9/21/2014

How I Woke Up

We've just passed the 13th anniversary of 9/11 and now, more than ever, individuals on all sides of the 9/11 spectrum are demanding to know more about what really happened on that day.  On one side you have the co-chairs of the 9/11 commission report, Lee Hamilton and Thomas Kean, who have called for the 28 classified pages of the 9/11 commission report to be released in the public eye.  As more and more congressmen and senators read those pages for themselves, a growing coalition on the right and left is forming behind a bill that would declassify them for all to see.  On the other side of the 9/11 spectrum you have Architects and Engineers for 9/11 Truth (AE911 Truth) making unprecedented ground in their cause.  AE911 Truth is a major force behind the High Rise Safety Initiative, which has collected tens of thousands of signatures from New Yorkers and is currently fighting and appealing various legal battles to ensure a ballot measure will be put to the voters that would require the NYC Department of Buildings to investigate the causes of high-rise building collapses in New York City, starting with World Trade Center 7.  AE911 Truth has also put up a video billboard in Times Square this month showing millions of New Yorkers the 6.7 second collapse of WTC 7 and challenging them to "Rethink 911".

But for the 9/11 truth movement, one of the most exciting events is a new documentary called Anatomy of a Great Deception.  It has been getting great reviews from the 9/11 truth community and Richard Gage, founder of AE911 Truth, is calling it "the best chance in years to push the 9/11 debate into the mainstream".  So what is so revolutionary about this movie? Does it have new information or new evidence? No, the hype around this documentary is not because of the evidence it presents, but the way it presents it.  It's not overloaded with ten thousand questions and puzzle pieces of evidence concerning the various reasons to doubt the official story.  Instead, it's a personal story, a story of how one man stumbled upon an innocent question that lead him to another question, and then to another, until months later he was on the brink of personal disaster.  David Hooper is a successful businessman and entrepreneur; and in this very personal film he relates how his research destroyed his world view and almost ruined his most precious relationships with his wife, family and friends.

As Hooper describes the genesis of this film, "I began assembling footage to visually relay what I had found for my wife, my sister, and a couple of dear friends.  This footage turned into the documentary The Anatomy of a Great Deception."  Hooper's amateur documentary succeeded to convince his family where other documentaries failed.  As word of mouth spread, Hooper decided to raise money to take his film to the next level and professionally release it so that others in the 9/11 truth community could share it with the people in their lives.

Several years ago, for various reasons, I decided that I would not promote 9/11 truth in the same way that I unashamedly promote libertarianism and Austrian economics.  Yet, I can't honestly describe how I've come to be the person I am today and carry the beliefs that I do without going back to 9/11.  More specifically, not 9/11, but WTC 7.  Like Hooper, that building shattered my world view and set me on a course of investigation that would completely transform my belief system.  So in the same spirit that Hooper took when telling his story, I will tell mine.  My purpose is not to try to convince anyone to accept my beliefs, I've given up on that long ago.  I merely hope this will help others understand my journey.

WTC 7 and Me

The most transformative event of my life occurred on Saturday, April 15th, 2006 - Easter weekend.  I was completing my Senior year at the University of Iowa and I had recently taken an internship at the Operator Performance Laboratory instead of pursing a 3rd summer with my door-to-door book selling career.  I had completed the math and physics classes required for all engineers, and now that I was taking my upper level courses in Electrical Engineering things were really starting to get interesting.  The seemingly abstract world of calculus and differential equations was finally made real as I learned how to apply those concepts to understand the physical phenomena of the world around me.

It was under this context that I went home for the holiday weekend and my youngest brother showed me a video that he had accidentally found while searching for Tool music videos.  Someone had intentionally mislabeled a 5 minute video called "Painful Questions" to trick people like my brother into downloading it.  He was shocked and scared by what he saw, and he didn't discuss it with anyone until I came home for a visit.

He told me he had a video that I needed to see, I watched it, and my whole world was turned upside down.


It's hard to remember my exact reaction, but I was in a state of total shock, my mind racing at the consequences of what I saw.  I watched it again and again to make sure I could believe my eyes.  The video was a condensed version of a longer documentary by Eric Hufschmid called Painful Deceptions.  While the full length documentary covers many aspects of 9/11, this 5-minute version only discussed a sky scrapper called World Trade Center Building 7, or WTC 7, which I had never heard of before.  In this crude and unprofessional video I was quickly made aware of a few key facts:

  1. On 9/11 there existed a modern 47-story steel-framed skyscraper called WTC 7.
  2. This building was not hit by a plane on 9/11, but it did catch fire on several floors.
  3. At 5:20 pm on 9/11 this building "collapsed" into its own footprint in 6.7 seconds.

That's all I had, 3 inconvenient facts and the video of it "collapsing" from multiple angles over and over again.  Right away I saw this could not have been a fire-induced "collapse".  What I saw looked identical to a building that was brought down in a controlled demolition.  But that conclusion was too painful, it immediately brought question after question: Who was responsible for bringing this building down?  If WTC 7 was a controlled demolition, does that mean the Twin Towers were too?  If so, then that means people in the government were involved.  How was I not aware of this event?  Does that mean elements of the media are in on this too?  How could people be so evil?  How could a conspiracy this big and this important be hidden from me for so long?

I didn't have answers to any of those questions.  For all I knew, myself, my brother and the maker of this video might be the only 3 people in the world that were aware of this evidence.  I couldn't wrap my head around the giant implications of this revelation, but I had seen all I needed with my own two eyes.  Eric Hufschmid's video might have also brought up the fact that the maximum temperature of an office fire is 1,700 degrees Fahrenheit while the melting point of steel is 2,700.  It might have shown me examples of other sky scrappers that had burned longer and hotter than WTC 7 but weren't even weakened, let alone brought down.  It probably pointed out that no sky scrapper in history had ever collapsed due to fire.  It might have mentioned a character named Larry Silverstein, the man who told fire fighters to "pull" WTC7 and whose recent acquisition of the lease for the Twin Towers 6 weeks before 9/11 would allow him to collect billions in insurance claims.  It might have even shown examples of reporters saying WTC 7 collapsed before it did, most notably the BBC reporting it had collapsed while it was still standing and visible in the background!

But I didn't need any of that.  The three inconvenient facts were all I needed and they could not be refuted.  No one denied that this mysterious building existed and fell on 9/11 and the rest I could see for myself from the video evidence.  The height of this building and the speed in which it "collapsed" were a matter of public record.  And that is the key that woke me up - the fact that this building "fell" so fast and into its own footprint, the path of most resistance.

In physics I had learned how calculus could take me from the velocity of a moving object to the change in velocity (acceleration) to the change in acceleration.  In statics I learned how to calculate the opposing and combining forces of objects at rest - how various forces would act against "static" objects like weights, dump trucks and buildings on ramps, pulleys and wires.  I knew how the law of conservation of momentum applied to inelastic collisions and how kinetic energy and gravitational potential energy would be converted to other forms of energy like heat and sound.  So when I saw the videos of WTC 7 coming straight down in 6.7 seconds I knew that fire and gravity alone could not have caused this.  Why?

David Chandler, the retired physics teacher who forced NIST to admit in its final report that WTC had 2.25 seconds of complete free-fall acceleration, puts it this way:
“Anything at an elevated height has gravitational potential energy.  If it falls, and none of the energy is used for other things along the way, all of that energy is converted into kinetic energy – the energy of motion, and we call it ‘free fall.’  If any of the energy is used for other purposes, there will be less kinetic energy, so the fall will be slower.  In the case of a falling building, the only way it can go into free fall is if an external force removes the supporting structure.  None of the gravitational potential energy of the building is available for this purpose, or it would slow the fall of the building.
...
[P]articularly striking is the suddenness of onset of free fall.  Acceleration doesn’t build up gradually...  The building went from full support to zero support, instantly...  One moment, the building is holding; the next moment it lets go and is in complete free fall...  The onset of free fall was not only sudden; it extended across the whole width of the building...  The fact that the roof stayed level shows the building was in free fall across the entire width.  The collapse we see cannot be due to a column failure, or a few column failures, or a sequence of column failures.  All 24 interior columns and 58 perimeter columns had to have been removed...  simultaneously, within a small fraction of a second.”
That explanation spoke to my education, but I thought of a much simpler way of finding the absurdity in this situation.  Without even having to perform the calculations myself, I could go to a simple free fall calculator online and execute a thought experiment.  Knowing the height of WTC 7 was 190 meters, I could plug in my own weight and the air resistance coefficient for a person sky diving and calculate the time it would take for me to fall that distance in free fall acceleration.  The answer: 6.75 seconds...  So if I had jumped off the top of WTC 7 the moment it started "collapsing", I would have hit the ground only 1/20th of a second faster than the roof did?  What hits first, my falling body with nothing but thin air underneath, or WTC 7 with 40,000 tons of structural steel to crash through?  The question answers itself.

