Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Big Government Socialist Beast and The Plague of Self-Delusion

Politics / US Politics Nov 28, 2009 - 09:02 AM GMT

By: Tim_Case


Diamond Rated - Best Financial Markets Analysis Article"It has been proved, by indisputable evidence, that power is not the grand principle of union among the parts of a very extensive empire; and that when this principle is pushed beyond the degree necessary for rendering justice between man and man, it debases the character of individuals, and renders them less secure in their persons and property…" ~ James Winthrop, Antifederalist No. 11

I doubt there are many who have thought about the transitive verb, secure, used by James Winthrop in the quote above. Noah Webster’s, 1828 American Dictionary of the English Language, says secure is to make certain; to put beyond hazard, then addresses secure in this context: "Liberty and fixed laws secure to every citizen due protection of person and property…"

Noah Webster addresses the blessings that accompany the constraints placed on unrestrained centralized power, while James Winthrop addresses the curses which are the consort of unjust, excessive governmental controls.

I am sure there are many in the United States who have never read (or heaven forbid, studied) the Antifederalist papers. If they had we may have averted the present governmental albatross which is choking the life out of our society.

Given the present political climate, with its common disregard for the lessons of history, I am sure those learned 19th-century Anti-Federalists are viewed as nothing less than arcane mystics espousing apocryphal concepts. So, the Antifederalist papers are discarded, having no place in any social discussion, undoubtedly on the grounds that they are offensive myths. The void is, of course, filled by the assertions of the mentally dull, noisome parasites belonging to the politically correct, progressive, liberal, (choose your own label) camp.

The historical fact that these progressive policies have failed miserably, wherever and whenever they have been tried, is summarily dismissed. So, we are treated to a rehashed assortment of the original tripe while being asked to believe that this time it will work because a new and improved noxious byproduct emanates from the southern orifice of the smartest, most enlightened in society.

Nor have the tactics of the nationalists changed.

When the Constitution was first presented for ratification (without the bill of rights) to the thirteen states, the Federalists argued that it needed to be voted on without debate so as to "avoid the possible and transitory evils" of anarchy, and "as the instrument of deliverance, as the only avenue to safety and happiness."

"The other specter," wrote Centinel in Antifederalist No. 6, "that has been raised to terrify and alarm the people out of the exercise of their judgment… is the dread of our splitting into separate confederacies or republics, that might become rival powers and consequently liable to mutual wars from the usual motives of contention."

Centinel continues, "This hobgoblin appears to have sprung from the deranged brain of Publius, [The Federalist] a New York writer, who, mistaking sound for argument, has with Herculean labor accumulated myriads of unmeaning sentences, and mechanically endeavored to force conviction by a torrent of misplaced words."

If you recognize the argument of necessity, fear, lies and safety as the means to push a political agenda, then it should come as no surprise that these are the emotions used recently to pass the "stimulus bill" of 787 billion dollars. To one degree or another, these sentiments have been at the forefront of every governmental policy which has been detrimental to the American society.

It was "Montezuma" in Antifederalist #9, entitled A Consolidated Government is a Tyranny, who stated one of the greatest concerns of those opposing a new constitution. Montezuma points out, "… (W)e have thought… to indulge them in something like a democracy in the new constitution, which part we have designated by the popular name of the House of Representatives. But to guard against every possible danger from this lower house, we have subjected every bill they bring forward, to the double negative of our upper house and president. Nor have we allowed the populace the right to elect their representatives annually… lest this body should be too much under the influence and control of their constituents… for we have not yet to learn that little else is wanting to aristocratize (sic) the most democratical representative than to make him somewhat independent of his political creators…"

Did you really think an aristocracy would listen to your complaints?

Philadephiensis in Antifederalist 74 expressed the danger clearest when he wrote: "A conspiracy against the freedom of America, both deep and dangerous, has been formed by an infernal junto of demagogues."

In spite of the Antifederalists’ arguments the Constitution was ratified; ostensibly to "establish Justice, insure domestic Tranquility, provide for the common defence (sic), promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity…"

Under the guise of the U.S. Constitution and agog with their own self-importance, Americans fooled themselves into believing they, and only they, were the freest people in the history of world.

National acquiescence to a blatant lie has relegated a number of pesky historical facts to the backwaters of the national memory. These specifics include, but are not limited to: The Sedition Act of 1798; The Bureau of Indian Affairs; The Tyranny of Abe Lincoln; The Reconstruction era lasting until 1917; The temperance movement resulting in the 18th Amendment to the Constitution (Prohibition, 1919–33).

Then there are those paragons of virtue: the conservation movement and the ensuing environmental movement along with the food and drug laws which now reside in the FDA. Each in turn has clearly denoted the Constitutional government’s intent, which has never been anything less than the total domination of the American public and every aspect of our lives.

Is it any wonder, then, why we are faced with the socialistic beast that is trying to steamroll over our lives now?

Equally objectionable is the declaration that under the guidance of a constitutionally mandated Federal government, America has had the highest standard of living the world has ever known.

