At one point a few years ago I had noticed a link to a book Dale has written called Slackernomics: Basic Economics for People Who Think Economics is Boring. Given that I’m not the type who thinks economics is boring, but had enjoyed his blogging, I wanted to get a chance to read it. At that time, the book was only available in print at a price above $20. It took a spot on my “buy when I get around to it list”, and sat there for quite some time, but I never pulled the trigger. Then, more recently, it became avaiable for the Kindle at only $2.99 — I no longer had an excuse not to buy it. So onto the Kindle it went, and after several long months of sitting there taking up space, I’ve finally gotten around to reading it.

Slackernomics is a primer on basic economic theory that, as the title suggests, is written for people who think economics is boring. It’s written in a convivial tone, and the illustrative examples that Dale uses reminds one more of Freakonomics than of Adam Smith. Don’t let that fool you, though — the book is not a “sideshow” like Freakonomics — it gets to the heart of the matter. I liken it to be similar to Henry Hazlitt’s “Economics in one Lesson”, but written for people who may not be interested in the more formal writing style of Hazlitt. In addition, having been written many decades after Hazlitt’s book, it’s obviously much more up to date.

The book covers everything from price theory, minimum wage & rent control to monetary theory and the business cycle, Keynesianism, taxes / deficit spending, savings & investment, and economic statistics. He continues with a great defense of free trade and a bit of entrance into politics (touching a tad on public choice theory). In all, for being a relatively short book, he hits all the major notes that anyone looking for an introduction to economic thought would need to learn.

But the big question, for readers of this blog, is whether it’s worth it to buy. “Am I going to learn anything new?” And I can honestly say that despite the fact that I read economic books & blogs for leisure, and that I’ve blogged a fair bit about economics myself, I learned some new things from Slackernomics. Dale’s fourth chapter, unwinding the mess of the myriad of economic reports and statistics he’s constantly posting on Twitter, Google+, and at QandO, was wonderful. I’ve looked at many of these reports merely reading analysts *reaction* to the numbers (Higher jobless claims? How unexpected!), but rarely understood which group (public or private) was putting out certain reports nor how they all fit together. For me, a layman who is conversant on a lot of economic theory but not as perhaps on the technical reports, I have never seen an explanation of the reports that come out each week and each month as simple and readable as that chapter. That was more than worth it for my $2.99.

So my recommendation is simple: at $2.99, if you have a Kindle (or a device with a Kindle app), it’s hard to pass it up. You’re almost assured to get your money’s worth from the book. Even further, if you know someone in high school or college that may not have received good schooling in economics (which is, unfortunately, most of them), and who isn’t exactly about to tackle The Wealth of Nations, find a way to get them a copy of Slackernomics. Dale’s writing style will keep them interested.

All in all, it’s a book that lives up to its title, and goes well beyond.

The challenge of creating an economically sound, simpler, and more just tax code, be it the existing code, 9-9-9, a flat tax, or a sales tax will remain an impossibility if tax revenues is the only focus of any reform. The problem that dwarfs any notion of how tax policy is implemented is how the money is spent by the government.

As I write this, the national debt is approaching $15 trillion. That’s $47,810 per citizen or $132,927 per tax payer.

Even more staggering, the sum total unfunded liabilities for Social Security and Medicare is just over $116 trillion. The prescription drug part of Medicare is over $20 trillion by itself!

Other than the Federal Reserve creating money out of thin air, what tax policy can possibly begin to support this kind of spending? It seems stupid to even pose the question.

Yet the only answer the Obama administration seems to have to pay down the debt or turn the economy around is to raise taxes on the wealthy and continue the reckless spending. The Republicans for their part offer modest tax cuts and modest spending cuts that will have no noticeable impact on the debt.

It’s high time that we as citizens tell our public servants that the out of control spending has to stop. We must demand serious structural reforms to entitlement programs or phase them out over time.