I could fall the same height of WTC 7 in 6.75 seconds, only 0.05 seconds longer than it took WTC 7 to "collapse".

It didn't add up, and I knew that I couldn't go back to my normal life and forget about this information.  My world view had been shattered.  I didn't understand the big picture, but I knew that I needed to reset my biggest assumptions about how the world worked and do some serious research to understand how this event could be possible.

Down the Rabbit Hole

To my great relief, over the next few days I found that there was a whole movement of people well aware of the evidence calling into question the official story of 9/11.  I watched dozens of documentaries that exposed me to more and more information like Loose Change, 911 Press for Truth, and what became one of my favorites, 9/11 Mysteries: Demolitions.

I read the testimony of Sibel Edmonds, the FBI translator for terror-related communications and the "most gagged person in the history of the United States of America" who said 9/11 was executed by the "highest levels of NATO, the U.S., M16, CIA and the Pentagon."  I listened to the harrowing story of William Rodriguez, the last man out of the Twin Towers who saved countless lives by leading firefighters up the stairwells with his master key. Unsurprisingly, I had never heard his testimony of bombs going off in the basement before the planes hit.

I wanted to know all I could about 9/11 and along my journey I found claims that made sense to me and plenty of claims that didn't hold water.  Some people said that no planes hit the buildings - that they were holograms!  Others said only space beams or secret direct energy weapons could account for the buildings collapse.  Others claimed that it was all a conspiracy orchestrated by "the Jews".  I found documentaries and YouTube comments that were downright hateful, bigoted, ignorant, and devoid of logical thinking.  Before long I realized that I knew enough about 9/11, in fact I had known all I truly needed to know in the first 5 minutes with my 3 painful facts concerning WTC 7.  I didn't need to know exactly what really happened on 9/11 - whether it was space beams or nano-thermite that brought down the towers didn't add much value.  If WTC 7 could not possibly have been a fire-induced collapse, if that part of the official story was a lie, then the rest of the narrative goes with it.

The big question was cui bono, who benefited?  Who had the motive, the means, and the opportunity to pull this off?  I recalled going to the theatre to see Michael Moore's film "Fahrenheit 9/11" and walking away unconvinced.  If this was all about making money off oil sales it seemed like there were easier ways to get it done.  Eventually I stumbled upon Alex Jones and his film Terrorstorm: A History of Government Sponsored Terrorism.  Now the rabbit hole was getting deep and splitting off into a dozen different directions. From the first time I tuned into the Alex Jones Show he begged his listeners not to believe a word he said but to research the facts for themselves, and I took him up on that challenge.  Every guest he had was an expert on a different topic pointing me to research Eugenics, the Franklin Cover-up, government drug trafficking, the fluoridation of the water supply and a dozen other topics that I would have dismissed as "conspiracy theories" in my old mindset but now I was willing to approach with an open mind.  One of his guests was producer and director Aaron Russo and I watched his documentary America: Freedom to Fascism.  His film sent me back 100 years to 1913 where I started researching the creation of the Federal Reserve and the origin of the income tax.  Now that international bankers were in my sights, my research took me to Antony Sutton and the powers that bankrolled both sides of the greatest wars of the last century including WW1, WW2 and the cold war.  Finally, I started reading the words of the conspirators themselves, books like Tragedy and Hope and The Anglo-American Establishment by Carrol Quigley, The Grand Chessboard by Zbigniew Brzezinski, white papers like Rebuilding America's Defenses by the Project for a New American Century, and declassified documents like Operation Northwoods.

As I processed all of this information found in countless books, reports and documentaries a coherent picture started to emerge.  This picture was composed of a hundred puzzle pieces and 9/11 was just one of those pieces to the larger puzzle.  If I took any one of these other pieces and examined it in isolation I could see how one's first reaction would be to discard it.  "What is more likely, that this one particularly conspiracy theory is real or that everything I know is wrong?"  But when you have a hundred of these instances the odds flip in the other direction and now evidence of an "invisible hand" guiding these events seems more and more plausible.  This force is composed of the most inner circles of banking, government and military found in groups like the Council on Foreign Relations, the Bilderberg Group, and the Order of Skull and Bones.  Some call the this group the Illuminati, Gary Allen called them the Insiders, Alex Jones refers to them as globalists, the John Birch Society described them as a "conspiratorial cabal of internationalists, greedy bankers, and corrupt politicians", and the most popular name of all is what many top government and banking elites refer to as the New World Order.

9/11 Truth Evangelicalism

Once I felt that I sufficiently understood enough of the big picture that I could explain the "who, what, and why" of 9/11, I began spreading the word all day, every day.  First I would burn DVDs of my favorite documentaries to hand out to friends, family, classmates, co-workers and strangers - anyone that would listen.  Then I learned about the activists in Alex Jones' home town of Austin, Texas.  They started a student group called Project for a New American Citizen (PNAC), a play-on words of the previously mentioned Project for a New American Century, a think tank composed of top government officials in the bush administration that infamously longed for a "catastrophic and catalyzing event––like a new Pearl Harbor".

Knowing there is strength in numbers, I formed a chapter of that student group at the University of Iowa and started trying to recruit other activists.  When I was invited to speak at PNAC's conference in Austin, "Rebuilding America's Senses", I met the men behind Brave New Bookstore.  Instead of burning 1 DVD at a time myself, I would order 100 or 500 DVDs and ship them straight to the bookstore.  They would use their superior equipment to burn them all in a fraction of the time and send them to me, professionally labeled, ready to distribute.  Now I could take my activism to the next level.

I networked with the campus anti-war group (those things still existed when the red team was in charge) and secured a booth at their rally.  I made a giant banner for our table and relished the opportunity to hand out DVDs and fliers for our scheduled campus meeting.  I used our status as a recognized university student group to get funding and to set up a table at the student union so that everyone could know why "9/11 was an inside job".

Ultimately, I didn't have much success gaining the kind of converts I wanted.  I expected people to have the same reaction I did when shown WTC 7.  If that particular piece of evidence didn't have the effect I expected, then I had an entire arsenal of 9/11 questions to throw at them - surely something would stick.  But instead, only a handful of people had the same "awakening" that I did, where they recognized the importance of this information and went on their own quest to research and find the truth.  In retrospect, I didn’t have much at all to do with those people, they had the type of life experience or personality that would set them onto that path whether or not I had intervened.  Instead, the majority of people reacted in one of a few ways to my 9/11 Truth evangelicalism:

  • Some claimed to understand what I had shown them but then took an ostrich approach to the information.  One person literally said, "You are right about this, but you shouldn't talk about it."  That statement boggled my mind.
  • Others would agree with me when I talked to them, but then if they encountered someone else preaching the opposite view they would change their tune like a leaf in the wind.  They weren't convinced by the evidence, they were just easily persuaded by anyone that spoke with authority.
  • The vast majority weren't convinced by the evidence I presented.  My carefully presented arguments would elicit an emotional response and the next thing we're in an argument.  In the case of a close friend or family member we would end with a stalemate to save the relationship, there are some topics that we just don't talk about.

I didn't come to the conclusion that I should change tactics until the professor that I worked for asked me about my new beliefs.  This was a man I highly respected.  He held multiple advanced degrees in Electrical, Mechanical, and Industrial engineering.  When I worked at his lab I saw him accomplish feats of technical ability that truly humbled me and showed me how much I had to learn.  I did my best to just stick to the scientific facts around WTC 7.  I thought that since that was the evidence that woke me up it had the best chance of getting through to him.  After some back and forth debate I drew a picture on the whiteboard to illustrate my closing argument.  It was a long vertical rectangle on one side (to represent one of the Twin towers) and next to it was a square 1/5th the size of the rectangle suspended in the air.  I asked him, "explain to me the mechanism that would allow the structure to the left to crash through itself and come to the ground at nearly the same speed that it would take the structure to the right to fall through the air".

