The point is that any enlargement [of the State], good or bad, reduces the scope of individual responsibility, and thus retards and cripples the education which can be a product of nothing but the free exercise of moral judgment. Like the discipline of the army, again, any such enlargement, good or bad, depraves this education into a mere routine of mechanical assent. The profound instinct against being ‘done for our own good’ . . . is wholly sound. Men are aware of the need of this moral experience as a condition of growth, and they are aware, too, that anything tending to ease it off from them, even for their own good, is to be profoundly distrusted. The practical reason for freedom, then, is that freedom seems to be the only condition under which any kind of substantial moral fibre can be developed.

--Albert Jay Nock, “On Doing the Right Thing." 

Every four years we are told how important the upcoming election is and how its results will have far ranging consequences. Each and every individual must participate no matter how limited the choice is or how uninformed or misinformed about that choice you are. However, this year unlike years past this talk is not just media hype there is an actual choice to be made for the first time in our lives. We can choose ever increasing financially crippling debt which is systematically destroying our children’s future, perpetual warfare which harms countless lives, but does not make any of us the least bit safer and is one of the main causes of our impending total bankruptcy by voting for Barack Obama or any of the Republican candidates except Ron Paul. Or we can vote for someone who has demonstrated his belief in freedom, which already has vastly improved the lives of millions of people all over the world throughout history, many times before in both words and actions, Of course the Democrat and Republican parties and their handmaidens in the media will do everything and anything they can to stop Ron Paul from being elected because he represents the one thing they fear the most, change and the diminishment of their own personal power as a result. In 2008 the people wanted and voted for real change but the establishment and propagandists did not fear or oppose Barack Obama because unlike many of the rest of us they were not fooled by his lies. Yes he was able to produce good sounding rhetoric but nothing of any substance changed when he took power. The most racist policy since chattel slavery ever devised by government, drug prohibition, is still in effect and being pursued by Barack Obama with renewed vigor. Last summer the Republicans allowed Obama to borrow another 4,2 trillion dollars and as I write this he is preparing grab yet another 1.2 trillion more so the burden on our children will continue to astronomically increase, while Obama pretends to be a man of peace we are still engaged in various wars all over the globe ,and Obama, perhaps not so much with words but certainly with deeds, is encouraging a new one with Iran. The political classes  decisions against their own interests still continues unabated. If you provide a good or service that has real value and their devotion to the military industrial complex did not change with the election of Barack Obama. The micro managing of peoples’ lives forcing them through the use of government coercion to make badle are willing to pay for it voluntarily with your own money then Barack Obama considers you an enemy of mankind. However, if you are able to manipulate government into employing its monopoly on the use of force into stealing for you no matter if you get anything of value in return or how much it is unfair and disrupts your life then to Barack Obama you are a hero. We must put Rom Paul in office because the country really needs effective change because the other Republicans do not offer that option.

I've just re-read Ortega's Mission of the University. Interesting stuff, like everything he wrote, but the best part is the last page, which is a blistering attack on the press -- or what we today would call "the mainstream media." When his colleagues at El Sol, a paper for which he wrote, saw it, they wrote a collective editorial bashing him for it. What's most disturbing is how close to the truth it still is today -- probably much closer than it was in 1930, when he wrote it.

Here we are in the midst of a primary election campaign, and there is a huge amount of reporting on who is going to win (though it's fairly obvious who will win), little reporting on their positions on the issues, and almost non on the issues themselves. That is exactly the sort of "inversion" Ortega talks about below.

[H]oy no existe en la vida pública más “poder espiritual” que la Prensa. La vida pública, que es la verdaderamente histórica, necesita siempre ser regida, quiérase o no. Ella, por si, es anónima y ciega, sin dirección autónoma. Ahora bien: a estas fechas han desaparecido los antiguos “poderes espirituales”: la Iglesia, porque ha abandonado el presente, y la vida pública es siempre actualisima; el Estado, porque, triunfante la democracia, no dirige ya a ésta, sino al revés, es gobernado por la opinión pública. En tal situación, la vida pública se ha entregado a la única fuerza espiritual que por oficio se ocupa de la actualidad: la Prensa.

Yo no quisiera molestar en dosis apreciable a los periodistas. Entre otros motivos, porque tal vez yo no sea otra cosa que un periodista. Pero es ilusorio cerrarse a la evidencia con que se presenta la jerarquía de las realidades espirituales. En ella ocupa el periodismo el rango inferior. Y acaece que la
conciencia pública no recibe hoy otra presión ni otro mando que los que le llegan de esa espiritualidad ínfima rezumada por las columnas del periódico. Tan ínfima es a menudo, que casi no llega a ser espiritualidad; que en cierto modo es antiespiritualidad. Por dejación de otros poderes, ha quedado encargado de alimentar y dirigir el alma pública el periodista, que es no sólo una de las clases menos cultas de la sociedad presente, sino que, por causas, espero, transitorias, admite en su gremio a pseudointelectuales chafados, llenos de resentimiento y de odio hacia el verdadero espíritu. Ya su profesión los lleva a entender por realidad del tiempo lo que momentáneamente mete ruido, sea lo
que sea, sin perspectiva ni arquitectura.

La vida real es de cierto pura actualidad; pero la visión periodística deforma esta verdad reduciendo lo actual a lo instantáneo y lo instantáneo a lo resonante. De aquí que en la conciencia pública aparezca hoy el mundo bajo una imagen rigorosamente invertida. Cuanto más importancia sustantiva y perdurante tenga una cosa o persona, menos hablarán de ella los periódicos, y en cambio, destacarán en sus páginas lo que agota su esencia con ser un “suceso” y dar lugar a una noticia. Habrían de no obrar sobre los periódicos los intereses, muchas veces inconfesables, de sus empresas; habría de mantenerse el dinero castamente alejado de influir en la doctrina de los diarios, y bastaría a la Prensa abandonarse a su propia misión para pintar el mundo del revés. No poco del vuelco grotesco que hoy padecen las cosas -Europa camina desde hace tiempo con la cabeza para abajo y los pies pirueteando en lo alto- se debe a ese imperio indiviso de la Prensa, único “poder espiritual”. Es, pues, cuestión de vida o muerte para Europa rectificar tan ridícula situación. Para ello tiene la Universidad que intervenir en la actualidad como tal Universidad, tratando los grandes temas del día desde su punto de vista propio -cultural, profesional o científico.

“Tyranny is the exercise of power beyond right.” “Wherever law ends, tyranny begins.”
—John Locke, Second Treatise of Civil Government

“The historian is . . . one step nearer to direct power over public opinion than is the theorist.”
—Friedrich von Hayek

Man of the Year (2009)

Say what you will, but the Fed certainly has chutzpah: driving interest rates to zero, printing money, and now jawboning Congress to write down the principal of the nation’s mortgages (nationalized by force in 2009 and held by the federal government). It’s only money, after all, the property of “nobody” since the government now owns the nation’s housing debt. Bernanke has declared that if Congress does not legislate as he desires, then Bernanke will take law-less action. By Locke’s definition, that is tyranny

Why does the Fed Chairman bother with the facade of lobbying Congress when he assumes unlimited power to himself? Is there any limit to Bernanke’s hubris? Above all, why does he behave this way? A recent Independent Review article splendidly explains the how of Bernanke’s audacious rule but not the why—particularly how he gets away with it.

The answer lies partly in the role historical memory plays in justifying and excusing despotic actions under one man’s rule, particularly during times of crisis. Hayek noted that most policymakers are driven by mental images they got from textbooks, not economic theory. To “sell” a policy or action, the rulers simply resort to historical shorthand passed down from one generation to another, often through government-approved K-12 textbooks and the introductory college text. Don’t kid yourself that they actually teach economics (of any kind) K-16 to the unwashed masses. Instead, it is subsumed—as Hayek knew—via the stories told by historians.

Example: The “script” for the Great Depression goes like this: lack of banking regulation, “unfettered capitalism,” income inequality, and corporate “administered prices” led the nation into a great abyss. FDR came to power, spread the wealth and people felt better. That is still  the version in 2011 despite decades of economic literature on the causes of the depression (the role of international gold standard, the Fed’s actions, branch banking bans that weakened the financial system, etc.).

