Can Economic Crashes Lead Toward Independence? – Follow the Money, Politicians Do

Catalonia Independence Movement

Without a doubt, the current overarching panic has been framed to be that of COVID-19. From all angles, those opportunists are hoping that this crisis can assist them in burying some past or paving the way to some glorious future. Whether it is the unsustainable debt, the banking sector, the pharma sector or even those that deal in welfare (to both corporations (GOP) or individuals (Dems)), everyone it seems are bent on not wasting this crisis.

The very last thing on these people’s mind is that of personal liberties or the free market. To them it is the desire of command and control that consume their soul. Real men (when I use this word I use it the same way our Creator would, meaning men and women), men of character, principled humans who are both compassionate for others and yet principled in not attempting to fix other’s lives or circumstances. Help is afforded when both the opportunity presents itself and the help aligns with what is on the giver’s heart, because surely, Jesus did not heal everyone in the crowds, only those that were on His Father’s heart.

So here we are again where a divided nation is fighting both the effects of a virus as well as the proper method to achieve that. Authoritarians (even the ones that were libertarian just weeks ago) want the government to mandate nothing less than house arrest and martial law all across this land. Libertarian leaning people think the people themselves can figure this out on their own, since only they know their specific and unique circumstance. They might be a city dweller with a network of like minded people that CAN achieve social distancing while also bartering for what may be needed in the weeks to come, OR they might live on a farm or ranch that is miles from their neighbor who can also be in their network for critical supplies.

Montana “social distancing”

What comes to mind then, out of an article penned as Brexit was achieved, is that this is not too different than what face the American people in 1860. Yes there were those who felt righteous enough to demand that others free their slaves immediately, and yet if anyone knew how prepared these slaves were for freedom, it was probably their owners and others on the plantation or farm. While slavery was in fact winding down, there were people willing to demand their agenda no matter the cost, even if it was 700,000 dead soldiers and economically ruined regions of the country that would not recover for a century.

The American leader that most people black and white still rally around today as a man of principled freedom and equality for all is Abraham Lincoln. At times, if you read his very words you have to wonder when in fact he had his heart on the fate of the black slaves and IF his version of “the union” which he was so fond of keeping intact was the best for the marriage that existed between the north and south.

John Marquardt from the Abbeville Institute only a week ago penned an article that is rich in unpacking what really happened 150 years ago as well as the economic factor that was at the root of almost all the BAD decisions by politicians along the way. Lets work our way through some critical quotes and see where this leads:

1775:

… thirteen of its major colonies, with a cry of “no taxation without representation,” declared their independence, seceded from the British Empire and joined together to form the United States of America. Faced with the loss of a vast source of the revenue needed to fill coffers drained by its seemingly endless wars with France, Great Britain opted to wage war on its own colonies.

1860:

… seven of the States in the new American nation felt that the weight of long economic oppression by the Federal government was more than they should be forced to bear and opted to secede from the Unites States to form their own more perfect union . . . and once again the action brought forth a war in which the central government attacked its own citizens to prevent their departure.

At this point I think it is helpful to see Lincoln’s own thought processes and see how they changed through the years (an inevitable characteristic of being a politician as there is nothing off the table morally when a crisis is at hand):

1848:

.. when Lincoln was a U. S. congressman from Illinois, he gave a speech in the House of Representatives in which he stated “any people, anywhere, being inclined and having the power, have the right to rise up and shake off the existing government, and form a new one that suits them better. This is a most valuable, a most sacred right, a right which we hope and believe is to liberate the world.”

1858:

“neither the General Government, nor any other power outside of the slave States, can constitutionally or rightfully interfere with slaves or slavery where it already exists.”

Lincoln said that he did not understand the Declaration of Independence “to mean that all men were created equal in all respects,” and added that he was not in favor of “making voters or jurors of Negros nor of qualifying them to hold office nor to intermarry with white people.” He then went on to say that “there is a physical difference between the white and black races, which I believe will forever forbid the two races living together on terms of social and political equality.”

Lincoln was not a huge fan of the blacks it is very apparent, but his core philosophy that he never gave up was that the blacks were never to be allowed to migrate north and take away jobs from whites, which would cause economic upheaval. One has to come to terms that back in 1860, it was conceivable that the northern regions were more racist than southern regions who interacted with blacks on a daily basis:

The North feared that slave labor would compete unfairly with its own low-wage, largely immigrant labor force which, unlike slaves, could be willfully hired and fired as needed and did not require food, housing, clothing or even rudimentary medical attention.

It is at this point that John paints the real economic condition of the United States in 1860. Have you ever been taught this in schools as part of a CSI to understand what businessmen around the country thought about seven states leaving the Union? I doubt it, so here it goes, consider it COVID-19 home schooling:

In regard to the true economic cause behind the War, just as it was with Great Britain’s case in 1776, the gaping hole that would be formed in the Federal revenue served as the actual rationale for the Union to wage war on the departed Southern States. In 1860, there were more than thirty-one million people in the thirty-three States and ten Territories, with only a third of these, including almost four million slaves, living in the South. According to the U. S. Federal Abstract for 1860, the total Federal expenditures for that year amounted to some sixty-three million dollars, with over eighteen million of this being used mainly to finance railways, canals and other civil projects in the North. On the other hand, Federal revenues at that time amounted to a little over fifty-six million dollars. As there was then no corporate or personal income tax and revenue from domestic sources, such as the sale of public land, amounted to less than three million dollars, the remaining fifty-three million dollars were provided by what was termed “ad valorem taxes,” in other words, the tariff on foreign goods imported by the United States. The basic problem with this, however, was that as much as three-quarters of that revenue was collected in Southern ports, which meant that there would be a loss of up to forty million dollars in Federal revenue if the Southern States left the Union. Added to this was the fact that well over half of America’s four hundred million dollars in exports in 1860 were agricultural products from the South, mainly cotton, rice and tobacco.

You can see the predicament that Lincoln had when he was inaugurated in early March 1861. You can also see what the British view was back in 1775 and why they did what they did.

Now project yourself forward in time and try to understand what the so-called united States of America faces in 2020.

  • Will the economic crisis cause everyone to stick together and pay the $25T in debts over the next hundred years OR will regions of the US be allowed to go their separate ways?
  • Would anyone in the federal government be willing to let ANY state go in peace?

These are the questions one must answer themselves, along with, what is the moral path forward? Personally I think that bankruptcy is the only moral path forward, but as I was told in the US Navy, ‘opinions are like *ssholes, everyone has one’.

Ok then, let us look to see how Lincoln (Trump-like?) evolved as President:

04MAR1861:

Lincoln stated that he would “hold, occupy, and possess the property, and places belonging to the (Federal) government, and collect the duties and imposts . . . but beyond what may be necessary for these objects, there will be no invasion, no using force against, or among the people anywhere.”

.. [then] stating he had “no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so.”

Pretty clear that economics forced his hand to propose the absurd notion that tariffs would still be collected in the seven states that LEFT the union while he had no real heart change on the fate of the black slaves.

Early April 1861 before Ft. Sumter:

Virginia, which still remained in the Union, commissioned a three-man delegation headed by John Baldwin, a pro-Unionist and former judge of the State Supreme Court of Appeals, to meet with Lincoln at the White House in an effort to negotiate a peaceful settlement. During their meeting, the president was reported as saying privately to Baldwin “but what am I to do in the meantime with those men at Montgomery (i.e., the Confederates)? Am I to let them go on and open Charleston, etc., as ports of entry with their ten-percent tariff? What, then, would become of my tariff if I do that, what would become of my revenue? I might as well shut up housekeeping at once.”

By early April, Lincoln and his cabinet, the majority of the New Englanders as well as the farmers in the West (now called the Midwest) all saw clearly the economic ramifications of having just 7 states leave the union. Like today, the panic and gross exaggeration seemed to consume people and they were all looking to the US government to do something, ANYTHING!

