Krugman, ThinkProgress. As Dangerous as it Gets

08/02/12 • 13 min

Tenth Amendment Center: Constitutional Conversation

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Today, Paul Krugman decided to give us his wisdom on the subject of nullification – by saying almost nothing at all. In a short blog post, linking to a “report” by ThinkProgress, he notes – laughingly – that a Senate Candidate in Texas supports the idea of states nullifying acts of Congress. He doesn’t say a thing about nullification, but he’s obviously brushing it off as idiotic. As Tom Woods wrote on his blog today, “Paul Krugman thinks the idea of state nullification of unconstitutional laws is so self-evidently stupid that he doesn’t even need to offer an argument against it.”

Digging a little deeper – just a little, mind you – you’ll see that the ThinkProgress article he linked to was referring to Ted Cruz, who had a proposal where two or more states could work together to refuse compliance with the Affordable Care Act. Not outright nullification, but we certainly know that non-compliance in large numbers can in fact nullify a federal law.

ThinkProgress, the well-funded liberal blog which was vehemently anti-war while Bush was in office (now they don’t seem to think foreign policy is worth much of their time), has an interesting relationship with such nullification actions taken by the states. They turn a blind eye to them when Republicans rule in Washington. They sometimes give the image of cheering such efforts when politically popular. They attack and denigrate them when Democrats rule in Washington or when they oppose favored policies. And when they see nullification efforts getting popular among their own supporters, they simply freak out. All in all, these people, led by the crackpot pseudo-expert Ian Millhiser, are promoting an extremely dangerous view of how this country should be run.

Millhiser tells us that the Supremacy Clause provides that “Acts of Congress “shall be the supreme law of the land,” and thus cannot be nullified by rogue state lawmakers.” In other words, Congress passes a law, the President signs it, and it’s a done deal. Anything and everything is somehow authorized by the Constitution. But that begs the question. If the federal government can do anything it wants, why even write a Constitution at all? Here, Millhiser makes an argument that is so silly that it’s not worth my time. On top of it, his view of the supremacy clause is totally wrong. He knows it. He’s just counting on his readers not reading the clause, like Brion Mclanahan did.

STATE NONCOMPLIANCE

In 2005, the Republican Congress and the Bush Administration gave us the privacy-invading, state-commandeering, constitution-violating Real ID Act. In much of the country today, while the law is still on the books in congress and has never been challenged in court – it remains null and void. Why? Because of mass state noncompliance with the act which has led to its de facto nullification.

Did ThinkProgress have anything negative to say about such efforts? If they did, it sure wasn’t as prominent as their attacks on those who seek to nullify the federal health insurance mandate, or federal light bulb standards. Millhiser said that the embrace of nullification in those areas “threatens the very union itself.”

Isn’t it odd, then, that we didn’t hear a peep from TP about “threats to the union” when they reported on a Democratic governor nullifying the Real ID act in 2007? Here’s all they had to say,

Montana Gov. Brian Schweitzer (D) said “no, nope, no way, hell no” Tuesday to helping create the first national identifcation cards, signing into law a bill that blocks the state from complying with the REAL ID Act.

The articles linked in that brief report were to those supporting the nullification effort. The first was to an article from the editors of the Daily Kos, praising the Democrat for refusing to comply with the federal law. And the other to the ACLU’s Real ID website highlighting state resistance – and encouraging more widespread non-compliance.

If ThinkProgress were intellectually honest, ...

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STATE NONCOMPLIANCE

If ThinkProgress were intellectually honest, ...

Previous Episode

End the Fed! Whether Congress Wants us to or Not!

Since its inception, the Federal Reserve’s monetary policies have led to a decline of over 95% in the purchasing power of the U.S. dollar. As a result, there have been several attempts to reduce or even eliminate the Federal Reserve’s powers.

Louis T. McFadden led efforts in the 1930s. Wright Patman pressed again in the 1970s. Henry Gonzalez got things moving in the 1990s. And, Ron Paul has led the charge for more than twenty years now. In nearly eighty years, though, none of these efforts have succeeded.

And, even with House passage of Ron Paul’s Audit the Fed bill earlier today, it’s highly unlikely that the imperial Senate would ever allow light to be shed on the actions of its financial backer. Resistance to these efforts is seriously entrenched.

But yet, a large number of people across the political spectrum want to know what goes on behind the Fed’s curtain. And with calls to audit the federal reserve reaching a fevered pitch, it’s a good time to ask the basic question – is this even a worthy effort?

Not to say that you should want a secret national bank, but rather – is this kind of activism the best place for you to put your energy...and hope? Will lobbying the Senate get Harry Reid to allow a vote? Will calling Mitch McConnell change anything? Will Barack Obama or Mitt Romney allow such a bill to pass without their veto?

I believe the answer to all these questions is a big, fat NO.

PULLING THE RUG OUT

On the other hand, in contrast to attempts to put a stop to the Fed at the national level, a paper that William Greene presented at the Mises Institute’s “Austrian Scholars Conference” proposes an alternative approach to ending the Federal Reserve’s monopoly on money. The “Constitutional Tender Act” is a bill template that can be introduced in every State legislature in the nation. Passage would return each of them to the Constitution’s “legal tender” provisions of Article I, Section 10:

“No State Shall...make any Thing but gold and silver Coin a Tender in Payment of Debts”

Such a tactic would achieve the desired goal of abolishing the Federal Reserve system by attacking it from the bottom up – pulling the rug out from under it by working to make its functions irrelevant at the State and local level.