We must also recognize the difference between military spending and true national defense spending. We can no longer afford to police the world. It’s time to tell Iraq, Afghanistan, South Korea, Japan, and others that they are now responsible for their own national defense and domestic security.

That’s just a start; there’s a great deal more spending that should be cut. But before any significant cuts can be made, we need to decide just how much government we want in our lives and what we are each willing to pay. For those who believe that individuals who make under a certain income level should be spared from paying any taxes at all (i.e. too small to tax) maybe it is you who should be out front in demanding a whole lot less government.

Is an economically sound, simpler, and more just tax code even possible?

The truth of the matter is that there are too many people on the Left and the Right who do not want a simpler tax code that treats everyone equally.
It’s probably not because the defenders of the existing system necessarily think the existing code is good economic policy nor does a better job funding the federal government. The most likely reasons why there is so much resistance have to do with political pandering, vote buying/special interests, and social engineering.

It’s not too difficult to figure out why the Left panders to the working poor because the poor always outnumber the wealthy regardless of how well the economy is doing overall. What would happen if there was such a tax code where everyone paid the same rate without any tax credits or loopholes and without any hidden or embedded taxes? I’m guessing it would be more difficult to raise taxes on the evil rich if it meant that everyone received the same percentage tax hike. When it comes to the tax code, equality is the very last thing the Left wants.

If there is anything I agree with the Occupy Wall Street crowd or the Left more generally it’s the special treatment politically connected individuals and businesses receive via the tax code and/or subsidies. So you say you want to get money out of politics or do something about the role of corporate lobbyists in Washington?

I do too.

The simple answer IMO is to eliminate all taxes on business and all subsidies that benefit business. If there are no taxes or subsidies, there is no reason for businesses to lobby for special tax treatment or subsidies; the main reason most industries send lobbyists to Washington in the first place. If we would like to go any further in limiting influence of special business interests, maybe just maybe we should get the government out of regulating just about every aspect of business* and restrict the government to its limited constitutional powers. What a novel concept!

Finally there’s the social engineering aspect of the tax code. Frankly, I’m not sure if those on the Left or the Right are worse when it comes to using the tax code as a tool to encourage the American people to engage in particular activities. Even with Perry’s flat tax plans, there are a handful of deductions that are sacred cows. The home interest, charitable giving, and state and local taxes are preserved for those who earn up to $500K. Those who earn under $50K can choose not to file under the 20% rate with a $12,500 per family member deduction (which would eliminate all if not most tax liability under the existing rate for those in this tax bracket). With these deductions as part of the plan, the Perry plan can hardly be called a flat tax.

While I’m critical of keeping these deductions in place (he probably could get by with a smaller rate without the deductions), it’s not difficult to figure out why Gov. Perry keeps them in place. Voters would raise all sorts of hell at the thought these deductions would go away. Maybe there’s a good argument to make that charitable giving should be deducted since these funds help people who might otherwise be on government assistance.

But the home interest deduction? Why is that held sacred? Is there some sort of right for homeowners to get a break because they choose to buy a home rather than rent? I suspect that the realtor and home building lobbies and those in government who truly believe that every person should buy a home perpetuate this notion to a point to where now home owners think they are entitled to this special treatment.

Perhaps the most sacred cow of all of the deductions is the child tax credit. This deduction is a feature of every tax reform I mentioned in part 1 (even the Fair Tax prebate is based on family size). In the last presidential debate, Rick Santorum said in so many words that the federal government should promote families via the tax code.

Is this really the sort of thing the government should be concerned with? Should the amount of taxes an individual pays have anything to do with marital status or number of dependents s/he is supporting? Is it fair to make a single person pay more taxes because s/he doesn’t have dependents?

I don’t think there is an answer that will satisfy everyone.

Part 3

*In the current climate of overregulation, an industry would be foolish NOT to send lobbyists to Washington.

One of the things that occurred to me watching this was how little true discussion is going on between the OWS movement and their critics. Notice how some of the protesters say things like “you rich people” or “you Republicans” etc. Just as its unfair for these protesters to lump everyone into these groups is a mistake, I think it’s also a mistake to assume that all of these protesters are clueless and don’t have some legitimate grievances.

Kudos to Peter Schiff for going out among the protesters and having this much needed conversation. There seems to be some common ground concerning these grievances; the real differences are what the solutions should be.

LAS VEGAS – Republican presidential candidate Rep. Ron Paul unveiled his economic “Plan to Restore America” in Las Vegas Monday afternoon, calling for a lower corporate tax rate, a cut in spending by $1 trillion during his first year in office and the elimination of five cabinet-level agencies.”

[…]

Paul does get specific when he calls for a 10 percent reduction in the federal work force, while pledging to limit his presidential salary to $39,336, which his campaign says is “approximately equal to the median personal income of the American worker.” The current pay rate for commander in chief is $400,000 a year.

Based on Dr. Paul’s speech, there’s not a whole lot not to like. Cutting $1 trillion of government spending in the first year would be a very good thing IMO.

As a Gary Johnson supporter, I can’t help but get more than a little annoyed each time one of Paul’s supporters, member of his campaign staff, or the congressman himself makes the claim that Dr. Paul is the only candidate in the race who would balance the budget. Gov. Johnson has promised a balanced budget, not merely in his first term but in his first budget in virtually every debate, interview, and speech he has given since he announced his candidacy.

That criticism aside, I hope this plan is given serious consideration by the primary voters and debated among the candidates.

Yeah, there goes crazy Uncle Ron again with these crazy misquotes he picked up off the internet!

I’m not sure if the crowd was laughing at Cain or Paul at this point but it wasn’t that difficult to find audio of his “misquotes” on YouTube from when he was guest hosting The Neal Boortz Show.

But this wasn’t the first time Cain has been busted on a flip-flop followed by an accusation that he was misquoted or received “misinformation”. The next example: Cain changes his mind as to whether the president can target an American citizen for assassination without due process.

The Flip:

The Flop:

I never said that [President Obama] should not have ordered [the killing]. I don’t recall saying that. I think you’ve got some misinformation. Keep in mind that there are a lot of people out there trying to make me sound as if I am indecisive.

I don’t know all of the compelling evidence that the intelligence agencies and the military had. I’m convinced — I’m convinced that they have enough intelligence information that said he’s a threat to the United States of America. You don’t try to prosecute or capture him simply because he’s a United States citizen.

What will he say when he is confronted with these audio and video clips? Would he have us believe that these were imposters?

If Cain would have said on either of these issues “You know, I after thinking about it a little more, I was wrong…” I might be able to respect that. But to accuse people who challenge him of misquoting him when it’s so easy to prove otherwise is disturbing to say the least.

To understand the meaning of this, we should first understand the meaning of the S&P ratings.

The ratings indicate several things:
1) The likelihood of a default – the debtor failing to make interest payments owed to the people who purchased the bonds.

2) The likelihood that the bond holders will recover some of their losses after a default.

3) How quickly the debtor’s financial condition could deteriorate causing them to slide into default.

In the pdf explaining their rating system, S&P has a very interesting table showing the default rate associated with organizations based on their classification. As one would expect, in the past thirty years no AAA organization has defaulted, nor has any organization that is rated AA+.

In their press release explaining the downgrade, S&P makes the following points:

• The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.
• More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
• Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
• The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case
• The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short ofwhat, in our view, would be necessary to stabilize the government’smedium-term debt dynamics.
• More broadly, the downgrade reflects our view that the effectiveness,stability, and predictability of American policy making and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned anegative outlook to the rating on April 18, 2011.
• Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics anytime soon.
• The outlook on the long-term rating is negative. We could lower thelong-term rating to ‘AA’ within the next two years if we see that lessr eduction in spending than agreed to, higher interest rates, or newfiscal pressures during the period result in a higher general governmentdebt trajectory than we currently assume in our base case.

