Long ago Moses visited Pharaoh and told him God’s command: Let my people go! The Pharaoh disobeyed. So through Moses God brought ten plagues upon Egypt. Even though Pharaoh’s magicians, Jannes and Jambres, could not undo what God had done, they “duplicated” the first plagues God brought upon Egypt, and for some strange reason, Pharaoh took comfort in that.
What is magic, that thing magicians do? More often than not “magic” is just sleight of hand. The magician just fools us into believing he is doing something he is not actually doing. Sometimes, however, even the magician does not know what he doing.
That thing we call the economy is one of the most mysterious things in the world. That is, even though we depend upon it for our food, clothing, and shelter, none of us know exactly how it works. Therefore, when what is going on in the economy concerns us, we consult “experts,” economic magicians, to find out what we should do.
Economic magicians? Does that seem excessively derisive? Then consider these two stories.
Will negative interest rates come to the United States? Probably. Sadly, what economists recommend these days often does not make much sense. Our economy is becoming too contrived, like a house of cards. The problem? Well, let’s begin that discussion by considering a magic trick we call fiat money.
What is ‘Fiat Money’
Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for “it shall be”. (from here (www.investopedia.com))
Because it is not backed by anything, fiat money has no intrinsic or innate value. That is not to say financial analysts do not have formulas to calculate the intrinsic value of fiat money. Nevertheless, fiat money has no utility of its own.
The value that we get from goods and services is innately apparent from the simple, most basic acts of living. We need food to survive, so food has value. The value for tradeable goods and services is predicated on utility and relative scarcity.
For financial assets, and money is the world’s first financial derivative, there is no direct utility. It does not satisfy any basic demand of survival or continued existence. Therefore, any value attached to financial products does not come from utility. It comes from faith. (from here)
Value itself is nothing more than the outward expression of individual faith. The traditional value of money is really just an outgrowth of its historical reputation, earned through so many actions and consequences. Money may seem to add a level of objectivity into the discussion of value, but that is only because of a more universal “faith” in the transactional price discovery process it allows. (from here)
So why do we believe our money has value? There is actually a little more to it than merely believing fiat money is “real” money. Remember that our government uses its power to define fiat money as legal tender, that is, the government says we can legally use fiat money to pay off our creditors. That includes the government itself. Don’t we pay our biggest bill, our taxes, with fiat money?
Thus, using its power, the government prints money and creates a demand for it. So it is that even though fiat money has no actual value of its own, the value of fiat money still follows the law of supply and demand.
Supply equates to scarcity. How much labor or how many goods and services are required to obtain a certain amount of money?
The demand for fiat money depends upon the bills we must pay. What is the amount of money we need to pay off our creditors?
Therefore, to make its fiat money serve as an appropriate means of exchange, our government must regulate both the supply of and the demand for its fiat money. That’s what we will talk about in the next post.
Note: that I don’t claim to have a huge amount of economic expertise. I am sharing my observations in the hope of promoting a discussion. Hence corrections and comments are welcome. If you want your comments to include what you think of the economic proposals of the presidential candidates, that is okay with me.
The most effective way to bring about change in society, therefore, may start at a grassroots level, from the bottom up. After all, politicians sometimes change their voting patterns, so the conservative senator or representative you voted for in 2012 may decide that the liberal party provides a better membership package or simply change their personal views on the issue. I’m not saying it’s pointless to vote; however, I’m arguing that participating in the political process is not the ultimate expression of the Christian faith. (from here)
I suggest clicking here and reading all of ‘s comment. What has to say is quite excellent and true. Nevertheless, I think overlooks the fact that as Christians we must participate in the political life of our country. We must do so because we love our neighbors.
16 Then the eleven disciples went away into Galilee, to the mountain which Jesus had appointed for them. 17 When they saw Him, they worshiped Him; but some doubted.
18 And Jesus came and spoke to them, saying, “All authority has been given to Me in heaven and on earth.19 Go therefore and make disciples of all the nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit,20 teaching them to observe all things that I have commanded you; and lo, I am with you always, even to the end of the age.” Amen
If we want to spread the Gospel to our family (especially our children), our friends, and our neighbors, then we must continually fight for the right to do so.
