I know you are, but what am I?
Here's a pretty old post from the blog archives of Geekery Today; it was written about 14 years ago, in 2010, on the World Wide Web.
Here’s Frank Rich, beating the same dead horse in the New York Times (2010-02-13) that he’s been beating for the past administration and a half:
Instead of praising bailed-out bankers, the president might have more profitably instructed his press secretary to drop the lame Palin jokes and dismantle the disinformation campaign her speech delivered to a national audience. Palin, unlike Obama, put herself on the side of the angels, railing against Wall Street's bonuses and bailout, even though she and John McCain had supported TARP during the campaign.Indeed she did; but then, so did Senator Barack Obama; oops. In fact, he voted for the damned thing. Which would tend to make any attempts by the Obamarchy to condemn Sarah Palin for supporting it rather, well, awkward.–Frank Rich, New York Times (2010-02-13): Palin’s Cunning Sleight of Hand
Which is hardly to say that nobody should come out and blast Sarah Palin for supporting TARP. The fact that both political parties were in absolute agreement on such an obviously horrible screwjob and overt act of plunder as 2008’s Endangered Capitalists Act is no argument that supporting TARP was somehow O.K., or that the politicians who supported it deserve anything other than contempt and condemnation. If the Obamarchy were to come out blasting Sarah Palin for her support for TARP, their own history would be no argument against the point. But be that as it may, I certainly don’t know why Frank Rich expects Barack Obama or any other prominent Democrat to come out against their own damned program.
If you want an alternative, you need to look outside of the political parties and the interlocking Beltway consensus that they have constructed. It’s not going to come from Sarah Palin, to be sure, but if you’re expecting it to come from a Democrat, you’re going to stay disappointed. The most you’re ever going to get out of such a constrained debate is a massive game of “I know you are, but what am I?”
As for those of us who both Republicans and Democrats consider small enough to fail, the disgust and anger with Obama and the Democratic Congress hardly means that we have been seduced by the devious pseudopopulist wiles of Sarah Palin; all it means is that
I am not altogether on anybody’s side, because nobody is altogether on my side, if you undertand me …Or, to come around to it, if we are ever going to get anywhere, we — you and me and the rest of us, the vast majority who have nothing to do with the Beltway and its idiotic shouting matches — must be on each other’s sides, and learn to do for ourselves, without these grandstanding jackasses. There’s no winner to pick in that horse race. And as long as Frank Rich believes there is, he’s going to continue putting out silly apologetics for a party that has trashed everything he supposedly cares about over and over again.
Follow
I don’t disagree with the substance of your piece. But I do think Obama’s bailout-support has another side.
In town hall meetings in March ’09, he framed the issue this way:
and also:
Is that just grandstanding? Maybe. But I don’t mind the loudest microphone in the world associating big banks with terrorists.
Whether or not monopolized money should blow up is another issue. I think Hayek’s notion of “concurrent” currency implies that monopolized money be displaced — not destroyed.
Discussed at www.echoesandmirrors.com /#
Echoes and Mirrors » Daily Links:
Obama’s a deep cover Hayekian?
Who knew?
MBH, I think this provides a more appropriate explanatory context for Obama’s vote to bail out the banking cartel.
You may notice that 3 of his top 10 campaign contributors were the biggest of the big bankers: Goldman Sachs (who more or less supervised the whole bail out scheme of which they themselves were a huge beneficiary), Citigroup and JP Morgan Chase.
Bob, I don’t think it’s that simple. The bailout was not primarily designed to pad pockets or to pad falls — even though much of it was (ab)used for those purposes.
As I understand it, the banking cartel cleared the risks of default from their books in order to indict the entire financial system in the event that X number of people became unable to make their mortgage payments. As that number began to approach X, Treasury was faced with the possibility that — within a relatively short time-frame — the value of homes could half itself along with all other goods and services which hinged on how people perceived their net worth through home ownership. 50% deflation of an entire economy — within a relatively short time-frame — was not an option. The stated design of the bailout was to ensure investors that everyone wouldn’t default at the same time.
I’m sorry Bob but I don’t see how dramatic deflation would have put us in a better position to institute concurrent currency. If people perceive destruction — whether that’s really the case or not — the market will reflect destruction. That’s a deep embracement of Hayek.
MBH:
Well, good. Overvalued goods should be revalued to better reflect relative scarcities in the real economy. And there’s no particular reason why the housing market should be rigged or politically goosed so as to systemically favor people with real estate to sell over the people who are trying to buy it.