In essence, the S&P rating agency is implying that since the recent debate about raising the debt ceiling was immaturely handled, they are now more pessimistic than they were this spring. This strikes me as and excuse to give plausible deniability to the accusation that for years they have been rating the U.S. government much more favorably than is appropriate by any objective manner.

The fact is that over the past few decades, the U.S. government’s long-term fiscal condition has been steadily eroding, and the legislature has shown no willingness to seriously tackle the issue.  Unsurprisingly any legislator who broaches the topic of reducing any of the major sources of spending, medicare, social security, millitary spending,  corporate subsidies, etc risks being voted out of office by an electorate whipped into a frenzy about an attack on the elderly, the poor, our allies, etc.

The rating agencies, having been granted a monopoly on ratings by the U.S. government, have been loath to bite the hand that feeds them, to risk the wrath of the legislature by frankly describing the terrible financial outlook for the U.S. government. At this point the AAA rating has become a joke; there is no way that the U.S. government can pay back the loans. There is no ideological chasm between the Republicans and the Democrats.  Both parties support massive welfare spending, high taxes, and massive plundering of the productive bits of the economy.  I am increasingly of the opinion that the debt fight was a kabuki theatre engaged in by the Democrats and the Republican leadership in order to end the Tea Party threat to the metastasizing state.  The Teaparty were the grownups announcing that the party has to stop, and the political parties’ leadership were the petulant teenagers plotting to keep things going a little longer.

At this point U.S. government bonds are a very bad thing to buy. The interest the U.S. government is offering is pathetically low.  Inevitably, to attract buyers, the government will have to raise the interest rate. Once they do this, prices in the secondary market for the older low-yield bonds will collapse.  The interest payments needed to service the outstanding debt will increase, and the U.S. government will be in even worse financial shape.  It’s possible that the Federal Reserve will buy the bonds itself, using newly printed dollars, much like the central bank of Zimbabwe.

Unfortunately too many retirees have invested in U.S. government bonds, expecting that the income from the bonds would provide a reliable, dependable source of income. Either they will be screwed by the inevitable default, or they will find their income’s purchasing power destroyed by inflation.

United States Constitution
Article 1, Section 7


All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

The issuance of debt is a revenue raising measure. The “debt ceiling” is, in fact, legislation initiated in the House of Representatives, which authorizes the executive branch to issue debt through the treasury (and by extension the federal reserve), up to a specific limit.

This “debt ceiling” and authorization of debt issuance; allows the executive branch to raise revenue in a constitutionally legitimate way; because the revenue is raised under the auspices of specific authorization by the house or representatives.

Neither the Senate, nor the House, acting separately or together; has the authority or ability to delegate this exclusive power of the house, to any other entity, including the president. In fact, it would be a clear violation of the principle of separation of powers to do so.

That is all.

It was at this point, after autopilot turned off and they worked to change their course, that a stall warning sounded, meaning that the airplane wasn’t generating enough lift. The report notes the co-pilot grabbed the controls and lifted the plane, which, according to aviation experts is contrary to normal procedure during a stall, when the nose should in fact be lowered. During the lift, the speed sensors plunged then spiked in an apparent malfunction, the report shows. “So, we’ve lost the speeds,” the co-pilot noted.

For nearly a minute, as the speed sensors jumped, the pilot was not present in the cockpit. By the time the pilot returned, the plane had started to fall at 10,000 feet per minute while violently rolling from side to side. But the BEA notes the crew acted in accordance with all procedures, frantically attempting to command the plane as it pitched and rolled in the sky. The plane’s speed sensors never regained normal functionality as the plane began its three-and-a-half minute freefall.

The report shows the flight remained stalled throughout the drop, with its nose pointed up 15 degrees in response to the pilots’ attempt to generate lift. The flight plunged into the Atlantic nose-up, killing all 228 on board.