Don’t believe me? Pick up introductory textbooks like Goldfield, et al. The American Journey (2011). The Fed isn’t even mentioned, except as a “Progressive” law that “provided for a flexible national currency and improved access to credit.” “The new system promoted the progressive goals of order and efficiency . . . .” (p. 622). Sure it did.

We all know that Ben Bernanke was an economic historian (a line repeated over and over). His knowledge of the depression was more complex than the textbook version (although even he felt compelled to get support by citing the “lessons of history”). Bernanke understood the Fed through Milton Friedman’s eyes and famously promised Friedman that the Fed wouldn’t allow the Great Depression to happen again. Hayek would have faulted Bernanke for reassuring the investing public about the housing bubble. “Nothing to worry about; the fundamentals are strong” was Bernanke’s line. Who remembers that? Here is an apt cartoon from February 2006:

In an illuminating interview (September 17, 2008), Allan Meltzer, the great historian of the Federal Reserve, explained how history—and personal concern for one’s place in it—motivates those in power to arrogate power beyond the letter and spirit of the law.

“I’ve been following these problems for 40 or 50 years. You know, it always comes down at the end to this.

Someone goes to the secretary of the Treasury or, in this case, the chairman of the Fed and says, ‘If we don’t do this, we’re going to have a terrible depression. It’ll be known as the Bernanke depression. And if you don’t act, there’s going to be a disaster.’

Well, that’s not always the case. And these disasters should be headed off early or should be left to the marketplace to settle. They made these mistakes, and they should pay for them.”

A savvy, self-restrained Fed chairman would retort:

“So you say. Tell me, who was chairman of the Federal Reserve between 1929 and 1933?

Answer: Roy A. Young and Eugene Meyer.

Never heard of them? You won’t find them in textbooks or in Hollywood depictions of the depression. In those days, the Federal Reserve “system” was much more fractured and the de facto chair was the head of the New York Fed. Don’t worry, you have never heard of him either: George Harrison (no relation to the Fab Four).

Still, the few people who spend their lives studying the history of money and depressions do remember that the New York Fed had a powerful chairman (Benjamin Strong) but he died and . . . we had a Great Depression because he died. Thus the Great Depression all comes down to the leadership and “expertise” of one man. Or so Bernanke thinks, based on his reading of the Great Depression.

Benjamin Strong’s death “led to decisions, or nondecisions, which might well not have occurred under either better leadership or a more centralized institutional structure.”

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

Any person who arrogates extreme power to themselves “to do good” ought to be handed a copy of Marcus Aurelius’s Meditations. Aurelius was the Roman emperor-philosophy who reminded his readers that no one remembers the actions of individuals who are constantly in the news of their day. Today, historians pick and choose who will enter the pantheon of “those to be remembered” but they have focused on presidents, leaders of social movements, and little else. You will look in vain for any scapegoating of individual Fed chairman. Instead, the history textbook goes like this: the Progressives came along (circa 1900-1920) and created many agencies to create order and benefit “the People.” They created the Federal Reserve and then . . . the Fed did various (unnamed) things. Now on to the Roaring Twenties and the evils of Wall Street....”

While the mainstream media revels in the presidential horse race, Bernanke is lauded for “doing something” (in general, historians give high marks to those who “do something”—the bigger, the better). And thus Bernanke was Time magazine’s man of the year in 2009 because he “stopped another Great Depression.” This is the left-liberal glow of one-man rule:

“His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future. The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world.”

But fear not: historians won’t attribute the cause of this recession to the Fed, Fannie Mae, Freddie Mac or anything but Wall Street and income inequality (remember the “script”). Bernanke was “Man of the Year” in 2009 but in the grand scheme of things he won’t rank so high. The “Man of the Year” two years into the Great Depression was Pierre Laval. Never heard of him? He sold France out to the Nazis, deported Jews to death camps and was executed by firing squad. But that was 15 years after he was named “Man of the Year”!

As for the Fed, it will augment its power and continue to abuse history for its purposes. It is almost inevitable since nearly all Americans have been told the same story of the Great Depression—and future Fed chairmen will take all power to themselves to prevent another one. The press approves but they liked Laval too.

By any other name, one-man rule of a nation is still tyranny. Not that the historians will notice.

This is a very interesting article on the OWS movement by the psychologist Jonathan Haidt.