06/28/12 – Lew Rockwell – The Scott Horton Show

All right, y'all, welcome back to the show.
It's Anti-War Radio.
I'm Scott Horton, and our first guest on the show today is Lou Rockwell.
He's the chairman of the Ludwig von Mises Institute, and he keeps the website lourockwell.com.
Also, check out the great blog there, lourockwell.com/blog.
And he's the author of the book The Left, The Right, and The State.
Welcome back to the show, Lou.
How are you doing?
Good to be with you.
Good.
Well, I'm very happy to have you here.
So you gave this great speech back in 2008 to the Future Freedom Foundation Conference, and I think I got there as soon as it was over, or like 15 minutes later or something.
But anyway, I've read it, and I guess people can watch the YouTube as well.
It's called War and Inflation, a speech at, again, the Future Freedom Foundation Conference called Restoring the Republic.
And this is a topic that we've, well, I've had you on the show to discuss numerous times in the past, because to me, it's really important.
It's one of those things that if everybody knew what I think I know about this subject, then things would be different.
This is sort of the crux of everything, and yet it goes unexamined most of the time, the relationship between the Central Bank and America's state of permanent war.
So I was hoping we could talk about that, and I was hoping that to start you could explain what exactly is the Central Bank anyway, because it seems like JPMorgan Chase and the rest of these guys, Bank of America, they have enough evil to sustain themselves forever, right?
Why do they need a Central Bank?
Well, you know, of course they are evil, and everything in the government is evil.
I mean, I shouldn't point out I'm an anarchist, and so I think that, you know, I see the state as an evil institution.
The one institution in society that claims the right to initiate violence against the innocent.
So to me, that's always wrong, and so that's everything the government does.
If you don't return your library book, or that's what they claim, they actually claim the right to kill you if you sufficiently resist paying the fine they're levying on you.
That's true of a parking ticket.
I mean, everything, that's the government.
And this is one reason governments love wars, and this is hardly anything.
This is long before central banking came into existence.
Governments love wars because it's a way to get everybody, the people to all obey, and the people to agree to pay taxes, because, oh, the Babylonians who are just over the hill are going to come and get us and eat us if we don't give all the money to the king of Assyria.
So these are very ancient things, and also I think there's maybe a psychological reason here as well.
People who join governments, and more important, people who rise to prominence in governments, tend to be a bloodthirsty bunch.
I mean, they actually get a kick out of killing people.
There are people like this.
In private crime, we might call them psychopaths or sociopaths or whatever, but we call them politicians when they're in the government.
So they like killing.
They like killing other people.
They like sending young men and women off to be killed.
They get a charge out of that.
These are not nice people.
So again, that's always been the case, but there's always been a limit on war because people, even in a totalitarian society, will only pay so much taxes.
They can't actually.
The government is always a minority.
It's against the vast majority.
Otherwise, they couldn't live it up like they do.
So there's a limit on what they can tax.
There's a limit on what they can borrow, if we're thinking in more modern terms.
There always is inflation, but there was a limit on that, too, because, for example, if you look at the coins of the early Roman Empire, the denarius, the key coin, which is about the size of a dime, was pure silver.
It wasn't too much longer before the denarius was copper coated with silver.
They can only get rid of all the metal in the coins.
So there was a limit even on inflation.
So from the standpoint of people who love wars, and of course people make a lot of money out of wars, too.
I forgot to mention that very important point.
So governments love wars.
They can reward their pressure groups and their special interests and the various incarnations of the military-industrial complex.
They can reward themselves.
They get more powerful.
Everybody's salaming them.
They're defending the nation from those bad guys who want to hurt us.
So we have to, therefore, hurt them and, of course, hurt our own people to screw them to make sure that they will do what we say.
But when central banking came into existence, because of war, by the way, in the late 17th century in England, where we had the first modern central bank, the Bank of England, people weren't paying for the king's wars.
And so a group of bankers approached the king and said, hey, king, we've got a great idea.
Let's just print some money, and we'll be able to fund all your wars, and by the way, we'll make a lot of money, too.
You'll make a lot, we'll make a lot, and we're all going to be happy.
So that was the beginning of central banking.
And as it's developed, and we think of the key central bank in the world today, and for some time, of course, is the Federal Reserve System.
And what that, among many other evils, the business cycle, depressions, recessions, or many transfer, vast transfers of wealth from people who are in the money to government contractors and the government itself and the big banks, many, many evils involved with it.
But the key one is, if the government's deciding to launch a new war, like they're going to murder all the people in Iran or Syria or whatever's the next crime that they're planning, they never have to worry about where the money is coming from.
They don't have to think, how are we going to get the people to agree to this?
They'll just print it.
So the Federal Reserve, which was started in 1913, passed in 1912, started in 1913 by big bankers who had a famous meeting in Jekyll Island, Georgia.
The Rockefellers, the Morgans, the Loebs, all the big banking families that were involved in starting the Fed I'll shock everybody, for the benefit of the big banks.
I don't want to hurt anybody's civics class memories of what they learned about the government.
But they in fact sold it the way the guys did in the 17th century in England.
Hey government, this is going to be great for you, and by the way, it's going to be great for us, and we're going to have a great partnership, we're going to make a lot of money, and we're going to be able to be much more powerful and rich and glorified.
So ever since that happened, and of course they first used it, although there were other crazy, horrible monetary schemes involving war, like Lincoln's Greenbacks, but there was no central bank until 1913, and then it funded World War I.
And I sometimes wonder, you know, do they have wars to have central banking and inflation, or do they inflate and have central banking and have wars?
I guess it's a symbiotic relationship, but it sure is bad for the rest of us.
The Rockefellers and Goldman Sachs and all these people, they do very well out of this.
