THE PENSION FUND CRISIS in the United States extends into the public and private sectors of the economy to an extent unprecedented in the history of mankind.  It’s instructive to compare two of the most notorious individuals involved in the mass destruction and destabilization of pension funds invested in debt instruments.  The two individuals in my cross-hairs are Michael Milken and Benjamin Bernanke, a pair of Wall Street types specializing in contrasting methods of financial mass destruction.

Michael Milken’s career began in the 1970s when he noticed that many corporations had over-funded their employee pension plans with high quality securities.  He reasoned (correctly) that such corporations would jump at the chance to refinance these plans with cheaper high yield junk bonds.  The high quality securities could be sold off and replaced with cheaper junk. The corporation could then pocket the difference, in effect looting the pension fund and using the proceeds for corporate expansion, executive bonuses, etc.  Major corporations swallowed the bait and things went swimmingly until an economic downturn caused major defaults in the junk bond universe.  The resulting pension fund failures caused thousands of employees and retirees to lose their pensions, often their entire life savings.  Michael ended up with a ten year prison sentence and banishment from the finance industry, a trivial punishment considering the heartbreak and misery he caused.

Ben Bernanke as head of the Federal Reserve Board used his position to slash interest rates through massive bond-buying schemes called “quantitative easing” (QE). For years this has caused the yield on most debt paper to remain at historic lows, in effect strangling the income stream of pension funds.  The capital requirements of pension funds are calculated on an income assumption based on available interest rates.  Funds based on an income assumption of 9% suddenly found themselves looking at available rates of 3% or less. To maintain the stability of such a fund it would either have to triple its capitalization or cut its benefits by 66.7% ! Many funds did not reduce their payout to adjust to the reduced income, causing them to expend capital to maintain monthly benefit rates.  Worse yet, the injection of thousands of billions into the economy has had an inflationary effect, eroding the purchasing power of the shrinking remainder.

The pensions destroyed by Milken were restricted to a limited number in the private (corporate) sector. He specialized in destroying capitalization through high risk junk bond default.  At the height of his popularity he was known as the “Junk Bond King.” Once convicted and imprisoned he was called other less friendly names.

The pensions destroyed by Bernanke dwarf in number and extent the damage caused by Milken.  Bernanke will be remembered as the greatest pension fund killer of all time. The current ultra-low interest rates are causing the failure of public, private, corporate, municipal, state, and federal pensions.  At the height of his popularity he was known as “Helicopter Ben” because he at one time proclaimed that he would dump money from helicopters like confetti, if necessary, to “juice up” the economy.  Now that he is destroying the retirement plans of millions of Americans, new, less complimentary, names are being heard.

Unsustainable pension plans have already caused the bankruptcy of various cities in California, the bankruptcy of General Motors, and the insolvency of the US Postal Service.  Money market, short term treasury, savings account, checking account. and bank CD yields are near zero — while food and fuel prices spiral upward, indicating a shredding of the US dollar.

Government policies are also stimulating the influx of excess labor into our country, causing collapsing wages, high unemployment, welfare overload, home foreclosures, and personal and business bankruptcies — and all of these effects massively reduce the contributions to pension funds from wages.  As in the case of Michael Milken, serious prison time is needed for the drunken-spending politicians and Fed personalities responsible for this disaster.

AS THE ECONOMY STUMBLES the American standard of living recedes. Forty-four million people are using food stamps and in one year that figure will be 60 million. Washington and Wall Street say “what, me worry?” Of course not; they are the “masters of the universe.”

We are 24 months into an inflationary depression and it still goes undiscovered. Who cares that the issuance of food stamps is up 80%, as long as the bonuses on Wall Street and in banking continue to flow and bureaucrats get higher and higher salaries and benefits? The high cost of health insurance, no longer affordable to most have increased and Medicaid users are up 17%, as the program costs increased 36%. Those on welfare rose 18%, as costs rose 24%. It is now evident to many that the choice of early retirement in the late 1990s at 52 and 59 years old was a big mistake. Many must now work into their 70s, or starve. Many retirees are forced to reenter the workforce. Recently there were 2,000 job openings and 75,000 people applied. How is that for recovery? The birth/death ratio is bogus and real unemployment is 22%. The economy needs 2 million new jobs a year and that is impossible. Good paying jobs are still being offshored and outsourced. How about the millions without jobs now for years? While all this transpires the Fed bails out Wall Street, banking and government and leaves crumbs for the dispossessed.

It always gets us when these acceptable writers use soft or euphuistic phrases to describe creeping national state socialism. The big picture is dreadful, but government, Wall Street and the media won’t tell you that. Truth has nothing to do with business. They all spin one lie after another, just as you have recently seen with a certificate of live birth and the death of Mr. bin Laden. It reminds one of the old song, “Anything Goes.”

Those running Washington from behind the scenes know America can never pay off and liquidate its debt. That is why there is little effort to do so. The real idea is to destroy the system. It reminds one of Argentina in 1999, before they defaulted on 2/3’s of their debt only in a much bigger way. The dollar, because it is the world reserve currency, and that nations hold about 60% of foreign reserves in US dollars affects the entire world. America’s Wall Street, banking and government has had a 66-year party and everyone gets to pay for it. The next step, rather than austerity, will be confiscation of all, or part, of pensions, that $12 trillion pool of government and individual retirement funds. Needless to say, such irresponsible actions only delay the inevitable monetary collapse.

Tagging not far beyond is England and Europe, both of which have used the same template for so many years. In the US and all of these nations we see more than 50% of the population functionally illiterate and this same group country to country essentially pays little or not taxes, and receive benefits from government. That does not include the illegal alien population in each country that pays virtually no taxes. Spending far beyond tax receipts can only mean eventually that the deficits will destroy the system. That means a lower standard of living, which has already manifested itself in all three regions. Such profligacy has in the US, UK and Europe caused the Fed, the Bank of England the European Central Banks to create money and credit out of thin air monetizing buying and holding sovereign debt as well as debt clogging the balance sheets of the financial sector. In Washington the administration is considering an oil tax increase as the public pays more than $4.00 a gallon and in Germany it’s $9.00 a gallon. Expect more of this non-income tax taxation. Each tax increase and each loss in services brings less purchasing power, as inflation rages.

All these entities each day find it harder and harder to sell bonds to support their debt load, thus, revenues have to be increased. In the US the top 10% of taxpayers will end up paying 75% of total income taxes. This has already started an exodus of high-income earners to leave the country over the past 15 years, and the numbers are increasing exponentially. That in turn throws an added burden on middle class taxpayers.

At the root of the problems of all these nations is Keynesian economics, which has become the basis for corporatist fascism. The growth of money and credit worldwide has been exponential and continues apace as nations refuse to cut spending and central banks continue to be fonts of money and credit for their financial sectors and for governments. The financial system worldwide is awash in liquidity, which is accompanied by low or near zero interest rates. If those conditions were to be higher interest rates and less monetization the world system would collapse, although governments are manipulating markets downward such as gold, silver and commodities. What they are accomplishing is very little versus the intermediate to long run. That is why in the long run gold, silver and commodities have to move higher, as investors flee the general stock and bond markets, that don’t reflect the results of inflation. That is why inflation will worsen as central banks continue to spew out more money and credit, which is now euphemistically called quantitative easing. First we saw inflation rise in the developing world for a number of reasons, which has since moderated to a great extent. Inflation is growing at a realistic 4% to 6% overall. The problem lies in the developed world where real inflation runs from 8% to 20%. Nations such as the US, UK, China, India, Brazil, etc. are not only suffering high inflation, but they are exporting it as well. Not enough to keep inflation at bay in their own countries, but enough to make financial conditions in victimized countries difficult. As an example, take America’s neighbors Canada and Mexico; instead of having a natural 3.5% inflation for 2011, their inflation at year-end will be 4% to 4.5%.

As we predicted a year ago, QE3 will become reality, although it will be called something else. Not only in the US, but also in the UK, Europe and other countries, as well. If the issuance of money and credit were to stop and interest rates were to rise the world would head into deflationary depression. That is why the music has to continue. Sooner or later it will stop and when it does the bottom will fall out of the world economy and financial system.

The Fed continues to create money and credit and prices continue to rise and will do so for at least 1-1/2 more years. If we get the equivalent of QE3 that will be extended 1 to 1-1/2 more years. Dependent on how big a QE3 could be two to three years ahead, inflation could range from 25% to 55%. As this affects the US economy the banking system will remain weak and near insolvency. As inflation rises in a moderate fashion in the developing world the first world will see inflation rise higher quickly.

We currently see yields on Treasuries falling again from 3.60% on the 10-year note to 3.22%, as the Fed manipulates lower yields into position. That would be in anticipation of higher real interest rates caused in reaction to QE3. This is all rear guard action to try to create employment from a sector that remains under intense pressure. Any job creation is being offset by the high layoff rates of municipal and state workers. These measures by the Fed will also continue downward pressure on the dollar and upward pressure on gold and silver and commodities. Any tightening by the government or austerity measures to reduce the fiscal deficit would be disastrous. That is if you want to keep the game going at today’s level. It is a different story if you really want to solve the problem.

