thinking, the kind of populace that in earlier generations would have stayed out of having an opinion on public policy. They have come to see democracy as a magic wand that delivers whatever one aspires for, merely through the vote. Nationalism is the emotional crutch for their failure to be self-dependent and their lack of self-confidence. None of these fake, irrational values can keep big nation-states glued together when the crunch time comes.

The result will be the possible breakup of many of the larger states. Would the US also break up? The irrational tribal slogan — “we are the biggest and the best” — can keep the US together for only so long. So far from world government being likely to happen, the future belongs to smaller states. But this will happen after a lot of turmoil, ironically made worse by the fact that in general, today’s populace is likely more statist and patriotic than the previous generations.

Central America: case studies on small countries

I have been very impressed with how well Hong Kong and Singapore are organized. In fact, I have become enamored with small countries.

I recently spent two months travelling in Central America, trying to understand its economy and people. I spent a fair amount of time in Boquete, Panama, a place where a large number of American expatriates live. When I was there, a girl with a flirtatious look (and from what I understood, based on my talks with the locals, her only competence) was elected as the local political representative. Alcohol was banned during the election days, but that did not stop restaurants from serving it, in coffee mugs.

The populace in Central America is not necessarily more awakened than that of the United States — perhaps much less. But does that matter? Mostly people are ambivalent about the existence of expatriates, if not grateful for their contribution to the economy. The state is alive and well there, but I hardly care about the state anymore. What I care about is how it affects me.

These small states recognize the economic importance of expatriates and mostly let them get on with their lives. Protecting property rights is their core competence. Nicaragua, for example, has become an attractive place for property investment, offering the cheapest options for those who can navigate this emerging country. In terms of expense, Panama is in between Costa Rica and Nicaragua.

Panama offers quality at a reasonable price. It also uses the US dollar, which is not the best way to run a monetary policy, for it is still dependent on a fiat currency, but this ensures that Panamanians cannot run their own printing press. Of course, they have no central bank of their own, and hence no cartel that comes with it.

Why is a place such as this, relatively conflict-free and wth enormous natural resources, not very rich?

Not only Americans and Canadians but also those from Ecuador, Venezuela, and other countries are finding safety in Panama. As a rule of thumb, small countries offer asset protection that big counties don't, for if these small countries stop respecting property rights, expatriates will fly away with their money.

Neither Costa Rica nor Panama has a military. This not only saves what would have been about 5% of the GDP in wastage but it sets a certain way of thinking among the citizenry. War is the health of the state, and statism is the worst religion. While all conventional religions are tribal in nature, they at least have elements of compassion, honesty, and other virtues. But statism thrives on hatred for other people. When you have the military solely for defence, narrowly defined (as is the case with Singapore and Switzerland) or have no military at all (as in Panama and Costa Rica), the social mindset is not about hatred for people who are different.

The repercussions are far-reaching. Less hatred also means fewer social conflicts within such societies, and hence a lack of civil wars within these countries. One must still be cautious about isolated crimes.

Incidentally, Central America is a unique place for nature lovers. This small piece of land separates two major oceans, the Pacific and the Atlantic, and hence is a channel for equalizing weather differences between the two oceans. I cannot think of another place where the forests change within minutes of walking, as you move from the area influenced by one kind of weather system to another, just on the other side of the ridge.

When traveling around in Costa Rica and Panama one must wonder — as I did — why a place that has been relatively conflict-free and has enormous natural resources is not a very rich place. Businesses tend to hire expatriates as much as they can. Locals are not known for their work ethic. Why this is the case, I am not sure. But that is why I travel, for it forces me to think about issues that would otherwise not occur to me. It hones my understanding of cultures, politics, and economics. Again, as an individualist, what I care about most is what affects me; and I doubt that the realm of One World Government would stimulate me much.




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The Age of Redefinition

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On the evening of January 20, when President Obama started the delivery of his state of the union address, Supreme Court Justice Ginsburg rapidly, and very appropriately, fell asleep. Some of the other justices looked as if they were ready to drop off too. I’m sure that most of the television audience, unburdened by protocol, went all the way to dreamland.

The irritating thing was that stories about Ginsburg’s snooze— which was the only important event of the evening — were headlined and teased with words like these: “81-Year-Old Justice Caught Nodding Off.” If you still need to be convinced about liberal bias in journalism, ask yourself how many stories on Ginsburg’s far-left opinions have been headlined with a reference to her age. “81-Year-Old Justice Opines Again”? No, no chance of that. Write a bizarre legal document? An act of courage. Fall asleep during a boring, pointless speech? Senility.