If there's any reason to question 9/11, the speed and the manner in which the buildings fell is it.

He looked at me and said, "I don’t believe people can be that evil".  And that was it.  We didn’t speak of it again, and frankly, the wind was taken out of my sails.  I realized then that there were some topics that are just too painful to try to push on people and 9/11 was certainly one of them.  Like the Matrix, no one could be told what 9/11 truth is.  You have to see it for yourself.

Changing Tactics: From Negative to Positive

It was around the time that I was becoming disillusioned with 9/11 Truth activism that I stumbled upon a series of YouTube videos of Michael Badnarik's constitution class. This was my 2nd great awakening. After the first 2 segments I was hooked and I proceeded to watch the entire series in one sitting.  He is the one that first taught me the difference between rights and privileges and how they are interconnected with the concept of property.  The consistent logic and common sense of his arguments rang true - even if he held some radical views like "just about everything the government does is unconstitutional".  Learning that he was a presidential candidate for the Libertarian Party, I started reading about libertarianism.  From there I heard about a book called Economics in One Lesson.  Reading that book was my third awakening.  Henry Hazlitt introduced me to the Austrian School of Economics and for the next few years all my free time was spent reading the works of its greatest thinkers, from the founder Carl Menger, to the heroic Ludwig Von Mises, to the man that would become my intellectual mentor through his works on history, economics, ethics, and libertarianism - Murray Rothbard.

Unlike my other awakenings where there was a clear event that separated a former way of thinking from a new world view, my transition from a constitution-supporting minarchist libertarian to a full-blown rothbardian anarcho-capitalist came gradually.  I don’t recall a particular doubt that was shattered as a grand event but I do know that it was through reading Rothbard that the economic, ethical, and even practical case for individualist, property-rights based anarchism made more and more sense.  With all arguments for the "middle of the road" night-watchmen state laid to waste, there was only two logical places to go: full-blown socialist collectivism or to the logical conclusion of libertarianism, anarcho-capitalism.

This second and third awakening was just as important as the first because it showed me what I was for, not only what I was against.  Libertarianism taught me the moral case for freedom: how the consistent application of the non-aggression principle would solve most, if not all of the conflicts we encounter in society.  Austrian Economics teaches the consequences of whether or not we follow the non-aggression principle. It shows how voluntary interactions lead to wealth creation, to capital formation, and to a rising standard of living for everyone.  On the flip side, when we abandon voluntary and peaceful solutions and go to the government with our problems, the laws of human action dictate that scarce resources will be misallocated, wealth will be squandered, and we will be worse off than we would be otherwise.

Without a solid foundation in economics and an ethical / political philosophy, it's easy to be lead astray by anyone that claims to have a common enemy.  For instance, the documentary Zeitgeist became very popular and also spoke to the 9/11 truth community.  However, as the solution for the problems in the world it endorsed getting rid of all money and entering a resource-based economy where all decisions would be dictated by a technological elite with the promise that everything would be free. With an understanding of what money is and how free-market economic decisions ultimately guide scarce resources to be efficiently allocated these pipe dreams are easy to see through.  But without that understanding a 9/11 truther may be jumping out of the frying pan and into the fire.

The other big difference these final awakenings had was to my effectiveness as a communicator and an activist.  From an end-point perspective, I want as many people to join my cause as possible.  So looking at it practically, it is a very difficult and possibly fruitless undertaking to convince someone of a giant conspiracy so that they are against what the New World Order is pushing.  Instead, you can teach logic, economics, and libertarianism so that one naturally ends up at the very same solutions.  This line of attack also allows people to keep the commonly held assumption that the government is filled with well meaning people at all levels.  Once someone finds a hundred examples of government policies that have the opposite effect of the claimed goal, the next logical step is to question if our elites and leaders can really be so intelligent and successful in some areas while completely ignorant and incompetent in others.  At that point one may independently come to the conclusion that it is much more likely that some of our government leaders simply have a different set of secret goals that are not communicated to the public because they are not in our best interest.

Conclusion

In April of 2006 there was no official story on WTC 7.  The 9/11 Commission Report didn't devote a single sentence to the third worst structural failure in history.  That in itself was revealing to me but now that NIST has provided its final report in November of 2008 defenders of the official story are in an even more indefensible position.  At least with no story one could speculate on mysterious causes for WTC 7's collapse such as diesel tanks that may have been stored in the building or entire sections that may have been scooped out by debris without any photographic evidence showing it.  But now NIST's final report has come out and it explicitly states that fire alone caused the collapse and those other factors did not contribute!  Yes, that's right, a heretofore unknown phenomenon called "thermal expansion" explains how normal office fires caused a chain reaction of a "key critical column" to fail and that alone set off a "rapid succession" of structural failures that resulted in a 47 story building laying in a pile of rubble.  I'd call this the "death star" theory of WTC 7.  And while on the one hand I recognize how ridiculous all this is, I always try to keep in mind how difficult this information is to others - even to fellow libertarians or Austrian economists.

Understanding that there is a place and time for everything, I keep my multi-layered beliefs separate based on the type of activity I'm engaged in.  I find that some 9/11 Truth activists continue to talk about 9/11 all day, everyday, whether they are at a libertarian event, a Mises circle, or the local city council meeting.  And on one hand I can't blame them - I used to be that way myself.  But instead of using that approach I like to think of my interactions with others as carefully going through a series of filters.

If I'm interacting with someone that is a die-hard member of the republican or democratic party I'll ask a series of questions related to economics or libertarianism to see how well I can poke holes in their belief that the use of government violence is the best way to solve the issues of society.  If I'm talking to a John Stossel type of libertarian I will try to challenge them to strengthen their foundation by digging deeper into Rothbard and the works of other Austrian economists.  If I'm talking to a fellow anarcho-capitalist, someone that is well aware of the state's crimes and is courageous enough to think we are better off with no state than with one, then that's when I'll start pushing their boundaries when it comes to "conspiracy theories".

There are many entrances to the rabbit hole and while the "collapse" of WTC 7 was the starting point for me that doesn't mean it should be the starting point for everyone.  Looking at the history of false flag attacks on America, 9/11 is just one of many and it's notable only for its boldness.  When the Golf of Tonkin was admittedly faked and resulted in the death of some 3.1 million people in the Vietnam war, or one looks at the false narrative that justified dropping atomic bombs on civilian cities, or the west's involvement in funding Mao Zedong and the mass murder of 60 million people - what are 3,000 deaths compared to that?  Admittedly, the people behind that event were full of hubris and confident in their control over the American booboisie to think they could blow up buildings in broad daylight and get away with it - and that in itself is noteworthy as it shows just how serious a predicament we're in.  But as every 9/11 anniversary comes to pass and every additional false flag event wakes up another wave of people and re-energizes the truth community we'll see if their gamble pays off.

7/28/2014

Battle of the Bears: Deflation or Inflation?

In the first corner, we have Harry S. Dent, Jr. Dent is known for predicting both the decline of Japan and the impact of the Baby Boom generation hitting its peak in spending in the 1990s when most economists were proclaiming the opposite.  In his numerous television and media appearances, Dent warns of a stock market collapse and a deflationary depression due to massive debt deleveraging and the mass retirement of the Boomers.  His company is Dent Research, where he sells subscriptions and products that promote "capitalizing on the predictive power of demographics".  His latest book is The Demographic Cliff: How to Survive and Prosper during the Great Deflation of 2014-2019.

In the opposing corner we have Peter D. Schiff.  Schiff is known for being the lone voice to warn of the housing bubble and stock market crash of 2008.  A video compilation of his media appearances between 2006 and 2007 called "Peter Schiff was Right" went viral with 2 million views, showing him make accurate and dire predictions only to be openly mocked by the media.  Schiff calls himself the "original opponent of the 2008 Wall Street bailout" because he predicted the government's reaction to the crisis and opposed it in 2007, a year before it was even proposed.  In media appearances and on his radio show, Schiff warns that the crash he predicted hasn't happened yet, that what we saw in 2008 and 2009 was merely "the tremor before the earthquake".  He is the founder of several companies, including his investment / brokerage firm Euro Pacific Capital, Euro Pacific Precious Metals, and Euro Pacific Bank Ltd.  In his latest book, The Real Crash: How to Save Yourself and Your Country, Schiff warns that the twin bubbles of the U.S. dollar and treasury bills will pop when the rest of the world stops trusting America's currency and credit, giving us the real crash.

