Does The Bell Toll For The Fed?

Last week, Federal Reserve Chair Janet Yellen hinted that the Federal Reserve Board will increase interest rates at the board’s December meeting. The positive jobs report that was released following Yellen’s remarks caused many observers to say that the Federal Reserve’s first interest rate increase in almost a decade is practically inevitable.

However, there are several reasons to doubt that the Fed will increase rates anytime in the near future. One reason is that the official unemployment rate understates unemployment by ignoring the over 94 million Americans who have either withdrawn from the labor force or settled for part-time work. Presumably the Federal Reserve Board has access to the real unemployment numbers and is thus aware that the economy is actually far from full employment.

The decline in the stock market following Friday’s jobs report was attributed to many investors’ fears over the impact of the predicted interest rate increase. Wall Street’s jitters about the effects of a rate increase is another reason to doubt that the Fed will soon increase rates. After all, according to former Federal Reserve official Andrew Huszar, protecting Wall Street was the main goal of “quantitative easing,” so why would the Fed now risk a Christmastime downturn in the stock markets?

Donald Trump made headlines last week by accusing Janet Yellen of keeping interest rates low because she does not want to risk another economic downturn in President Obama’s last year in office. I have many disagreements with Mr. Trump, but I do agree with him that the Federal Reserve’s polices may be influenced by partisan politics.

Janet Yellen would hardly be the first Fed chair to allow politics to influence decision-making. Almost all Fed chairs have felt pressure to “adjust” monetary policy to suit the incumbent administration, and almost all have bowed to the pressure. Economists refer to the Fed’s propensity to tailor monetary policy to suit the needs of incumbent presidents as the “political” business cycle.

Presidents of both parties, and all ideologies, have interfered with the Federal Reserve’s conduct of monetary policy. President Dwight D. Eisenhower actually threatened to force the Fed chair to resign if he did not give in to Ike’s demands for easy money, while then-Federal Reserve Chair Arthur Burns was taped joking about Fed independence with President Richard Nixon.

The failure of the Fed’s policies of massive money creation, corporate bailouts, and quantitative easing to produce economic growth is a sign that the fiat money system’s day of reckoning is near. The only way to prevent the monetary system’s inevitable crash from causing a major economic crisis is the restoration of a free-market monetary policy.

One positive step Congress may take this year is passing the Audit the Fed bill. Fortunately, Senator Rand Paul is using Senate rules to force the Senate to hold a roll-call vote on Audit the Fed. The vote is expected to take place in the next two-to-three weeks. If Audit the Fed passes, the American people can finally learn the full truth about the Fed’s operations. If it fails, the American people will at least know which senators side with them and which ones side with the Federal Reserve.

Allowing a secretive central bank to control monetary policy has resulting in an ever-expanding government, growing income inequality, a series of ever-worsening economic crises, and a steady erosion of the dollar’s purchasing power. Unless this system is changed, America, and the world, will soon experience a major economic crisis. It is time to finally audit, then end, the Fed.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

America Should Not Emulate Denmark

At the Democrat presidential debate two weeks ago, Vermont Senator Bernie Sanders said we “should look to countries like Denmark…and learn from what they have accomplished for their working people.” The good senator should either rephrase his statement, or look more closely at the data. Democratic-socialism may work in some places in Europe, but was never intended, nor can it work, in the United States of America.

Another of Sanders’ erroneous statements regarding Denmark was when he claimed that Denmark’s economic model “provides extraordinary security and opportunity.” It does provide security, but little opportunity, economic or otherwise.

Democratic socialism is a political ideology which juxtaposes a democratic political system, (popular elections) with a socialist economic system. As such, it involves a combination of political democracy (usually multi-party democracy) with “social ownership of the means of production.” Consequently, it can be somewhat characterized as a less tyrannical and totalitarian form of socialism, since the masses are voting for the cadre that will separate them from the fruits of their labors. And while it may not abolish private property ownership, as its more draconian sibling communism does, it taxes income, and inflates prices sufficiently, so that private property ownership is severely limited.

The sheer economies of scale make a comparison between the Scandinavian country and the U.S. impracticable. Denmark, with a landmass of 16,562 square miles, is roughly the size of Maryland, and with a population of 5.6 million has about 1.5% of the U.S. population. Compound that with America’s propensity toward a kakistocracy, as evidenced by the last two presidential election cycles, and democratic-socialism would likely destroy the economy, and the republic.