We are living in a time when even common news stories make it virtually impossible to pin down the simplest facts, such as where, exactly, something happened.

But since we’re talking about journalists who hit the wrong target, consider an article published by FoxBusiness on January 15. It’s not important in itself, but it presents a fair sample of the things that make American journalism so horrible to read, or even to think about.

The article, written by Larry Shover, is ostensibly a news story about a decision made somewhere in the constipated bowels of Swiss banking. In reality, it’s an advertisement for the author’s skills in Writing. In an earlier life, Mr. Shover must have been a sports reporter. He shows the typical sports guy’s zest for in-group chatter, incomprehensible to everyone outside the dugout. This is part of a larger problem, characteristic of journalists in every field. They want to do something with their material, something glitzy and clever, no matter what the effects on communication.

According to Shover, Jan. 15 (or maybe it was Jan. 14, or Jan. 13; he never says) was no common day:

It was shaping up to be a sleepy morning until the Swiss National Bank — in a surprise move — decided to lift its minimum exchange rate, put in place in 2011, of 1.20 euro for every Swiss franc.

One point twenty euro[s], eh? But if the rate was “lifted,” what was it before? Like all those “journalists” who report on schoolteachers striking for “higher” wages, this author doesn’t specify the point at which the lift began. But wait! Perhaps, just perhaps, he means that the limit was removed entirely!

Unless you’re inside the dugout, it’s hard to tell what he means. We are living in a time when even common news stories make it virtually impossible to pin down the simplest facts, such as where, exactly, something happened.

To continue with the words (and punctuation) of Mr. Shover’s article:

We are not yet far enough removed from the rear-view mirror to see clearly however this SNB surprise action can today, be likened to a steam locomotive’s piston valve or blood pressure medication.

The only thing that’s clear about Shover’s story is his assumption that every reader he is laboring to inform knows as much about the subject as he does. Like the guys who write the sports headlines — “M’ville Nine to Mr. C: Drop Dead” — he’s not going to let anybody else in on the secret.

Do I need to mention that this is also the pattern in political reporting? Am I the only one who had to check 20 news reports about the Republicans “increasing” their majority in the House (or “maintaining” their majority, as Democrat journalists expressed it) before I discovered an article that told me how many seats they’d won?

And, of course, metaphors. Shover’s article goes on:

This “Swiss-central bank Shocker” . . .

But wait. . . . That’s in quotes, but who said it? Anybody? Well, who cares? No one wants to report on a non-shocker.

I resume:

This “Swiss-central bank Shocker” quickly unsettled a fragile layer in the economic mountainside causing plates of snow to tumble from the Matterhorn — traders and citizens alike have filled the morning selling Swiss stocks — causing one of the largest one-day drops in 30 years.

Notice that the fall of a metaphorical “layer” caused actual “snow” to “tumble” from an actual “Matterhorn.” Odd.

Mere amateurs in meteorology would expect the author to say, in plain terms, what he’s talking about. But a jazzy, hip, contemporary writer wouldn’t get any fun from doing that, compared with the fun of writing jargon and metaphor:

In addition, the SNB, weary of its precarious position of being everyone’s chaperone, cut its deposit rates (now -0.75%) along with its target range for three-month Libor (now between -1.25% and -0.25%).

Before you can ask, “What’s a Libor?”, Shover moves on to the ethics and the personal meaning of the whole thing:

Central bank “snap decisions” ought to be reserved for econometric case studies or faraway countries with delicate balance sheets. Many a trader rebooted a computer, phoned a colleague when the Swiss Franc jumped 30% in the wee hours of this morning.

Pity the poor trader, having to reboot like that. Were transfusions necessary? And what a fresh phrase, wee hours of this morning!

Shover provides other fresh phrases and cute metaphors (besides chaperone, snap decisions, and rear-view mirror): immediate fall-out, surprise divorce, standard fare, stave off, claws its way back, seen the elephant, its ultimate entrails are indiscernible (huh?), panties in a bunch . . . Whose panties? Those of “corporations and countries,” of course! But I’ll bet you didn’t even know they had underwear.

I can’t resist mentioning that when I first saw it, the page that offered Shover’s article had a teaser to another piece, which concerned the release of Yemenis from the prison at Guantanamo. The teaser was illustrated with a photo of a chain gang at an Arizona jail.

Hence the word "reign," and hence the appropriate and formerly general impression that government is the master and wizard of terror.