These two men have so many similarities.  Both have accurate and less than accurate predictions to their name.  They seem to have hired the same graphic designer for their latest books, and David Stockman, former OMB director under Reagan and author of The Great Deformation: The Corruption of Capitalism in America, gave them both favorable reviews.  They are both opposed to the government's economic stimulus and both claim that a major crash is coming - warning that our economy is built on a foundation of quicksand.  Both have companies and products behind their name and offer advice in their books that will help their readers brace for the storm ahead.  They both have explanations for why economies rise and fall, and yet, they disagree on something that would seem to be basic and fundamental: will we have inflation or deflation?

The Case for Deflation

The essence of Harry Dent's outlook and the basis for his economic predictions can be summed up in 7 words: People do predictable things as they age.  Given the information age we live in, Dent takes readily available statistics like birth indexes and consumer behavior patterns to make both short and long-term predictions.  To Dent, demographics is the "ultimate indicator that allows you to see around corners, to predict the most fundamental economic trends not just years but decades in advance".

The first step is to identify your peak birth years, like the baby boomers who accelerated in 1937 and peaked in 1961.  The next step is to identify the age when the average individual or family spends the most on some good or service.  The last step is to perform simple arithmetic and then... profit!

For example, the typical household spends the most money overall when the head of the household is age forty-six, so using the powers of addition we arrive at a peak in spending and a concomitant economic boom from 1983 to 2007. Dent argues that despite some bubbles in stocks and real estate that burst along the way, this is exactly what happened.

Dent believes this method also works for specialized industries.  For instance, we know when the typical family rents an apartment, buys their first starter home, upgrades to a McMansion, buys a vacation home, downsizes to a retirement home, and then goes onto a nursing home.  Therefore, we know when we should see these real estate markets rise and fall accordingly.  We also know when the average family will spend the most on diapers or potato chips, mini vans or sports cars, prescription drugs or Carnival cruises, so invest accordingly.  Dent believes that the single most important factor driving middle class economies is consumer spending by age.  In The Demographic Cliff, he states, "consumers are 70 percent of the GDP, and business investment only expands if consumer spending is growing and the government taxes businesses and consumers for its revenues; hence, it follows consumer spending indirectly as well."

Indeed, according to Harry Dent, demographic trends are the primary force driving inflation, deflation, and the booms and busts that take place in the economy.  Dent states, "Inflation rises with younger people entering the workforce, then wanes after they become most productive in their forties.  Deflation can set in when more people retire than entire the workforce."  Based on this understanding, Dent found a strong correlation between the growth in the labor force and inflation, with inflation following by 2.5 years.  Because he can predict the average number of twenty-six year old who will enter the workforce and the average number of sixty-three year olds that will exit, he can predict workforce growth and inflation nearly two decades in advance.  Dent used this "Inflation Indicator" to predict near zero inflation by 2010 in the 1980s, and like clockwork, that's what happened.  To Dent, the role of central banks and politicians is of secondary, or even nominal importance compared to demographic trends.  Dent states, "The greatest inflation in modern history was not caused by central bankers, nor was high workforce growth in the 1970s caused by politicians.  Who would want to create 16 percent inflation and mortgage rates and upset everybody?"

With this understanding of inflation and deflation, it is not surprising that Harry Dent also has a thesis on booms and busts that is centered on demographics.  He calls this the "Eighty-Year, Four-Season Economic Cycle" with the duration equaling roughly the average human lifetime.  Just like we have spring, summer, fall and winter in weather, and youth, adulthood, midlife, and retirement, in life, and innovation, growth, shakeout, and maturity in our business cycle, he sees this 4 stage pattern driving the overall economic cycle:
"New technologies and generational boom-and-bust cycles create a sustained boom that starts in the spring, hits speed bumps in summer with high inflation (think high temperatures) and falling generational spending that then descends into an autumn bubble boom with rising generational spending and productivity, falling inflation and interest rates.  That final boom creates bubbles in financial assets and new technologies and business models that, like after the fallow season of winter, will pay off for many decades to follow, but must first get more efficient by means of the deleveraging of debt bubbles and financial assets (as happened in the 1930's and will occur in the decade ahead).

This is a natural cycle of boom and bust, inflation and deflation, innovation and creative destruction that is the invisible hand of the free market system that has driven us to unprecedented wealth and incomes, especially in the last century.  But, as we've seen, governments taking more and more of the debt drug have stopped the rebalancing of our economy after a glorious fall bubble boom.  That means we won't get to spring and long-term growth again unless we allow the rebalancing and deleveraging to happen."
Hence, Harry Dent has major concerns with the governments of the world partaking in stimulus programs - they are directly fighting the natural and unavoidable deflationary "winter season" of the economic cycle.  Of the four major challenges that he sees coming over the next several decades, he lists #1 as "Unprecedented private and public debt - we must deleverage in the coming decade, against the determined efforts of banks and governments, or the debt will weigh us down for decades".  He looks at the total government debt (19.8 trillion), the total private debt (39.4 trillion), the foreign debt (2.3 trillion) and our unfunded liabilities (66 trillion) to arrive at $127,000,000,000 of debt, or 8.2 times the GDP.  This is the elephant in the room that cannot be ignored forever.

While Dent shares this concern of our debt with many other economists, primarily those he deridingly calls "gold bugs", this is where we start to see big differences.  Dent sees the dollar maintaining its value relative to other currencies, as he believes, "The lesson of the late 2008 meltdown was that the U.S. dollar is the safe haven."  He believes it is a myth that "The falling dollar is eroding our store of value and capacity to save".  Inflation is not a concern for him - it's as ridiculous as worrying about heavy snow in the middle of summer!  Dent predicts gold will continue the decline we've seen the last two years and eventually drop to $250/oz. by 2023.  With the demographic cycle and our mountain of debt as more powerful than any other economic factor, Harry Dent is predicting a deflationary depression from 2014 to 2019.  This will be when America falls off "the demographic cliff".

The Case for Inflation

Whereas Harry Dent sees economics as a byproduct of demographic factors, Peter Schiff adheres to the Austrian School of Economics, and next to Ron Paul, he is one of its most famous modern proponents.  Schiff had a head start in life in this regard, as he is the son of Irwin Schiff, a libertarian, economist, and famous tax protestor who testified before congress' committee on banking and currency to speak against the repeal of the gold reserve requirements for United States currency in 1968, 3 years before Nixon took us off the gold standard.  Irwin, at the age of 86, is currently serving a sentence for tax crimes and promoting his view that the United States government is applying the income tax incorrectly and unconstitutionally. Peter Schiff has spoken about his father's sentence, but I have also heard him tell stories of his father taking him to stores in the 60's as a boy to exchange dollars for pre-1965 coins that had 90% silver content.  Growing up, Irwin would also tell Peter and his brother stories that taught economic theory, which eventually came to be published as How an Economy Grows and Why it Doesn't.  In tribute to their father, Peter and his brother Andrew released a retold version of that story titled How an Economy Grows and Why it Crashes, which I think is one of the best introductions to economics ever written.

Hence, The Real Crash is a book written by someone with a solid background in economic theory.  When you hear him predict the housing bubble to a group of mortgage bankers in 2006 or hear him explain why the economic meltdown should have surprised no one at the Austrian Scholars Conference in 2009, he gives the same point-by-point, detailed analysis as he does in his book of how various interventions in the market have side effects that are easily predictable to someone with an understanding of how the free market works.  For Schiff, the solution is clear and consistent:
"We need to stop bailouts, government spending, government borrowing, and Federal Reserve manipulation of interest rates and debasement of the dollar.  We need to reduce government spending so we can offer real tax relief to the productive sector of our economy.  We need to repeal regulations, mandates, and subsidies that create moral hazard, lead to wasteful and inefficient allocation of resources, and artificially drive up the cost of doing business and hiring workers.  We need to let wages fall, allow people to pay down debt and start saving, and allow companies to make capital investments so that America can start making things again."
His proposed solutions aren't a silver bullet.  As he explains, this is like taking control of a car going 80 miles an hour and steering it into a ditch.  You might walk away with some injuries, but its better than crashing into a brick wall at 120 mph down the road.  But this is the only solution to keep us from continuing our habit of repeating the same mistakes over and over again.  In the 1990s we saw the Federal Reserve inject money into the economy that blew up a bubble in stocks, particularly dot-com companies.  When that bubble burst, instead of learning from that mistake, we allowed Greenspan to manipulate rates even lower, and combined with other government subsidies and programs, we inflated a bubble in housing and the financial institutions that were involved.  Just as Schiff predicted, we didn’t learn from that mistake either, and we compounded the problem with the Wall Street bailouts and government stimulus.  Without another bubble to inflate, we are setting ourselves up to destroy the dollar.  Schiff explains:
"Just as the housing bubble delayed the economic collapse for much of the last decade on the strength of imaginary wealth, the government bubble is propping us up now.  The pressure within the bubble will grow so great that the Federal Reserve will soon have only two options: (a) to finally contract the money supply and let interest rates spike - which will cause immensely more pain than if we had let this happen back in 2002 or 2008; or (b) just keep pumping dollars into the economy, causing hyperinflation and all the evils that come with it.

