By John Ryskamp, an attorney and author of The Eminent Domain Revolt
Why, in their article on Latvia’s austerity budget, are Marshall Auerback and Robert Parenteau giving Latvia credit for warm, fuzzy feelings? Especially in the context of Draconian cuts? It’s because Auerback and Parenteau don’t know what they want—their emotions are not grounded in any articulated policies. So they sound friendly. But are they friendly?
Let’s take a look. Maybe they just haven’t got their terms straight. For example, they say: “Mainstream economics insists that one path to full employment is via lower wages.” No, that’s not mainstream economics—that’s police state economics. That’s simply liquidation. They seem blithely unaware that since the power structure in America decided the suburbanization binge was over—that our suburban cow had ceased to be a profit center and had turned into a cash guzzler—America is no longer a paying proposition. So power is taking its flunkey, Uncle Sam, out of government.
That’s liquidation: power is withdrawing government from American society—and right on cue, the rest of the world is following suit, including Latvia.
Memories are short—and sometimes, even truncated. Just because World War II cut short Mellonesque liquidation, don’t for a minute buy the argument that somehow it wasn’t still policy right through the Roosevelt Administration—or that it isn’t always waiting in the wings, asserting itself all the time against countervailing forces (we shall return to those forces).
Liquidation is what is going on in Latvia. There is no attempt to achieve full employment or any other level of employment. Check out liquidation’s repertoire of techniques:
3. currency race to the bottom gambits
4. credit contraction
5. induced supply chain collapse
and that’s just a very few of them—including, of course, shrinking the budget. The problem is that we don’t have a SINGLE academic study of liquidation as a sociopathology. When and why is each technique picked up and put down by liquidation? We just don’t know. Indeed, according to a supply chain management professor in the UK, to whom I put this question, there is no academic study of supply chain deterioration.
Power goes to power. Power is the assumption AND deduction of power. Power is the means AND the end of power. So Andrew Mellon would have had us believe, and when the going gets tough guess what? We believe it. They seem to have swallowed it in Latvia, and in the United States. I see no evidence of tax strikes, uprisings or any organization revolutionary movement, calling liquidation what it is. The protests are as vague and helpless as the implied protests of Auerback and Parenteau. We must toughen our minds.
Look what Auerback and Parenteau say is the motive of the powerful in Latvia (and their superiors elsewhere). They say the policy of power is to “internally deflate.” This is imprecise. Latvia is liquidating, but also somehow the policy is to maintain full employment. Huh? For them, Latvia is acting “under the mistaken assumption that the [currency peg] was inviolable,” and then they go on to cite the numerous problems with a currency peg.
But it’s not a problem if liquidation is your goal, and looting the population is one way you go about it. I don’t think the powerful in Latvia were under any assumption, mistaken or otherwise, about a currency peg. It is a liquidation technique, a technique for looting—it is not tenable to believe it is invoked without knowing why it exists and what it does.
They call a “hidden assumption”—unknown to the powers in Latvia which provoked collapsing labor costs and prices—the idea that “a debt deflation spiral does not do the host country in as domestic private incomes are deflated.” It is not credible that anyone in a position to invoke a collapse in income, demand and prices, does not know the point of these gambits. It is liquidation. Nor do Auerback and Parenteau show any evidence that the powerful in Latvia share their concerns and are simply naïve, or wrongheaded.
Look at the other thoughts they put in the heads of the powerful in Latvia: “Policy makers have tied both their hands and their feet behind their backs so that markets could work their self-adjusting magic.” Where is the evidence that the powerful in Latvia believe there is such a thing as a market, much less that it is self-adjusting? There is none. Indeed, all the evidence Auerback and Parenteau put forward is that the powerful in Latvia are putting forward all the liquidationist tricks put forward under any police state, Mussolini, Hitler, Stalin—you name it.
There is nothing magical, and no mystery, about a police state. What is mysterious is constantly imputing benign motives to people when the evidence shows they are carrying out police state acts.