Of course it was. Why wouldn’t it be?
It’s not an option that the U.S. Department of the Treasury would ever contemplate, because it would certainly hurt the privileged interests that the U.S. Department of the Treasury was created to profit and protect. But since when did the limits of their political imagination become a good guide to how the world actually works?
The goal isn’t to figure out the best possible way to institute concurrent currency. The goal is to get Goldman Sachs’s hands out of working people’s pockets, and to stop using overt acts of violence and plunder to prop up the corporate capitalist status quo.
If concurrent currencies emerge under conditions of freedom, great. If not, great. Either way, we can be relatively confident that people got more or less the kind of currency that they wanted.
Rad Geek:
Agreed.
You’re right that there were other options. But I’m not convinced that the people were prepared for them at that particular point in time.
How do you sculpt freedom without concurrent currency?
Let me be more precise.
(1) Every possible world operates through at least one form of currency.
(2) All possible worlds could operate through the same form of currency.
NOT (3) The gold standard will necessarily reveal that form.
I don’t think we necessarily know what that form is. I’d think it’s actually the quality of information. But whatever it is, we’d have to use trial-and-error experiments to find out. How do you conduct trial-and-error experiments without concurrent currencies?
MBH,
So?
I’m not concerned about I’m concerned about people. Not as a politicized mass contemplating policies, but as human individuals facing the violence of the state and the banditry of bailout capitalism.
I’m not trying to freedom. Freedom is a social relationship; I am working with other people, not working on raw materials.
But, anyway, I also think you’re underestimating how much most people opposed the bail-outs and to TARP in particular. Seems to me that I talked with a lot of people back in 2008 who were disgusted and angry about it, and wanted alternatives. What happened is not that people It’s that the policy apparatus considered it out of bounds, and effective opposition was quickly swallowed and stifled by bipartisan power politics, in the midst of a stupid government election.
As for concurrent currencies, the simple answer to your question is that having multiple currencies is not a necessary condition of freedom. Blocking any form of coercion in the selection of currencies is. I happen to think, for reasons that aren’t worth elaborating, that an uncoerced market would tend to produce a fairly messy variety of different currencies. I also think that for a couple of specific strategic purposes — specifically, tax evasion, and economic self-sustainability outside of corporate-capitalist wage labor — promoting multiple alternative forms of money may be useful in getting us closer to an uncoerced market than we are right now. But I don’t think that’s something you can determine apriori. (There are conceivable, praxeologically coherent markets in which everyone uses a single currency; I just don’t think, as a matter of thymology, that it would work out like that under common present conditions.) And I don’t think it’s either a sufficient condition or a necessary one for economic freedom. I certainly don’t think that it ought to lead us around by the nose when we try to work out what to say about state violence or economic exploitation.
Rad Geek,
I don’t mean to imply otherwise.
I see. So concurrent currencies is not necessary but not-ruling-them-out is. I can live with that.
Getting any kind of competing underground money off the ground is a tricky business due to the legal tender laws that compel people under threat of force to accept the FedRes greenbacks in exchange for their labor and/or goods. It would basically take a cadre of the ideologically hardcore willing to tolerate some steep costs to insist on using the black market money. Surely not impossible, but it is a monumental task.
You’ll never see legal tender laws loosened or liberalized, much less repealed. Never. It’s the linchpin in the whole corporate-state financial monopoly racket.
But the Feds’ sheer use of pure muscle is even more of a hindrance than the legal tender laws. Take the whole Liberty Dollar operation–they’ve been hassled out of business by the Federal goons even though the Liberty Dollar was initially declared legal by Federal Reserve officials.
(So why, oh why, do they insist on using the U.S. flag as part of their web site’s logo????)
Bob,
I agree with you that the only way that alternative currencies will emerge is by counter-economic methods, not by any sort of legal reform. And I agree that, among possible counter-economic enterprises, this one is fairly tough, perhaps even impossible under present circumstances. But I think my reasons for thinking this may be different from yours. It’s true that the Feds have openly attacked a couple of competing currency providers (Liberty Dollar and e-Gold, in particular). But most alternative, non-dollar-denominated currency systems never face that risk of attack, or at least that kind of attack (the FBI never came after Ithaca Hours, or after most of the people promoting the use of gold and silver as a form of currency, for that matter; the assault on the Liberty Dollar was a rather unusual case). The bigger problem that most of these systems face are just problems of path dependence, and of Gresham’s Law — the fact is that as long as most people’s main bills are dollar-denominated and can be paid with US$ as easily as with the alternative currency, most people either won’t want to take potential alternative currencies (since your landlord won’t accept Hours), or having taken them, don’t want to spend them (even if your creditor does take goldgrams, if she takes dollars too, you’re usually better off ditching the dollars and holding the gold).