Under the Constitutional Tender Act, the State would be required to use only gold and silver coins – or their equivalents, such as checks or electronic transfers – for payments of any debt owed by or to the State. This includes things like taxes, fees, contract payments, and the like.

All such payments would be required to be denominated in legal tender gold and silver U.S. coins, including Gold Eagles, Silver Eagles, and pre-1965 90% silver coins. The market would then require that all State-chartered banks – as well as any other bank acting as a depository for State funds – offer accounts denominated in those types of gold and silver coins, and to keep such accounts segregated from other types of accounts such as Federal Reserve Notes.

But that’s not all! Not only would the use of Federal Reserve Notes by the State be made illegal; the use of legal tender U.S. gold and silver coins would be encouraged amongst the general population too – by eliminating sanctions against its use.

HOW IT PLAYS OUT

Passage of the Constitutional Tender Act would introduce currency competition with Federal Reserve Notes by outlawing their use in transactions with the State. Ordinary people, being required to pay their State taxes in gold and silver coins, would find it necessary to conduct some transactions with metal – including the use of checks and debit cards based on bank accounts denominated in such coins

All businesses operating within the State, being required to pay their State sales taxes and license fees in gold and silver coins, would need to do the same. Most importantly, though, in order for businesses to acquire the amount of gold and silver needed, they find it necessary to offer their goods and services in “dual currency” denominations, where customers could choose to pay in Federal Reserve Notes or gold and silver coins.

This kind of “bottom up” approach to ending the Fed will have a greater likelihood of success than the “top-down” approaches we’ve seen over the years for two major reasons:

1. The top-down approach has been an utter failure. While it has succeeded greatly in an educational role, it has simply not worked tactically.

2. It’s decentralized. Political opposition won’t be as strong or well...

Next Episode

Dear Congress: Get out of the Way!

On August 2nd, Robert Gray, the executive director of the American Open Currency Standard – that’s the company that mints our official Tenth Amendment Center 1 ounce silver medallions – gave testimony before Ron Paul’s Congressional Subcommittee on Domestic Monetary Policy. We thought he made some extremely powerful statements – and wanted to share it with you here. The audio above was the live testimony, as shared on a recent episode of Tenther Radio – and the text version below is the full (not time-constrained) testimony prepared by Rob for the hearing.

Mr. Chairman and Members of the Committee, My name is Rob Gray and I was asked to testify today on the theory of competing currencies, and the practical challenges that make such a theory difficult or impossible to implement.

For nearly 5 years now, I’ve successfully directed the American Open Currency Standard – the standard for private voluntary and complementary currencies that compete against each other, not against the US dollar.

Allow me to clarify: we do not consider AOCS Approved medallions produced and traded in our private barter marketplace ‘competition’ to the US Federal Reserve Note. Because “fair competition”, as one would find in the “free market”, assumes the existence of a level playing field, the existence of a standard set of rules. Those players who wish to compete honestly do so by relying simply on the merit of the value they bring to the market.

No fair challenge can be made between honest men and thieves. Let me be clear that when I say thieves: I refer to the current private central bank and the men in government who allow it to exist.

This brings us to a critical point: according to your Employee Handbook, Article 1, Section 8 says: “The Congress shall have the Power ...To coin Money, regulate the Value thereof...”. For anyone who has been a manager or business owner, it is not uncommon to find that you may have an employee who may choose to not do the work that is delegated to them, or even that they simply do it very badly. When such a time comes it is necessary for the manager or owner to step in and do the work themselves.

I would argue that since 1913, Congress has failed to do the job with which it had been tasked. We the people are now bypassing you and are no longer waiting for you to make it right. It is far better to simply walk away from the system. We are walking away from toxic thoughts, relationships, investments and careers. We are taking the hard intellectual journey to rid ourselves of the indoctrination that keeps us in this system. We are realizing the power we have in ourselves and the everyday choices that we make to either empower some soulless collective or our own families. We are realizing that we simply need to withdraw our time, energy, and money from banks, politicians and corporations that do not serve our interests.

In the time since our inception, the American Open Currency Standard has enjoyed nearly five years of growth and success in our mission of issuing a means that allows valuable exchanges among men who produce. In the next five years, we expect to expand our offerings and to increase our ability to keep up with the demand for our private currency. We are doing the job Congress would not.

The use of community currencies here in the US became popular back in the early 1930’s. You see, at the time, the theory was that a group of the world’s most powerful men, many of them international bankers, were intentionally and systematically removing currency from circulation, creating an artificial scarcity of money across America. Small cities and towns felt it worse than anyone. But life did go on.

Then, during the greatest economic depression this country had ever seen, individuals across this country developed their own mediums of exchange. They still needed things – food, clothing, daily essentials – they still needed to live, and they didn’t have time to wait for the government to fix the problem, and they certainly weren’t going to rely on the same bankers that caused the crash to offer solutions. And so, according to historical records, thousands of community currencies were created, circulated and traded in places where the scarcity of dollars was interfering with the human desire to live, and the market’s desire to trade. And since their elected employees were not doing the job for which they were hired, these individuals took it upon themselves to secure the means to their own survival and potential prosperity.

More recently, community currencies have sprung up across Europe as the Euro and national fiat currencies become increasingly unavailable and undependable. Today, communities all across the Eurozone trade their own money instead of the Euro.

Community currencies are not simply a good idea in theo...