We ask Lew Rockwell of the Ludwig Von Mises Institute about one aspect of the Federal Reserve that has not made front page news: how the Fed, with its printing press, may be making war easier. After all, if the people of the United States were asked to write a check every year to the IRS in order to fund the exploding deficits and rising interest payments on the national debt, would they continue to support all these wars? Randolph Bourne may have famously quipped that “war is the health of the state,” but it isn’t the health of the economy, this is for certain. If the American people could identify their miserable economic plight with the actions of the federal reserve and with the hundreds of billions of dollars spent every year on war and defense, it is reasonable to expect that they would simply refuse the burden all together. We will ask Lew Rockwell, Chairman of the Ludwig Von Mises Institute what he thinks, and if he thinks that war is made easier by a pliant and compliant central bank.
Lew Rockwell Explains to Lauren Lyster How the Fed Enables War, Empire, and Destroys the Middle Class
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Let’s discuss the middle class and war.
Completely and mutually exclusive. The middle class cannot exist for long when running parallel to war. Whether the middle class is from the winner or loser of the conflict, the middle class will suffer grievously in the long pull. If one looks back over the last 5,000 years it is pretty clear that every empire, from the Sumerians, Phoenicians, Hittites, Egyptians to the USSA, started out with the best intentions of laying down an infrastructure of peacefulness and growth opportunities for the common man. I’m not going to claim the Egyptian rulers were freedom-minded and peace loving but the ordinary citizen wanted to see his family and community do well, with enough food, decent housing and a certain freedom from the rapacity of the ruler-tyrants and bellicosity of the neighboring tribes. The middle class wants peace. They generally want to be left alone to raise their families and live their lives without undue stress. The lower classes in these times were generally hard laborers and slaves and even they would prefer lives that did not include the imminent threat of terror and death.
The sad part of this story is there would always rise from the middle classes the few powerful men who, for their own mentally delusional reasons, thought that the people needed war and conquest. They thought they were speaking for the people when all they were hearing was voices in their heads. They might be a ruling class of demi gods,kings ruling through family lineage or just a tribal leader who takes power with force of arms or intellect. The result was always the same. The lower and middle class was dragged into the fight against their will and ultimately destroyed.
Thus enters the role of the central bank, whether it was an integral part of the central government; an exchequer or minister of the treasury, or a separate enterprise such as the Fed and its spawn. If a central bank did not exist before the winds of wars blew over the land, it would have to be created.
Goverments are good at two things. Waging war and debasing the currency. These two actions are aided and abetted by a central bank. And thrust into the middle of this morass of printing and war is the common man.
Fast forward to our current period.
It was the era of the USA empire building, fresh from its victory in WWII. No nation matched us for military might, even the USSR. We held them at bay with the philosophy of MAD; Mutually Assured Destruction. Empire building was and is extremely costly. The spoils of war eventually wear thin. Victories prove ever more costly. The Romans found that out the hard way. Our denoument was The Vietnam war; horrible and consumate waste of blood and treasure. We lost and thus we passed a tipping point in the empire building notions of this country. Unfortunately our leaders did not get the telegram. And the tears continue to present day.
One of the craziest, most psychopathic humans ever to occupy of position of power was Richard Milhouse Nixon. History is already holds him in high contempt. Even LBJ couldn’t hold a candle to the deep sickness that inhabited the skull of this monster. Leaving aside his war-making lust and attempts to remake this country with new and completely unsustainable programs such as Medicare and the EPA; those could be contained with time, he commmitted the greatest financial crime of the last 2,000 years, one that will go down in history as the most vicious since the Roman empire began debasing their precious metal currency. Nixon will be regarded as the 20th Century’s Diocletian. He took this country; our country, off the gold standard. And thus began the decline and fall of the USSA Empire
The tragedy following this act has resulted in continual and unrelenting war with a Defense budget that cost a minimum of 25% of the entire Federal budget. And who paid for it? We, the long suffering middle class. But profligate printing gave us an illusion of prosperity for the next 40 years. Monetary Hopium fed our delusions of prosperity. Printing FIAT gave the lower class the notion that the government would always provide for their basic needs. This same Big Print gave the middle class the illusion that everything was ok. We were seduced by a multi trillion dollar flow of money that buffered the worst of the governmental excesses, allowing us to think we were in charge and the government worked to our best interest.
Today, the largest budget item, weighing in at $1.03 trillion dollars, supporting 83 uncuttable entitlement programs, not even including Medicare and Social Security, is the welfare state. 25% of the total Fed outlay goes to the most needy of our citizens.
The next largest expenditure in the budget is the tsunami of cash for the DOD, tipping the scales at $800 billion. Presidents who oppose this monster end up dead so the money will flow until our empire collapses in a bloody heap.
More than 50% of our entire budget, both in the form of tax receipts and debt is devoted to Guns and Butter. This is a sad 40 year history of a line of subservient politicians, Democrats and Republicans, who have been true to form, selling their souls for a place at the slop hog trough.
And what of the middle class?
The middle class has not seen one penny of increase of financial wellbeing since 1969. Not one damn dime. Just in the last year the middle class reached its own tipping point. The inflation adjusted income of the middle class has fallen back in time. It’s been 40 years since the middle class could actually be said to have gotten ahead of the game. Even the best of the Reagan era was spent making up for the disaster of the 1970-80 time period. Look at the nature of the presidents during that decade and you get a clue of the nature of those at the top of the food chain.