Lincoln’s Cabinet

It is well documented that Lincoln’s plan to send troop transports to Charleston harbor where his Union garrison had broke a gentleman’s agreement on Christmas 1860 and moved from Ft. Moultrie to Ft. Sumter was to have the South Carolina cannon to fire the first shot (not unlike FDR’s efforts to have Japan do the same at Pearl Harbor, or Bush II’s efforts to have 9/11 be allowed) so he could be “justified” in his next action:

Lincoln’s call to the Union for seventy-five thousand volunteers to suppress what he termed the “rebellion” of the Southern States. Lincoln’s call not only led to the secession of Virginia, but Arkansas, North Carolina and Tennessee as well, and brought about a war that made casualties of five percent of America’s population, devastated a third of the nation’s States and left deep wounds in the American psyche that to this day have not yet completely healed.

Lincoln, a lawyer, never addresses the seceded states from this point forward, but relied on George Washington’s legislation created during the Whiskey Rebellion to “legally” put down the southern “insurrection” as if it was an unorganized scene of violence that had to be safely extinguished for the safety of the masses.

Keep this in mind for 2020, just sayin’.

By 1862, it was obvious what had happened:

A comparison between the conflicts of 1776 and 1861 was also made in a “London Times” article of November 7, 1861, in which it was said of the War Between the States that the “contest is really for empire on the side of the North, and for independence on that of the South, and in this respect we recognize an exact analogy between the North and the Government of George III, and the South and the Thirteen Revolted Provinces.”

In a letter written in March of 1862, Dickens stated “I take the facts of the American quarrel to stand thus; slavery has in reality nothing on earth to do with it . . . but the North having gradually got to itself the making of the laws and the settlement of the tariffs, and having taxed the South most abominably for its own advantage, began to see, as the country grew, that unless it advocated the laying down of a geographical line beyond which slavery should not extend, the South would necessarily recover it’s old political power, and be able to help itself a little in the adjustment of the commercial affairs.”

So whatever became of Lincoln’s transition toward loving the black slave? Well, we do know that Lincoln was surrounded by a culture that he was totally in alignment up to the so-called Civil War:

… pertaining to racial discrimination, Dickens said “Every reasonable creature may know, if willing, that the North hates the Negro, and until it was convenient to make a pretense that sympathy with him was the cause of the War, it hated the Abolitionists and derided them up hill and down dale.”

When the war went poorly and Lincoln was doubtful to his re-election and the possibility of an externally arranged peace conference, he issued the Emancipation Proclamation which sounded good but did not actually free one slave (and later admitted that this was a “war measure”). One can see that even this act was not from his heart as can be revealed by the following quotes:

“Send them to Liberia, to their own native land.” ~ Lincoln, speaking in favor of ethnic cleansing all blacks from the United States.

“I cannot make it better known than it already is, that I favor colonization.” ~ Lincoln, in a message to Congress, December 1, 1862, supporting deportation of all blacks from America.

“They had better be set to digging their subsistence out of the ground.” ~ Lincoln in a War Department memo, April 16, 1863

 

After securing a 2nd term as president he continued to meet with northern Black leaders about his plan to export blacks to the Caribbean or back to Africa after the war. For those black slaves that remained:

“Root, hog, or die” ~ Lincoln’s suggestion to illiterate and propertyless ex-slaves unprepared for freedom, Feb. 3, 1865.

So here you see that war and economics changes everything and allows politicians to make decisions that in peacetime or prosperity would have been prevented, one way or another.

It seems that today, most Americans have given in to their lot as tax slaves happy for just enough freedom for them to claim they live in the land of the free and are able to worship the flag and eat the occasional apple pie. To a majority of Americans, they know little of their history that would help them to see the red flags all around them as freedom and liberty evaporate in this once free land (mainly in 1783-1878).

May a new generation and a new remnant of Americans see though the infectious nature of government and decide for the future that they will take responsibility for themselves, their livelihood and the education of the next generation and never trust any government again.

I can dream can’t I?  One day at a time everyone, one day at a time, however, it is good and well to dream and hope for a better tomorrow where the lessons of this crisis are well learned!

Peace out.

-SF1

When the Honeymoon is Over: Is the First Fight Always About Money?

One of the most ridiculous claims I have ever heard is that the South left the North over slavery. Anyone with a thinking mind should have done their research and realize that when the media/government spins a yarn so very hard and for over a century, it is probably false.

In reading a 1960s well documented book by Murray Rothbard called “Conceived in Liberty, Volume 5: The New Republic”, it becomes apparent that the new “marriage” of several colonial regions in America had some high hopes and dreams that were quickly dashed with some harsh realities. Promises made or implied give away to a selfish attitude that neatly translates for the North into some more economic bondage for the South.

This core resentment and distrust would eventually be the key reason why the South (as of 04MAR1861, just the seven states of the deep south) did not flinch when Lincoln promised them LEGAL and PERMANENT slavery of blacks IF they would simply re-enter the Union. By this time the South was tired of the abusive relationship the North treated them with and it was apparent that as of NOV1860 that the North could elect a president without ANY Southern support or votes spoke volumes.

As the American Revolution ended in 1783 with the Treaty of Paris, the engagement of the thirteen colonies signed 04JUL1776 with the Declaration of Independence led to the creation of the wedding vows on 15NOV1777 followed by the commencement of the marriage on 01MAR1781. Note that the language of the vows talks of a perpetual union, however, by the time a constitutional convention was called in 1787, these original vows were discarded for a new set (the United States Constitution) that “promised” a better relationship. In hindsight, it was all downhill from that point forward.

With the end of the war-period in which these thirteen colonies fought together, but with a wide range of sacrifice, it was time to settle all the debt incurred during this period. It is in this period that some significant character flaws started to make themselves known that should have been red-flags, especially for the South, to anticipate what a continued relationship might look like and if the North could be trusted in the long-term.

Murray Rothbard shares a summary:

“A key to the politico-economic problems of the Confederation period, as well as one of the leading arguments for centralized power, was the swollen corpus of war-born public debt. The mass of federal and state debt could have depreciated and passed out of existence by the end of the war, but the process was stopped by Robert Morris. Morris and the nationalists moved to make the depreciated federal debt ultimately redeemable at par, and also agitated for federal assumption of the states’ debts. This was done to benefit speculators who purchased the public debt at depreciated values and to force a drive for a national taxing power ..”

To have a “spouse” like that to hijack the relationship towards a future that philosophically was repulsive to the independent minded Southern colonies, in effect, USING the South for it’s economic engine (which at that time was much more healthy than the North, this in spite of the major conflicts that occurred in the South during the last 1/2 of the war).

As a result of the nationalists’ efforts to assume the public debt, the value of the public debt, in specie, increased from $11 million in 1780 to $27 million in 1783, the vast bulk of which was held in the northern states. While scrambling to assume some of the debt themselves, the states had also amassed a huge burden of their own debt. Thus, by the end of the war, Massachusetts’ total debt was nearly £1.5 million; Rhode Island, about $0.5 million; Connecticut, over $3.75 million; Pennsylvania, over £4.6 million; Virginia’s over £4.25 million. As a result, payment of interest on the debt amounted to an overwhelming proportion of the state budget, and one estimate is that 50–90 percent of state expenditures went for this purpose ..

Not cool. The elites looked to benefiting themselves and placing the common folk on the hook for all the taxes needed not just to satisfy the interest payments on the debt, but to eventually pay off all the American Revolutionary War debt,

One problem that bitterly divided the states during the Confederation period was the settlement of common accounts. Under the Articles, expenses made by the several states for causes common to them all would be lumped together as “common charges” and the charges paid proportionately by the various states. In short, “debtor” states would pay their share to claimant “creditor” states through Congress and thus settle their accounts. Wartime expenses were clearly a common charge for the general welfare, and therefore those states which had expended more in the war effort (notably the southern states, because of the nature of the last few years of the war) were entitled to payment from the others. Logically, the public debt incurred by Congress should also have been assumed pro rata by the separate states, but the nationalists’ fierce determination to amass and retain a federal debt was able to keep that debt a federal rather than a “common” charge.

Talk about a bait and switch. So the vows that were agreed to in 1781 were just words on paper and the actions after the war’s end were highly dishonorable in regards to the nationalist’s agenda:

Throughout the 1780s the southern states tried to obtain their just settlements, but the northern states faithlessly fell back on technicalities, lack of official vouchers and authorization, etc., to keep the southern states from their just due. Also the South in particular had gone much further than other states in assuming unliquidated federal debt during the war (e.g., Quartermaster and Commissary certificates) and had exchanged them for state debts, only to find Congress (i.e., the North) balking about accepting these federal certificates as evidence for expenditures in the common welfare. Again, the North was depriving the South of their just due.