Doesn’t logic dictate that if a people are to have quality housing, food, medical care, educational opportunities, transportation, communications…etc that their money must be either: (A.) of high value or lacking that (B.) available in great quantities?

"Money," writes D.G. White in Gold, the Golden Rule, and Government: Civil Society and the End of the State, "…is simply a commodity that, as an inherent store of value, is used as a conduit for exchange. And given its considerable attributes – e.g., beauty, density, indestructibility, malleability, homogeneity, divisibility, transportability – it is little wonder that, over time, gold became the commodity of choice, the preeminent medium of exchange the world over. Nor is it any wonder that with the subsequent emergence of banknotes and other money substitutes, which greatly facilitated indirect exchange and therefore the division of labor, it was gold that usually backed them up."

This was certainly true of the 1904 Liberty Head Gold Double Eagle affectionately known as the $20 Gold Piece. The coin was made up of 90 percent gold (30.0924 grams) and 10 percent copper.

At the time the coin was issued it contained 96.75% of 1 Troy ounce of gold while both the US government and the New York Market set the value of gold at $20.67, a price it had maintained since 1879. As such, the $20 Gold Piece had an inherent value of exactly $20.

Since we are talking about a standard of living based on purchasing power we will use 96.75% of 1 Troy ounce equaling $20 as our constant.

We generally think of those living in the early part of the 20th century as being poor by our standards today, but were they really poor? Let’s look at the years 1920, 25 and 30.

The US Index of Composite Wages gives us the following information concerning the average US worker’s wage during the years 1920, 1925, and 1930.

To check these figures let’s look at the average weekly incomes for twelve major manufacturing industries during the same period.

The yearly average salary of those in the manufacturing industries is slightly greater for the years 1920 and 25 than the national average and slightly less in 1930.

What does that mean for us today?

As of this writing, the value of 1 troy ounce of gold is $1176.90. Using the standards set above the current wages on a national average would have to be greater than or equal to $67,687.09; 68,911.14 and $70,664.67 respectively to offer the same purchasing power as our forefathers had.

Granted, it is extremely hard to compare the "standard of living" between the 1920’s and today but we can get a sense of how we measure up by looking at the tax rates and a family budget during the 20’s verses today.

For the years, 1920, 25 and 30 the US Federal Tax was as follows:

This is very telling since the national income was less than $2,000.00 annually we have the salaries of most Americans being equal to their total disposable income.

To have parity with the tax rates above, at today's gold price, our tax table would have to read:

Oh, and lets not forget the wealthy.

In 1920, 25 and 30 the highest incomes were taxed as follows:

As a comparable the tax table today would look like this:

Now, I don’t know about you, but I don’t know of anyone who wouldn’t be tickled to death to pay those sorts of taxes. But I also don’t know anyone personally who has an annual taxable income of over 5 million dollars let alone over 56 million dollars.

I certainly will understand if you’re not feeling too enthusiastic about our national economy, at the moment. The simple fact is that for today’s family to have the purchasing power of a 1920’s family our total disposable income would have to be greater than 67,000 dollars annually.

It is true that family budgets would, of necessity, widely vary from region to region throughout the United States as they do today. This would be due, in large part, to the price of housing, food prices, what the family used for fuel to heat the home, whether they owned a car or not, and a host of other variables.

However, for the moment let’s agree to hold a budget taken from Fall River, Massachusetts in 1919 as a workable model for families through out the U.S. during the 1920’s.

In 1919 the National Industrial Conference Board of Boston, Massachusetts study found that the probable distribution of an American family’s disposable income broke down into the categories "Minimum Budget" and "More Liberal Budget." Their conclusions resulted in the allocation of the family income as follows:

The Industrial Board concludes that "to maintain a family consisting of man, wife and three children under fourteen years of age, at a minimum American standard of living but without any allowance for savings, $1,267.76 per year will be required, or a steady income of $24.38 per week."

If gold today does not exceed $1176.90 a Troy ounce this would mean the American family of today would need to have an income, after taxes, equal to or greater than $72,175.35 yearly or a weekly income of $1,387.99.

It also becomes apparent that from 1920 to 1930 Americans were maintaining a standard of living fully in line with the Board’s findings in 1919.

As it takes more and more dollars to purchase a troy ounce of gold these figures will increase commiserate to the number of dollars chasing an ounce of gold.

At the present we are left with the realization that today’s dollar has a value of less than two pieces of penny candy from the 1920’s.

Not unlike the ancient Romans we have deluded ourselves; we have rejected the warnings that knowledgeable men of history have tried to give, to our own detriment: the continued degradation of our standard of living accompanying the reduction of our freedoms.

Many may be feeling comfortable and confident with their present status and that maybe as it should be.

However, generations of complacency and ignorance are about to come to an end. Reality is going to have its day and it is coming with the fury of a woman scorned. We will pay for our folly and it will be a penalty few will survive.

This article is dedicated to Joanne Hare, a dear friend and a delightful lady.

Tim Case [send him mail] is a 30-year student of the ancient histories who agrees with the first-century stoic Epictetus on this one point: “Only the educated are free.”

    © 2009 Copyright - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules