All right, y'all welcome back.
It's anti-war radio.
I'm Scott Wharton.
And our next guest today is Sheldon Richman, the editor of the Freeman, the journal of the foundation for economic education, that's the freemanonline.org.
He's also a fellow at the future freedom foundation, FFF.org, and keeps the blog free association at SheldonRichman.com.
This piece at the freemanonline.org is entitled is serfdom an executive order away national defense resources preparedness.
Oh, Sheldon, you alarmist.
You welcome back to the show.
Thank you.
Always great to be back.
Uh, very happy to have you here.
Uh, what is the national defense resources preparedness?
Well, this is an executive order that, um, president Obama issued, uh, the end of, uh, last, uh, or about the middle, I guess of last month, uh, basically directing members of the cabinet to, uh, get us ready for a national emergency.
I guess, I guess that'd be the way to put it.
In other words, were he to decide there was an international emergency, he wants to make sure the government, the executive branch, I should say, because even the government's too general, Congress is not involved in this, that the executive branch will be able to commandeer the economy in order to, you know, see the, uh, see through the crisis, see, uh, see the crisis through.
And so it goes into detail about what he wants, uh, various cabinet members to do, to, you know, assess our resources and industrial base and, and, um, be prepared to do what's necessary to, to get it up to what, you know, what it needs to be.
And, and then, uh, basically the government would have first claim on all resources.
Uh, there is a reference also to military conscription in there.
So it's a military manpower.
And, uh, like I said, in case he decides there's a national emergency and this seems to be just an unchecked power.
Yeah.
Well, um, it's funny, you know, in the 1990s, uh, I don't know where I first found it.
Uh, I think I just found it trolling through executive orders on Bill Clinton's website.
Maybe I found a one two nine one nine, which is the Bill Clinton version of this exact same thing.
And now, uh, there may be a blog or somewhere or another that went and compared, you know, paragraph for paragraph, what all the differences obviously now there's a department of Homeland security.
And so things have got to be, you know, reorganized a little bit.
But, uh, in fact, I haven't even read the new one, but I did read the old one, the Bill Clinton one, uh, very well.
And of course this goes back kind of in conspiracy theory lore to old Bircher stuff from the seventies, because Richard Nixon had these same kinds of executive orders in place.
And then of course, Ford and Carter and Reagan and Bush and all the way through had them too.
And, um, but, uh, by the time of Bill Clinton, this really like flipped me out and I was just, you know, I don't know, in high school and really learning about politics and real politics, uh, around that time.
And I thought, well, this must be the goal of all of this.
This is actually the blueprint for the day the other shoe finally drops and they quit pretending.
We even have a constitution anymore and just decide to make America totalitarian state.
Because as you say, it's not just an authoritarian thing where they declare an emergency.
And so now, you know, it's martial law and you could be shot.
If you disobey that kind of thing, it actually describes in detail how to seize all transportation, all medicine, all food, all trade, all everything.
And it's, it's, it's actually pretty breathtaking.
But then the, my question is, what are they waiting for?
Why didn't Bill Clinton go ahead and make himself the emperor and start shooting lightning out of his hands back then?
Well, let's put this in a little bit of perspective.
Why didn't Obama implement it himself a month and a half ago?
Instead of just saying, everybody get ready.
Why didn't he just say, all right, everybody give it up.
Your money or your life.
Well, he hasn't declared a national emergency and I guess, uh, you know, there are always political limits to these things, even if they're not legal limits.
So if today, uh, just out of the blue, he said national emergency, uh, I'm taking over the economy and imposing martial law.
Well, I, I expected that they would anticipate some resistance to that.
Cause it doesn't really seem to be a national emergency.
So you, you know what I mean?
There's just, there's going to be some political limit on, on what he can do.
Um, I want to put this in a little bit of perspective because I don't want to join in the, uh, you know, the Obama, uh, historical chorus who thinks this is something, uh, this is something unique to Obama as a Robert Higgs, uh, points out in a blog post to which my article links, uh, uh, you know, the government has exercised this sort of power.
World war one, it basically took over the economy.
And of course we had a draft, uh, it then lets the powers recede.
They don't always formally repeal them, but they put them kind of on the shelf.
This is whole, this is Robert Higgs, his whole ratchet theory, uh, namely that in a crisis, the government assumes a new powers after the crisis.
Uh, it, it may give them some of them up, but it may be an informal giving up.
And there's, there may be available anytime the government wants them.
And he points out in world war two, the government did the same thing.
Uh, it didn't relinquish them until the Korean war started.
