Feb. 9, 2012

Members of Generation X, born 1962 to 1981, and Generation Y, 1982-2004, are rallying behind Ron Paul in his run for president. Media commentators find it odd that people under the age of 40 in the X Generation and especially voters under age 30 in the Y Generation are so taken with this unassuming, soft-spoken 76-year-old candidate. Ron Paul is in the Silent Generation, whose members are now 70 to 87 years of age (born 1925-1942).

Exit polls show that Ron Paul won the majority of voters under age 40 in the Iowa caucus and in the New Hampshire primary. He received 21.4 percent of the votes in Iowa (first-place Rick Santorum got 24.6 percent) and came in second in New Hampshire with 22.9 percent of the votes (first-place Mitt Romney got 39.3 percent). More voters under age 30 chose Ron Paul over the other candidates in the South Carolina primary and Nevada caucus. He garnered 41 percent of the under 30 vote in Nevada – Mitt Romney got 36 percent; Newt Gingrich, 16 percent; and Rick Santorum, 7 percent. But only a small minority of older people has voted for him, as was especially evident in the Florida Republican primary.

In Generations: The History of America’s Future, 1584-2069 (1991) and The Fourth Turning: An American Prophecy (1997), William Strauss and Neil Howe examine the four main generations alive today, including the Boom ("Baby Boomer") Generation, born 1943-1961. They show how these generations mirror ones in the past. They note that a "Young Hero and Elder Prophet" pairing occurs repeatedly in history, myth, and art, as with Joshua and Moses in the Old Testament, the Gray Champion in Colonial America, King Arthur and Merlin in Celtic myth, Tolkien’s Frodo and Gandalf, and Luke Skywalker and Obi-Wan Kenobi in Star Wars. In Star Wars, Episode IV, Obi-Wan Kenobi instructs Luke in the ways of the Force and in Episode VI tells him that killing Darth Vader (his father) is the only way to destroy the evil Galactic Empire. And as Joseph Campbell, the American mythologist, notes, the young hero’s close bond with a wise elder is essential to his ultimate success.

The "Gray Champion" precipitated the Boston Revolt of April 1689, mounted to protest King James II’s increasingly autocratic rule of the British-American colonies. As Nathaniel Hawthorne describes it in his Twice-Told Tales, the King-appointed governor of New England marched British troops through Boston to intimidate the public and quell any thoughts of colonial self-rule. Hawthorne writes:

"Suddenly, there was seen the figure of an ancient man, who seemed to have emerged from among the people, and was walking by himself along the center of the street, to confront the armed band. He wore the old Puritan dress, a dark cloak and a steeple-crowned hat, in the fashion of at least fifty years before..." 

This elderly champion with a manner "combining the leader and saint" commanded the soldiers to stop; and "at the old man’s word and outstretched arm, the roll of the drum was hushed at once, and the advancing line stood still." Then, "inspired by this single act of defiance, the people of Boston roused their courage and acted. Within the day, Andros [the governor] was deposed and jailed, the liberty of Boston saved, and the corner turned on the colonial Glorious Revolution." This revolt led to the American Revolution 85 years later.

Ron Paul is the Obi-Wan Kenobi and Gray Champion of our time, and the Darth Vader of our U.S. Empire is the Federal Reserve.

The Federal Reserve System, with its network of twelve regional private banks, was established in 1913. The Fed is the country’s third central bank (the first two, established in 1791 and 1816, each lasted for 20 years). The Fed issues token coins and paper dollars, and creates and transfers unlimited amounts of computer-generated digital money. Manufacturing money this way, during its 99-year existence the Fed has destroyed 98.8 percent of the value of the dollar, as calculated by the Shadow Government Statistics (SGS)-Alternate-Consumer Price Index (CPI). Using this measure of inflation, a basket of goods and services that cost $100 in 1913 now costs $8,204! (Even the Bureau of Labor Statistics admits that the dollar has lost 96 percent of its value since 1913, with that $100 basket of goods and services now said to cost $2303.) Using the more accurate SGS-Alternate-CPI, the greatest drop in the dollar’s value, 95.1 percent, has occurred since 1971, when president Nixon severed the dollar’s last remaining link with gold, turning it into an effortlessly issued fiat currency. (A fiat currency is one that has no hard asset backing it such as gold and derives its value from government edict.) Like a virulent virus, the Fed has infected the U.S. dollar and made it grow like a cancer.

The Spanish Flu pandemic of 1918-1921 killed somewhere between 20 to 40 million people (including my 22-year-old grandmother and my wife’s 23-year-old grandmother). What the Fed is could result in an equally dire hyperinflationary economic collapse, similar to what happened in the Weimar Republic, Austria, and Hungary in the 1920s, Argentina in 1989, and Zimbabwe. (A practical definition for hyperinflation is that the country’s largest pre-inflation bank note – for the U.S., the $100 bill. – becomes worth more as toilet paper, or for stoking a fire, than as a currency. The currency remains "current" but no longer serves as a medium of exchange.)

Dr. Paul prescribes an Austrian cure for our country’s economic problems (see below). A professor at the University of Vienna, Carl Menger (1840-1921), founded the Austrian School of Economics, which is named for its country of origin. (Government officials and economists in Austria do not follow or endorse "Austrian Economics.") This branch of economics studies the action of individuals in the marketplace and puts forward a subjective theory of value. It explores important subjects like marginal utility (the amount of benefit derived from consuming one additional unit of a product or service, a concept that debunks the labor theory of value), moral hazard (where being covered against loss increases risk taking – executives at the leading investment banking and securities firm, Goldman Sachs, make a bad, multibillion dollar investment in AIG, and the government, i.e., U.S. taxpayers, bails them out), and malinvestments (making the wrong kind of investments, like building too many shopping malls, encouraged by Fed-set artificially low interest rates). Austrian economists don’t spin their wheels constructing mathematical models of the economy on a large, "macroeconomic" scale, something that Keynesian economists like to do and which have little bearing on the real world of human action. In contrast to pump-priming, big government Keynesianism, Austrian economics stresses the importance of free markets and a stable currency for economic calculation and setting prices.

Starting at a young age, Americans need to learn the basics of Austrian Economics and appreciate how it restores economic health. But government schools do not teach Austrian economics or the concomitant Jeffersonian vision of individual liberty. These subjects make a compelling case for limited government and are thus politically incorrect.

The primary role of government schools, where 90 percent of U.S. children are educated, is to inculcate, in the words of John Calvin, "the duty of obedience to rulers." Government-employed bureaucratic officials determine what political and economic ideas children are to be taught. Compulsory government schooling has become a zero-tolerance, one-size-fits-all, dumbed-down operation that focuses on social engineering rather than on learning and individual achievement. James Ostrowski, in Government Schools Are Bad for Your Kids, puts it this way: "[The government school] produces barely literate, historically ignorant, uncultured lovers of big government." Sadly, public schools have evolved into prison-like indoctrination centers that children and adolescents in the Y Generation currently endure – six and seven hours a day for thirteen years. For a sobering assessment of what our nation’s public schools have turned into, watch the online documentary on tagtele.com titled "War on Kids," available HERE.

Nevertheless, there is reason for hope.

The outpouring of support by young people for Ron Paul is truly heartening. In Texas, for example, students at the Hudson Middle School in Hudson overwhelmingly cast ballots for Ron Paul in the school's mock GOP primary, "after spending weeks studying the candidates' views on the issues and watching debates among the hopefuls" according to a newspaper account, which reported: "They liked Paul's anti-war stance, as well as his willingness to talk straight and not attack his opponents to make a point. ‘He's just like this down-to-earth dude who just seems like he knows what he's doing,’ seventh-grader Danielle Heidkamp said."

Generation Y members like Danielle will carry the Ron Paul banner forward. The Y Generation is also named the "Millennial Generation," coming of age as it is at the beginning of a new millennium. This generation must cope as young adults with the unfolding global financial crisis. When the Baby Boomer generation was growing up in the 1950s and 60s U.S. government debt increased $2.5 Billion a year. Life was good. Today, with the Millennial Generation coming of age, U.S. government debt increases by $2.5 Billion every 16 hours.

After the housing boom peaked in 2006 and foreclosures began to mount, the so-named "Millennial Crisis" began in February, 2007 when the Federal Home Loan Mortgage Corporation (Freddie Mac) announced that it would no longer buy subprime mortgages or mortgage-related securities (collateralized debt obligations). The Y Generation facing this crisis today bears some likeness to the GI Generation, born at the beginning of the last century (1901-1924), who became young adults during the last big crisis in U.S. history, the Great Depression and World War II. Strauss and Howe see the GI and Y generations as both manifesting a "Hero" archetype – can-do heroes and competent pragmatic managers who possess confidence and optimism.

Strauss and Howe name Generation X the "13^th Generation" because it is the thirteenth one to call itself "American," beginning with the Awakening Generation born 1701-1723. The Glorious Revolution (Revolution of 1688) brought this about, which dethroned King James II and led Parliament to pass the 1869 English Bill of Rights, called "An Act declareing the Rights and Liberties of the Subject and Setleing the Succession of the Crowne." This Act enabled people in the American colonies, emboldened by the Boston Revolt and this Bill of Rights, to see themselves as distinctly American and not servile British subjects.

Progressives view human history as a linear process. Beginning with Theodore Roosevelt and Woodrow Wilson early in the last century, progressives have sought to expand government power and use it to effect what they consider to be beneficial social, political, and economic change. They are notable for launching the FED, an income tax, World War I, Prohibition, and the New Deal. Linear thinkers, which include politicians, the mainstream media, and CEOs of big corporations, work to maintain the status quo and their power and wealth. Rather than progress in a linear fashion, however, human history has a more seasonal, cyclical nature. As Mark Twain observed, "It is not worthwhile to try to keep history from repeating itself, for man's character will always make the preventing of the repetitions impossible." Twain is also alleged to have said something like, "Although history doesn’t repeat itself, it often rhymes" (source unknown). Whatever "rhyme" or "repetition" that might have helped bring about the Millennial Crisis, having a linear-thinking progressive president will only serve to make things worse. That includes President Obama and all the Republican presidential candidates except Ron Paul. He alone knows what is really going on, understands it, predicted it, and knows how best to deal with it.

Not counting the earlier crisis that caused the colonial Glorious Revolution and its Boston Revolt (1675-1704), there have been four crises in American history: the American Revolution (1773-1704), followed 66 years later by the Civil War (1860-1865), 64 years later by the Great Depression and World War II (1929-1946), and 61 years later by the current Millennial Crisis (2007-?). Each crisis has been worse than the previous one. There were 25,000 deaths in the American Revolution. Some 600,000 to 800,000 people died in the Civil War. And in World War II 50 to 70 million people died (civilian and military). In the American Revolution hyperinflation of the Continental Dollar rendered it worthless, and in the Civil War the Confederate Dollar suffered the same fate.

In The Fourth Turning, William Strauss and Neil Howe predicted, in 1997 when the book was published, that the next period of crisis in our country’s history, the "Fourth Turning" (following the first three crises) which they named the Millennial Crisis, would begin in 8 to 10 years. They were spot-on predicting when it would begin, 10 years later (in 2007), and this is what they say about its course:

"The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. Thus might the next Fourth Turning end in apocalypse – or glory. The nation could be ruined, its democracy destroyed, and millions of people scattered or killed. Or America could enter a new golden age, triumphantly applying shared values to improve the human condition. The rhythms of history do not reveal the outcome of the coming Crisis [the one we are experiencing now]; all they suggest is the timing and dimension."

