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Idle Rich or Idle Poor

March 16, 2010 in Religion by Greg | 8 comments

“A Reader’s” comment last week on the post Is Healthcare a Right? reminded me of the following excerpt from Hugh W. Nibley’s classic essay “Work We Must, But the Lunch is Free”. In this article, Dr. Nibley discusses the modern distinction of the idle poor versus the ancient teaching that the “idle rich shall not eat the bread of the laboring poor, as they always have.”

We begin, as in the other scriptures, with the basic principle that everything we have is a free gift from God: “The earth [is] my very handiwork, and all things therein are mine;… and behold this is the way that I, the Lord, have decreed to provide for my saints” (D&C 104:14, 16). That does not mince matters but gets right down to business. He wants us all equal, “that the poor shall be exalted, in that the rich are made low” (D&C 104:16). And he wants to make us co–workers in the project, which is all for our benefit: “It is expedient that I, the Lord, should make every man accountable, as a steward over earthly blessings, which I have made and prepared for my creatures” (D&C 104:13). He wants all his creatures to enjoy his bounty, with never a mention of who is worthy or deserving–as ever, the only principle of distribution is that of need: “You are to be equal, or in other words, you are to have equal claims on the properties for… your stewardships, every man according to his wants and his needs, inasmuch as his wants are just” (D&C 82:17). That limitation on wants is important, since one often wants what one should not have; a want is “justified” only when it is a true need, and as we have seen, our real needs are few…”food and raiment,” mansions and yachts not included. In introducing this particular revelation, the Lord repeats for the third time what he has said in the grove: “The anger of God kindleth against the inhabitants of the earth; and none doeth good, for all have gone out of the way” (D&C 82:6). And always the same reason is given for that anger, that men withhold God’s gifts from each other in a power–game, and that this is the prevailing evil of the age.

How do we distribute it then? “I have given unto the children of men to be agents unto themselves” (D&C 104:17). You are perfectly free to make all the money you can; just as you are perfectly free to break any one of the Ten Commandments, as millions do every day, though God has forbidden it, as he has forbidden seeking for riches. But your behavior once you have entered a covenant with God will be judged by the standards which he sets: “Therefore, if any man shall take of the abundance which I have made and impart not his portion, according to the law of my gospel, unto the poor and the needy, he shall, with the wicked, lift up his eyes in hell, being in torment” (D&C 104:18). A clear reference to the rich man who fed Lazarus the beggar with crumbs (Luke 16:23).

Idle Rich or Idle Poor »»

Federal Reserve and the Constitution

January 15, 2010 in Money by Greg | 1 comment

Part 2 of 1 in the series Paper Money

Congressman Ron Paul (R-Texas) wrote about the role of the Federal Reserve in relationship to the Constitution. After providing a brief U.S. history lesson of the debate over paper money, its attendant danger of inflation, and the role of a central bank in society, he wrote:

The lack of respect for the Constitution even in the nineteenth century set the stage for the Federal Reserve Act of 1913. Fear, misinformation, and ignorance allowed government to ram bad policies down the throat of the American people. This is not unlike giving the president authority to go to war and to bail out those least deserving help in an economic crisis. The rationalization that the state’s interest supersedes the interests and the rights of the people is embedded in the arguments as to why the American people had to go along with those who hate commodity money and love central banking.

The Fed was established as a result of the public and banking clamor for an elastic currency, and an elastic currency is nothing more than one that can be arbitrarily increased in volume at the discretion of the monetary managers. Sometimes they argue over who exactly will have the authority to do so, the central bank or Congress or private banks themselves. Increasing the supply of money and credit is the proper definition of inflation, meaning that when the demands were heard for an elastic currency, all they were looking for was a legal right to inflate the currency for the benefit of whatever special interests they were concerned for at the moment.

Noble intentions are always used to justify the inflation, but the real reasons are far more sinister. Those who get the control over the money are the beneficiaries, not the people as a whole.