As we switch to the Middle East we see serious trouble coming. In fact it probably is the groundwork for World War III, the event needed from an historical prospective to begin a new world war to cover up the economic and financial collapse now taking place. Why else would the US and UK stir up rebellion in Syria, the home of a Russian naval base and in Libya where the Chinese just recently had to remove 29,000 workers due to a US and UK created rebellion. Libya supplies relatively inexpensive quality oil to China in large quantities. As these adventures unfold it becomes more obvious that a new war is being set in motion. As a reaction we see China saying they want to reduce their dollar forex position by 2/3’s or by $2 trillion. The US won’t let that stop them, so China is going to be a large dollar seller and part of those funds will go in gold and silver. That means the dollar will definitely fall lower both in terms of other currencies, but more importantly versus gold and silver. Dollar bulls are very hard to find. Those negative regarding the dollar we doubt have a clue that WWIII is underway. What has come to the attention of those negative on the dollar is that the US is developing into a Nazi police state. The US government wants to know exactly where all the assets of every American are and at the same time set compliance rules on foreign banks and institutions, which have US persons as clients legally. For Americans, foreign countries have to report any real estate owned by Americans in their country and on January 1, 2013, annually these nations banks have to send 1/3rd of all bank assets to the US IRS ostensibly to pay taxes, which in most instances have already been paid. It is a grab of the assets of Americans who dare to live in another country. As a result the US government gets little or no respect outside the US. The US is a pariah and the laughing stock of the rest of the civilized world. What people other than Americans could believe the fantasies of the obviously phony “live birth certificate” and the death of a man that had already been dead for almost 10 years. The foreign opinion is that the sheeple deserve it.

As an adjunct to this the US government is going to keep US troops in Iraq beyond the end of the year. The Iraqis have to approve this action, so we’ll have to see what happens. It is obvious the US has no intention of permanently withdrawing their troops. The excuse is based on the Shiite uprising in Bahrain and the massive Saudi intervention, along with events in Yemen where the dictator has agreed to leave. Iraqis believe that accommodation with Iran is the only way to coexist. They see iran as the only real power in the region. They also recognize Iran as an emerging regional power. Thus, we see Iran balking at the US leaving 20,000 troops in Iraq.

As Iran vies for influence in Iraq so does Saudi Arabia. Both are funneling money into Iraq. Iran is the target of the US, Israel and Saudi Arabia, but it has an edge at the moment. That is because of a multiplicity of problems in Saudi Arabia itself and on its borders with Bahrain and Yemen. Thus, Saudi is in a difficult situation in trying to extend its influence into Iraq. The only real weapon the Saudis’ have is money and lots of it. They cannot really pretend to be anything but a minor defensive military power. Thus, their reach is limited. As of late the US has only been of limited assistance. Naval and air solutions lack the ability to threaten Iran’s center of gravity, its large ground force. The intrusions already made have been dangerous and the US lacks ground troop ability. One thing learned over the centuries of warfare is that if you conquer you have to occupy. Each place you occupy involves leaving troops that are lost to the vanguard. The US simply does not have the troops to occupy or to engage massive Iranian forces. In addition a war with Iran that probably would become WWIII, would cost trillions that the US doesn’t have. As opposed to the past America’s allies outside the region don’t have the stomach for war, or the resources and appetite for involvement. Their militaries are skeletons of what they had in the past.

We recently saw aggressive action long planned for in the Middle East and North Africa by the US. They may be able to create turmoil and a civil war in Libya and replace one group of American dictators with another, but no substantial change will take place. What has taken place is a temporary pacification process to leave the road to Iran unfettered. The supposed execution of Osama bin Laden has definitely made matters worse in the region just to make Mr. Obama seem like he has accomplished something. These are some of the worst foreign policy moves we could ever imagine.

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We at The American Mercury are honored and pleased to welcome back to our pages Mr. Bob Chapman, an international economic expert and distinguished writer who was part of the print Mercury in the pre-Internet era.

Read the full article at The International Forecaster

by Bob Chapman
Publisher of The International Forecaster.

THE ADMINISTRATION and those who control it, the House and Senate, want us to believe that debt can be paid out of revenues now and forever. As inflation and perhaps hyperinflation set in we could easily see 10% interest rates. If that happened debt service would consume more than 40% of tax revenues. The projection that tax receipts over the next four years would grow by 1/3rd is ludicrous. That is more than 12% a year. Further increased taxation would send more companies and jobs offshore. The bottom line is that further will impede GDP growth and further stagnate the economy. Do not forget 70% of GDP is via consumption. There is no conceivable way with free trade, globalization, offshoring and outsourcing preceding a pace and with the manufacturing base in a shambles, that production and exports can pull the economy from its doldrums. How can revenues be increased under such circumstances? At the same time consumers are reducing debt and saving about 4% of income. This kind of environment is not inductive for consumption to rise from 70% of GDP to 74%, which is needed to bring about those revenues.

That brings us to QE2, and $862 billion in spending. QE1 and $868 billion did not cause a lasting recovery, so we do not believe Qe2 and pork spending will either. Last time we had five quarters of 3% to 3-1/4% subsidized growth. We call it the law of diminishing returns. We believe that by the end of September when the fiscal year ends that the Fed will again have spent $1.7 trillion, as they did in QE1, money and credit that they created out of thin air. Presently the expansion in spending from QE1 and stimulus 1 are starting to be monetized within the system in the form of inflation above and beyond that which is needed to neutralize the undertow of asset deflation. Presently Chairman of the Fed Bernanke tells us there is no inflation, and government tells us it is 1-1/2%, when in reality it is 6-3/4%. We believe by the end of the year we will be looking at 14%.

In QE1 the funding went to the financial sector, which was on the verge of bankruptcy. That was followed by record bonuses for the criminal syndicate known as Wall Street. QE2 is being used to bail out the US government by purchasing US Treasury and Agency securities again with funds created out of thin air. In the first process some $13.8 trillion was used to assist financial institutions in both the US and Europe. The Fed wouldn’t tell us what they were up to so the people had to get a court order to force them to reveal where all the funds had gone and how much had been spent.

We have spent ten years in which growth has been created by inflation. As far as we can see in the future this will continue to be the case, and as a result the US dollar will continue to deteriorate versus other major currencies and in particular versus gold and silver. Even though official Fed interest rates are close to zero real rates are advancing. That is in spite of Fed support of the long end of the market. The US 10-year note has recently traveled from 2.20% to 3.65%. It is probably headed to 4% to 4-1/4% by the end of the year. This is a reflection of investors demanding higher yields to protect against further dollar deterioration. These higher rates mean that US debt service will grow in the future causing debt service to become more onerous. As a result the Fed will have to create more money and credit and monetize it by buying ever more Treasuries and create ever more inflation. That is a vicious circle. In the meantime taxes will be raised, which will cut back on economic activity, which will cut revenues eventually and at the same time increase already high unemployment. The Fed is surely headed for a crackup of enormous proportions.

In the House and Senate and in the White House there is no talk of a balanced budget and budget cuts will be at a minimum. The cycle continues of never ending debt, as taxes move relentlessly higher. That includes 44 million on food stamps that could grow to 88 million – 15.7% below the poverty line that could easily double, unemployment at 22.6%, which could double. At the peak in 1933 unemployment, U6, was 37.5%. Yes, this time it will be worse. Workers are now receiving 42% of their income from non-government income. That could fall to 21%. The 18% receiving who get their income could rise to 36%. Calling U3 at 9% is an insult to any thinking American. There is a way to cut costs under the Medical Reform Act; all those with chronic diseases will be allowed to die. Society can no longer afford useless eaters.

Inflation officially is 1.5%. Real inflation is 6-3/4%. It will be 14% by the end of 2011 and higher in 2012, as QE1 and QE2 flow through the system. The creation of inflation does not create jobs. It makes the rich richer. Government is presently trying to redefine a balanced budget by eliminating interest payments, which shows you the arrogance of these criminals. The President and his advisors know that interest payments will eventually become the largest debt budget item.

The President tells us he will increase spending by $20 billion, which will accompany taxes. We certainly do not call this tax reform, but an open door to tax increases and major spending policies. The CBO, the Congressional Budget Office tells us the bipartisan tax cut legislation, or pork package of $862 billion in stimulus, will drive the government’s deficit to a record $1.5 trillion in 2011.

Government is going to continue to borrow 40 cents of every dollar it spends. Soon the cash deficit will reach $14.3 trillion, which is the current limit by law. We expect the limit to be raised to about $17 billion and the best we can hope for in spending cuts will be $50 billion. If you subtract the President’s spending increases that is really a $30 billion cut. Who knows at this stage whether these cuts will really become reality. It just shows you the Republicans haven’t changed much. The cuts are really just cosmetic. In addition, the CBO believes GDP growth in 2011 will be 3.1%. We believe it will be 2% to 2-1/4%. If the CBO is incorrect it will deeply affect economic statistics and outcome. If you add in a 2% payroll tax cut this year and extended unemployment benefits you will get much different results. The payroll cut alone will cost another $400 billion.

The CBO also says Social Security will pay out $45 billion more in benefits this year than revenues, because since June 1935 the fund has been looted by channeling revenues through the general fund, which were immediately spent. After the next election in 2012 you can expect a reduction in future benefits and an increase in retirement age further reducing future benefits. We expect a 15-cent a gallon increase in gas taxes and a further scaling back in tax breaks, including the child tax credit. They will also try to eliminate the mortgage interest reduction, which would further devastate the residential real estate industry. The House will attempt to end the deduction claimed by employers who provide health insurance in exchange for rate cuts for corporations. The 500 major corporations are presently sitting on $1.9 trillion in cash, domestically and $1.9 trillion in offshore accounts — a benefit derived from free trade and globalization. There is already in the works, via secret White House talks on December 15th, a plan to bring those funds back into the US at 5-1/4% taxation rather than 35% costing taxpayers $650 billion in lost tax revenue. Those funds will be used to buy company shares boosting them, allowing officers to cash in their stock options and make billions of dollars, prop up the stock market and assist by buying Treasury and Agency bonds. This is what corporatist fascist governments are all about.

From 2010 onward two million addition citizens are expected to sign up for Social Security, Medicare and Medicaid annually. The COLA formula has been falsified for 30 years by bogus CPI figures. As bad as that has been and is, it will be much worse when that link is broken and only a flat benefit will be paid as inflation rages. If you couple this with the Medical reform death panels there will be very few Americans roaming around America. They’ll either have been eliminated as useless eaters or starved to death. Believe us this is no exaggeration.

In 2011 the US dollar will continue to deteriorate. It will test 71.18 on the USDX, which are 6 major currencies versus the dollar. The dollar will also fall versus gold and silver as will other currencies. Over the past ten years nine major currencies have fallen an average annually versus gold by 15-1/4% and versus silver 20-2/3%. Those are the real benchmarks of dollar deterioration. Versus the USDX 71.18 should be broken in 2011 and eventually reach 40 to 50 over the next few years as gold and silver rise. Do not forget based on 1980 methods of value, when gold was $850 an ounce officially gold should be selling for $2,400 an ounce. If you use unadjusted figures that price would be $7,700 today. It just shows you the extent of gold suppression by the US government, the Fed and other central banks over those years. If you were depending on Social Security for retirement or your pension, 401K or IRA, forget it. Your only guaranteed protection will come from your gold and silver assets and do not forget that.

The situation in the euro zone is well known to most readers. Greece has borrowed $132 billion or is in the process of doing so, and the EU, the ECB and the IMF are committed to $1 trillion in bailout money for the six countries in trouble. Several of these countries have been downgraded by rating agencies. This situation is problematic, but the US situation is fundamentally worse. In a way the European situation although not good has been used as a cover for US systemic problems. That is because American professionals do not want to hear about it and the American public is still wondering around in the darkness.  They still for the most part do not know what is being done to them, nor generally do they care. It is all Super Bowl and beer while it lasts. The US has been in a mode of printing money instead of producing goods and services for years. Dollars are the world’s reserve currency, which has given the dollar an unnatural extended life. In addition to that foreign countries have continually printed their own currency, bought dollars and bought US Treasuries in order to manipulate and cheapen their currencies. In this process the US has been able to export inflation. In time this unusual situation will end and the inflation will be turned inward in the US becoming very disruptive. This means at the dollar’s present pace it soon won’t be the world’s reserve currency. As currencies such as the dollar fall against other currencies the cost of imported goods will rise and US inflation will get another boost.

America needs to recapture its manufacturing base, which has been the basis of its success for more than 250 years. The way to do that is impose a 25% plus tariff on all goods and services. This is a matter of survival, not politics. The US carried the world for 65 years and it is time for these complainers to pay a price for their success and standard of living. The US will also profit from a much higher savings rates, 10% or more would be helpful. It is currently 4%, down from 7% prior to November.

There is no question that the dollar’s reserve status has and is being abused. The prime reasons for that status was it was the only nation really left standing at the end of WWII, and the dollar was backed by gold. That has not been the case since August 15,1971. If the US is to maintain its dollar status it has to devalue and revalue versus other currencies and go into multilateral default. Then gold backing can again be put behind the dollar. If they do not have the gold they will have to buy or borrow it. If that is not done another currency or group of currencies will have to be used.

Since WWII all other nations have deliberately devalued their currencies. The US didn’t mind because it was by far the strongest nation in the world. Whenever the world had a recession the US bailed it out by creating more money and credit. That made everyone happy and the world rolled along. This is no longer the case. Since the 1980s, at the behest of WTO, NAFTA and CAFTA, the trade tariffs have almost all been removed. This free trade, globalization, offshoring and outsourcing by transnational conglomerates has destroyed America’s internal manufacturing infrastructure with the loss of 42,400 company and 8.5 million good paying jobs. As long as this is allowed to continue America cannot compete and will continue to slip toward a lower status among nations. The only way to stop this headlong rush into oblivion is to leave WTO, NAFTA and CAFTA and reinstitute tariffs including penalties on those countries that insist on continuing to depreciate their currencies. If this is not accomplished with the unpayable debt the country is carrying, it is doomed.

Yes, tariffs mean higher prices for imported goods and more inflation. Our trade deficit would fall and the dollar would stabilize. All those American corporations that moved to foreign countries to take advantage of cheap labor would no longer be able to capitalize on cheap labor and perhaps keeping their profits offshore in secret tax havens when they pay no US taxes. Things have to change and change quickly, or America’s competitive position will be permanently destroyed. Other nations will be able to buy more domestic goods with their stronger currency, raise their standard of living and develop their own domestic economies.

Those whose aim is to bring about world government know that if a country does not have a sound industrial base it can never be successful as a nation. What is being done to the US and Europe in the name of free trade is to force the people of those nations with a collapsing economic and financial structure to accept World Government. This is what this deliberate destruction is all about. In order to rebuild the manufacturing base the US has to erect tariff barriers on goods and services and savings have to be increased. The situation with savings is the same as it was in 1959, 43% of Americans have less than $10,000 saved for retirement. America needs a 10% savings rate if they ever hope to recover. Accumulation of savings has been difficult since 2000 due to declining interest rates. Stocks have risen only 9%, bonds 67%, but gold has risen five-fold and silver six-fold. We have recommended gold and silver coins and shares over that 11-year period so subscribers have been able to save and profit. The other 99% of professionals have been losers, not to mention the losses to inflation. The gold and silver bull market will be the greatest bull market of all-time. There is no safer place to be.

Listen to American Mercury contributor Bob Chapman on GONOB Radio (Though the host has a few flights of fancy, he’s learning, and it’s great to hear Bob’s insights, from being trained in intelligence work a half century ago to becoming the “worst nightmare” of our illegitimate rulers. — Ed.)

*  *  *

We at The American Mercury are honored and pleased to welcome back to our pages Mr. Bob Chapman, an international economic expert and distinguished writer who was part of the print Mercury in the pre-Internet era.

Read the full article at The International Forecaster

“When in the course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another… a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.” –The Declaration of Independence

INCREASINGLY, I have no fealty to the U.S. government. This has nothing to do with George Bush, bogeyman of the Left, the war in Iraq, or Halliburton, and everything to do with the reasonable assessment that the United States is too big for its own good. Too big in its 300 million people to be represented by 550 mostly millionaire men (not women) in a far-off swamp called Washington, D.C. I therefore have stopped calling myself a U.S. citizen.

I prefer to be called a Brooklynite or a Moabite, after the two places I call home– Brooklyn, New York, and Moab, Utah–which to me are part of the same nation only in name and only by the force of outmoded institutions. In each there are unities of language and custom, sure, but the fundamental interests of the citizens are not the same. My loyalties to each place will last as long the place lasts, but the fealty is local, my interest zoned within a hundred-mile radius and certainly not tied to the abstraction known as the national interest. “There is no national interest,” the historian Howard Zinn once said. Which brings me to the question of secession–the breaking-off of smaller countries from bigger countries. I am for it in the case of the United States. I am for it because I think we need to rejigger our loyalties to the needs of localities. And I am not alone in this thinking.

What happened in Chattanooga was an American moment, certainly, and not the least of its charms was the irony of the old Left of the North and the old Right of the South standing united in their opposition to the Union. The Associated Press, The New York Times, New York Newsday, The Washington Post, and USA Today carried the story, which traveled to newsrooms in Canada, England, Ireland, New Zealand, Belgium, and India, and thence to the ubiquity of eyes on YouTube, and across the airwaves of at least 50 radio stations that ran interviews with the leaders of the convention. By the evening of October 4, the convention had settled on a list of principles they called the Chattanooga Declaration. “The deepest questions of human liberty and government facing our time go beyond right and left, and in fact have made the old left-right split meaningless and dead,” said the declaration. “The privileges, monopolies, and powers that private corporations have won from government threaten everyone’s health, prosperity, and liberty, and have already killed American self-government by the people.” The answer, it went on, was that the American states ought to be “free and self-governing.” Two hundred and fifty years earlier, the Declaration of Independence asked for a similar dedication to self-governance: “Whenever any Form of Government becomes destructive,” wrote Thomas Jefferson, “it is the Right of the People to alter or to abolish it, and to institute new Government.”

Indeed, it could be argued that secession is the primal American act, the founding event as old as the concept of the states themselves. What else did our founders accomplish in 1776 but secession from the tyranny of England?

Here’s how it will be with Vermont: The leaders of its secessionist movement, the Second Vermont Republic, want to feed, shelter, clothe, and fuel a free republic broken from the empire. This doesn’t mean the little country will sink into Albanian isolation, its citizens ceasing to trade with China or refusing to watch the rot beamed on DirecTV satellites. It will continue to be a tourist destination, its slopes welcoming New Yorkers and Quebecois equally. But the state’s secesh want to keep their tax dollars at home and put them toward localized food economies (calling it “food sovereignty”), energy supplies based on wind and water, and credit lines out of community lenders freed from the distant tyrannical rate controls of central banks.

One day two years ago, I heard Kirkpatrick Sale speak before 1,500 attendees at a meeting of the SVR. Sale, who has the build and mien of a terrier on methamphetamine, reasoned out the desire for separation from the behemoth. “It is intolerable,” he said, “for a citizen to succumb to a government that is in favor of unjust and unjustified warfare, brutal torture in defiance of all conventions, illegal detentions, the fostering of terrorism, war profiteering, sky-high trade deficits. … It is intolerable, I say, for a citizen to live under such a government, in such a country.”

“But,” Sale went on, “I have no intention of going to Canada, or France. I love my home, and I want to leave this country without leaving home. And the only way to do that, ladies and gentlemen, is … secession.” The crowd exploded, but gently. They were young and old, hippies and farmers, old Right and new Progressive, college educated and tenth-grade educated. The room where they gathered, the great hall of the Vermont State Legislature, was hung with purple velvet, and built of fine wood and marble, and smelled clean. The rebels were not of the type to shame the solemnity of the place.

As Sale slapped out his peroration at the podium, nearby sat the foremost organizer of the secessionist cause in Vermont, the softer-spoken but no less radical Thomas Naylor, 72, a former Duke University economist and social critic, co-author of the bitterly funny Affluenza, a diagnosis of the American consumerist condition as political pathology. Naylor, who knows his history, christened the movement under the title “Second Vermont Republic” because there was once a first Vermont republic–it was no mere colony or state–that ceded its independence and voted on March 4, 1791, to join the nascent American union. Each year, Naylor and his Second Vermonters like to memorialize the event by walking in a mock funeral procession through Montpelier playing a dirge and carrying a casket marked “Vermont.”

Now he took to the podium, looking tall, if a little aged, with white hair, and answered questions from skeptics who wondered if Vermont could indeed go it alone as a political and economic unit, or, more important, if perhaps the secession urge was just a hotheaded reaction to the injuries of the Bush administration. What Thomas Naylor will tell you in answer when you sit him down at his little house in the Vermont village of Charlotte–what he tells every crowd he addresses–is that the problem of the United States as it stands has no solution in the current framework….

“The nation is not sustainable,” Naylor tells me. He thinks the United States is a political and economic monster, stumbling and out of control, a land where bigness in all things has led to military overstretch, runaway debt, mass inequalities, and a government by and for the few. He draws a causal connection with the dire social effects on the ground: Of all the western democracies, the United States stands near dead last in voter turnout, last in health care, last in education, highest in homicide rates, mortality, STDs among juveniles, youth pregnancy, abortion, and divorce–a society which, in keeping with its degenerate morals, wreaks one-quarter of the environmental damage on the planet every day.

“It comes down to the problems of the human condition: separation, meaninglessness, powerlessness, fear of death,” he says. “The human condition is not being dealt with in the United States. It is our inability to deal with this human condition that leads to a sickness that I call affluenza.” Affluenza, he says, can be recognized by key symptoms: technomania and e-mania–obsession with technology and the Internet–rampant consumerism, megalomania, narcissism, “robotism,” and “affluenza’s concomitant: imperialism and national aggression.” Consumerism and megalomania and narcissism I get–I grew up in New York City. But “robotism”? As Naylor puts it, all Americans “watch the same TV programs, listen to the same radio programs, subscribe to the same political viewpoints”–the limited amplitude of opinion afforded in the two-party system–”claiming to be a country of individualists while in truth we are the nation of conformists.”

So what to do? “You can commit suicide,” offers Naylor. “You can deny the human condition through megalomania and the pathology of having, owning, possessing, which requires an empire that stomps around the planet stealing resources. Or you can say ‘hell no’ and rebel and confront the human condition and, as Camus says, die happy. Secession is fundamentally an act of rebellion driven by a combination of fear and anger and hope. It’s the ultimate destructive rejection of the system, the strongest possible way you can say to someone like George Bush, ‘Go fuck yourself.’ The creative element is Vermont. A state of small towns, small farms, small churches, small businesses–this is the alternative we’re offering to America.”

Here’s the way it is with Vermont: At the border with New York State, the billboards disappear. They just go, as if aliens had hoovered them away. Vermont, you see, is already a separate country. It is the most radical state in the Union in terms of the number and kind of town meetings–direct democracy in action. Its constitution of 1777 made it the first state to outlaw slavery, it was the first to mandate universal suffrage for all men, and is currently one of only two states that allow incarcerated felons to vote. It has no death penalty and virtually no gun-control laws, yet remains one of the least violent jurisdictions in America. It has no big cities, no big businesses, no military bases, no strategic resources, few military contractors. All three members of its Congressional delegation voted against the Iraq War resolution. It is rural and wild, with the highest percentage of unpaved roads in the nation. And those billboards? It was the first state to ban them along its roads. With its strict environmental-impact laws, Vermont fended off the predations of Wal-Mart superstores longer than any other state, and Montpelier today remains the only state capital in America without a McDonald’s restaurant. Economically, though, Vermont has the smallest gross state product. And the SVR concedes it is still unclear how secession would play out–legally, economically, and logistically.

The idea of it coming to pass in Vermont today is not entirely quixotic: Following mock secession debates during the 1990s in seven Vermont towns, all seven voted in favor of the idea. Statewide, this peculiar contrarianism would need to be harnessed in a legislative vote (the method employed by Confederate states in the 1861 secession), a popular referendum, or a constitutional convention. In each of these cases, a supermajority would be required. Vermont’s governor would then be empowered to present the state’s exit declaration to the U.S. secretary of state. As it stands, a 2007 poll found that just 13 percent of Vermonters say they would opt for it.

The movement’s detractors, of course, have a valid set of concerns, too. Some have expressed discomfort with conferences like the one in Chattanooga, seeing a dire development in the far Left working in tandem with the far Right….

Another concern is that the understanding of the U.S. Constitution today allows no other recourse but armed revolt for a state wishing to go its own way. “Secession is not possible today without violence,” Pauline Maier, a professor of American history at the Massachusetts Institute of Technology…. “It’s to follow the example of the Southern secessionists who thought that they could just leave the Union peacefully, and, nuttier still, get a part of the unsettled territory as a parting gift. … Isn’t it time that Americans began learning something from history? Or must we again bleed ourselves into wisdom?”

In her 1936 book, Give Me Liberty, Rose Wilder Lane, [once] an avowed Leninist, described her travels to the Soviet Union, where she found that the workers “liberated” into the “communal” life of the state were pretty unhappy. One peasant she spoke to said of the new country: “It’s too big.… At the top, it is too small. It will not work.” History bore out the lowly peasant’s judgment, not Lenin’s.

George Kennan, the architect of Cold War containment and the national-security state that arose in answer to the Soviet Union, came to the same conclusion about the United States. “There is a real question,” Kennan warned, “as to whether bigness in a body politic is not an evil in itself.” Years later, when Thomas Naylor wrote to the old Cold Warrior outlining a New England secession uniting Maine, New Hampshire, and Vermont, Kennan personally responded with a letter dictated from his sickbed: “I write to say that in the idea of the three American states’ ultimate independence, whether separately or in union, I see nothing fanciful. [Such] are at present the dominating trends in the U.S. that I see no other means of ultimate preservation of cultural and societal values that will not only be endangered but eventually destroyed by an endlessly prolonged association … with the remainder of what is now the U.S.A.”