The politically easier choice will be the latter, wiping out the dollar through hyperinflation.  The grown-up choice will be the former, electing for some painful tightening - which will also entail the federal government admitting that it cannot fulfill all the promises it has made, and it cannot repay everything it owes.

In either case, we'll get the real crash."
Schiff is concerned about our 127 trillion debt and some of the other same economic indicators as Harry Dent, he just has faith that our government is going to make the same mistakes that they've been making the last few decades.  It's like watching a twilight zone fire department attempt to put out fire with gasoline.  It would be great if they'd admit their incompetency and try using water, but this is an institution that has been taught and trained to do things their way for decades.  So if you had to take a bet if the fire would continue to grow or get extinguished, knowing what you do about the people trying to put it out, where would you put your money?

The difference is two-fold, first the question of political expediency.  Can anyone imagine the government admitting we've made a horrible mistake, that social security and our other entitlement programs are bankrupt, and that we need to declare bankruptcy as a country and restructure our debts with our creditors?  No, with a 4 year term limit, any administration is going to continue business as usual and kick the can down the road for someone else to inherit.  The way Schiff sees it, we'll hear:
"Need to pay off the national debt?  Fine, just print more money, and pay it off with that money.
Need to pay for unsustainable entitlements like Medicare and Social Security?  Fine, just print more money, driving up nominal wages and thus tax revenue."
The second big difference between Dent and Schiff is to question what other governments will do when it's clear that the United States has neither the means no the ability to pay off its debts without massive inflation.  Dent argues that it doesn't matter, the dollar will not lose value because other countries are also inflating, and besides, 2008 taught him that the dollar is the save haven.  Schiff asks the question, will that dynamic last forever?
"As of 2010, 60 percent of foreign exchange reserves are in U.S. dollars.  That means, as a foreign country, you're willing to take dollars because you know some other country will be willing to take dollars.  That other country will take dollars because some third country will take dollars.  If this sounds familiar, its because we've seen it before.

In 1999, people were investing in dot-coms not because they thought these companies might make a profit, but because they thought someone else would be willing to buy the stock at an even higher price.

In 2006, people were buying houses not because they thought the house was worth that much, but because they thought they'd be able to flip it for more money to someone else.

This is only slightly different from a Ponzi scheme.  It all depends on the existence of a greater fool.  Eventually you run out of fools and the bubble pops."
So again, are we never going to run out of fools?  Will China continue to send us ships full of goods, only to return to their shores empty with nothing to show for it but more of our bonds?  Will they do this forever?  And if this won't last forever, what will happen then?  Schiff doesn't claim to be able to predict to the same level of accuracy as Harry Dent with respect to when events will happen.  He doesn't take the short term approach, but he has confidence in what will happen in the long term, and he's willing to ride out the temporary bumps in the road until we get to that destination.  It's not a destination he wants, because it's not a pretty picture:
"Unfortunately, the only way the Fed can keep rates artificially low as inflation rises is to create even more inflation.  Our creditors are only willing to lend us money at low rates because they believe inflation is not a problem, and that if it were to become one, the Fed would quickly extinguish it.  Once they discover otherwise, our creditors will refuse to lend.

So to keep rates down, the Fed will have to buy any bonds our creditors will refuse to roll over.  The problem is that the more money the Fed prints to pay off maturing bonds, the more inflation it must create to buy them.  This process feeds on itself.  Soon it's not just Treasuries the Fed has to buy, but all dollar-denominated debt.  No private buyers will purchase corporate or municipal bonds at rates far below the official inflation rate.  That is when its balance sheet really explodes.  Soon the inflationary fire threatens to burn the dollar and our entire economy to a cinder.  At that point the only choice is between hyperinflation and default.  This is the rock and the hard place the Fed will eventually be between."
Dent may have a point when it comes to the role of demographics in economic trends.  It is plausible that you can foresee when the economy will need more apartments vs McMansions vs retirement communities based on the years since the baby boomers peaked.  But to ignore the power of a government that will do anything to maintain its status of having the world's reserve currency or of the reckless nature of politicians that will do anything to stay in office is to pretend that the hyperinflations of Weimar Germany or Zimbabwe never occurred.  If the bankers are willing or forced to print endless amounts of money, then we will see inflation, demographics be damned.

Lost in Translation

Now that we've reviewed the cases for deflation and inflation from two leading experts that both predict a coming crisis during this supposed stimulus-induced recovery, let's take a step back and revisit our core definitions.  Recently the Austrians have been mocked and accused of making up their own definition for inflation out of thin air, but in actuality there has been a difference of opinion on this term for over 100 years, making meaningful discussion of this concept all the more difficult.

As Robert Murphy recently wrote, Ludwig von Mises and other proponents of the Austrian School of Economics refer to the object of inflation as the money supply itself, while other economists refer to inflation as a rise in the price of goods.  Specifically, Mises said the only rational definition of inflation would be "an increase in the quantity of money … that is not offset by a corresponding increase in the need for money."  This qualifier is important, because according to the Austrian school an increase in the supply of money and an increase in prices are not the same thing or even a necessary consequence of each other.  True, if you imagine a thought experiment where you magically double the supply of money that everyone possesses and hold everything else the same, then twice the number of dollars would be chasing the same amount of goods and services so you would see those prices increase.  But in the real world there are many factors that could drive prices down, including demographics and other consumer trends.  So all the Austrians can say is that logically, an increase in the supply of money will increase prices higher than they would otherwise be absent that increase in the money supply.  What would the prices be absent the inflation of the money supply?  It's impossible to say.  Maybe other factors would have driven prices down 10%, but due to the inflation of the money supply they only went down 5%.  In this case an inflation of the money supply didn't result in "prices rising" - so it's important to distinguish the two.

This qualifier is important considering some of the claims that Harry Dent makes when he makes the case for inflation being a good and necessary thing:
"All debt and financial asset bubbles are followed by deflation, not inflation or hyperinflation.  The core theory behind the hyperinflation view is that governments, by endlessly inflating, create inflation.  The argument is that this causes a debasing of the currency, robbing you of your purchasing power and standard of living.  This is simply not the case, and if you don't understand what actually causes inflation and why it is often not a bad thing, you will make bad investment decisions."
I was hoping for a well thought out rebuttal, but I came away disappointed:
"Since its invention in 1971, the ever-multiplying microchip has created a revolution in human communications.  The microchip's rapid evolution has also been a clear sign of progress and a harbinger of a higher standard of living.  So why would the multiplication of dollars not also be a sign of progress that similarly fosters a revolution in urbanization, a more complex and richer specialization of skills, and an improved standard of living?  We're not talking about the recent QE here.  We are talking about the story of economic history: more dollars per person and, more to the point, increasing urbanization that leads to rising affluence and the need for more dollars for transactions."
So according to Dent, as more people enter the work force, the increased specialization requires the need to pay people more money.  Through a mechanism that Dent doesn't identify, this need for money results in its creation, thus, inflation is natural and even welcome.  Schiff argues the opposite:
"For most of our country's history, the dollar gained value.  The dollar was worth 75 percent more in 1912 than it was worth in 1800.  You know those stories were your parents or grandparents tell about how they used to buy a sandwich and a fountain soda for a dime?  How everything was so much cheaper back in the day?

If you were around in 1900, for instance, the old folks didn't tell those sorts of stories.  What cost a dime in 1900 probably had cost fifteen cents in 1875, and twenty cents in 1800.