One thing is certain. This crisis, now in its 6^th year, will not be over anytime soon. How bad it becomes will depend on whether or not our country heeds the teachings of Ron Paul and his advocates.

Unfortunately, the establishment media tries to ignore Ron Paul and pretend he doesn't exist. Jon Stewart, on The Daily Show, skewers the media's talking heads on this score, asking "How did Ron Paul become the 13^th floor in a hotel?" in "John Stewart Shows How Ron Paul Is Feared By The NWO Mafia Controlled Mainstream Media," which can be seen on YouTube HERE. But other wiser heads can see and appreciate his true worth.

Bill Buckler, Captain of the financial newsletter The Privateer, published in Australia, has this to say about Ron Paul:

"Dr. Paul’s great and merited attractiveness to a growing number of admirers has a very simple source. He is that rarest of creatures – a FREE man. He is beholden to nobody. He has developed his ideas and his convictions over a long and fruitful life of independent thinking. He does not compromise. He hones in on the fundamental issue and principle of any political issue and serves it up without salt or other ‘seasoning.’ He says what he means and he means what he says. He is the living embodiment of the ‘dream’ that most Americans have long since given up on as they saw it slip further and further beyond their grasp. He is the only prominent person who is doing everything he can to turn the non-debate which masquerades as the ‘mainstream’ in the US and global political economy into something of substance. That, far more than presidency, is his goal."

Ron Paul wants to legalize freedom and have the government stop punishing people for using the freedom that is rightfully theirs (as long as you, of course, do not encroach on other persons and their property). All the other leading candidates who want to be elected president are pro-big government and seek power. Mitt Romney is Wall Street’s Republican candidate, with the investment banking and securities firm Goldman Sachs being his biggest contributor. There is little difference between Mitt Romney and Barack Obama, except perhaps that Romney is even more pro-war than is Obama. I highly recommend Andrew Napolitano’s YouTube video "Judge Napolitano What if the Government Has Been Lying to You" where he portrays Republicans (excluding Ron Paul) and Democrats as "two wings of the same bird of prey."

Ron Paul is different. As the YouTube video What Is It About Ron Paul? affirms,

"Once you get hooked on Ron Paul you can no longer bear to listen to a man who wants power. You become instantly disgusted whenever they begin to speak. Before they were just boring, but now they’re revolting. Listening to a Romney, or a Gingrich, or a Bush, or Obama makes you sick; and you just don’t understand how Ron Paul can get through those debates without getting nauseous. You see a political veneer in these politicians that is so transparent, like a ghost flapping its ethereal tongue at you."

A poster shown in the video states, "Once you get hooked on Ron Paul you can no longer bear to listen to a man who wants power."

People all over the world are getting hooked on Ron Paul. A Canadian citizen, Terry Neudorf, for example, writes this in a blog titled "Ron Paul Shakes the World":

"When the name Ron Paul is mentioned to my grandchildren, a smile will creep across their faces, and they will recall, and speak with excited tones about a time where an idea was born, a message was spread, and a revolution took hold that shook the world. That's the time I'm living in right now. I will treasure every moment. Thanks for all you do."

Young Americans are joining The Ron Paul Movement, like those manning phone banks to promote and raise funds for his campaign. (Don’t expect Goldman Sachs to contribute any money to Ron Paul’s campaign.) Leaders of the X and Y Generations allied with Ron Paul are our best hope for the future – and for coming through the Millennial Crisis without war. A third world war, with nuclear weapons in play, could well prove to be even more devastating than was World War II. But even if he is not elected president, all is not lost. Like Obi-Wan Kenobi, Ron Paul’s spirit and teachings will live on and guide a new generation of Luke Skywalkers, including his son, X-Generation Rand Paul, to lead our country safely through this time of economic and social peril.