Here’s another one: “In each of these nations, if the private sector is retrenching already, and the public sector tries to retrench on top of that, unless a massive swing in foreign trade can be accomplished, policy makers are unwittingly inviting falling private nominal incomes and private debt distress into the picture as they reverse fiscal stimulus.” Perhaps the problem with this notion is that Auerback and Parenteau regard as stimulus, bailing out bankrupt Ponzi schemes. Co-conspiring is stimulus? A new definition of the word “stimulus,” to quote the guy in Rules of the Game. But then, I guess if you believe it isn’t, then the logical conclusion is that those who promote “stimulus” are capable of doing things “unwittingly.”
In short, Auerback and Parenteau impute good faith where all the evidence shows there is only liquidation. Why? Because they’re soft on rights. Almost everyone else is, too. The day we gave the political system near absolute power over facts (we did it here in 1937 with West Coast Hotel v. Parrish), and thereby denied ourselves any rights, we let the political system define all the terms. In return for a middle class existence, we surrendered our right to find out the facts. It’s called “health and welfare.” We let the political system decide that. We are not allowed to intervene as individuals.
So we haven’t really inquired into the facts, and we’ve sort of lost the ability to inquire into the facts. Auerback and Parenteau are examples of this. It sounds like their approach tolerates “some” liquidation, “some” level of unemployment. They don’t really understand that the countervailing force to power, is rights. For example, the authors of the U.S. Constitution see only two forces. They see the police state (which wanted to hang them all), and important facts.
Important facts are unchanging facts of human experience, facts which history has demonstrated, are robust and resilient in the face of attempts to affect them. For the Founders, these facts included protected speech. For us—or at any rate, for those of us who have persisted in factual investigations—these facts also include housing, liberty, maintenance, education and medical care.
When important facts are defended, power weakens; when important facts are not defended, power strengthens. That’s the sum total of the Constitution. How can you defend important facts against assault, when you can’t provide the evidence that they are important, because you don’t know that the issue is importance?
Police states know perfectly what important facts are—and they hate them. Does that put you, reader, in the crosshairs? Gee, d’ya think?
It would clarify the thinking of Auerback and Parenteau, and clarify our response to what they write, if they could tell us with regard to two facts they consider so important in their article—income and employment—whether they think those are important facts as defined above.
I think they are indicia or aspects of maintenance, and I think maintenance turns back attacks by interrelating maintenance with income and employment—and also with housing! And also with protected speech! The maintenance of important facts—which, according to this analysis, is what the law does, and only what it does—is a complex, ongoing venture which requires vigilance—political, and intellectual and observational vigilance.
If you practice this vigilance, you really see what Latvia is doing, even according to the generous (naïve?) interpretation of Auerback and Parenteau. It is saying that income and employment are goals, not facts. It is saying that income is maintained by destroying income, and employment is maintained by destroying income. In short, complete nonsense. The evidence shows that income and employment ARE facts, are important facts, not goals, and not policy.
This is why I say that the only response to liquidation, is individually enforceable rights. And that’s why I wrote the New Bill of Rights. It says:
No individual shall be involuntarily deprived of liberty;
No individual shall be involuntarily deprived of housing;
No individual shall be involuntarily deprived of maintenance;
No individual shall be involuntarily deprived of medical care;
No individual shall be involuntarily deprived of education.
If this was the law in Latvia, could the cuts described by Auerback and Parenteau, occur? No.
Is this a laundry list of worthy goals, a grab bag of ideals? No. It is the progress we have made—exercising the individually enforceable rights we have—toward investigating the facts of human experience. We have pretty conclusively demonstrated, with regard to the facts above, that they are important facts.
You only have to understand the issue, to find that this process of evaluation is continually going on. For example, is property an important fact. It may interest you to know that the investigation is inconclusive so far. Also, we are revisiting the settled principle that an exercise of religion is an important fact. Who knew?
If you want to see a perfect example of this investigation going on with respect to a fact—from an initial point of view that it should be left to politics, to a point of view that individuals have control over it—look at the new right to education in the state of New Jersey. I suggest you go to www.edlawcenter.org, to understand the exacting—but exactly vital—process we have to go through, in order to fight liquidation.