It was the stratagems of George Kennan, who died in 2005, that ultimately defeated the Soviet Union. Naylor sees this as historical irony, and he takes pleasure in drawing a dark comparison between the Soviet Union and the United States: There is the same far-flung geography. The same corporate socialism that defies free markets. The same spread of influence worldwide through violence, murder, and pillage. The same stunted public discourse. The same electoral sclerosis in the legislature (Congress is almost as stable in membership as the Politburo). “No one in the Soviet Union in 1960 or 1970 or even 1980 found it imaginable that someday it would collapse,” says Naylor. So, too, he says, is our certainty today in the stability of the United States of America.

Read the full article at Good Is

April 13, 1945

THE BALTIMORE Sun editorial on Roosevelt this morning begins: “Franklin D. Roosevelt was a great man.” There are heavy black dashes above and below it. The argument, in brief, is that all his skullduggeries and imbecilities were wiped out when “he took an inert and profoundly isolationist people and brought them to support a necessary war on a scale never before imagined.” In other words, his greatest fraud was his greatest glory, and sufficient excuse for all his other frauds. It is astonishing how far the Sun has gone in this nonsense. When the English fetched Patterson and John Owens they certainly did an all-out job. I know of no paper in the United States, not even the New York Herald Tribune, that croons for them more assiduously.

Roosevelt’s unparallelled luck held out to the end. He died an easy death, and he did so just in time to escape burying his own dead horse. This business now falls to Truman, a third-rate Middle Western politician on the order of Harding. He is fundamentally against the New Deal wizards, and he will probably make an earnest effort to turn them out of power, but I have some doubt that he will succeed. They have dug in deeply and they may be expected to fight to the bitter end, for once they are out they will be nothing and they know it. The case of La Eleanor is not without its humors. Only yesterday she was the most influential female ever recorded in American history, but tomorrow she will begin to fade, and by this time next year she may be wholly out of the picture. I wonder how many newspapers will go on printing her “My Day.” Probably not many.

It seems to me to be very likely that Roosevelt will take a high place in American popular history — maybe even alongside Washington and Lincoln. It will be to the interest of all his heirs and assigns to whoop him up, and they will probably succeed in swamping his critics. If the war drags on it is possible, of course, that there may be a reaction against him, and there may be another and worse after war is over at last, but the chances, I think, run the other way. He had every quality that morons esteem in their heroes. Thus a demigod seems to be in the making, and in a little while we may see a grandiose memorial under way in Washington, comparable to those to Washington, Jefferson, and Lincoln. In it, I suppose, Eleanor will have a niche, but probably not a conspicuous one. The majority of Americans, I believe, distrust and dislike her, and all her glories have been only reflections from Franklin.

The Baltimore Hearst paper, the News-Post, handled the great news with typical cynicism. Hearst is one of the most violent enemies of Roosevelt, and all his papers have been reviling the New Deal, and even propagating doubts about the war. But the whole first page of the News-Post is given over this afternoon to a large portrait of Roosevelt flanked by two flags in color and headed “Nation Mourns.” The editorial page is filled with an editorial saying, among other things, “The work and name of Franklin Delano Roosevelt will live on, not only today or tomorrow, but in all the annals of recorded time.” This, as I have noted, is probably a fact, but it is certainly not a fact that tickles Hearst. He is, however, an expert in mob psychology, and does not expect much. The Sun is in a far less rational position. It certifies to Roosevelt’s greatness in all seriousness.

April 15

All the saloons and major restaurants of Baltimore were closed last night as a mark of respect to the dead Roosevelt, whose body passed through the city at midnight. It was silly, but it gave a lot of Dogberries a chance to annoy their betters, and so it was ordained. As a result, the Saturday Night Club missed its usual post-music beer-party for the first time in forty years. All during Prohibition the club found accommodations in the homes of its members, but last night no member was prepared, so the usual programme had to be abandoned. August and I came home, had a couple of high-balls, and then went to bed.

Roosevelt, if he had lived, would probably have been unbeatable, despite the inevitable reaction against the war. He was so expert a demagogue that it would have been easy for him to divert the popular discontent to some other object. He could have been beaten only by a demagogue even worse than he was himself, and his opponents showed no sign of being able to flush out such a marvel. The best they could produce was such timorous compromisers as Willkie and Dewey, who were as impotent before Roosevelt as sheep before Behemoth. When the call was for a headlong attack they backed and filled. It thus became impossible, at the close of their campaigns, to distinguish them from mild New Dealers — in other words, inferior Roosevelts. He was always a mile ahead of them, finding new victims to loot and new followers to reward, flouting common sense and boldly denying its existence, demonstrating by his anti-logic that two and two made five, promising larger and larger slices of the moon. His career will greatly engage historians, if any good ones ever appear in America, but it will be of even more interest to psychologists. He was the first American to penetrate to the real depths of vulgar stupidity. He never made the mistake of overestimating the intelligence of the American mob. He was its unparallelled professor.

LAST DECEMBER, when Tennessee Rep. Susan Lynn, R-Mount Juliet, said she would introduce legislation which would declare null and void any federal law the state deems unconstitutional, some people were horrified. Rep. Lynn was specifically targeting the health-care reform legislation that was pending at that time. But the reaction that many people had to her language was not an expression of their support for Obamacare.

Too many Americans hear the terms “states’ rights” or the word “nullification” and immediately think of racial prejudice, Jim Crow laws and school segregation. Honestly, if all I had to rely on was what I remember being taught in public school, I would probably tell you the history of it all went like this:

The theory of nullification was first invented in the 1800s’ by advocates of slavery. They used nullification of tarrifs as a test run in the 1820s. Of course, what they really had in mind was maintaining the institution of slavery against any possible attempt by the federal government to abolish it. Then America fought the Civil War in order to end slavery, but the ideas of states’ rights and nullification were later revived in the 1950s’ by belligerent white southerners in an attempt to block the racial integration of schools. The Civil Rights Movement started and the feds had to step in and force the southern states to treat everyone equally. THE END.

That’s a rough, abbreviated version of the narrative that was handed to me, but it gives you an idea of what many Americans think they know about states’ rights and nullification. Fortunately, thanks to people like Tom Woods, Thomas DiLorenzo, and many others, I know today that this was a gross misrepresentation of the classical liberal states’ rights tradition. Then again, (and it’s not my intention to be prideful here), I’m not like most Americans. And If you’re reading this, you probably aren’t either.

Civic Illiteracy

In 1798, Jefferson and Madison articulated the concepts of nullification and interposition in the Kentucky and Virginia Resolutions, which were passed in response to to the hated Alien and Sedition Acts. But the ideas which support nullification and interposition were actually expressed earlier during the ratifying convention of Virginia by the Federalists themselves!

Given the fact, however, that most Americans cannot even correctly name all three branches of our federal government, it’s probably a safe bet that they have never heard of the Kentucky and Virginia Resolutions or the fact that nullification was used to assist runaway slaves.

So should it really come as any surprise that many people in Tennessee recoiled in horror at Rep. Susan Lynn’s comments about nullification? Rep. Mike Turner of Tennessee’s 51st District responded with a sarcastic and condescending comment that probably expressed the sentiment of many Tennessee’s left-liberal elites:

“Susan Lynn is yearning for times gone by,” Turner said. “Maybe we could put the poor people back to sharecropping and slavery and let the people up at the big house have all the nice things. We’ve already had that fight about states’ rights.”

Lynn responded to Turner’s comment by saying:

“I can’t even imagine that’s a serious comment.”

Rep. Turner’s comments resemble some of the incredibly ignorant and / or vicious comments directed against today’s advocates of nullification that frequently appear in the bologoshpere. One particular blogpost I stumbled upon really embodies the either extremely ignorant or wholly deceptive attempt to associate today’s proponents of states’ rights and nullification with segregationists, white supremacists and domestic terrorists:

“Why is it that the extremist teabaggers are not called traitors even though they are basically calling for an overthrow of the democratically elected U.S. government? There latest stunt should seal it. They are calling for a long rejected theory called Nullification, and at least one treasonous..blogger and teabagger is pushing it.”

The Compromise of 1850 and How Abolitionists Used Nullification

In 1850, Congress compromised in order to hold the Union together against the divisive issue of slavery. Since the preservation of the Union (Northern control of the South’s economy), rather than the abolition of slavery was foremost in the minds of influential Republican bankers, manufacturers and heads of corporations, this compromise made perfect sense.

Part of this compromise was the passage of more stringent fugitive slave legislation that compelled citizens of all states to assist federal marshals and their deputies with the apprehension of suspected runaway slaves and brought all trials involving alleged fugitive slaves under federal jurisdiction. It included large fines for anyone who aided a slave in their escape, even by simply giving them food or shelter. The act also suspended habeas corpus and the right to a trial by jury for suspected slaves, and made their testimony non-admissible in court. The written testimony of the alleged slave’s master, on the other hand, which could be presented to the court by slave hunters, was given preferential treatment.

As would be expected, this new legislation outraged abolitionists, but also angered many citizens who were previously more apathetic. In 1851, 26 people in Syracuse, New York were arrested, charged and tried for freeing a runaway slave named William Henry (aka Jerry) who had been arrested under the Fugitive Slave Act. Among the 26 people tried was a U.S. Senator and the former Governor of New York! In an act of jury nullification, the trial resulted in only one conviction. “Jerry” was hidden in Syracuse for several days until he could safely escape into Canada.

The government of Wisconsin went even further and in 1854 officially declared the Fugitive Slave Act to be unconstitutional. The events that lead up to this monumental decision, which is a milestone in the history of the states’ rights tradition, is one of the best stories most Americans have never heard.

In 2006, H. Robert Baker, assistant professor of legal and constitutional history at Georgia State University wrote a book called, “The Rescue of Joshua Glover: A Fugitive Slave, the Constitution, and the Coming of the Civil War“. In its review of the book, The Journal of American History wrote:

“Terribly conflicted about race, Americans struggled mightily with a revolutionary heritage that sanctified liberty but also brooked compromise with slavery. Nevertheless, as The Rescue of Joshua Glover demonstrates, they maintained the principle that the people themselves were the last defenders of constitutional liberty…”

Joshua Glover was a slave in Missouri who managed to escape from his master. In 1854, with the help of the Underground Railroad, he made his way north, all the way to Wisconsin. There he found work at a mill in Racine, a community in which anti-slavery sentiment ran high. Unfortunately for Glover, his former master, B.S. Garland eventually managed to find out where Glover had taken up residence.

Accompanied by two US Marshals, the three of them took Glover by surprise. In spite of his resistance, Glover was subdued with a club and handcuffed. Thrown into a wagon, he was surreptitiously transported to Milwaukee, where he was thrown in jail. Glover’s abduction was discovered somehow or another, however, and in no time one hundred or so men landed by boat in Milwaukee.

The men marched towards the courthouse, which was adjacent to the jail, and crowds of people began to join their ranks or follow along as spectators. An abolitionist named Sherman Booth, who published a local daily newspaper there called the “Free Soil Democrat” rallied the supporters of the citizen army shouting:

“All freemen who are opposed to being made slaves or slave-catchers turn out to a meeting in the courthouse square at 2 o’clock!”

When the meeting at the courthouse adjourned, those who had assembled eventually resolved that Joshua Glover was entitled to at least two things: A writ of habeas corpus and a trial by jury. A local judge concurred and delivered the writ to the US Marshals at the jail. As might be expected, the federal officers rejected the writ as invalid. After all, federal law trumps state judicial authority, does it not?

The assembly of citizens from Racine and Milwaukee must have decided that such was not the case in this instance. In fearless defiance, they broke down the doors of the jail and freed Joshua Glover. In an act that probably would have filled Sheriff Mack with joy, had he been there, the Racine County Sheriff arrested Glover’s former slave master and the two US Marshals who had kidnapped him. They were charged with assault and put jail. In the meantime, the Underground Railroad assisted Joshua Glover as he crossed the border into Canada.

Although Glover escaped to freedom, it was not without a price. Glover’s former master, B.S. Garland was released on a writ of habeas corpus and in the long run would sue Sherman Booth, turning him financially upside down.

In the short run, Booth and two other men were arrested and indicted by a grand jury. While Booth maintained that he had never incited the crowd to liberate Glover or that had helped Glover escape in any way, he did not mince words either. Speaking in his own defense in front of the US Commissioner, he proclaimed:

“..I sympathize with the rescuers of Glover and rejoice at his escape. I rejoice that, in the first attempt of the slave-hunters to convert our jail into a slave-pen and our citizens into slave-catchers, they have signally failed, and that it has been decided by the spontaneous uprising and sovereign voice of the people, that no human being can be dragged into bondage from Milwaukee.”

According to his account of these events, Henry E. Legler wrote in 1898:

“Byron Paine made an argument in behalf of Booth that attracted attention all over the country. It was printed in pamphlet form and circulated on the streets of Boston by the thousands. Charles Sumner and Wendell Phillips wrote the author letters of hearty approval and commended his force of logic and able presentation of argument. This pamphlet is now excessively rare; but half a dozen copies are now known to exist.”

Judge Smith of the Wisconsin Supreme Court made the following declaration, that ought to inspire and motivate champions of the Tenth Amendment and state sovereignty today. Speaking not only for Wisconsin, but of all the states, he said that they would never accept the idea that:

“..an officer of the United States, armed with process to arrest a fugitive from service, is clothed with entire immunity from state authority; to commit whatever crime or outrage against the laws of the state; that their own high prerogative writ of habeas corpus shall be annulled, their authority defied, their officers resisted, the process of their own courts contemned, their territory invaded by federal force, the houses of their citizens searched, the sanctuary or their homes invaded, their streets and public places made the scenes of tumultuous and armed violence, and state sovereignty succumb—paralyzed and aghast—before the process of an officer unknown to the constitution and irresponsible to its sanctions. At least, such shall not become the degradation of Wisconsin, without meeting as stern remonstrance and resistance as I may be able to interpose, so long as her people impose upon me the duty of guarding their rights and liberties, and maintaining the dignity and sovereignty of their state.”

The United States Supreme court eventually reversed the action of the Wisconsin’s courts. Booth and one other man accused of helping to liberate Joshua Glover were found guilty. Both spent months in jail in addition to having to pay stiff fines. This was the price that was paid for Joshua Glover’s freedom.

Wisconsin Historical Marker

Rather than being deterred, however, Wisconsin, along with several other states, such as Connecticut (1854), Rhode Island (1854), Massachusetts (1855), Michigan (1855), Maine (1855 and 1857), and Kansas (1858) all went on to pass even more personal liberty legislation designed to neutralize federal enforcement of the Fugitive Slave Act of 1850.

It was no coincidence that the 1859 statement of the Wisconsin Supreme Court borrowed words directly from the Kentucky Resolutions of 1798:

“Resolved, That the government formed by the Constitution of the United States was not the exclusive or final judge of the extent of the powers delegated to itself; but that, as in all other cases of compact among parties having no common judge, each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress.

Resolved, that the principle and construction contended for by the party which now rules in the councils of the nation, that the general government is the exclusive judge of the extent of the powers delegated to it, stop nothing short of despotism, since the discretion of those who administer the government, and not the Constitution, would be the measure of their powers; that the several states which formed that instrument, being sovereign and independent, have the unquestionable right to judge of its infractions; and that a positive defiance of those sovereignties, of all unauthorized acts done or attempted to be done under color of that instrument, is the rightful remedy.”

The End, or Just the Beginning?

Signpost up ahead

Few Americans have ever heard the heroic story of how the people of Wisconson and several other states stood up to the federal government’s tyrannical, unconstitutional slave laws with the help of their elected state officials.

Today state sovereignty and the Principles of 1798 are being invoked again, for a variety of reasons, just as they were invoked for a variety of reasons all throughout American history, in spite of what you may have been taught or are being told today.

States legislatures all over the Union today are standing up and re-asserting their sovereignty, which is guaranteed by the 10th Amendment. They are proposing and passing legislation which would nullify a whole host of unconstitutional federal laws including: The federally mandated national “REAL ID” card, restrictions on the use of Medical Marijuana, unconstitutional deployments of State National Guard units, federally mandated health insurance, unconstitutional regulations of state manufactured firearms and much more…

It is tragic that left-liberals have seemingly abandoned the classical liberal states’ rights tradition in favor of nationalism and the centralization of power. It is also shameful that they have made a concerted effort to associate nullification with slavery in the minds of average Americans. As Josh Eboch, State Chapter Coordinator for the Virginia Tenth Amendment Center observes:

“Of course, even though activists on the left supported nullification for Real ID and also for medical marijuana, those calling for state sovereignty with regard to health care will have to deal with the standard cries of racism and references to the Jim Crow…But just because nullification was used [unsuccessfully] in the past to deny rights to certain groups doesn’t mean it can’t be used to regain our rights today. In the end, ‘for desperate people whose freedoms are being systematically usurped by all three federal branches and both political parties, nullification may be the key to restoring our republic’.”

Derek Sheriff  is the state chapter coordinator for the Arizona Tenth Amendment Center

Read the full article at the Tenth Amendment Center

Reprinted from Indigenous Affairs. Published by the International Work Group for Indigenous Affairs.

NATIVE COMMUNITIES, primarily in the western US, have been chronically exposed to low doses of radiation for over forty years. This exposure derives from the many nuclear activities on indigenous lands such as uranium mining and milling, uranium conversion and enrichment, and testing of nuclear weapons. More than one half of all US uranium deposits lie under reservation land. In the past, the Secretary of the Interior was authorized to lease tribal mineral resources for national defense purposes. In return for mining rights, the large energy consortiums have historically paid royalty fees and employed Indians in substandard working conditions.

Although native communities bear a disproportionate burden of risk from those activities compared to the general public, they are in many ways the least equipped communities to respond appropriately. Information on exposures and their health effects is often inadequate, incomplete, inaccessible and incomprehensible. The environmental consequences of uranium mining, atomic bomb testing and production, and radioactive waste disposal on or near reservation lands have often been disastrous. Estimates conclude that over 22,000,000 tons of mine tailings or waste by-products have been left at 24 locations in nine western states since the 1950s and that 220 acres of tailings have contaminated the Four Corners region alone. This article looks at the cases of two nations—the Western Shoshone and the Pauite-Shoshone of Ft. McDermitt.

The Western Shoshone Nation

Because of the long-term use of the Nevada Test Site (NTS), which is located on traditional Shoshone land, the Western Shoshone nation has become known as the most bombed nation on earth. The 928 American and 19 British nuclear explosions in Newe Sogobia have been classified by the Western Shoshone National Council (WSNC) as bombs rather than “tests.” The purpose of a bomb is to destroy while the idea of a test is to introduce something new. About 1,350 square miles of their total territory of about 43,000 square miles has been destroyed by hundreds of craters and tunnels, which are uncontrolled underground nuclear waste dumps, by nuclear bombs since 1951 when the bombing began. But no treaty, agreement, vote or sale exists that give the US permission to explode nuclear bombs on or under the Western Shoshone Nation. The Treaty of Ruby Valley of 1863, signed by representatives of the US and the Western Shoshone and ratified by the US Senate in 1866 and confirmed by President Grant in 1869, recognized Shoshone territorial sovereignty. The treaty did not transfer ownership rights and is till in effect. But through a variety of ethically and legally dubious methods, land was taken from the reservation. US authorities in the form of the Bureau of Land Management, Forest Service, Park Service, Fish and Wildlife, Atomic Energy Commission, Department of Defense, Department of Transportation, etc., control now approximately 90 per cent of the Shoshone land.

Environmental monitoring reports for the NTS from the 1950s until 1991 document substantial low level releases of radioactive iodine, strontium, cesium, plutonium and noble gases that have contaminated lands in Nevada and Utah. The Western Shoshone reservations, Duckwater and Ely are within a fifty-mile radius of the NTS and were more heavily contaminated. Residents reported unusual animal deaths, hair loss and gardens turning black. The health of the population still remains at high risk from cancers and birth defects. Despite these facts, the US government has now designated an area of the Western Shoshone Nation, known as Yucca Mountain, to become the final repository for the high level nuclear waste from the US nuclear industry. The Department of Energy (DOE) estimates that its scientific investigation of the site will be concluded by 2001, at a cost of $6.3 billion (year-of-expenditure dollars) and a repository could be opened by 2010. The DOE is no longer looking for another site. Although the tribe is very concerned about observed health and environmental effects, there are no official health studies under way, no offers to remedy environmental pollution, no programs for early detection of disease or disease surveillance in place.

In order to collect data on the effects of nuclear fallout from the NTS, WSNC started its own project in 1994. The main goal of the Western Shoshone Health Project is to provide data on the state of the land, soil, water, plants as well as the health of the people. This project is part of the Native American Health Network. Various organizations such as the Childhood Cancer Research Institute (CCRI) and Native Americans for a Clean Environment (NACE) work together in that network. They targeted the Western Shoshone and Paiute communities in the Great Basin among their highest priorities.

The overarching goal of the project is to begin proactive steps to correct the imbalance of risk by fostering a better understanding of radiation health issues among members of Native American communities to meet growing concerns about past and ongoing exposures. The communities will be empowered to obtain appropriate health protection and community controls for the future. A part of the project is the Training of Trainers program. This is a comprehensive, integrated program of training and technical assistance for the purpose of empowering native people to protect their communities and nations by arming them with an understanding of critical social and technical radiation issues directly affecting their health and environment. The program will create a unique partnership between researchers, health care providers and native communities by promoting a combination of indigenous thinking coupled with technical skills. The community trainers will take technical information, processes and techniques and translate them into a cost effective approach for the communities by developing education modules. The modules will be utilized by the community trainers for educating community members on the issues. Beyond this, the general research goal will be to use existing data resources to compile important information on off-site exposures for the communities, including those exposures to and from specific environmental or food chain pathways. Health scientists from the Center for Technology, Environment and Development (CENTED) at Clark University, Worcester, MA, are maintaining a dialogue with the community as their research is carried out so that they may benefit from local knowledge and experiences. For example, the Western Shoshones have indicated that mule deer, sheep, rabbits and pine nuts are main sources of subsistence for their people. As such, research on the up-take of radionuclides to these animals and roots are of much interest to them. They also mentioned several nuclear tests that they were particularly concerned about. Such community input will guide the scientists’ research, help to prioritize data collection and lead them to investigate other related issues of concern.

The Issue of the Ft. McDermitt Pauite-Shoshone–Background

The Quinn River Band of the northern Pauite originally inhabited the lands of the current Fort McDermitt Indian Reservation. As a result of the Indian Reorganization Act (IRA) of 1934, the members of the tribe adopted a Constitution and Federal Corporate Charter, and became the federally recognized Fort McDermitt Paiute-Shoshone Tribe. As for many other tribes, the adopting of an IRA Constitution and Corporate Charter was to terminate the Tribe’s traditional form of government and dispute resolution. It also established a republican form of government and court system. The IRA also imposed tribal laws codified in the Tribe’s constitution and federal Corporate Charter which tribal and federal officials neither take into consideration in their deliberations nor abide by. Furthermore, the IRA allowed the federal government more authority in intra- and intertribal affairs.

The tribe originally comprised a much larger land base, but a large part was taken away by dubious methods. Eventually, a Land Claims Commission was established to dictate monetary settlements, which many tribal members accepted. However, as many as two or three dozen of the more traditional families would not accept any monetary compensation, believing that by doing so they would be relinquishing their inherent rights as indigenous peoples. But because they did not accept the money, they did not become enrolled tribal members. At the reservation there are now approximately 400 enrolled members and about 300 unenrolled. The MRS Localization Process

Because of the desperate economic situation at Ft. McDermitt reservation, the Tribal Council was willing to participate. Participation in that process means access to $100,000 in the first phase and $200,000 in the Phase II-A for feasibility studies and education.

Research for a Monitored Retrievable Storage (MRS) for nuclear fuel has a very high priority for the DOE. The 23,681 MT (metric tons) of nuclear fuel in 1992 and its growth is a pressing problem. The Nuclear Waste Negotiator (NWN), a federal agency working closely with the DOE, but accountable only to the President and Congress, has to find one or even more sites where the radioactive material can be deposited for the next 30 or 40 years before final storage, possibly at Yucca Mountain Repository.

NWN’s first attempt to establish an MRS in Tennessee failed because of the opposition of the State, the Governor and inhabitants. That is why NWN is now looking for sovereign volunteers. In May of 1991, the NWN sent a letter of introduction to all state and territorial governors, Tribal and Business Council governors, Tribal and Business Council chairpersons, and presidents of Pueblos and Native American Nations (both federally recognized and unrecognized). In June, feasibility assessment grants from the NWN Fund were authorized through the DOE. The size of the grants are determined by tribal conditions. Phase II-A offers an additional $200,000 for continued education and feasibility studies. All nine of the Phase II-A applications were held by Native American Nations, therefore, if a MRS is to be sited, it will be on an Indian reservation. Phase II-B offers up to $2.8 million to continue feasibility studies and education outreach, to enter into formal negotiations, identify potential sites and commence an environmental assessment. One has to remember that a volunteer participant can drop out of the MRS process at any time and without any explanation. At the time of writing, the Mescalero Apache and the Tonkawa Tribe of Oklahoma have voted down the plans of their Tribe Councils. But with the carrot or the stick tactics, the Apache’s Tribe Council persuaded the tribe to a new and, for the Council successful vote. In this way, the pressure on the Ft. McDermitt Pauite-Shoshone will increase too. The tribal supporters of MRS expect $60,000-$70,000 per capita payments per year. But in spite of their poverty, most tribal members are unwilling to trade their land for money under the MRS arrangement. Tribal member Dennis Smartt said: “If I sell my land, I break my connection with my heritage and I can never get that back.” Many tribal members have complained about a lack of credible information concerning the MRS project, including outright fabrications put forth by DOE promoters. The result of a mail-in-survey which was organized by Citizen Alert shows that 77 per cent of tribal members are opposed to the project. Tribal members ousted four pro-MRS incumbents in the November 1993 election but the Tribal Council is still in favour of the MRS.

Grace Thorpe, who is the Sac and Fox Tribal Health Commissioner and daughter of the legendary athlete Jim Thorpe, stated to the National Congress of American Indians, “The nuclear waste issue is causing mental and possibly genocidal decisions regarding the future of our people. It is wrong to say that it is natural that we, as Native Americans, should accept radioactive waste on our lands, as the US Department of Energy has said. It is a perversion of our beliefs and an insult to our intelligence to say that we are natural stewards of these wastes.”

For further information, please contact:

Western Shoshone National Council (WSNC) P.O. Box 210 Indian Springs, NV 89018-0210 Phone/fax: 702-879-5203

Western Shoshone Health Project Citizen Alert Native American Program (CANAP) Attn. Virginia Sanchez P.O. Box 5339 Reno, NV 89513 Phone: 702-827-5511 Fax: 702-827-4299

Andreas Knudsen is a member of the IWGIA Danish National Group.