Granted, those 74 pages of pilot posts suggest that there are likely some very reasonable explanations for why the situation was misdiagnosed. But key is that it doesn’t appear [from what has been released to date] that the pilots understood — at the point it became critical — that the aircraft was stalled and thus did the exact wrong thing. What they did seems (to non-pilots) to be an intuitive response; if you’re quickly losing altitude, you should try to climb. But this is exactly the wrong approach to a stall. In a stall, your airplane is behaving like an expensive rock, not an airplane. Despite losing altitude you must point nose down until you get enough airspeed over your wings for the airplane to become an airplane again. I’m not a pilot, and I understand enough about aviation to know that.

So why am I posting about such things on a political blog? Simple. Our economy isn’t behaving like an economy, it’s behaving like a rock. We’re stalled. Yet our politicians are trying to do the same thing the pilots of AF447 did to get us out of it: pull back on the yoke [subsidies & intervention] and goose the throttle [monetary and fiscal stimulus]. We’ve got inexperienced pilots at the controls, who know more about flying a plane in Keynesian theory than in Austrian reality.

What happened? Well, previous rounds of throttle [low interest rates / shoddy lending standards of Fed & banks during Bush administration] and pitch [national housing bubble] put our economy up in the realm of “coffin corner”, where seemingly minor changes in AoA or airspeed cause an aircraft to exceed its flight envelope in rapid fashion. I can’t claim that the Obama administration was handed a very easy situation. But that doesn’t begin to excuse them for adopting the exact wrong strategies to dealing with it.

America’s economy is stalled and not responding to your stimulus. It’s rapidly heading groundward and yet everyone in charge can’t seem to explain why pulling the nose up with fancy rhetoric isn’t fixing the problem. The answer is not for the government to try to fix the problem. It’s for the government to stop worsening the stall, get the hell out of the way, and let the economy start behaving like an economy again.

But what if I told you that there was another $11T of outstanding US dollars* out there in the world, and that everyone except the US has a say in whether they are circulated. In fact, that those dollars are sitting on foreign soil is a very good thing for the US and has been for decades, but it’s not assured it will last forever. As I said WAAAY back in 2007:

As I’ve pointed out in the past, the dollar’s status as a reserve currency has largely allowed America to inflate with very little visible burden on our own citizens. We create worthless money, use it to buy durable goods from other countries, and watch as they hold that money or reinvest it in the sinkhole that are Treasury bonds. It’s a credit card on the world, and we can print whatever we need to pay it off…

…as long as they don’t wise up. If they do, suddenly that money might come back to us, and we’ll feel the results of the inflation we’ve engaged upon.

Inflation benefits those who see the money first — in this case, Americans who used that money to buy durable goods from overseas. It has the least benefit for those who see the money last. To date, that has been forex reserves, sovereign wealth funds, etc. But should those foreign nations decide they no longer want to hold US dollars, they’ll spend them right back into circulation — and they’ll eventually want us to sell them goods in exchange for those dollars.

If that happens, the inflation comes full circle and we feel it right here at home — without the Fed ever releasing the $2.7T they have on their balance sheet.

We’ve spent the last four decades, ever since Nixon “closed the gold window”, sending dollars abroad to other nations who stick them under their mattresses. This has been the persistent trade deficit we’ve held. Sure, some of those dollars came back to be lent to our own government to finance even MORE spending that didn’t come from the American people, but much of them quite literally got shoved under the mattress.

What happens if they want to spend those dollars? Well, dollar-denominated assets and goods produced in the US will rise in price. Oil, gold, silver, food (produced in the US), etc. Look at gold, for example: In the last year, gold has increased in dollar terms by over 32%, but by less than 8% in Swiss francs. USD vs other currencies show similar (but smaller) gaps. What can explain this? Well, if nothing else, that big buyers like China and India are using their dollar surplus, rather than their reserves in other currencies, to buy gold.

Where’s the endgame if this dollar-spending widens? Well, eventually those dollars are sold to people who don’t want to buy goods from China or US T-Bills: they want to buy US exports or US assets. That sounds good, of course; everyone likes exports! But is it good? Restate it this way: a durable good (i.e. product of American workers’ output) needs to be produced to leave our shores, and it increases the circulating money supply in the USA. The good we produce here is enjoyed elsewhere, while the increased money supply makes our own goods at home more expensive.

We change from trading our paper for other nations’ hard work to trading our hard work for our own paper back.

The endgame is the end of trade deficits, where we work harder as a nation to supply the rest of the world with goods in exchange for a lower standard of living here. That doesn’t sound good to me at all.

America has enjoyed a very privileged position in the world, and that position has only been possible from two things: other nations have trusted us and they’ve had no other options. The first is eroding to the point where they’re looking for the second. If we want to continue enjoying our position in the world, we need to convince the rest of the world that holding the US Dollar as a reserve currency benefits them — and neither trillion Dollar deficits as far as the eye can see or quantitative easing accomplish that.

When the inflation comes, it’s not going to be the Fed printing money — it’s going to be other nations sending us the money printed over four decades and expecting to buy something with it.

* Difficult stat to come up with. I used wikipedia to determine that there’s ~11T total forex reserves and about 61% of them are USD, which gives me about $6.7T in USD sitting in forex reserves. Add to that about $4.4T foreign holdings of US treasury securities, and I came up with a total number of about $11T.

…but it appears that the US Attorney doesn’t agree. She seems to think this is a lot more important than the rest of us… And what she says here [on the FBI press release, no less] is chilling:

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Tompkins said in announcing the verdict. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”

Really, Anne? Really? You’re going to throw around terms like “domestic terrorism” over this? For as much as I disagree with what von Nothaus was doing — profiting off of those who feel your fiat currency, backed by nothing more than a promise, is on the verge of a potential collapse — he wouldn’t have such a big market to sell to if the Fed wasn’t doing everything in its power to undermine the legitimacy of the US Dollar every day.

Every day the government’s inflationary policies erode the value of the US Dollar, stealing the wealth of people who have worked their butts off to earn those Dollars. While I think what von Nothaus was doing was fraudulent, I think I’m beginning to agree with those who have used the old adage to explain why you chose to go after him: “Don’t steal. The government hates competition.”

Let me state, first and foremost, that I am not a fan of the Federal Reserve, or of fiat money. I fully support the right of the people of the US to use and circulate alternative currencies. I enjoy the fact that some of those currencies would be backed by precious metals. But I incurred quite a firestorm of comments here after the raid, when I explained that I thought the government was right. While I support alternative currencies, and would love the Liberty Dollar to have been one, I claimed it was NOT an alternative currency:

A competing currency must not be interchangeable with FRN’s, which is the fiction that the Liberty Dollar creators try to uphold. Thus, the ALD becomes a method for them to sell silver at a profit while their associates or merchants work to defraud businesses by offering silver worth less (in FRN terms) for goods that are priced in FRN terms. At each level, it appears to have a cut of profit, as all multi-level marketing schemes do, and at the bottom of the scale, those who receive ALD’s as a “face value” equivalent to FRN’s are being shafted.

The Liberty Dollar does not seem to live up to what is bills itself as. If it were a true competing currency, merchants would price goods in ALD terms higher than in FRN terms, in order to receive identical value for their wares. If it were a true competing currency, the “exchange rate” between ALD’s and FRN’s would float, rather than be defined by the Liberty Dollar creators. I previously have written favorably about the Liberty Dollar, but given new information, I have changed my mind. It does not fit the bill of an alternative currency; it is a scam.

After three years of legal wrangling, it was announced today that the founder of the Liberty Dollar, Bernard von Nothaus, has been convicted on all four counts.