From that time on, the federal debt increased by $16 trillion, roughly $400 billion in extra FIAT flowing into the economy year over year inflation asjusted, while at the same time 40,000,000 good paying jobs were offshored. This is the tragedy of an economy that subsists on continual war and continual currency debasement. The middle class has been fully and completely gutted through debt upon debt by government that cares not one iota for its wellbeing. Government by and for the people was and is a painful illusion
Did I miss anything here? Sure, lots of material. Are the results any different today than 3,500 years ago. Not really. The middle class; the lower class; the common people are ground to dust under the jackboots of the psychopaths, deviants and escapees from insane asylum. Think Hitler when you think about what qualifies for leadership in this country today.
Many good points for sure, AG, but…
“Leaving aside his (Nixon’s war-making lust…)”
My memory of the Viet Nam era is that Kennedy got us into it, Johnson continued it, and Nixon got us out. Seems to me that Kennedy and Johnson were the real war mongers in this scenario.
“Nixon will be regarded as the 20th Century’s Diocletian. He took this country; our country, off the gold standard.”
Indeed. However, when only *1* nation is on a gold standard and is trading with many countries that are not on a gold standard, we use gold to settle our debts while they use their fiat. After a while, we have a ton of fiat and they have all the gold. This is not sustainable. Everyone has to be on a gold standard so that gold is used in BOTH directions when trading with other countries. I am not certain that “closing the gold window” was the best of ideas but it was certainly a long way from the worst of ideas. Was there another viable alternative that was politically acceptable to our trading partners?
“The middle class has not seen one penny of increase of financial wellbeing since 1969. Not one damn dime.”
I am at a complete loss to explain how I, a very middle class person, graduated from college in 1971, got a job, worked hard, saved religiously, invested wisely, lived well within my means, and became sufficiently wealthy to retire comfortably at age 55. Your statement indicates that this is not possible. The proof of it, however, exists, I assure you. Oh, wait! I know… I was “lucky”. LOL!
I have to admit that I wrote this while cranky and in a lot of pain. Strangely enough, in my case nothing in the pharmacopia of pain meds including Dilaudid mitigates the pain of a hip replacement. Today was about a ’6-7′
What’s more unusual is that I was a big fan of Nixon back in the day. My persona was a bit darker back then.
Johnson was a foul, corrupt small time grifter. Kennedy was a drug addicted sexaholic who’s time was cut short by dark forces that needed to see him off this world. He became unleashed and a danger to the status quo.
Yep, JFK and LJB got us dialing into Vietnam. I think Nixon had war ennui and with Watergate hounding him wanted nothing more than to be shed of the war. Our exit was on a winning note but the bastard Democrats gutted the ARVN and our remaining troops who were left in country to fend for themselves.
The backwardation of the middle class (if I can use this term in a different mode) was directly due to the profligate printing and subsequent debt explosion. We are finding out the hard lesson that you can’t borrow yourself into prosperity. Most of the middle class of the Vietnam ware era is now either gone or very elderly. The Greatest Generation has been in realatively decent shape, pensions and social security being what they are. The present day middle class is getting hammered from all direction. Ed, I think our Boomer era has its stuggles equal to those of the incoming middle class but the majority of Boomers find themselves on shaky ground for many reasons, not least of which is a small retirement war chest.
You and I were more than lucky, however It appears that made your stack by the philosophy of The Millionaire Next Door. Only about 5% of the US population accomplished that.
My situation was a little different. I worked my freaking brains out in a industry that paid me gobs of money. I saved poorly, invested badly, lived outside my means and the only reason I stayed ahead of the pack was I made money faster than I could lose or spend it.
You were smart. I was lucky. If anything had caused me to stumble even momentarily I would have been screwed. As it stands, I’m doing ok and finally got my head wrapped around some sensible ideas of investing.
The problem isn’t the idiot currently in the white house, it is the shadow government behind the scenes making the real decisions. War makes them wealthy so we stay at war. If we drop wars they will probably legalize drugs to keep an income stream. And most of the middle class is to addicted to their latest electronic piece of crap from China to notice.
Hi Mary B
Bread and Circusesin infinite amount and variety can be found on any smart phone. It amazing what technology can do to further the subjugation of the people without them having even the slightly awareness of what is happening to them
I have to admit, this Lauren Lyster stuff always makes me laugh;
young attractive woman with intelligence, personability showing cleavage and legs:
release endorphins and pleasant feelings in men, while taking in a message, all provided by the benevolent Russian news media. ”We’re your friends… see… here is a pretty and pleasant and intelligent Western woman helping you stay informed about the crooked men preventing you from having a bright future… from Russia with love… ”.
http://www.timesofisrael.com/what-the-mossads-female-agents-do-and-dont-do-for-the-sake-of-israel/
The Russians are not our friends, as much as one may dislike current Western corruption. RT is a Kremlin PR device (as is PressTV for the Ayatollahs…). Case in point, you’ll never hear anything critical about Iran or Russia on either of those channels. They only criticize the more civilized Europeans/Americans/Israelis (which says a lot about their level of civility, seeing as we Westerners are no angels).
That’s alternative news for you. You can see all the western positive-spin you could ever need in our own media. RT is an alternative to it.
Watch for lies or obvious shillery, then report that. We have had our own alternative radio broadcasts (Radio Free Europe) into the eastern block for decades. http://www.rferl.org/
What’s good for the goose…
And Lauren almost never shows any cleavage, but she is quite a looker. To be fair they should get some old geezer with a pink bow tie instead? naaaah.
The Federal Reserve can do all that by simply printing dollars out of nothing. By that, they can fund unlimited wars, spread the empire across the globe and beyond. This is destroying the middle classes because their purchasing power is getting stolen from the Fed by putting more dollars in circulation.