Imagine living in a Muslim nation. Did you know that at one time most of the people living in the Middle East were Christians? During the latter days of the Roman Empire, untold numbers of men and women had died to spread the Christian faith. Unfortunately, Muslim “warriors” rose out of Saudi Arabia’s dessert wastes. Preaching the “peace” of Islam, with brute force these “warriors”conquered formerly Christian lands. These “warriors” forced the inhabitants to adopt Islam. They murdered the idol worshipers who refused Islam, and they tormented Christians and Jews with special taxes and other forms of abuse. Thus, Muslim bullies did what the most powerful Roman Emperors had been unable to do. They hit upon a way of methodically extirpating the Christian faith from their conquests.
As Christians, because we believe the Bible is true, we must defend the right of our family, friends, and neighbors to choose what they believe. That is a political act, one that requires us to involve ourselves in politics. Our opponents? These are people who attempt to impose their own beliefs by force. Given the opportunity, they will deny their family, friends, and neighbors the right to choose Christ.
Rights and Due Process
What is the difference between a tyrannical government and a government that serves the People? A government that serves the People protect the rights of the citizenry. Before the government can deprive any citizen of their rights, a free People requires their government to follow specific procedures. Otherwise, there no use in saying that any citizen has any rights. Without the requirement to follow specific procedures, government officials can ignore the rights of the citizenry and arbitrarily do as they wish.
What are rights? This dictionary definition of rights is not very helpful. Either we get dragged into the definition of a right (which has many definitions), or we get dragged into an ambiguous definition of civil rights. The trouble, however, is not with the definition. The trouble is with our propensity to abuse language. Because we have a pronounced tendency to call anything we want a right and a large sense of entitlement, anything and everything has become a right.
So what are our rights? Here I think it is worthwhile to consider the etymology of the word right (see here and here). What the references suggest is that we derive our “rights” from the impropriety of denying someone the ability to exercise their own capacity to do what they should do. If someone wants to do what is in accordance with what is good, proper, or just; what sense does it make to stop them? The last thing morally upright people want is a government that prevents them from doing what they should do. Yet don’t tyrants have their own ideas? If a good man speaks out against villainy in high places, won’t those in power attempt to silence him? When ordinary people try to fulfill their obligations to feed, cloth, shelter, and educate their children, won’t the greedier of our elites connive to separate those parents from wealth that would otherwise be used more appropriately? Therefore, our rights originate from a desire of the People, the desire to do the right thing.
This is a point that mastersamwise has striven to make in many of his comments (see here, here, here, and here, for examples). Our primary interest in protecting each others rights lies in our desire to enable each other to do what is good, not what is evil. Unfortunately, government is not especially good at distinguishing between good and evil. Therefore, instead of just protecting the individual’s right to do good, we protect the individual’s rights to life, liberty, and the pursuit of happiness. That is, we each use the law to protect each of our family, friends, and neighbors from each of our other our family, friends, and neighbors.
“Due process” refers to the legal procedures we use to protect our rights to life, liberty, and the pursuit of happiness. That is, we require government officials to follow specific procedures and accord each citizen the due of process of law. Consider this excerpt from Legal Information Institute.
The Constitution states only one command twice. The Fifth Amendment says to the federal government that no one shall be “deprived of life, liberty or property without due process of law.” The Fourteenth Amendment, ratified in 1868, uses the same eleven words, called the Due Process Clause, to describe a legal obligation of all states. (from here)
What is in the Fifth Amendment?
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. (from here)
Who makes certain that government officials follow specific procedures and accord each citizen the due of process of law. You, me, and every other citizen. Protecting each other one of the ways we show our love for each other.
34 A new commandment I give to you, that you love one another; as I have loved you, that you also love one another.35 By this all will know that you are My disciples, if you have love for one another.”
The Free Market
Some people have a disdain for filthy lucre. They portray the desire for wealth as selfish. However, there is nothing selfish about voting to ensure the prosperity of our family, friends and neighbors. When governments abuse their powers or refuse to maintain proper order, people suffer. Sometimes they don’t get enough to eat.
In addition, what we buy and sell reflects our ethical beliefs. We may not wish to buy from or sell to companies who produce products made with slave labor, for example. Hence, we we want an economic system that gives us the freedom to choose.
Theoretically, our current economic system (which still contains vestiges of Capitalism) follows the law supply and demand. Generally, when our government does not interfere in the economy, the market sets the price for goods and services. When that happens shortages are generally brief. Because it pays well, people produce what is in high demand. On the other hand, if something is not selling well, people don’t waste time and resources trying to produce it.