And then after the Korean war, they were sort of put, put like again, put on the shelf in the meanwhile, 1950, they passed this, uh, national defense with the resources act, um, which then, you know, again, can be, uh, it's there when they need it.
That's, that's kind of a theory.
So Obama here is just on the basis of that.
And he cited the not, uh, it's called the national defense production act of 1950.
He cited that act, uh, as the basis for his, uh, executive order.
In other words, the, uh, the broad authority, I guess, is in the act, but now he's telling specifically what the secretary of defense labor, uh, homeland security, you know, and so on the, uh, the secretary of state just going down the list, what it is he expects of them to be, to be ready for a national emergency.
And then what they're able to do in an international emergency, he's putting sort of, uh, you know, the flesh on the bones.
And, uh, yeah, it really is something to, to read through it.
And they really have thought this through, huh?
What it would look like.
Although I wonder, uh, like you said, there are political limitations.
Is this basically, you know, all hyperbole aside really just for after a nuclear war, something to save the last little bit of, you know, cause the state of course, always is going to put its own survival first under the premise that no one could survive without it.
So, you know, is that basically what we're looking at here is that if the society is obliterated, they have total power in some old law to refer to, to, to consolidate what's left.
Well, I, uh, that's, I'm sure part of it.
And they've always had plans for that.
There's a big underground, uh, headquarters somewhere.
It's like a city on the ground somewhere where the government could carry on.
We should all feel, you know, rest assured and sleep well at night.
And we'll carry on in case of a nuclear war.
But I think it, I think it, uh, I think they have in mind things that are less than that.
Uh, who was it that said, you know, if there's another, uh, terrorist attack, the constitution is suspended.
Wasn't that?
It was Tommy Franks who was the head of the Iraq invasion.
Yeah.
Okay.
So there you go.
Uh, I don't think they see nuclear war, the big one, as the only scenario in which this, this kind of thing will kick in.
You know, I gotta tell you after September 11th, this is the state of my paranoia at the time.
I was so pleased and thankful that like I could have prayed a grace over it or whatever, that George Bush merely asked the governors to please call out their own guard units and put them at the airports instead of nationalizing them all and put them there just as a start.
And I remember thinking, Oh, what a great half measure, less than what I thought might happen there.
I mean, they could have got away with quite a bit worse.
In fact, at the time.
Um, although I'm not, obviously I'm sort of joking that, you know, it's all matters relative here.
Uh, I'm not, I'm not saying, you know, this is about to go into effect.
Uh, I think they realized for political purposes, it would have to seem pretty extreme, but I still think that extreme is something short of, you know, the, the, the Soviets and the Chinese and the U S all beginning a full exchange and that we'll throw the Israelis in while we're at it, a full, a full nuclear exchange.
So, uh, you know, I think it would have to be something pretty big, but I don't think it would have to be as big as, you know, world war three.
Yeah.
Well, uh, someone I knew, uh, told me when I first, uh, stumbled upon this stuff, uh, executive order one, two, nine, one, nine under Bill Clinton that, you know what, they've had these powers since Nixon and Nixon didn't invoke them in 1968 when the whole country was being torn apart.
So you should probably breathe easy for a little while anyway, but, uh, we'll have more with Sheldon Richman from the Freeman, the Freeman online.org right after this.
All right.
Y'all welcome back.
It's anti-war radio.
I'm Scott Warren.
I'm talking with Sheldon Richman and, you know, all these timed hard breaks don't, it doesn't always, uh, lend itself to a proper explication.
Um, yeah, no, I, I did not mean to say Sheldon that you're saying that, oh my God, Obama's going to do this tomorrow or something like that.
Um, I just, it's sort of a meme going on out there that this is all about to happen.
I think that's what you were, you know, referring to when you said you weren't trying to play into that.
It's sort of the whole, you know, Obama's a Kenyan, uh, kind of, uh, level stuff.
Um, but on the other hand, this makes it very clear that the people who run the government of the United States of America considered that virtually every square acre of property in America belongs to them.
Every hospital belongs to them.
Every bandage belongs to them.
Every bandage belongs to them.
Every port, air or sea belongs to them.
Every road belongs to them.
Every person belongs to them in order to defend the government.
I mean, there's a lesson in there for you people, which is that nationalism at all is really communism, you know, at the very basic level, uh, it's, you know, Marxism, at least in security.
And this is what you get.
Ultimately it ends with, you know, all roads lead to Soviet totalitarianism, man.
That's what's instructive about the executive order.
Not that it's anything brand new.
It's that, that's the mentality that in the end, in the end, the state owns everything, including us.
Eminent domain.