Well, peace to the Swiss and whatever they did with, to, under, over, or around the euro. The big news in January was the terrorism in France. It’s interesting that when you slay a handful of journalists in a Western country, you attract the kind of attention you don’t attract when you rape, torture, and kill large populations elsewhere. Yes, the Charlie Hebdo events were news and deserved to be. But I wouldn’t plaster them with the kind of metaphors the media uses for nearly every violent event. Particularly notable was the glee with which Megyn Kelly, pundit-reporter for Fox News, discussed the events on her Jan. 9 TV show. “A three-day reign of terror,” she said, was “coming to a head."

A general protest needs to be lodged against coming to a head. Its literal reference is to a pimple getting ready to pop — and if that’s not the image it conjures up, what exactly is that image? But however that might be, you’d think that anyone would have sense enough not to combine coming to a head with reign of terror. It’s dumb. It’s also wrong: there was no reign of terror in Paris in January 2015; there was a gang of murderous fanatics. And it’s misleading: reigns of terror (the first of which occurred in France in the 1790s, when a regime of radical democrats set out to exterminate all possible opposition) are the effects of government, not of volunteer terrorists. Hence the word reign, and hence the appropriate and formerly general impression that government is the master and wizard of terror.

The common phrase war on terror amplifies the misunderstanding. How do you declare war on an international gang of bigots and morons? One might, of course, try the smaller expedient of keeping them out of the country and removing any who managed to get in. Unfortunately, that doesn’t make snappy headlines, and it might offend the sensibilities of people who think that if you stop anybody at a border, you’re a racist.

No, I didn’t consider the Charlie Hebdo attack an insignificant event. Not at all. I just didn’t consider it a reign of terror. But this is an age of arguing by redefinition, of saying that X is Y and then believing it. Such beliefs are, disappointingly, sincere. As Swift wrote, “When a man's fancy gets astride on his reason, when imagination is at cuffs with the senses, and common understanding as well as common sense is kicked out of doors, the first proselyte he makes is himself.” Anyone who makes the experiment of calling a tweak in Swiss banking an avalanche, or a terror attack a reign of terror, will soon believe that idea himself.

You saw redefinition in action, and on a broad front, in the aftermath of the big, self-congratulatory anti-terrorist march in Paris. It was supposed to be a demonstration in support of free speech. Within a week, however, European governments had resumed arresting people for saying bad things;and presidents, prime ministers, and the Pope o’ Rome had resumed their habitual redefinition of free speech as appropriate speech and responsible speech and legal speech — in short, as anything other than free speech. There was a large-scale reinstitution of that favorite word of communist and other dictators, provocation.

It’s interesting that when you slay a handful of journalists in a Western country, you attract the kind of attention you don’t attract when you rape, torture, and kill large populations elsewhere.

The Pope was especially lively on this topic. His asinine comments about free speech can be found at this place. Sure, he allowed, everyone has free speech. It’s a “right.” But curiously, it’s a right with limits. Free speech must be distinguished from speech that provokes those who don’t like your free speech. The Pope’s example was saying bad things about somebody’s mother. All right, shall we stipulate that free speech means “every kind of speech that does not say bad things about somebody’s mother”? No. The Pope intended some larger stipulation and restriction, some grand but vague set of responsibilities that he had the power to define but did not fully communicate at the moment. Otherwise, perhaps, he would have been licensing every atheist, Muslim, evangelical Christian, and devout Catholic to attack him for so provokingly lecturing them about their duties. We know this: “You cannot make fun of the faith of others.” That is completely out.

Am I being provocative? Will the Pope have me arrested?

The Pope is in the religion business. If he were in the business of selling antiques, I assume he would be threatening people who laughed about used furniture. But that’s what he is: a salesman for old, trite, useless intellectual objects. I don’t mean Christian ideas; I myself am a Christian. I mean the old, trite, useless, egregiously false, totally baseless and debasing, grotesquely unwarranted notion that you have a right to control what I say, especially if you’re insecure and stupid enough to believe that what I say threatens your own beliefs.

To leave one sad subject for another: there is fresh evidence that the practice of defining things to suit yourself has become far too popular in American universities — fresh evidence that the head offices at these institutions are havens for people who have never progressed beyond the stage of childhood at which saying makes it so. During the past few months, the University of Virginia has made itself a case study in arrested development. A popular magazine said that an anonymous woman had been gang-raped at a UVA frat. The published words made the story true. Administrators and faculty members immediately concluded, and announced, that rape was a desperately serious problem at Virginia and, very likely, every other institution of higher education. This also was accepted as true, because they said it. Greek activities were forbidden on campus; the frat house was vandalized; important Eastern newspapers made mighty utterances. When the story proved (to put it delicately) incapable of corroboration, university administrators welcomed the frat to resume its activities, as if making that statement would restore amends. All very simple: reality is what you say it is.