It’s not just that the government is going to bash you on the head; it’s that, for most people right now, countereconomic money just doesn’t pay. Until it does, it is only going to be used by people who are willing to pay additional costs in order to have the consumer good of doing something sexy or adventurous from a radical standpoint. (Which is part of the reason why the kind of counter-economic projects I emphasize so often have to do with just getting out of the cash nexus, rather than creating an alternative cash nexus. I see the latter as only being practicable a ways down the road. My own view is that there’s nothing at all wrong with alternative forms of money, and they may even be useful, especially in crisis situations, but that the widespread success of countereconomic money is not likely to happen until a much larger portion of economic activity is countereconomic in nature. Workable money emerges out of living market economies, not out of preconceived schemes, so the best thing to do is generally going to be to simply work to grow the countereconomy. Once it becomes plausible to talk about paying food, housing, utilities, entertainment, and most of your other everyday needs through a vigorous market of countereconomic providers, you’ll begin to see real demand for countereconomic currencies (just for the practical benefits for large-scale tax evasion, if nothing else). Once there is a demand strong enough to overcome the difficulties, widespread use of countereconomic money will start to emerge. For right now, though, I think the prospect is relatively remote.
I thought Liberty Dollar was a fruadulent operation.
scineram,
Well, I think that the Liberty Dollar operation was a scam, but not a fraud. The Federales’ case against von NotHaus is generally based on the numerical dollar values that are stamped on the rounds; this is held, first, to be counterfeiting U.S. silver coins (), and, second, to be fraudulent, in the sense that the Liberty Dollar stamped on the coins, which Liberty Dollar is telling people to use as a basis for calculating their exchange value, are wildly higher than the value of the silver contained in them. At the time they were shut down, they had moved the — the printed face value — for a 1oz silver round up to $50, and were selling these in bulk for about $36. At the time, silver was trading around US$15-$18 an ounce, so if you bought direct from Liberty Dollar, you were paying about a 100% premium over spot, and if you were actually accepting the Liberty Dollar at the value they suggested, you’d be giving up US$50 worth of goods for silver worth about 1/3 of what you were giving up.
Since I oppose both government money and IP monopolies, I think the first charge is obviously tyrannical; the U.S. government has no right to a monopoly over producing stuff that looks kinda sorta like U.S. currency. As for the fraud claim, I think it’s unfounded. People who would accept a silver round in payment can generally be reasonably expected to know roughly how much silver is worth, and to decide their prices accordingly, and if they do not, that’s sad, but losing money through ignorant pricing is one of the risks of doing business. There may be limited individual cases in which somebody who bought a Liberty Dollar from von NotHaus then turned around and used it for a purpose that was genuinely fraudulent (although I think the burden of proof here would be much higher than simply showing they spent it and got US$50 of goods in return). But if so, that’s an individual case of fraud committed by a third party; it’s not something that von NotHaus ought to be prosecuted for. (For what it’s worth, from what I can tell, the main people within the federal government pushing for the prosecution were not Secret Service, who typically handle counterfeiting, or the FBI, who typically handle fraud, but rather the U.S. Mint, which produces and sells Silver Eagles, and hence is a direct competitor with von NotHaus.)
That said, a 100% (or 300%!) markup over spot is absolutely ridiculous. I think von NotHaus’s scheme was a transparent attempt to exploit people’s political enthusiasm for alternative currencies in order to bilk them (or, worse, encouraging middle-men to exploit third parties’ political enthusiasm to bilk them out of even more), and that anybody who wants to use metal-based rounds as a currency would be much better off buying bullion from a reputable dealer at as small a premium over spot price as possible. (And, as a general thing, I think it’s idiotic to try to tie metal coins to something like a US$ monetary value. That value fluctuates all the time, because the US$ fluctuates all the time. If you want to measure out the value of a silver round, measure it out in ounces of silver — 1oz of silver is what it is, and not something else.
So I don’t think von NotHaus ought to be prosecuted. But I do think that honest countereconomists ought to treat him like you treat psychic hotlines, and guys selling on late-night teevee.