I used to think it was eminent domain.
Like, Hey pal, the road's coming through here imminently.
And you got to get out of the way.
No, I mean, that's exactly right.
And listen, even without eminent domain.
If you own, if you own land, if you own a house, uh, you really are just renting it because try not paying your property tax.
We call it, we don't call it rent.
We call it a tax, but it's a rent.
Isn't it?
Yeah.
Liberals like to say, Hey, even Thomas Jefferson was in favor of that.
And so therefore there's a limit to your individualism, Sheldon, you know, if Jefferson was a communist on the issue, then you gotta be too, you know, but that's the point you can't, when the government decide, uh, that, that, uh, you know, we're in an emergency.
You may not say no.
It has first claim on all contracts.
It says, it says right in that executive order that he can make any contract.
Uh, first of all, required acceptance.
Yeah.
In other words, if the government wants you to, if let's say you have a factory and you make a widget and they need widgets, they can make you accept the contract and make you put that priority, you know, ahead of everything else.
And, uh, too bad.
I mean, it basically now owns it.
In effect, if I can tell you what to do with it, it's the effect of owner of it.
Even if it's nominally still private property.
Yeah.
So, so that's, that's what I think, that's why I thought it was worth writing about this, not that it's Obama, you know, Oh, the Obama taking over Obama as a Marxist, that's all nonsense.
It's a, it's a reminder because it's true for every regime.
It's a reminder that ultimately the state owns everything.
Well, you know, our government has done nothing, but go around making sure that there's a whole bunch of people in the world would like nothing better, but to commit some acts of revenge against the American people and, you know, in a way that can make our government overreact and destroy us even faster or whatever, probably the better for a lot of them.
And so we could be in a situation where, I don't know, six cities are on fire because of some plan thing, a nine 11 attack in three cities at the same time, Oh no, uh, something on that level where, um, you know, we have an unlimited number of people probably willing to try something like that in the world, unfortunately, and they could, this really could happen.
This is a, a government that now claims the power to, uh, like Dick Cheney proposed and Bush vetoed it.
No way.
We can't do that.
They wanted it.
He wanted to send the army after the Lackawanna six and, uh, and, uh, Bush decided not to order, but now that's basically just codified that Obama can send the military after us if he wants to with the, uh, NDA now.
Yeah.
Well, see, that's the key point.
I mean, you can't take any comfort in the fact that, Oh, Oh, this could only be invoked in a national emergency.
The government can create a national emergency intentionally or not by fooling around in foreign policy.
And really we're under a thousand different, or, okay.
I don't know.
Hundreds of different national emergencies right now.
Probably they never repeal them.
They just move on to the next one, you know, December 7th, 1941 people generally regarded that as a national emergency, but the government had spent a couple of years goading the Japanese as, as, as secretary of war, Stimson put it at the time, just a few days before Pearl Harbor.
We, we talked about how to maneuver the Japanese into firing the first shot.
Uh, so they could create an emergency.
That's not the problem.
So, I mean, for them, it's not a problem for us.
It's a problem.
So, you know, this isn't just, Oh, well, there's no need to worry about this.
This is only if there's a dire emergency.
The government can manufacture an emergency and has many times throughout our history.
Well, and you know, the one politician who predicted the, uh, financial crisis of 2008 through right now is predicting another one when he says we're going to face a Greece like crisis where our government sovereign debt is no longer worth anything on the market.
And at that point, our currency becomes worthless and the savings of tens, hundreds of millions of Americans are completely wiped out and we have a serious financial crisis in this country.
And, you know, I don't know if that means it's definitely going to happen, but sure doesn't seem like they're electing him.
So, well, you know, my old friend and a very good economist named Jeff Hummel at the San Jose state, uh, has written repeatedly that the, the, the two issues are really separate, the currency and, and the debt, and he predicts that there will be a default because the government will have no other way to, uh, you know, to pay it, to pay that because, uh, inflation doesn't do it for them anymore.
They don't reap, uh, cash from inflation the way governments used to.
And, uh, they can't raise taxes, uh, beyond a certain limit because it doesn't raise the revenue.
And, uh, there's no will to cut spending deeply.
So that he says the only alternative they're going to have is to, is to default, but he doesn't predict a currency collapses as a result of that.
So, uh, I am not, that's the way that doesn't mean monetizing all that debt and having the Fed just pay it off with inflated money.
He thinks there'll be an outright repudiation.
No, because monetization doesn't get them what they want.
Inflation doesn't get them what they want anymore.
And he's got the numbers.