The Pope is in the religion business. If he were in the business of selling antiques, I assume he would be threatening people who laughed about used furniture.

A more recent example is the attempt by Duke University to convert the tower of its chapel — which is, pace all media reports that I have read, a Christian church — into a minaret for the use of Muslim students. No one — at least no one who gets his words in print — appears to have asked why the Muslim students needed a minaret, or if they did, why they couldn’t pay for one themselves. Paying for things oneself seems never to be considered. I doubt, however, that the minaret idea was cooked up by Muslims. It appears to have been the inspiration of people deeply cubicled in the administrative complex. One of them, it seems, was a certain Christy Lohr Sapp, associate dean for religious life, who triumphantly (triumphalistically?) announced, “The use of it [the church] as a minaret allows for the interreligious reimagining of a university icon.”

How many begged questions do you discern in that comment? It assumes (A) that “reimagining” is always good; (B) that “interreligious” is always good; (C) that “interreligious” has a meaning; (D) that if some action is “allowed,” one must do it . . . Four is enough for me; you may find others. Lohr Sapp must have assumed that saying these things would make them true. Alas for her, within 48 hours of her statement, reality intervened. Donors (for once!) protested, and the “interreligious” activity was canceled — for the time being. Despite all that, I think it’s remarkable that Lohr Sapp, who as associate dean of religious life is presumably acquainted with basic religious terminology, reimagined the chapel as a “cathedral” and then as a “minaret,” and reimagined an icon as something like a tall building that is supposed to attract the eyes of donors but is currently being underused by a politically correct administration that can therefore convert it to any purpose it wants.

When he wrote The New Class, Milovan Djilas had no idea how large the class of ideological managers could be, or how many philistines it would contain. Christianity? Islam? Judaism? Hinduism? All the same — from the bureaucratic and interreligious point of view. Yet there are some things in life — most of them, in fact — that cannot achieve any value apart from their individuality. Christianity is not deism. Judaism is not Eleanor Roosevelt. And Islam is not an ersatz form of do-goodism. None of the cultural and intellectual contributions of these faiths could have been made on the basis of interreligion. And none of their salient defects — about which devout people, at their best, are scrupulously self-critical — could ever have been identified from an “I’m OK-you’re OK-but especially I’m OK” perspective, the perspective that makes it appear that every religion is at all times and in all ways a religion of niceness, togetherness, and especially peace.

This is the kind of reimagination that Islam is now suffering. America, the first nation in the world to separate church from state, now abounds in state-authorized definitions of religion. Not since Pontius Pilate have so many theological decisions been attempted by politicians. And not just American politicians. On Jan. 9, French President Hollande, that great religious authority, declared that the Charlie Hebdo “terrorists and fanatics have nothing to do with the Muslim religion.” The next day, French Prime Minister Valls declared that France was at war “against terrorism, against jihadism, against radical Islam, against everything that is aimed at breaking fraternity, freedom, solidarity." That takes in a lot of territory. The prime minister will have to do a good deal of fighting if he wants to win that war. Looks like jihad to me. Maybe he could begin by trying to convert his president to his ideas about Islam.

Our own president may be harder to convince. Last year, he convulsed Americans with laughter by asserting that ISIL is “not Islamic.” “ISIL” stands for “The Islamic State of Iraq and the Levant.” I found that out; why hasn’t he?

And he is not alone in his odd claim to religious expertise. Great Islamic scholars have concerned themselves for more than a millennium with the question of what is Islamic, but they didn’t have the benefit of Howard Dean’s profound investigations:

Former Democratic Party head Howard Dean objected to calling the shooters in the Paris attack "Muslim terrorists," though the attackers were witnessed shouting "Allahu akbar" as they fired.

Dean, speaking Wednesday on MSNBC, argued that they should be treated as "mass murderers" instead.

"I stopped calling these people Muslim terrorists. They're about as Muslim as I am," he said. "I mean, they have no respect for anybody else's life, that's not what the Koran says. And, you know Europe has an enormous radical problem. . . . I think ISIS is a cult. Not an Islamic cult. I think it's a cult."

Back to the practice of journalism: does anyone, on such occasions, ever ask the speaker which part of the Koran he’s talking about? I mean, really. If he stood up and said that “Christianity is a religion of peace,” which is what they all say about Islam, shouldn’t some canny reporter bring up the Crusades or the Spanish Inquisition or some of the juicier parts of the Old Testament? Shouldn’t someone recite

Mine eyes have seen the glory of the coming of the Lord;
He is trampling out the vintage where the grapes of wrath are stored;
He hath loosed the fateful lightning of his terrible swift sword—
His truth is marching on.