Economist John Maynard Keynes, before he became the champion of inflation, wrote quite correctly of the grave danger of inflation. Like Greenspan, he changed his tune as the years moved on. Keynes stated in his book The Economic Consequences of the Peace:

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.¹

Federal Reserve and the Constitution »»

John Maynard Keynes, The Economic Consequences of the Peace (New York: Harcourt, Brace, 1920), pp. 235-236.↩

American Welfare State

November 14, 2009 in Socialism by Greg | 28 comments

A couple weeks ago, I came across an article written about the effects of the American welfare state.¹ Its provocative title immediately caught my attention since it seemed related to previous posts.²

The article is a review of Edgar K. Browning’s Stealing from Each Other: How the Welfare State Robs Americans of Money and Spirit. Mr. Browning is a Research Fellow at the Independent Institute and Professor of Economics at Texas A&M University. His analysis of the welfare state is based on the economic concept of opportunity cost. First developed by John Stuart Mill, the economic opportunity cost is the value of the next best alternative foregone as the result of making a decision. Accordingly,

What do we give up by the choice to have the federal government engage in widespread income redistribution?

Browning’s answer is: a great deal of output. He estimates that U.S. GDP would be at least 25 percent larger if it weren’t for the host of programs and taxes constituting the welfare system. He regards it as a bad tradeoff and makes a powerful case for abolishing federal income transfers and adopting a “just say no” policy toward any suggestions for more of them in the future. (Browning is fine with states’ running whatever welfare programs they want; he respects the Constitution’s federalist plan.) “A non-redistributive federal government,” he writes, “would permit more of the productive potential of the American people to be realized.”

Based on this premise, the welfare system causes the economy to lose output in a number of socially destructive ways. Some of these include:

American Welfare State »»

Leef, George C. “Robbery and the Welfare State”. 28 Oct 2009. The Future of Freedom Foundation. 14 Nov 2009.↩
See for example, the many similarities between Leef’s article and the themes presented in the post on the Gadianton Robbers.↩

Great Depression and Current Recession Compared

October 9, 2009 in Economics by Greg | 1 comment

Earlier this week, Robert Higgs, Senior Fellow in Political Economy at The Independent Institute, spoke about the similarities and differences between the Great Depression and the current recession at the Economic Liberty lecture series. Although he finds considerable differences between the two events, he feels there are only a few similarities between the Great Depression and the current recession.

Below are my notes of his presentation.

There are some similarities as well as differences.

The media and journalists have rushed to see these similarities.

I was shocked.

The Great Depression was so much more horrible, devastating, than the current recession.

They were using this talk to sell some type of policy to the people who look to the government for answers.

I don’t feel the two events are fully comparable.

People would be much happier living through today’s recession than during the Great Depression.

Read the rest of this entry »

Hyperinflation Video

October 1, 2009 in Money by Greg | 11 comments

Over the course of the last year, readers of this blog are aware that the United States has strayed away from the firm monetary policy¹ as outlined in the U. S. Constitution.²

The following video is part one of a three part series about the history – as well as the causes and effects – of hyperinflation. Although it is somewhat partisan, the video provokes a discussion about the competing forces over control of U. S. monetary policy.

Since 1913, the same year the Federal Reserve Act was enacted³, the dollar,

. . . has lost 96% of its purchasing power due to inflation. A common misconception today is that prices for goods and services have been going up. The truth of the matter is that prices have remained nearly the same in precious metals terms; it is the value of the dollar that has declined. It simply takes more and more dollars to buy the same products, since the dollar’s value has become less and less. Gold and silver were scrapped as a “control” mechanism for our economy, and ever since, we have been circulating a “robust paper” in place of real money. This “robust paper” is now the world’s reserve currency in central banks. From 2002 – 2005, the U.S. dollar lost over 40% of its value to the Euro, and had similar losses to other major currencies of the world.”⁴

As the government continues its inflationary policies based on Keynesian economics⁵, China and other nations continue to push for replacing the dollar as the international reserve currency.⁶

How should the U.S. solve its insolvency problem? (Pun intended.)

Sources:

Money.↩
Gold and Silver Coin as Tender in Payment.↩
Federal Reserve Act”. Wikipedia. 1 Oct 2009.↩
“U.S. Dollar”. First National Bullion. 1 Oct 2009.↩
Keynesian Economics and Savings.↩
Dollar as Reserve Currency. See also, Goldstein, Matthew. “Q=A – Replacing the Dollar as the Reserve Currency”. 8 Jul 2009. Reuters. 1 Oct 2009.↩