I mean, even in the seventies, when we had the high inflation, the government was not reaping cash from a result of that.
There wasn't getting the senior agent used to be, you know, cold, uh, which is the difference between, you know, what it costs them to print money and what, and the value of the money that they, they get to spend as a result.
Well, and they're in between the rock and the hard place already, right?
Where if they, if interest rates go up at all, they can't pay the interest on the debt anymore.
Cause it's already more than half a trillion dollars a year, just the interest on the national debt.
Yeah.
They'd be chasing their tail.
The other thing is the, you know, the markets are much more sophisticated these days.
And of course the high tech, uh, so you're saying they can repudiate all that debt, but it won't destroy the currency when they do it.
That that's a Jeff Hummels.
I mean, I'm not a, you know, I'm not a money and banking expert.
He, but he is, he, I wish I was, that sounds like fun.
He teaches money in banking and, and banking history.
So he knows the both sides of it very well.
And he says it would not cause the, he doesn't believe they're going to try to inflate their way out of it because they'll realize they can't do it.
First of all, people will flee the currency very early on, right?
With the, with the tools they have today, the computers and everything in the worldwide currency markets that can react so quickly, they'll, they get an early clue if there's, if the fed were to start to kick that into motion and would immediately get out of it.
So that's going to, that will neutralize the, the effects of that.
So it's, I think some of those do doomsday scenarios on the monetary side may be overblown and I think repudiation would be a good thing.
First of all, I don't believe they should be taxing people to pay that debt because the people didn't ask for the debt, the politicians did.
And if you, it seems to me, if the government has a choice of who to pay voluntary creditors or coerced creditors, like say social security recipients, I side with the coerced creditors, not the voluntary credit.
Look, anybody that buys a bond from the government knows what it's doing and they've chosen to do it.
Yeah, I'm with you except, you know, people with their pension funds invested in them and that kind of thing out of their control.
Right.
But well, but of course inflation or high taxes, which squelches production won't help those people either.
This is the mess the government has given us.
They've done it.
They dug this huge hole and now they're looking to blame somebody else.
And it's a real solution.
I'm pretty sure Jeff Hummel agrees with this is just to abolish the state entirely that way.
There's nobody to collect a tax or pay off a bond holder anyway.
But of course that would be repudiation.
That's right.
Yeah, absolutely.
Repudiate the entire thing.
Popular sovereignty.
What kind of BS is that?
Whoever heard of that?
It's not very popular in my view.
No, it's not.
I don't even know if people know that that's the thing to repudiate, but I repudiate it.
All right.
Well now, but here's the thing though, back in the real world, instead of me getting my way, what we have is, and this is something that we'd talked about before was James Bamford and the National Security Agency and the new pieces that he's written for Wired about the Israelis too.
I don't think we've covered that on the show.
And that's in the book, The Shadow Factory as well, which I highly recommend to everybody.
But in his new Wired piece, Bamford quotes an NSA whistleblower as saying, listen, this is, and he's really paraphrasing, might as well be paraphrasing Senator Church from the seventies saying, this is a turnkey totalitarian state.
We are, the only thing we have is our pretended respect and interest in the old law.
Other than that, we could be, it could be absolute 1984 Big Brother land around here, unimagined totalitarianism basically.
Well, uh, Bamford knows what he's talking about.
I have great respect for him and, uh, I take that very, very seriously.
Yeah, it's problematic.
Well, you know, it's, I guess, you know, people are always going to get it too late, but it does seem like more and more people are getting it that the solution to most of these crises is to just scale back state power.
Um, I don't know if they'll ever get it.
That's the solution to all of them.
Um, but more and more, it, it's seeming like it's apparent to me that we're seeming like it's apparent to people that the government's the problem in the first place.
You know, I don't know if they can follow through on the logic there, but well, that's right.
And there is a sort of a, uh, forgive the term as I'm, I don't like psychiatry much, but it's schizophrenia there.
I mean, people do have a sense that the government is way too powerful, but when you get to specifics and say, do you want to cut, you know, X, Y, or Z even tea party, people say no.
So, you know, they want to cut in general, but they don't want to cut specifically.
Unfortunately, the world doesn't work that way.
Yeah.
Well, yeah.
And as long as they got Republicans and Democrats for people to switch back and forth on, you know, we'll be kind of screwed anyway, but yeah.
Anyway, um, well, a war in Iran will take our mind off all of us.
Yeah.
You know, I wonder, let me ask you one more thing then about the money repudiation thing.
If they do just go ahead and repudiate the debt, is that going to have an effect on the troops?