Someone should, but probably no one would. It would cost the journalists too much brain power just to figure out what the song meant.

As for me, I’m beginning to think that Justice Ginsburg’s method of dealing with presidential speeches may have a much wider application. Suppose we all grew too sleepy to find the News pages on our computers, or the Opinion pages (which are often, as we know, the same thing). Suppose we all discovered that we were old enough to take a snooze. What would happen then? What would happen to the pundits and the prophets? What — more to the point — would happen to the ad revenues?

/emp




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Reply Hazy, Try Again

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Age of Gold, Age of Paper

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It lasted for more than a thousand years. Its Great Palace was the seat of imperial and religious government for as long. It claimed to encompass the Roman Empire, and often did. It was the largest and greatest court in Christendom. In its Chrysotriklinos, its Golden Hall, hydraulic engines powered fountains, large organs, golden birds that sang in jewel-drenched trees, and golden lions that roared. Ambassadors bowed to its emperor as his throne magically rose to the ceiling. Gold mosaics dazzled visitors to its court and cathedral.

It was Byzantium.

I’m reading Judith Herrin’s history of that empire. She is a good historian but perhaps not much interested in economics. In her book, Byzantium: The Surprising Life of a Medieval Empire, an essential fact of Byzantine economy gets a fleeting mention as a caption to an illustration: “Byzantium preserved a gold coinage of reliable fineness over 700 years.”

Many empires have been laid low by the degradation of their currency. I think ours is next. No historian will ever say that the US dollar preserved reliable fineness for even a tenth of 700 years.




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The Liberty Dollar: An Update

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Bernard von NotHaus, creator of the Liberty Dollar, was convicted in federal court in Statesville, N.C., on March 18. The Justice Department said he was found guilty — not of counterfeiting or of fraud, neither of which he was accused of, but “of making coins resembling and similar to United States coins; of issuing, passing, selling, and possessing Liberty Dollar coins; of issuing and passing Liberty Dollar coins intended for use as current money; and of conspiracy against the United States.”

Readers of this story in Liberty (“Attack on the Liberty Dollar,” March 2008) would have had little doubt of the outcome. The federal code, 8 U.S.C. 486, says:

“Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.”

Von NotHaus always asserted that Liberty Dollars were lawful, arguing that the Constitution’s grant of power to Congress to coin money was not exclusive; that in the 1800s private mints were allowed to issue precious-metal currency, and that Liberty Dollars were not “coins” because they were not legal tender. Given the law cited above, none of these arguments was likely to persuade a federal court. In that sense von NotHaus was much like the tax protesters who argue that the federal income tax is illegal, or unconstitutional, or that it’s voluntary, and who try to win their arguments by asserting in a louder voice and a higher tone that they are right. These people invariably lose. It takes a while, because the government is slow, but it eventually gets them.

In announcing its victory, the Justice Department made its own political statements. According to US Attorney Anne Tompkins, “attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. We are determined to meet these threats through infiltration, disruption and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”

Trying to trade a privately minted coin of 999 fine silver for goods or services is hardly terrorism. Who would be terrified by it?

Liberty Dollars were indeed an attempt to undermine the public’s faith in US dollars, but they were never a “clear and present danger” to the Treasury, because no bank ever accepted them, and under the regulated system we have, no bank was ever going to accept them.

Von NotHaus’ organization was an economic venture set up to earn money — US-dollar money. It could sell Liberty Dollars at a profit into the collectible market, because the coins are beautiful and are of pure metal, and because of the political statement they make. (Several versions replace Miss Liberty with the head of Rep. Ron Paul.) But as a circulating currency, the Liberty Dollar was a failure. Probably it had the most success around Asheville, NC, where it had a diligent agent who is now facing prosecution as well. But he made such a poor living at it that he had to give up his storefront and operate out of his house.

The Liberty Dollar was a political act, a statement by a libertarian that he would offer the people a currency of valuable metal, now that the Treasury no longer did. Von NotHaus said as much, and he ambitiously named his company the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code. He did this openly. An act of civil disobedience? Yes. But a conspiracy? My dictionary defines conspiracy as “a secret plan to commit a crime or do harm, often for political ends.” There was nothing secret about the Liberty Dollar. Von NotHaus took as much publicity as he could get.

For all the various counts he has been pronounced guilty of, Von NotHaus, 67, could be sentenced to as many as 25 years in prison and a fine of $250,000. The federal government is also asking the court for the 16,000 pounds of copper and silver Liberty Dollars and precious metals it seized, said to be worth nearly $7 million.

As I write, the “buy it now” price on eBay for a 1-ounce 999 silver Liberty dollar denominated at $20 is $50.




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