When government interferes in the market by favoring some goods and services over others, unfortunate economic distortions can occur (For examples from the Great Recession, see the links at the following comments: here, here, and here.). Consider some examples of what is happening now.
Our government spends far too much money. Because we let our politicians buy our votes, our taxes are too high, and our government borrows money to pay for programs we could do without. Instead of deciding for ourselves how to spend the money we earn, we let our leaders take our money from us and spend it for us.
Our government artificially jacks up stock prices by increasing the money supply. That means stocks are overpriced. Eventually, that bubble will burst.
Because of government interference in the housing market, we periodically experience housing bubbles and risk the catastrophic failure of lending and other financial institutions.
Our leaders interfere in our college level educational institutions by giving schools money and “cheap” college loans to student. Thus, we waste billions encouraging our children to acquire degrees they can’t use and debt they have trouble paying off.
Federal, state and local governments finance a monopolistic public education system. That system, increasingly incompetent and expensive, responds poorly to parental desires. Instead, the educrats running it increasingly demand complete control over the education of children. Yet because we have multiple levels of government running the system, we have trouble determining who is responsible for the mess.
Our leaders have a Constitutional responsibility to control our borders and decide who is allowed to immigrate into our country. Instead, for the sake of cheap labor and voters they can buy off, they have reneged on their responsibility. Instead, they confer costly educational and welfare benefits upon people who don’t even have the right to be here.
Instead of responding user demand, politicians arbitrarily determine how, when, and where our transportation infrastructure should be financed and built. Their politically driven decisions force many of us to spend hours each day in stop and go traffic.
Foreign governments routinely practice a modern version of an economic model known as Mercantilism. These countries prey upon U.S. industries, using their economic clout to pressure U.S. companies to locate within their borders and give up trade secrets. Unfortunately, our politicians refuse to do anything to protect long range U.S. interests. Instead, they negotiate trade deals that are too complex for the public to understand.
One of the commenters to THE SIGNIFICANCE OF YOUR VOTE — PART 2, Necessary and Proper, provided an excerpt (here) from Free to Choose by Milton and Rose Friedman (1980). This excerpt argues against protectionism in international trade. Friedman makes the point that free enterprise both allows us to make our own choices and make the best use of the resources available. He argues that when foreign governments assist their companies and undercut U.S. manufacturers, they do so at a severe costs to their own citizens. Essentially, they give U.S. consumers a gift. Therefore, Friedman advocated for totally free markets.
We could say to the rest of the world: We believe in freedom and intend to practice it. We cannot force you to be free. But we can offer full cooperation on equal terms to all. Our market is open to you without tariffs or other restrictions. Sell here what you can and wish to. Buy whatever you can and wish to. In that way cooperation among individuals can be world-wide and free. (from here)
There may be a slight problem with Friedman’s reasoning. If U.S. investors know that the government of foreign competitors (China, for example) will drive U.S. companies out of a certain market sector, U.S. investors will not invest in that sector. Hence, foreign competitors will be able to sell their goods here at a premium prices. Moreover, if the goods over which a foreign government wants a monopoly has defense applications, that foreign government will have also succeeded in weakening U.S. defense preparedness. Therefore, in addition to keeping our own government from unnecessarily interfering with our economy, we must also defend our markets from the shenanigans of foreign governments.
Nevertheless, in a free market we each get to choose our vocation, where and how we live, what we buy and sell, and our charitable practices. In a free market we each have the fullest opportunity to follow the example of our Lord.
My congressman is Representative Rob Wittman (VA-01). Here is what emailed to my congressman at house.gov
I appreciate your opposition to giving the president fast-track authority for the TPP, and I would like you to continue that opposition. I have several reasons for this.
We don’t need trade deals. All free trade involves is opening our markets. If another government insists upon giving its merchants government aid, we can protect our home industries by taxing their products or setting quotas on what we import from them. On the other hand, if another government opens its markets, we can reciprocate, and we can do this without any treaties or trade agreements. All we have to do is establish and implement a consistent policy.
Trade deals provide an opportunity to abuse power. Politicians use trade deals to pay off constituencies. That includes foreign interests, even foreign governments who help to finance them.
President Obama’s track record shows he cannot be trusted not to abuse fast-track authority.
Trade deals have a history of being used to interfere in the affairs of other nations. That includes environmental and labor laws. That gives other nations an incentive to interfere with our laws. Why would we want to let other nations do that?