The crux of the government’s case rests pretty much on this, care of Coin World magazine [emphasis added]:

The federal government alleges that Von NotHaus, with three other defendants, worked together to violate the law by making Liberty Dollars the government characterizes as “coins” of silver “intended for use as current money” and “in resemblance of genuine coins of the United States …”

…

U.S. Assistant Prosecutor Craig Morenao, in opening statements, said the government would set out to prove that von NotHaus deliberately told people to give Liberty Dollars as change for Federal Reserve notes, in direct violation of laws that specifically prohibit the use of passing originally designed coins as current money.

It seems pretty clear that this is not counterfeiting in the *traditional* sense, where you try to copy the direct design. But given that everything I had seen from the website, marketing materials, etc suggested that the ALD should be spent at parity with federal reserve notes, and given to vendors in place of or given to consumers as change in place of federal reserve notes is problematic. Creating a currency to be spent alongside in competition with the US Dollar is one thing — creating a currency to be spent as a US Dollar equivalent is another.

I feel moderately bad for those who got sucked in to the Liberty Dollar system. But overall, I feel worse for anyone who would have the goal to create a *true* alternative currency, because the actions of Bernard von Nothaus have given the very concept a bad name, and imbued the idea of alternative currencies with fear of government prosecution. All this for what was just a scam to get rich fleecing people who distrust government fiat money.

Hat Tip: Reason

On the positive side, the mandate section of ObamaCare was found unconstitutional, the military’s “Don’t Ask, Don’t Tell” policy was repealed, Wikileaks exposed the federal government for the corrupt organization it is, the Democrats took a beating on election day, and the Bush era tax cuts were extended (though with the return of the death tax, extension of unemployment benefits, and other compromises in the bill, I’m not yet sure if this was a good or bad thing).

On the other hand, Republicans gained ground on election day (I’m not optimistic that they have changed much since the last time they ran things), the vast majority of incumbents in both parties were easily reelected, government spending is way out of control, the Fed wants to pump some $600 billion into the economy by printing more counterfeit money, unconstitutional invasive searches continue to take place at airports in the name of safety, both Democrat and Republican politicians consider Wikileaks to be a “terrorist” organization, and President Obama believes he can assassinate American citizens where they stand with no due process whatsoever.

On the criminal justice front, The Innocence Network (part of The Innocence Project) exonerated 29 individuals in 2010 for crimes they did not commit. Back in March, Hank Skinner came within an hour of being executed when SCOTUS halted the process. Skinner’s case continues to wind its way through the courts. In other death penalty news of 2010, Kevin Keith’s death sentence was commuted to life by Gov. Strickland, Anthony Graves became the 12th death row inmate to be exonerated in Texas, a key DNA sample was determined to not be a match for another Texas man, Claude Jones who was executed in 2000, and Texas continues to stonewall inquiries into the likely wrongful 2004 execution of Cameron Todd Willingham. As these questionable death penalty cases pile up, hopefully this will be the beginning of the end of the death penalty in Texas and elsewhere.

In a couple of other cases we never quite got around to at The Liberty Papers but deserve to be mentioned: Cory Maye was granted a new trial by the Mississippi Supreme Court because the trial judge failed to give jury instructions to consider a “defense of others” defense and in Arkansas, the Arkansas Supreme Court ordered a new hearing for the so-called “West Memphis 3” to consider newly discovered DNA evidence and juror misconduct from the original trial (if you are not familiar with this case, I urge you to follow this link as a starting point. The more I have looked into this case the more disturbing I find it to be…a perfect example of what is so terribly wrong with the system).

Hopes for 2011
Rather than offering predictions for 2011, here are some of my hopes:

- I hope that the justice will be served in the above cases.

-I hope I am wrong about the Tea Party Republicans and that they will actually be a force of positive change for more liberty and smaller government

-I hope that Ron Paul decides not to run for president for the 2012 campaign but instead puts his support behind former New Mexico Gov. Gary Johnson (I’ll get into my reasoning in a future post).

-I hope by this time next year, I’ll have far more successes than setbacks for liberty to report.

Now it’s your turn. How do you feel about the state of liberty in 2010 and how do you feel about the year ahead?