It should be noted that many Southern militia members never got the pensions deserved and yet so many New Englanders who never fought a battle received the same pension. Basically, the Yankee’s word meant nothing, and this was only the beginning:

As the dispute dragged on during the decade with the southern states unable to redeem their claims, Robert Morris’ wily “solution” proposed in 1783 began to look better to all concerned. An ultra-nationalist’s dream, the proposal was to accept all southern claims without cavil, but not to be paid by the debtor states: to be assumed by the federal government, which would issue federal securities for all claims. In short, the federal government would assume all war-born state debts. The tax-and-debt burdens of the states were, of course, aggravated when the depression of 1784 hit the country, for now a fixed sum of taxes and debt payments had to be exacted from a depressed economy in which prices were generally lower and therefore the real tax burden greater. One critical problem was whether the debt would be paid at its depreciated market value, which at least reflected current economic realities, or whether the state would insist on paying them at their far greater face value, and thus impose an enormously greater tax burden upon the people. The anger of people at paying debt charges was considerably aggravated by the fact that the bulk of this debt had passed from its original owners at highly depreciated amounts into the hands of speculators. Payment of face value, then, would not even benefit the original public creditors; in fact, they too would suffer from being taxed for the benefit of a windfall to a comparative handful of speculators in the public debt.

The way two former colonies would handle this situation showed the difference in character between the regions, which to me meant that they were not compatible for a “tight” marriage but might work in a loose “federation”. Unfortunately, the actions in 1787 with the new “vows” (the US Constitution, coup d’tat) would make this marriage so tight that it could only become abusive in the long haul.

Virginia showed honorable character:

Virginia was sensible enough to pay much of the debt at its depreciated market value, and make its taxes to pay the debt payable in depreciated certificates. Hence, Virginia was able to reduce its debt rapidly and without imposing enormous burdens on its taxpayers .. Numerous county petitions in Virginia pleaded the impossibility of paying taxes, a condition aggravated by the low price of tobacco in the mid-1780s. The Virginia legislature reacted sagely to the protests .. and agreed to lower or suspend taxes, and to allow hemp-growing western farmers to pay their taxes in hemp or flour. Indeed, Virginia agreed, in the spring of 1784, to suspend all tax collections for six months, and then agreed to cut taxes in half for the year 1785.

Massachusetts not so much:

Massachusetts, on the other hand, so handled its debt during the war as to benefit its debt holders and speculators, consolidating its debt by 1784 at twice its market value. To pay this particularly large debt, Massachusetts levied enormous taxes and insisted on collecting them in specie. This is not surprising, since the Massachusetts government was basically run by the very groups that owned the great mass of state debt. The debt burden was borne particularly by the poor, since roughly 33 to 40 percent of Massachusetts’ state revenue was raised by poll taxes, which were equal for each citizen. As a result, it is estimated that at least a third of a Massachusetts farmer’s income after 1780 was extracted from him in taxes, and in specie at that. Farmers and the poor demanded that the state debt at least be scaled down to market value, but the conservative ruling groups angrily refused. Typical of the eastern mercantile oppression over the mass of citizens and farmers was the imposition of excise taxes, which harmed the bulk of consumers. Thus, the tax on spirits (e.g., cider brandy) distilled from one’s own apple orchard was twice the level of the tax on New England rum: a clear privilege to the Boston and other eastern merchants over the western farmers. Tax oppression upon the Massachusetts people was enormous, and the courts ruthlessly threw those who could not pay into jail. Tax defaulters’ property was seized, but in the time-honored way of neighborhood solidarity, local mobs prevented anyone but the owner from bidding for the property.

The rifts were real and would be aggravated over time.  These events should have given caution to the southern states by the late 1780s that had the nationalists accelerate their efforts to centralize the US general government and create a central bank. It seems the longer the South stayed with the North the more the North sensed that it OWNED the South, as a slave and not respected her as a spouse.

Hindsight is indeed 20/20 .. but learning these things from real history is priceless!

-SF1