Danish author Mikkel Clair Nissen has published his own response to Americans who think Denmark’s democratic-socialism is so appealing. “I am a school teacher from Denmark making about $61,000 a year. We get free education. You don’t have to pay for the doctor, the hospital, and students even get paid to study. It all sounds so great…right? However, I forgot to mention that nothing is ever free. The lowest personal income tax in Denmark is minimum 40 percent. Also, we pay a sales tax of 25 percent, and on top of sales tax the government applies further (generally hidden) duties and fees, applied to almost everything, making it really hard for lower class people to get by, causing them to be deeply dependent on government handouts,” she says.

When Senator Sanders refers to “working people,” he likely is referring to the middle class, since that’s the most productive and economically viable demographic. Just as most of the fiscal initiatives of the past seven years have most adversely affected the American middle class, European democratic-socialism virtually plunders theirs. The middle-class in Denmark is taxed at a 60% rate, and that’s just the income tax rate. Yet to pay that rate, all one has to make is $55,000 per year. That means those who, by American standards, are earning a respectable middle-class income of $55k per year only keep $22,000 of their earnings. That’s a relatively paltry $1,833 per month.

Nissen continues: “A gallon of gas is about 10 dollars. Tax on a car is 180 percent, which brings a car valued a bit over $20,000 dollars in the United States (e.g. Honda Accord) up to an astounding $50,000 dollars in Denmark.” No wonder 65% of the travel in the country is by mass transit and bicycle. And not surprisingly, the cost of energy is extremely expensive, as most electricity is produced by “green” sources. The cost per kilowatt-hour of electricity is $.42, compared with an average of $.12 in the United States.

Nissen further explains that because of “excessive taxation, Danes also have the highest private debt in the world. Only few will ever own a car or a house here; banks generally do – hypocritically, the very same banks that the collectivists despise. Anyone who makes over $80,000 annually pays a personal tax of 68 percent. This means that almost all people with higher earnings have either found ways to evade taxes, or have left the country, often bringing their companies with them, making employment scarcely low.”

According to Eurostat, the European Union’s official data reporting service, real unemployment is double what the official figures indicate. By their calculations, Denmark’s real unemployment rate is 14%.

And Nissen provides more insights. “Denmark’s suicide rate has averaged 20.8 per 100,000 during the last five decades, with its highest level of 32. The American suicide rate averaged only 11.1 during the last five decades, and has never exceeded 12.7. Danes are deeply deprived, driven by severe narcissism, and so more than 11 percent of adult Danes – the supposed happiest people in the world – are on antidepressants. Well, of course, Danes are happy; they are medicated to be!”

If Danes are so happy to be economically socialized, why do they take their own lives at three times the American rate, and their anti-depressant dependency exceeds America’s by 40%? Could it be that the cost of freedom is much greater than we assume?

Nissen concludes his missive: “Everyone wants the American dream. In Denmark’s neo-communism, no one will ever own or accomplish anything.”

America was founded on classical-liberal ideals of maximum freedom to facilitate virtually unlimited potential. Benjamin Franklin said: “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor safety.” And that’s precisely what socialism, in all its iterations, does. It sacrifices individual freedom at the altar of security and egalitarianism

One of the most critical concepts of liberty upon which America was founded is economic freedom. Indeed, Thomas Jefferson and Alexander Hamilton championed economic freedom as the foundation for all other liberties. True liberty mandates that private property, and the ability to reap and freely expend the fruits of our labors, is sacrosanct. Nobel economic laureate Milton Friedman declared that property rights are “the most basic of human rights and an essential foundation for other human rights.” Without economic freedom, all else is severely vitiated.

There might be some things America can learn from the Danish economic model, but only if we deny what America was founded and intended to be — the land of the free, dedicated to life, liberty, and the pursuit of happiness.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

Employment Is Nothing Like Slavery

What is necessary to take away a man’s freedom? For many progressives, nothing more then a bad workplace. Amazon takes ongoing heat for its work environment, with opponents like Business Insider calling it a “slave camp.”

But this comparison mistakes the fundamental nature of coercion.

Many leftists, such as left-libertarian Susan Webber at Naked Capitalism, argue that we must work in order to live, and that therefore work is coercive. If you must do X to live, then surely whoever controls your ability to do X is coercing you.

The problem with this argument is that the state of nature is not a Rousseauian paradise, but a brutal place where most die. The state of nature involves poverty and endless drudgery to catch, kill, and cook whatever food one can to stay alive. The workday is every waking moment, and the pay is little more than an occasional meal.

There’s nothing stopping people from living this way in the modern world — say, off the grid — but the beauty of capitalism is that it offers us a way out of this wretched existence. When a company offers a man a job, they are not saying, “work or die!” the way a slaver does; they are promising him that, if he helps them to succeed, they will give him money to improve his life.

Professors Bertram, Gourevitch, and Robin at Crooked Timber make another argument: that the workplace is coercive by virtue of an unequal power balance. Employers can, after all, fire employees if they don’t do X. But this mistakes the nature of work and ignores the power of employees.

Coercion, according to the Oxford English Dictionary, is, “The practice of persuading someone to do something by using force or threats.” It involves a threat to harm someone if they don’t do X. In a prison or slave camp, prisoners can be beaten or killed for not complying with orders.

This is fundamentally different from the promise of an employer like Amazon, which is to engage in a relationship with workers so long as that relationship is mutually beneficial. As long as the employee performs good work, Amazon will continue to help him improve his life. If the employee no longer provides value to Amazon, then Amazon is under no obligation to continue to help him.

Refusing to continue helping someone is fundamentally different from the use of “force or threats” inherent in coercion. A slaver’s whip makes a person’s status quo worse if he doesn’t do as he’s told. An employer’s continued payments make one’s status quo better if he does as he’s asked.

Admittedly, being fired can leave former employees in a tough spot, and that’s more true if they’re fired without warning. Amazon’s harsh work conditions, combined with the specter of being suddenly let go if we don’t perform every day, don’t constitute a job most of us would choose. But equating this with a slave camp does employees a disservice by denying their agency.

The comparison ignores the power of employees. They can leave a company whenever they want, and wielding that power can leave their former employers in a bind. In a small company or a busy firm, an employee who quits can leave the company without the manpower to meet its obligations. If an accountant suddenly quits H&R Block during tax season, he’ll leave their franchise struggling to make up lost ground.

Even in a big firm like Amazon, employees who leave suddenly cost their bosses money. According to the liberal-leaning Center for American Progress, the turnover costs for employees earning under $50,000 per year averages 20 percent of that employee’s annual salary. These costs incentivize employers to retain staff, and grants bargaining power to employees.

Such language also ignores the fact that people tend to find jobs that represent their best option.

This is true of Amazon’s “fulfillment centers,” which took a lot of heat in 2013. But as The Guardian notes, Amazon builds these centers in “places of high unemployment and low economic opportunities.” Workers who otherwise wouldn’t find a job flock to Amazon, knowing that it may not be perfect but that it beats their baseline — unemployment. It’s also true of Amazon’s white-collar workers who just happen to be the subject of the latest controversy.

Amazon has “one of the most rigorous hiring processes in America,” according to Business to Community; and those hired could find jobs at most other tech companies. But they choose to work at Amazon. Rather than considering that these men and women may choose to work at Amazon for a reason, progressives deride their choices and their agency with talk of coercion.

The issue of coercion is important to understand because it’s the central difference between government and the private sector. If you don’t do X, government can punish you: it can take away your savings, throw you in jail, even shoot you. That’s true coercion. By contrast, if an employer asks you to do X, she can’t threaten you; all she can do if you say no is refuse to keep giving you money.

This difference highlights the essential freedom of the market. In any market-based relationship, one party can leave, and the other party can do them no harm. This is a freedom that is noticeably lacking in our interactions with government.

This commentary originally appeared at and is reprinted here under a Creative Commons license

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

Watch: Mike Rowe Just Set America Straight With A Message Every Single Person Should See

Mike Rowe, known for his work-inspired television shows, has a simple message for young people worried about finding a job.

“There is no such thing as a good job. There is no such thing as a bad job. There’s work,” Rowe said when asked what advice he would offer to the Occupy Wall Street movement in 2015.

Rowe, the star of the CNN original series Somebody’s Gotta Do It, explained that it is up to each person to make a job worthwhile.

“What you bring to the work, how long you decide to stay on the job and whether or not you use it as an opportunity, a destination or something from which to pass is completely up to you,” he said.

Rowe said there are 2.8 million jobs available now according to numbers from the U.S. Bureau of Labor and Statistics. All require training and a willingness to work. Most require special skills, but less than 20 percent require a four-year college degree.

“But, in general, if your willing to re-tool, retrain and potentially relocate, the opportunities are so much better than people realize,” Rowe said.

He said his own foundation, the Mike Rowe Works Foundation, offers scholarships that target opportunities that actually exist. The secret, he said, is being willing to do what it takes.

“It’s designed to reward anybody who’s willing to get up early, stay late and take a bite of the poop sandwich when it comes around,” he explained.

When it comes to protesting, Rowe said he supports the right to speak and protest. However, he also feels that time could be better spent.

“Enjoy the fact that you have enough rope to either build a bridge or hang yourself,” he said before he offered this advice. “I would suggest that the real conversation, in my opinion, ought to be focused not on the opportunities that don’t exist or the opportunities that should exist but on the opportunities that actually do exist,” he added.

He was asked how a young college graduate should handle the idea spending thousands on a college education only to find that manual labor jobs, like digging ditches, are the only jobs available.

“Well, you got to get over yourself. You know, there are a lot of people who chase a bad stock. That’s very typical on Wall Street but in life, I think, it’s, it’s pretty typical as well,” Rowe said

Rowe said people get into the wrong mindset by “falling in love with our own trajectory” and expecting to be rewarded the way they want because they paid for higher-level learning. That kind of thinking limits opportunities, he said.

“A lot of the greatest builders in the country right now started off with digging ditches. If you’re going to dig ditches, be a great dig ditcher,” he said, adding that it doesn’t have to be a job to keep for a lifetime.

He said there isn’t much we can control, but we can control how we view work and what defines a good job. The choice of how to define a good job is up to the worker, he said.

U.S. Economy Deteriorating At An Even Faster Pace

Despite doubling the national debt and the expansion of the money supply to some $8 trillion since the beginning of Obummer’s misbegotten presidency, the U.S. economy is once again in a free fall. Actually, there has been no real recovery, but a continual deterioration of living standards despite the lies and distortions from the financial media and government authorities.

Conditions, however, are now descending at an even faster pace.

Recently, the leading manufacturer of heavy equipment, Caterpillar, announced that job cuts would exceed 10,000 through 2018. Up to 5,000 employees will receive pink slips between now and the end of 2016. Retail sales for the manufacturing giant have slumped 11% between June and August.

While Caterpillar’s contraction is an ominous sign, a more telling indicator of worsening economic conditions came from the Federal Reserve’s refusal to raise interest rates at its latest FOMC meeting. Many commentators had speculated that the Fed would raise rates at least a quarter of one percent on the belief that the economy was strengthening.

The Fed, of course, based its refusal to raise rates on “international concerns” – China’s stock market selloff. The real reason is that the nation’s central bank understands, although it will not publicly admit it, that the economy is far too weak to “absorb” a rate hike, no matter how infinitesimal.

More importantly, the Fed cannot raise rates to any significant degree because the entire financial system, which is built on “cheap money,” would immediately plunge into a significant downturn similar to that of 2008, or worse. The federal government and many of the states and municipalities would default since they could not continue to finance their current profligate borrowing and spending patterns with higher interest rates.

Thus, the Fed is trapped in a world of zero interest rates for the foreseeable future. As economic conditions continue to worsen, the central bank will more than likely turn to another round of money printing like its infamous “QE” program.

While the Fed is locked into a zero interest rate policy, the Obama Administration and Congress remain oblivious to economic reality. A few years back, Obama and the one-time Democratically-controlled Congress tried a “stimulus” program which did nothing but increase the national debt. Also weighing down the economy is the disastrous Obamacare program, which will only become more burdensome as time passes.

Just as troubling, none of the current crop of presidential hopefuls, with one possible exception, has proposed or suggested any credible measure that will improve matters. None of the fundamental problems that are crippling the economy have been seriously addressed.

The reason why there has been no recovery is that the malinvestments and bubbles created during the last boom have not been allowed to contract and/or burst. Instead, the Fed pumped massive amounts of “liquidity” (money printing) into the markets, which kept these institutions (mostly banks) and their assets afloat.

A credit implosion will not come about “voluntarily.” The Fed will not increase interest rates, nor will the Obama Administration or Congress have the courage to cut spending to relieve pressure on the Fed to finance its unsustainable deficits and continue to inflate the stock market.

Instead, there eventually will be a monetary crisis surrounding the dollar, which will force interest rates to rise, which will lead to widespread defaults and bankruptcies and an ensuing depression which will dwarf every previous economic downturn in American history.

Alternative financial analysts have, for some time, pointed to the declining living standards not only in the U.S., but throughout the Western world. Egon von Greyerz of Matterhorn Asset Management has predicted some very unpleasant times in the not too distant future: “The coming years will not be easy. I wrote an article a few years ago called ‘The Dark Ages Are Here’ and I now really think they are imminent. These will be difficult times for most of us.”

Ultimately, the only way the U.S. economy will be turned around is through a change in ideology. The ideas and policies upon which not only the U.S. but the entire Western world’s economies are predicated upon must be debunked. Until the principles and beliefs of the current economic system are intellectually discredited, the U.S. economy will continue to stagnate and eventually collapse.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by