Of course, since 1912, the dollar has lost more than 95 percent of its value.  What cost a nickel in 1912 costs a dollar today. What cost $50 in 1912 costs $1,000 today."
Schiff goes onto explain the economic reasons that inflation is harmful:
"Inflation discourages savings and encourages consumption.  If you save your money for later, you know it won't be worth as much later.  That means you may as well spend it today before it loses its value.

Savings are the only way an economy can progress.  Only with savings does anyone have the capital or the leisure time to make machines, invent something new, or launch companies.  So by discouraging saving, steady inflation stultifies economic progress."
Dent uses the same rationale for explaining why inflation is good to make the case that the dollar hasn’t really lost value since 1913 since we are so much richer today.  Ironically, Dent writes:
"Are you better off than your great-granddaddy was? Indeed you are: after adjusting for inflation, wages are 7.1 times higher than in 1900, the very period of rising inflation and the supposedly falling "value" of the dollar.  Hence, it's not the "value" of the dollar but what your income in dollars will buy over time that counts."
The purchasing power of the dollar has dropped while real manufacturing wages have increased (according to government CPI).  So which is it, have we gotten richer or poorer than our grandparents?

Finally we come back to something that Schiff and Dent would agree on, the "value" of the dollar cannot only be expressed in nominal terms, but in relation to other items.  But while Dent points to the conveniences of modern times in proof that the "Purchasing Power of the U.S. Dollar" chart is misleading and wrong, Schiff has made the opposite case through real world examples.

In one broadcast, Schiff expounded on the statistic that in 1947 the average non-farm worker made $50 per week.  Translating this into "real money" (gold), that would be 1.4286 ounces of gold a week (at $35/oz.), which today would be $1,928.61 per week (at $1,350/oz.).  But back then people didn't pay income taxes, so instead of making the equivalent of $108,002 a year, assume 30% more from income tax and you arrive at $140,401 per year.

Now recall that today the average person makes $43,000 per year, and that person is probably a college graduate.  Now the mystery of how the average worker in 1947 with nothing but a high school degree could afford to support a wife and 5 kids in a house with a two car garage - he was making 3 times as much!

In another episode Schiff reminisces about the Brady Bunch and wonders how a modern day Brady Bunch could afford their live-in house keeper, Alice.  Again, we arrive at the same conclusion: back then Mike Brady, an architect, could afford a 4 bedroom house, a live-in house keeper, 6 kids, a wife that didn't have a job, and 2 cars.  That show wasn't based on science fiction - that is how the average American could live back then.

People can disagree on this point, but I don’t believe the proliferation of iPhones and iPads constitutes an improvement in the standard of living when it now takes two wage earners to put bread on the table instead of one.  In a free market economy we should expect falling prices and higher quality as the natural order of things, not higher prices.  Since everyone reading this has always lived in a world of rising prices due to the Federal Reserve creating artificially low interest rates and an expanding monetary base, this might be hard to imagine, but Schiff explains:
"Slow, steady deflation, though, is the natural state of things in an economy with sound, stable money.

Think about it this way: does creating a particular product or performing a particular service generally become easier or harder over time?  In most cases, it becomes easier: your computer becomes faster and the software gets better.  Manufacturing equipment improves.  Through practice, people figure out more efficient ways of doing the same thing.

So as widgets get easier to make, the cost of production goes down.  In a competitive market, this will bring the price of the widget down.  In other words, what we see with electronics would be the case with everything.
...
As long as you keep pace with the market, you can keep your pay steady, but prices will fall.  That way, you're getting richer."
Indeed, we should be getting richer.  Absent the government interferences described in The Real Crash, we should be enjoying all the material goods of modern technology while at the same time being able to work less and enjoy more leisure.  We should be working 10 hours per week and living in a Jetson's world, but instead our government seems intent on returning us to the world of the Flintstones.

Conclusion

Given the hero like status I confer to Peter Schiff it's hard to come off as objective.  That said, since I've been fearing inflation and preparing for the collapse year after year, I wanted to give Harry Dent the benefit of the doubt and let him make his case for deflation with an open mind.  After all, he shares many of the same concerns as other economists I respect, so maybe he is just seeing something that they're not.

Needless to say, I came away from his book very much unconvinced.  What I admire in people is consistency, and that is not something I find in Harry Dent.  While Dent claims to "espouse free-market capitalism as much as anyone", he goes on to call for a carbon-tax to "account for costs that the free market can't control", he supports government enforced savings programs to "combat our worst tendencies to not save", he says we need more government and more taxes to fund it because "Capitalism cannot excel in a libertarian society", and he supports a government-driven one-payer system for the most basic health care services because that brings "universal care and economies of scale and bargaining power to lower costs".  With a friend of free markets like that, who needs enemies?

Compare his recommendation of how to fix our healthcare system with Peter Schiff's analysis and the difference is striking.  Schiff devotes 34 pages to explaining how the government interventions that have been created over the last 50 years have caused our health-care system to be the mess that it is today.  It's almost like he's speaking directly to Dent when he writes:
"Health Care is different.
...
Often, politicians and journalists say it in order to justify government interference.  We can't just live this up to the market, because the market doesn't work here. Health care is too different.

Or people say "health care is different" as a way of explaining away all the problems regarding health care in our economy.  It's easier than trying to root out the causes.

But no, health care isn't that different.  The laws of supply and demand still apply.  If health care seems to operate outside the normal laws of economics, it's because our government treats it so differently."
From there Schiff goes on to explain the how the third-party-payer problem, the tax deduction on health care, over regulation of insurers, Obamacare, socialized medicine, the employer-based insurance system, malpractice reform, the FDA, and the licensing model for doctors all conspire to wreck our healthcare system one way or another.  He explains the history of each government intervention and logically traces how it has caused a problem.  That problem only leads to another "solution" by government intervention, which leads to another problem, until we get to the point that we're at today where a supposed supporter of free-markets like Harry Dent is endorsing a full-blown single-payer socialized healthcare system as the solution.

If there is something to be gained from Dent's book, I find some of the detailed investment advice interesting, such as when would be the best time to invest in apartments, starter homes, or retirement / vacation homes.  He believes that businesses that focus on health facilities, nursing homes, and assisted living care facilities will be needed for the next few decades - that makes sense.  But given his overall outlook on the future and his severe lack of solid economic theory, I'd take his advice only for short-term investments that I'm willing to lose.  When it comes to where I'm putting my money for the long-term, I'm unconcerned with The Demographic Cliff and I'm preparing for The Real Crash.

5/31/2014

A Libertarian Party Platform for Libertarians

I recently spent a weekend locked in an Indianapolis Hotel with 20 other libertarians from around the country.  We were either appointed by the Libertarian National Committee or sent as delegates from our state parties to create a report of recommended changes to the Libertarian Party Platform to be submitted to the delegates at the upcoming national convention.  Organized within the framework of Roberts Rules of Order and Parliamentary Procedure, we debated how libertarian principles, policy recommendations and marketing strategy should guide our party platform.  While serious points of contention revolved around grammar, style and the use of oxford commas, there were many fierce debates that got to the heart of what libertarianism is and isn't, putting our very name on the line.

I volunteered to be the representative for the Texas Libertarian Party not because I feel passionate about any particular planks I want to see changed in the current platform, but because I pretty much like it the way it is.  I've previously written on the dilemma that many principled libertarians face, which is whether or not to vote or otherwise engage in the political process.  The authors that contribute to the best-read libertarian website in the world seem to be almost unanimous in condemning political action, even within the LP.  I'm of the opinion that as long as the Libertarian Party does not misrepresent their core message to appeal to the masses and truly deserves the name "the party of principle" then the majority of the arguments against joining and supporting the LP don't hold water.

This gets to the heart of another topic on which I've written, whether the Libertarian Party should take a principled or a practical approach in the political process.  This foundational decision has many implications that don't always fall down the anarchist vs. minarchist party line.  What is the primary purpose of the Libertarian Party, to spread libertarianism or to get candidates elected?  Who is our target audience, libertarians or non-libertarians?  God help us, there are some that even disagree on what libertarianism is!  Only when those questions are answered do you have the framework for creating a cohesive and consistent Libertarian Party Platform - and when the delegates and leaders of the party are sharply divided on these issues we are setting ourselves up for some interesting debates in June.

What is Libertarianism?