The bottom-line is keep it simple (KISS). Fast-track authority complicates an otherwise simple process. We treat our neighbors the way we want them to treat us.
House Speaker John Boehner and Senate Majority Leader Mitch McConnell made the calculation quickly: If Congress didn’t act swiftly to send President Barack Obama a fast-track trade bill, it might never get done.
With that in mind, the Democratic president and the two Republican leaders embarked on their most intense bipartisan negotiating spree in recent memory, speaking on private conference calls, scheduling meetings with supportive Democrats and plotting a process to advance Obama’s top agenda item over the finish line. The back channeling, combined with some complex procedural machinations, might allow the House and Senate to clear both Trade Promotion Authority and Trade Adjustment Assistance before the Fourth of July recess. (continued here)
That’s why Delegate Bob Marshall sent this email out Monday. He says we each need to contact our congressman.
Your Help Needed!
NAFTA promised hundreds of thousands of US jobs and US trade surpluses which did not materialize. The same promises are being made for the Trans Pacific Partnership!
TPA, TPP and TAA
TPA stands for Trade Promotion Authority, also known as “fast track,” by which Congress approves trade agreements up or down without amendments. This bill paves the way for faster approval of the Trans Pacific Partnership. The vote scheduled for tomorrow, Tuesday June 16th, HR 1314, will be on the TPA.
TAA is the Trade Adjustment Assistance which retrains American workers who lose jobs because of the Trans Pacific Partnership. Unions favor it. The House rejected the TAA last week. According toBreitbart News, the assistance will be paid for by fines on small businesses, “that for no fault of their own, they forget to file a piece of paperwork telling the IRS how much someone else owes on their taxes.”
TPP stands for Trans-Pacific Partnership, a specific trade agreement being negotiated by the United States with other countries since 2009. No final vote has taken place on TPP.
Although future amendments to the TPP (the actual trade deal) would have to be approved by Congress after initial passage of the TPP, my question is, will Congress stand up to foreign nations or the U.S. Chamber of Commerce? Let’s look at the record.
“The House voted late Wednesday to remove country-of-origin labels on beef, pork and chicken sold in the U.S. … Wednesday’s 300-131 vote repealing the country-of-origin labels for meat follows a series of rulings by the World Trade Organization finding the labeling discriminates against animals imported from Canada and Mexico. …
Canada has threatened trade restrictions on a range of U.S. products, including meat, wine, chocolate, jewelry and furniture. … Country-of-origin labels … were mandated by Congress in … 2002 and 2008 … and require meatpackers to identify where animals are born, raised and slaughtered. The information is then printed on meat packages sold in grocery stores.”
My wife always reads the food labels! Polls show consumers overwhelmingly favor such labels. Shouldn’t we be allowed to know where our meat comes from? Congress does not always follow the wishes of “we the people!”
Congress Caves on Reining in Obama’s Amnesty
Another example: In the fall of 2014, Congress voted to fund the Department of Homeland Security through February, 2015 (other agencies were funded for a full year.) Speaker Boehner assured us that after January, 2015, when the Republicans would control both Houses, Obama’s amnesty policies would be curtailed by a Budget amendment.
However, in March, 2015, the Republican controlled House and Senate voted to fund the Department of Homeland Security 257 Yeas to 167 Nays WITHOUT a ban on the use of tax money to implement Obama’s Executive Amnesty for persons illegally in the US.
Instead, manufacturing jobs have shrunk dramatically in the United States while trade deficits skyrocketed. Can President Obama give better assurances that TPP will not follow NAFTA’s record?
Congress’ Record Leaves Little Doubt it will Cave Again
Why should anyone think Congress will reject a Trade proposal supported by the US Chamber of Commerce? HR 1314 paves the way to approving the Trans Pacific Partnership by giving the President “Fast Track” authority to negotiate the trade deal. Urge your Congressman to vote against HR 1314. The vote is likely to come up Tuesday, June 16th..
(Sorry for my typo in my previous Alert. I typed “TPA” instead of “TPP” but all quotes and links were accurate.)
Please contact your Representative through the links or at the phone or fax below:
Most of the time we should be quiet and listen. Because we don’t know very much, very few of us have much say. Yet there are times when we should say something. What is funny is how often we have to tell indiscreet elected officials to leave well enough alone.
See No Evil Republicans
Your calls and emails are having an impact on the Obama Trans-Pacific Partnership trade legislation contained in HR 1314, but we can’t stop now!