The Austrian Cure for Economic Illness

Dr. Paul’s Austrian treatment for the Millennial Crisis comprises six parts:

1) End the Fed – close down the central bank. "Unplug the machinery of the Fed," as Ron Paul puts it in his book End the Fed (see also the other three books he has written on government and liberty in "Suggested Reading" below). The market must be free to set interest rates without a central bank artificially lowering them and inflating the money supply. Banks should once again exist as free-enterprise institutions without privileges or bailouts from the state. ATMs, Web-based systems of funds transfer like PayPal, and online trading can function perfectly well without a Fed.

2) Restore sound money to the economy – privatize the country’s monetary system, abolish legal tender laws, and allow the free market to determine the forms of money it prefers.

3) Lower taxes and cut government spending – close military bases that the U.S. maintains in more than 130 countries around the world and bring the troops home; defund unconstitutional departments like Education, Housing and Urban Development, Agriculture, etc.; abolish the personal income tax.

4) No bailouts – the economy needs to liquidate all the malinvestments and mistakes made during the boom in order to be able to move on and recover from the bust.

5) Allow prices and wages to fall to levels the market sets – propping up prices stifles recovery, as the Great Depression proved.

6) Regulate the government, not private property and markets – entrepreneurs and investors will only make long-term investments that spur recovery and boost employment if they feel that their property is secure. (Fifteen cabinet-level departments control different parts of the economy, along with 100 federal regulatory agencies that have produced more than 81,000 pages of regulations, not including those set by state and local governments.)

Disclosure:

Like Ron Paul, I am a member of the Silent Generation.

Suggested Reading:

Articles

• Ron Paul. "Mises and Austrian Economics: A Personal View" (1984. 23 pages. Ludwig von Mises Institute)
• Murray N. Rothbard. "To Save Our Economy From Destruction" (The Freeman, 1995. Reprinted on LewRockwell.com)
• Llewellyn H. Rockwell, Jr. "Why Austrian Economics Matters" (1995. Ludwig von Mises Institute)
• Llewellyn H. Rockwell, Jr. "Money and Our Future" (2009. LewRockwell.com)
• Donald W. Miller, Jr. "A Fourteen Point Plan for a Post-Wilsonian America" (September 28, 2001. LewRockwell.com)
• Donald W. Miller, Jr. "The Austrian Cure for Economic Illness" (June 2, 2008. LewRockwell.com)

Books

By Ron Paul

• Pillars of Prosperity: Free Markets, Honest Money, Private Property (2008, Ludwig von Mises Institute)
• The Revolution: A Manifesto (2008. Grand Central Publishing)
• End the Fed (2009. Grand Central Publishing)
• Liberty Defined: 50 Essential Issues That Affect Our Freedom (2012. Grand Central Publishing)

Others

• F.A. Hayek. The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) (1944, Reprinted 2007. University of Chicago Press)
• Ludwig von Mises. Omnipotent Government: The Rise of the Total State and Total War (1944, Reprinted 2011. Liberty Fund, Inc.)
• Murray N. Rothbard. What Has Government Done to Our Money? and The Case for a 100 Percent Gold Dollar (1963, 1962, Reprinted 2005. Ludwig von Mises Institute)
• William Strauss and Neil Howe. The Fourth Turning: An American Prophecy (1997, Broadway Books)
• Adam Ferguson. When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany (1975, Reprinted 2010. Public Affairs. Also available for free download from the Ludwig von Mises Institute)
• Thomas E. Woods, Jr. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse 2009, Regnery Publishing)
• Thomas E. Woods, Jr. Rollback: Repealing Big Government Before the Coming Fiscal Collapse (2011, Regnery Publishing)

February 9, 2012

Donald Miller (send him mail) is a cardiac surgeon and Professor of Surgery at the University of Washington School of Medicine in Seattle. He is a member of Doctors for Disaster Preparedness and writes articles on a variety of subjects for LewRockwell.com. His web site is www.donaldmiller.com

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