“The International Work Group for Indigenous Affairs (IWGIA) is an independent, international organization which supports indigenous peoples in their struggle against oppression.” IWGIA publishes Indigenous Affairs four times a year. Subscriptions in 1996 are US $30 for individuals and US $50 for institutions. Contact: International Secretariat, IWGIA, Fiolstraede 10, DK-1171, Copenhagen K, Denmark. E-mail IWGIA@login.dkuug.dk.

Read more at the Republic of Lakotah

by Alan Stang

TOTE THAT barge, lift that bale, and make sure you pay on time. April 15th approaches and my guess is that only a relative handful of Americans knows why we have the income tax. With rare exceptions, they will exclaim that we must have the income tax to “pay the expenses of the government.” Of course the truth is exactly the opposite. The income tax has nothing to do with paying the expenses of the government.

First an obvious fact, something you already know. When was the country created? Pick a date. Many would pick July 4th, 1776, when the Continental Congress adopted the nation’s birth certificate, the Declaration of Independence. Many others would pick the date of ratification of the Constitution. Let’s arbitrarily use 1776.

Now, when did we get the income tax? Except for the temporary income tax during Lincoln’s Communist War to Destroy the Union, there was no income tax in this country until 1913, when the U.S. Supreme Court upheld its validity in Brushaber, 240 U.S. 1. Indeed, even then it did not affect more than a handful of our people.

As late as 1942, only 3% of our people paid income tax. Until that date, most people probably had heard of it, but they didn’t pay it and had never seen the form. It didn’t apply to them. Indeed, if you check the records, you will see that in 1941, when the reader may have already been alive, the federal government collected more in alcohol and tobacco taxes than it did in income tax. Remember “moonshine” and the “revenooers?”

The income tax finally did hit the people in a big way only in 1942, and then only because we were of course in the middle of the war Franklin Roosevelt had finally succeeded in tricking us into by arranging Pearl Harbor. Even so, the conspiratorial warmongers could put the tax over only by calling it the “Victory” tax, a “temporary” tax collected by withholding, which would be repealed as soon as we had won the war.

Question: Name for me a year, just one year, between 1776 and 1942, when the nation couldn’t function because we had no income tax. Can’t find one? Okay name a month, just one month, when the nation collapsed, couldn’t pay its bills, because we had no income tax. How about a week?

Indeed, remember that during all that time, we fought many wars. We won them all. Yes, we won World War II with the income tax because it was “temporary,” not yet a permanent part of our lives, but mainly because we fought that war on behalf of Stalin. With the income tax we have not outright won a war since, from Korea to Iraq.

Remember, you knew all this. I am simply reminding you of something you already knew. So, if we didn’t have an income tax, yet never collapsed, where did the federal government get the funds to pay for itself? Again, they came from alcohol and tobacco taxes.

They also came from tariffs, which made foreigners pay for the privilege of selling products here. And they came from other indirect taxes. These were enough to pay for the few powers the Constitution grants to the federal government. Did you know that one of the biggest problems in Congress before the turn of the Twentieth Century was what the newspapers called the “tariff monster?” So much tax money was pouring into the Treasury that Congress didn’t know what to do with it.

So, if we don’t need an income tax to pay for the federal government, why do we have one? In August, 1942, Meyer Jacobstein, of the Brookings Institution, testified to a Senate subcommittee that “it is necessary to mop up the excess purchasing power of the community . . . because of its effect on the price situation . . . .” There are also a couple of Ohio University economists, Richard Vedder and Lowell Gallaway, whose study showed that for every dollar of increased taxes, Congress increased spending $1.58. In other words, taxes cause spending.

Now, another question you know the answer to. When there was money (gold and silver) behind our currency, the government had to deposit in the treasury the appropriate amount of money, in grains or ounces, whenever it printed paper currency. In the same way, you must deposit the appropriate sum in your checking account before you write a check against it.

U.S. currency used to say it was “redeemable” downtown at the bank. The bank would pay the amount of money printed on the face of the bill to the “bearer on demand.” Even early Federal Reserve Notes said that. The only difference between your personal check and government currency is that your check names the person to be paid and the government currency does not. It paid the “bearer,” whoever had it in his hand when he walked into the bank.

Now here comes the question. Since there no longer is any money behind our currency; since the government no longer need find and deposit rare gold or silver into its account in order to write a check against it; and since paper and ink are relatively limitless in supply — indeed, computer entries, today’s “money,” are utterly limitless — why does the government bother to tax at all? Why the audits, the penalties, the raids and seizures, the divorces and suicides?

Why doesn’t the government just print what it needs; bigger numbers on bigger pieces of paper? Even easier, why not just boot up and click on ever bigger computer entries; then use those computer entries to pay the bills? This is what Meyer Jacobstein was talking about. The answer is that doing so would constitute hyperinflation, which would send prices to Alpha Centauri and destroy the dollar here.

That is what happened in the Weimar Republic in post-World War I Germany, where the process took two years. It is happening now in Zimbabwe. The reason it has taken so long to happen here is that the financial geniuses who run the conspiracy for world government run the unbacked printings and now the computer entries through the non-Federal non-Reserve System, which is brilliantly designed to confuse and conceal what is happening. Extra layers of obfuscation have since been added, including the CDO and other alphabetical horrors. I have explained the process many times; no need to do so again here. But it is happening and when the train stops we shall be in Weimar.

The man with the answers is Beardsley Ruml (illustrated above). Ruml was a lifelong Rockefeller factotum. Rockefeller is the family David Rockefeller boasts in his Memoirs is part of a globalist conspiracy against the United States. Ruml was chairman of the New York Fed. It was he who devised World War II “temporary” withholding. It was originally named for him: the “Ruml pay-as-you-go plan.”

In January, 1946, American Affairs published a speech by Beardsley Ruml. The title was, “Taxes for Revenue Are Obsolete.” In it, Ruml speaks of two remarkable changes: “the gaining of vast new experience in the management of central banks,” and “the elimination, for domestic purposes, of the convertibility of the currency into gold.”

Under the heading, “What Taxes Are Really For,” Ruml listed three main purposes: “as an instrument of fiscal policy to help stabilize the purchasing power of the dollar”; “to express public policy in the distribution of wealth and of income, as in the case of the progressive income tax and estate taxes”; “to express public policy in subsidizing or in penalizing various industries and economic groups.”

Redistribution of the wealth by government is communism. Subsidizing and penalizing various industries by government is fascism. You are seeing such fascism right now in the government “bailout” of certain favored companies. For instance, the government saved Goldman Sachs but flushed Lehman Brothers. What about stabilizing the purchasing power of the dollar? Ruml says this by far is the most important reason for the income tax and other federal taxes, sometimes called “the avoidance of inflation.”

Ruml explains that “federal taxation has much to do with inflation and deflation, with the prices which have to be paid for the things that are bought and sold. . . .” If people have “too much” purchasing power, prices will rise. “. . . This will mean that the dollar is worth less than it was before — that is inflation. . . .

“The dollars the government spends become purchasing power in the hands of the people who have received them. The dollars the government takes by taxes cannot be spent by the people, and, therefore, these dollars can no longer be used to acquire the things that are available for sale. . . .” So this is what Meyer Jacobstein meant by “mopping up purchasing power.”

The true purpose of the income tax, therefore, is to inhibit the inflationary effect of ravenous government spending. The income tax allows our rulers to juggle their fiscal balls in the air a bit longer, by offering a safety valve through which the inflationary pressure generated by that spending can more safely be released. The income tax does that by transferring purchasing power from the people to the government. Again, it has nothing at all to do with paying the government’s bills.

Read the full article at News With Views

WITH ALL DUE respect to Elouise Cobell, lead plaintiff in a recently settled lawsuit over American Indian trust funds (“U.S. to pay Indians $3.4B,” Dec. 9), I think the United States is continuing a policy of “Indians are not humans.”

During the course of this long-running, class-action litigation, it has been documented that the United States owes Indian people more than $137 billion for mismanagement of trust accounts. That was established just by the documents that were presented.

The original federal judge on this case was Royce Lamberth, who held at least three secretaries of the Interior in contempt for not producing thousands of additional documents. Also, during the course of this case, hundreds of relevant documents were found in the trash by Interior Department employees, who reported this to the court and to Interior Department officials.

To add insult to injury, the government is clearing its conscience by paying back 2.48 percent of the so-far known value of what the United States stole in the first place. Paying $3.4 billion on a known debt of $137 billion is a national disgrace; this needs to be known by all Americans. Cobell should have at least held out until all the documents were presented or a final calculation of the debt was determined.

In the words of a great Oglala Lakota statesman Chief Red Cloud: “The United States made us many promises, but they kept only one. They promised to take our land, and they took it.”

Bill Means is a board member of the International Indian Treaty Council.

Read the entire settlement offer here

American Indian movement article