George Orwell prophetically wrote on how language and the meaning of words can be used as a weapon in the political arena.  If you are able to influence culture enough to change or confuse the meaning of words you can thereby narrow the spectrum of allowable opinion and guide the masses without them ever realizing it.  One example of this phenomenon is the term liberal.  Thomas Jefferson's liberalism aligned to small governments, free markets, and natural rights while today's liberal supports big government, economic regulations, and privileges granted by "society".

Taking this lesson from history to heart, it is vitally important for the libertarian movement to not allow our brand to be misrepresented.  Without assigning motives to people I don't know, there are some trying to expand the term libertarianism to include things with which it has no concern, thereby diluting the core message into meaninglessness and creating contradictions where there should be none.

Quoting from a recent article by Laurence Vance on this very topic, "Libertarianism is a political philosophy concerned with the permissible use of force or violence."  But that can be said of all forms of government, as government is defined as a monopoly on the use of violence, and therefore the type of government you have guides how violence may be legally used.  Democracies adhere to majority rule, such that 51 people can vote to use violence against 49 others.  A Monarch can use violence against any of his subjects with impunity.  Under communist rule any individual can be aggressed upon if it benefits the commune in the eyes of the communist leadership.

Thus, Murray Rothbard defines libertarianism within this context:
“The only proper role of violence is to defend person and property against violence, that any use of violence that goes beyond such just defense is itself aggressive, unjust, and criminal.  Libertarianism, therefore, is a theory which states that everyone should be free of violent invasion, should be free to do as he sees fit except invade the person or property of another.” 
That is all libertarianism is about: when you can and cannot use violence or the threat of violence.  Because of this limitation some criticize libertarianism for not being what it is not and has not ever been: a comprehensive moral philosophy.  Libertarians are typically characterized as sexists, racists, bigots, homophobes and elitists because we do not believe in outlawing these types of behaviors.  Libertarianism says what you must not do, not what you should do.  We stand for the freedom of association, including the freedom not to associate.  We stand for the freedom of speech, including unpopular speech.  We stand for self-ownership, including the right to do things to your body that may be harmful.  Because of our principled stance to always protect individual liberty, even when liberty is used in ways some may disagree with, we are painted as endorsing these vices.  However, libertarians have a wide range of non-aggressive responses to vices.  Unfortunately, in this day of omnipotent government there are only two options for any given behavior, it should either be forced or forbidden, both carrying the threat of being locked in a cage or worse for disobedience to the state.

It is one thing to find this misunderstanding to be pervasive among the average voter, but it is far more serious and disappointing when people calling themselves libertarians display this same ignorance towards the most fundamental concepts of their professed ideology.  Sometimes it may be from lack of knowledge but at other times it is a deliberate misrepresentation.  At the Libertarian Platform Committee meeting suggestions were made to add and remove language to our platform planks to make them more appealing to the voters.  There is nothing wrong with being brief instead of wordy, using plain words instead of libertarian-insider words, and using proven salesmanship approaches - but only as long as you do not distort your message in the process.

One misguided idea that came up several times was to add qualifying terms in reference to who could and could not exercise certain rights.  For instance, plank 1.6 Self-Defense very boldly defends the right of individuals to own and use firearms in self-defense and correctly calls out our opposition to all laws that would infringe upon this right.  This is as libertarian as it gets - the right to own property, including firearms, is only limited by the duty not to infringe on the equal rights of others and any action to pre-emptively violate this right is itself an aggressive, unjust, and criminal action. Despite my best protests the committee voted to recommend a change in the current language from "individual" to "peaceful adult".  This might seem like a sensible substitution that doesn't materially change the plank, but let's explore the ramifications of this seemingly innocuous appeal to common-sense.

When we say that a right can only be exercised by a "peaceful adult" or use any other qualification it ceases to be a right and becomes a privilege.  The new language didn't say the use of firearms must be peaceful, that would be implied by the term "self-defense".  It described the type of individual who may exercise this right without prior-restraint through law.  Now we must define what is "peaceful" and what makes someone an "adult".  We are a political party concerned with the use of violence, so when we qualify a right in our capacity as libertarians we are not strictly speaking of the criteria we would impose in our private lives.  We're not simply saying, "it's a good idea for gun owners to have a history of being peaceful and mature enough to know the impacts of their decisions with firearms."  We are saying that only "peaceful adults" may exercise the "right" to gun-ownership, and others will be violently prevented from doing so.  When we beg the question of what is peaceful and don’t define it ourselves we are implying that government will define the answer - and today that answer is non-felons. When scholars report that the average person commits 3 felonies a day, tens of thousands of which are non-violent, we end up nullifying our entire plank with those two simple adjectives.  But even if we narrow our lens to felons with a history of violence, I believe that once they are freed from their cages they regain their right to own firearms and use them in self-defense.  In other words, I think that the current system whereby a mistake when you're 18 means you can't defend yourself or your family for the rest of your life is unjust and patently un-libertarian.  When you don't defend the rights of the marginal groups of society you strip those rights from everyone.  If this change is adopted it amounts to us saying that we defend the right of gun-ownership for some individuals, as long as the government says it's OK.  That is hardly a stance worthy of the name "the party of principle".


What is the Libertarian Party?

When all the libertarians in the LP understand the implications of our principles and are willing to defend them, even the unpopular ones, we still have some big questions to answer in the realm of tactics and strategy.  How do we market ourselves?  Who do we market to?  What are our goals?  These questions have very real impacts to how one constructs a party platform.

I believe that our primary goal is to spread libertarianism.  Unlike other libertarian groups that share this same goal, we explicitly use the political process, the political party, and candidates for political office as the channels for our message.  Every voting season there are millions of dollars worth of free publicity in newspapers, radio, and television.  Considering that libertarians are characterized for annoyingly pushing their message to unreceptive hosts at social gatherings, we must take advantage of every opportunity when we have an invitation to talk about libertarianism.  Journalists and special interest groups will invite libertarian candidates to speak to them and explain what libertarianism is and how it would solve our problems - and the only cost for this unprecedented opportunity is the time to fill out some paper work!

With our primary goal of spreading libertarianism and our means of the political process established our secondary goals naturally follow.  First, we need brave souls willing to run for office.  Candidates can spread libertarianism by speaking to voter groups, being interviewed by the press, and participating in debates.  In order to magnify the candidate's impact libertarian activists can help with their time and money.  This can take the form of block-walking a voting district, helping with a phone banking initiative, writing letters to the editor, or merely talking to friends and co-workers about why they are voting for the libertarian candidate when that question naturally arises.  For those that are short on time to donate, money can be used to buy advertising, mailers, yard signs, voter lists, and automated calling services.  Unfortunately, both time and money are needed in many states to collect signatures and fight lawsuits to get libertarians on the ballet, but this is worthwhile because it is a prerequisite to our means of engaging in the political process to achieve our goal of spreading libertarianism.

In order for the LP to do justice to the term libertarianism this prioritization of goals must be adhered to.  Unfortunately, a sizable number disagree with this approach.  During the Platform Committee meeting one member stated "I don't care about educating people, I want to get elected so I can make a difference."  Another member explicitly stated that the #1 goal of the LP should be to get candidates elected and pointed to the Indiana LP's "purpose and principles" as a reference, which states, "The mission of the Libertarian Party is to move public policy in a libertarian direction by electing candidates of the Libertarian Party to public office."

Let's consider the implication of this reversal of priority.  If the primary mission is to get candidates elected then any secondary goals must necessarily align with the primary goal or be sacrificed, by definition.  So if the voting population is not ready to accept the message of libertarianism, if a candidate who promotes a libertarian message cannot win a majority vote, then the candidate's message must be "softened" to increase the odds of electability.  But now we find ourselves indistinguishable from candidates of the two major parties - power hungry office-seekers who have no core beliefs but will modify their positions at the drop of a hat based on the latest polls.

Maybe that's a little harsh, but it is the logical implication of setting the primary goal as "winning".  As the saying goes, if we sacrifice our message we are more likely to lose twice, first because we won't win the election and second because we won't get our message out.

But let's suppose we do elect candidates with this "sneak attack" method.  Assume we have candidates who will adhere to their libertarian principles once in office but will water down their message when electioneering in order to trick the majority into giving them their vote.  In this scenario the elected closet-libertarians reveal their true intentions after taking office, after which they immediately roll back government excess and increase liberty in their district, in other words, "making a difference".  Based on the prosperity, peace, and other social goods that libertarianism provides, the voters then reflect that libertarianism is pretty great after all and are converted based on the experience of libertarianism, rather than by rhetoric and logic in the abstract.