Cause I guess that to me was going to be the silver lining of the dollar breaking when they pay off the debt with inflated money was that then the troops, I mean, I hope they don't get stuck and have to hitchhike home, but, um, you know, that they'll have to come home cause they won't be able to pay them with money.
That's worth anything to be soldiers anymore.
But it sounds like I'm worried that maybe they'll be able to keep the, uh, if they just repudiate the debt and start over, they'll be able to keep the empire going the way it is.
Well, maybe we should use that, that, that reasoning, which seems pretty legitimate to, uh, to launch a campaign to end the wars now before the government doesn't have the means to bring them home.
Yeah, there you go.
You don't want them stuck out there in central Asia, do you?
It'd be a sales pitch, wouldn't it?
Well, wait a minute, if they just repudiate the debt, won't all of Asia want to go to war with us?
Well, I don't, I don't think so.
Cause I mean, they own trillions.
I mean, what would happen to them?
They own trillions of dollars worth of our debt, right?
The Chinese, the Koreans and the Japanese too?
Yeah.
The Chinese, the Japanese, yeah, I guess they all own some, uh, I think sometimes it's overblown how much the Chinese own, but they, yeah, they own a fair amount.
Well, we'll give them warning, give them some warning.
No, there you go.
So they can, they can, you know, reshuffle their portfolios.
Hey, as soon as that really starts happening, let me know.
And then I'm going to try to figure out the futures market there and play some appropriate currency bets, that kind of stuff.
Well, you're probably going to know before I do.
I actually don't have any money, except maybe a general change to get started with, but if I play my cards or I could turn it into millions, the proper circumstances, like George Soros betting against the bank of England.
Uh, I don't really have a hedge against all this either myself.
So, uh, I think you'll have to rely on Charles Goyette.
Yeah.
I, it seems like, uh, more of us, uh, Austrian lean and types ought to use our knowledge to make money.
Like I knew about the housing bubbles and the.com bubbles because of Ron Paul, especially, um, you know, in real time back in the late nineties.
And then after that, the first collapse there, then onto the second bubble.
And, um, instead of just spending all my time driving a cab and do a PI radio, I could have been betting on vaporware and then, uh, selling at the right time.
I would have got out before the bubbles crash.
I was paranoid about it.
But I would say a caution to your listeners to not to think that because you know, Austrian economics, you are then a, you can become a crack investor.
Uh, cause Austrian economists will tell you that that, that kind of knowledge of theory is not what helps you make decisions on the ground.
When you're confronted with alternatives, uh, you know, there's, you could, you could be a good Austrian economist, get into a bubble and then get it.
If you get out in time, you're, you've made, you've made money.
You're fine.
But the point is the timing.
You don't know when the timing is going to, uh, how it's going to take place.
Theory can't tell you that kind of stuff.
So I'd be very careful thinking.
All I need to do is read man economy and state, and I'll become a great investor.
I said, you know, I got a great anecdote like this.
I know a guy who had a business building skate parks and he was completely hip to Austrian business cycle theory.
And he went all around the country, uh, with all these, uh, localities, uh, flush with millions of dollars of property taxes and all the increased inflated housing values and whatever.
And he convinced him to build these gigantic, super expensive concrete skate parks that'll last forever and ever and ever.
And all he did was he waited till the, he read the wall street journal every day.
As soon as they raised the federal funds rate by a quarter point, he knew that this is the part where Rothbard talks about in, um, America's great depression where they try to prick the bubble and just let the air out slow, but it never works, it always ends up collapsing.
But once they start to try to prick it, just go ahead and get out then.
That's when, um, like, uh, old man Kennedy said, uh, you know, his shoeshine boy was, uh, had decided to speculate in the market and he knew it was time to get out, you know, like, uh, that's when you go ahead and get out when the getting is good and sell all your equipment at your inflated rate to another bubble construction company that doesn't read the wall street journal.
And then you're set and it worked out for him.
So he was using the Austrian economic business cycle theory to make a great play based directly on the housing bubble.
Hmm.
Isn't that great.
And there are thousands.
It wasn't just him.
It was a lot of other people, thousands of permanent giant concrete skate parks all across America as Alan Greenspan's legacy, which you got to give them some credit, man.
You kind of have to, well, I will.
I will.
All right.
Hey, thanks very much for putting up with me and joining us on the show again, Sheldon.
Appreciate it.
Anytime, anytime, Scott.
All right, everybody.
That's the great Sheldon Richman from the foundation for economic education, the Freeman online.org, Sheldon, richmond.com, FFF.org.
And we will be right back with Adam Morrow live from Cairo, Egypt, right after this.