The two-part Obama Trade bill will be reconsidered Tuesday, June 16 in the House of Representatives to overcome a temporary setback for Obama.
The first vote was on Trade Adjustment Assistance (TAA provision), which provided job retraining and other assistance to American workers who will lose jobs from the Obama Trade bill (HR 1314). If Obama’s Trade proposal is such a good deal, why will Americans lose jobs?
The TAA vote lost 126 Yeas to 306 Nays. Representatives Beyer, Comstock, Connolly, Hurt, Rigell vote YES. Representatives Brat, Forbes, Goodlatte, Griffith, Scott, Wittman voted NO.
The House then voted on the Trade Promotion Authority provision (TPA). That passed 219 Yeas, to 211 Nays. Representatives Beyer, Comstock, Connelly, Forbes, Goodlatte, Hurt, Rigell voted YES. Representatives Brat, Griffith, Scott, and Wittman voted NO. (Please thank these four Congressmen for their opposition.)
POLITICO notes that the TPA’s provisions are treated as national security secrets with tight restrictions on who can read the bill and under what conditions:
“If you want to hear the details of the Trans-Pacific Partnership trade deal the Obama administration is hoping to pass, you’ve got to be a member of Congress, and you’ve got to go to classified briefings and leave your staff and cellphone at the door.
If you’re a member who wants to read the text, you’ve got to go to a room in the basement of the Capitol Visitor Center and be handed it one section at a time, watched over as you read, and forced to hand over any notes you make before leaving.
And no matter what, you can’t discuss the details of what you’ve read.”
Congressman Dave Brat, commenting on the TPA bill, said: “fatal conceit is to think that I’m smart enough to walk in a room and read 400 pages of legalese and believe it and know everything that’s in a trade bill that’s 400 pages long and digest it with everything that can go wrong … Ask your congressmen to explain to you what they know about it. And if they don’t tell you anything, say, I don’t trust the current regime. And I want a no vote out of you.”
Senator Sessions (R-AL) responded to the mixed vote on the Obama Trade bills:
“A vote for TAA next week is a vote to send fast-track to the President’s desk and to grant him these broad new executive authorities. … it will empower the President to form a Pacific Union encompassing 40 percent of the world’s economy and 12 nations—each with one equal vote. “Once the union is formed, foreign bureaucrats will be required to meet regularly to write the Commission’s rules, regulations, and directives—impacting Americans’ jobs, wages, and sovereignty. The union is chartered with a ‘Living Agreement,’ and there is no doubt it will seek to expand its membership and reach over time.
Fast-track … can expedite an unlimited number of yet-unseen international compacts for six years. … which includes labor mobility among more than 50 nations, further eroding the ability of the American people to control their own affairs. …The same people projecting the benefits of leaping into a colossal new economic union could not even accurately predict the impact of a standalone agreement with South Korea … which promised to boost our exports to them $10 billion, instead only budged them less than $1 billion, while South Korea’s imports to us increased more than $12 billion, nearly doubling our trading deficit. … opening our markets to foreign imports while allowing our trading partners to continue their non-tariff barriers that close their markets to ours.
If we want a new trade deal with Japan, or with Vietnam, then they should be negotiated bilaterally and sent to Congress under regular order. Under no circumstances should the House authorize, through fast-track, the formation of a new international commission that will regulate not only trade, but immigration, labor, environmental, and all manner of commercial policy.”
The vote on TAA will be on Tuesday, June 16th. Please let your Congressman know that you want to know how they voted, and that you will share how they vote with family and friends. Contact your representative by visiting the House of Representatives website and fill in your zip code in the top right corner to be connected to your Congressman’s website or contact the Capitol switchboard at 202-224-3121, ask for your Congressman by name and you will be connected. If you call ask to speak to either the Chief of Staff or the Legislative Assistant who handles Trade issues.
Thank you so much for your help!
Delegate Bob Marshall
P.S. If you would like to donate you can do so below or if you’d like to volunteer to help my campaign you can do so at my website at www.DelegateBob.com
Because Marshall is a Conservative, he is rarely indiscreet. He has taken the time to understand why things are as the are. He also displays an understanding that his job is about serving the people of Virginia, not his own ambitions.
We have an election coming up in November, as is usual here in Virginia. In Prince William County, we will be electing our delegate and senator to the General Assembly. In addition, we will be filling all the elected offices in our county. So as Marshall suggests, if we want to make a difference in the outcome, there is no time like the present.