In the best case scenario we can see this is a short term victory.  If we gain libertarians that like the utilitarian benefits of liberty but do not understand how the principles of self-ownership and non-aggression are the logical and economic pre-requisites, then have we really created an ally that's in for the long haul?  What happens when the opposing party promises more goodies?  Without the foundational understanding and truly creating a change in thinking and culture the best we could hope for is a few years of material improvement before regressing back to our current predicament.

But that thought experiment assumed something that would never happen in the first place.  A "liberty friendly" message that avoids the logical consequences of libertarianism for reasons of political expediency will never win under the banner of the Libertarian Party.  Wayne Alan Root was the most visible proponent of this "big tent" strategy, where he openly called for only appealing to disgruntled republicans and avoiding our beliefs that would not align with this voter block.  I attended Freedom Summit in 2009 where Judge John Buttrick debated this strategy head-on and pointed out its flaws.

Judge Buttrick's most compelling argument appealed to common sense and asked us to put ourselves in the position of a liberty-friendly disgruntled-republican.  Given all the options for spending one's time and energy, in what vehicle will such a person get the greatest returns for their activism buck?  Will they go to a party that fights to get more than 1% of the vote in a Presidential election and hasn't earned an electoral vote since 1972? Clearly not.  They will join Ron Paul and work to reform the Republican Party from the inside.

Making the primary goal of the LP to "get candidates elected" is a death-sentence for our party.  Not only will it cause us to fail in what our mission should be, to spread our message and increase the number of libertarians, but it will also never be successful in getting candidates elected by misleading the public into giving us their vote.  As Lew Rockwell pointed out in his essay what libertarianism is and isn't, "if we expect to trick people into becoming libertarians, we will fail."  Instead of trying to appeal to the masses we should stick to our principles, even the unpopular ones.  This leads me to a novel idea: the Libertarian Party should focus on libertarians.

Guiding Principles for a Libertarian Party Platform

Some believe libertarianism should include things that don't pertain to the permissible use of violence but fall in the category of fairness and egalitarianism.  A sizable number of LP leaders believe the primary goal of the Libertarian Party is to get candidates elected so we can pass bills and "get things done".  Both of these beliefs directly impact how one approaches what the LP party platform should contain, how it should be written, and who it should cater to.  For those that share my position about libertarianism and the Libertarian Party, I offer the following principles that drove my thought process when serving on the LP platform committee and will guide my voting at the convention this June.

Platform planks should logically flow from self-ownership and non-aggression.  Why do we oppose the war on drugs?  For the same reason we oppose taxation.  It's the same reason we support freedom of speech, the right to contract, and the right to associate: self-ownership and non-aggression.  There are plenty of causes, beliefs, and opinions that libertarians hold in their private lives but if they do not pertain to the use of violence in society they should be left out of our platform.  Yes, individual libertarians may believe that it is moral to donate to charity, offer fair wages, and operate without discrimination, but unless we are opposing government violence from forcing us to do these things we have nothing to say in our capacity as libertarians concerning what individuals should do in their private lives.

Platform planks should speak to timeless principles, not to specific policies or bills.  We are against aggression, and therefore theft, and therefore taxation.  We are not for "the fair tax", the "50 payer tax", excise taxes, or other taxes that would be less bad than what we currently have.  As individuals or even as candidates we might support these half-measures to ease our suffering.  However, we'd support them not in our capacity as libertarians, but as victims of current aggression that we would like to be relieved of, if even partially.  We are in the position of a concentration camp victim that would gladly take the opportunity to sign up for work under the supervision of a sympathetic guard instead of a psychopathic one known for his cruelty.  In this way we are not confusing the libertarian message by claiming that we are for "low taxes" when libertarianism is logically opposed to all forms of taxation.

Platform planks may be aligned with the Constitution, but that is not why we support them.  We are not the Constitution Party, we are the Libertarian Party.  It is one thing to say "Libertarians support the rights recognized by the Fourth Amendment", it is another to say that we support the Constitution unilaterally or to imply that we support a right because it is in the Constitution.  We don't need a piece of paper to guide our decisions, we have something far more powerful.

Abide by the Dallas Accord.  Frankly, non-aggression and government are polar opposites.  The only permissible "government" that would be logically consistent with libertarian principles is one where all services would be paid for voluntarily and any violence executed would be defensive in nature.  Of course, one could argue that in that case you are no longer describing governments but private businesses that are in the defense and arbitration industry.  It seems a fair compromise to ignore this bit of double-think in exchange for remaining silent on the need or "legitimate purpose" of governments and always allowing for an interpretation of no government without saying so explicitly.  Not everyone is ready to go full-blown an-cap so we should welcome the minarchists by allowing for the fantasy of the non-coercive "government".  At the same time, we should not turn away our most logically-consistent and principled demographic, the anarchists.

Golden rule: don't make candidates oppose the platform.  Some candidates might only support a bill that would repeal a tax completely, some might vote for one that would reduce taxation, but both operate under the same principle that taxation is inherently immoral and un-libertarian.  Some candidates might rest easy with a night-watchman state and others may not be satisfied until we live in our anarcho-capitalist paradise, but both can agree on the maximum role of government, because technically, a maximum without a minimum can give us a role of nothing.  The goal is to give libertarians a platform that teaches by example how our principles of self-ownership and non-aggression logically guide us to all of our policy positions, and from there give candidates the freedom to get more specific within the guidelines we've set.  Because the principles of liberty are timeless, an ideal platform would be as relevant and powerful 100 years from now as today.

Conclusion

The positions I've set forth would cause some to label me a "purist".  While I proudly wear that badge of honor, there is unfortunately some truth to the negative connotation that comes with it.  Many of the "purists" lack basic tact and social skills to such an extent that it seems they might actually enjoy arguing with people just for the sake of disagreeing.  If talking to a democrat they'll talk about gun rights, if talking to a republican they'll bring up gay marriage.  Instead of finding common ground and educating, they will latch on to the biggest point of contention and revel in being marginalized.

It doesn't have to be this way.  This is not a black or white issue.  It is a false choice between upholding a pure and consistent libertarian message and adhering to basic social etiquette.  We can utilize proven persuasion and marketing skills when speaking to the public without watering down our message and confusing our brand.

Having spent two years as a door to door salesman, and currently working in the consulting field, I have a few suggestions that apply to all areas of sales, including selling the message of libertarianism.

Instead of talking, listen.  Try to do twice as much listening as talking.  Then three times as much, then four.  The harder this is for you, the more important it is to work on it.  If your goal is truly to wake up minds and change people's perspective, you first need to make them feel understood before they will actually hear your feedback.

Speak their language.  In other words, be adaptive to their interests.  It's perfectly alright to talk about "fiscally conservative" issues with republicans and "socially tolerant" issues with democrats.  The opportunity to educate comes with first finding that common ground and using that as an opportunity to explain how the principles of self-ownership and non-aggression align with their beliefs.

People hate to be sold, but they love to buy.  This has a lot to do with listening instead of talking.  Don’t push your ideas on people.  You may be 100% correct, but if the other person isn't listening to you because they feel like they are being sold something against their will then what good does it do?.  Ask questions, then listen to what the other person has to say.  What do they think about a certain problem that they are passionate about?  Why do they think it occurs?  What do they think should be done about it?  If the answer is "there should be a law against it" then the answer isn't to call them a statist.  Ultimately this person has the same end goals as everyone else - peace, prosperity and a higher standard of living.  When you find the opportunity to answer a question and explain how libertarian principles result in these social goods, you have created the condition where they might just want to buy what you have to sell.

Ultimately, the biggest lesson I've learned in my activism career is that the only person I can educate is myself.  Oftentimes when someone "wakes up" to the libertarian message they are so excited by this new world view that nothing seems more important than sharing this epiphany with everyone, all the time. This urge, while commendable, should be resisted.  The first step is to educate yourself, not just on your pet issue that aligns with libertarianism, but on all of the hard cases too.  Walter Block's Defending the Undefendable is a classic libertarian book that takes up this challenge head-on.  Of course, Murray Rothbard's For a New Liberty and The Ethics of Liberty are must-reads for setting the foundation and exploring the full spectrum of libertarianism.  When hard topics like environmental protection and child-labor comes up, we have the shoulders of intellectual giants at our disposal, and we would be foolish not to use them.
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