Lockheed, Martin Marietta, they're all living it up, and they're all getting rich.
Blackwater, I mean, you go down the list of all the horrible federal agencies and private companies that work for the federal government in the business of murdering.
They're all living it up.
It's very bad for the rest of us, for any of us who love peace and understand that it is the peacemakers who are to be called the sons of God, not the war makers, and who think that for religious reasons, libertarian reasons, both reasons of free markets and not having this gigantic monster government towering over us, understand that central banking is the foundation of the whole modern scam.
And it's one of the reasons that we live today in really a bankocracy.
This is what's happening in Europe and here.
People are being impoverished, so that the banks can be bailed out.
They don't know about bailing out Greece, but Greece is being bailed out.
It's the banks that hold the Greek government debt.
And this is true with Spain and Italy and France, and it's true in this country too.
Regular people have the boot put on their neck, the government boot, so the banks can live it up and never have to worry about anything going wrong for them.
This is what central banking has done.
It's made this partnership of banking and government and war dominant in the whole globe.
It's horrendous.
And if there's one government agency we could get rid of, I'd like to see the Fed gone.
All right, well, I think the world is changing too in the sense that people are finally understanding this, that inflation is not just a force of nature, where hey, prices rise, that's just how it is.
There's something going on here, and it ain't right.
And of course, Ron Paul deserves most of the credit for bringing this to the masses' attention.
Now we've got to leave it for this commercial break.
We'll be right back with Lou Rockwell from the Mises Institute.
They're on the case of this inflation thing.
All right, y'all, welcome back to the show.
It's Antiwar Radio.
We're talking about central banking and war.
It is inflation and war with Lou Rockwell, chairman of the Ludwig von Mises Institute.
And War and Inflation actually is the title of this great speech that he gave back in 2008.
You can read the text of it at lourockwell.com.
It's got this great picture of the Federal Reserve Bank in D.C. with all the crosses of the dead soldiers in the front lawn there.
So what we learned in the last segment was that inflation is not a force of nature, that there's a very specific reason that prices always rise, and it's that the government and the banks are colluding all the time to create new money.
And just like why it's a crime for us to counterfeit, same kind of thing.
It devalues the rest of the money.
So, and as Lou's saying here, he's trying to explain, it's so that they can get away with funding things that maybe people wouldn't want to finance.
If George Bush, for example, said, all right, we've got to raise $5 trillion in new taxes to pay for the war in Iraq and its aftermath, the American people might have thought about it a second time before they let him do it, you know?
Whereas when he says, oh no, the war's going to be free, and in fact, here's a $300 stimulus check in the mail just to prove to you how free the war is, then people go, well, all right, I guess we're all making money off of this thing.
Good old Republicans.
And the war goes on.
In fact, people don't even think about the wars.
I mean, it's the very unusual American who is in any sense consciously aware of the fact that the U.S. is at war all over the place and trying to conquer the globe.
I mean, with the U.S., every government would like to be a totalitarian state, every government would like to be the world's totalitarian state.
The only one with the actual commercial and financial wherewithal to do it is, of course, the U.S.
And we hear all this talk from Romney about how Russia is the great existential threat to the U.S.
The U.S. is a threat to Russia, not the other way around.
Or that we're supposed to be worrying about China because not everybody's starving to death over there anymore as under communism.
The people are actually able to live decent lives and to own property and to build businesses and so forth.
So this is considered a great threat to the U.S.
Oh, no.
I remember when Bill Kristol recently said that it's a terrible thing that Chinese are seeking to be the main power in the South China Sea.
Well, that's like saying the U.S. is seeking to be the main power in the Gulf of Mexico.
But, of course, to the U.S., while nobody should be in the Gulf of Mexico, the U.S. should be able to be messing around with China, and they couldn't do it without inflation.
And you're exactly right to say that the equivalent of counterfeiting, like everything else with the government, which is above the law, when it counterfeits, why, that's okay.
If you counterfeit, you're going to jail.
And as Murray Rothbard said, when it's counterfeiting or some other crime against the government, there's no talk about, well, the guy didn't have a playground when he was a kid and he was oppressed by his parents.
None of that talk when it's a crime against the government.
They just want to either electrocute you or put you in the supermax prison.
But when, not only is inflation not a normal thing, deflation is the normal thing.
Whenever we've had, in our own history and in the rest of the history of the world, we have a capitalist economy that's producing more and more goods and services every year.
But the money supply, because it's gold, for example, is only very little increasing, and not through the banking system, but through mining and so forth.
Prices fall.
And that's not even really deflation, right?
That's just falling prices.
Well, it is deflation.
It's not a result of an act by a central bank.
You can have deflation that way, too.
But deflation is always good.
It's the way that economic prosperity communicates itself to the average person.
Your paycheck is worth more every year, even if you didn't get a raise.
When you put savings away in your twenties for your old age, they're worth more when you take them out.
I mean, it sounds like science fiction, but that's the way a capitalist economy is supposed to work.
So it takes vast effort and trouble by the central bank and all the banks to make the opposite.
So they do this so that the banks and the central bank can inflate together, illegitimately profit together at the rest of us, at the expense of the rest of us.
The rising prices through inflation cause a transfer of wealth from certain groups in society to the government and the banks and all that.
That's evil.
It's a theft operation, as is all counterfeiting.
It also brings about the business cycle because by finagling with the interest rates, and that's not even talking about like what they're doing today with a near zero interest rate, but by lowering the interest rate below the rate it would otherwise be, they bring on recessions and depressions.
This is why we had the bust in 2007.
This is why we're still in the bust.
It's thanks to the Federal Reserve.
These creeps, if you're unemployed, if you're worried about the future, you're worried about your kid's economic future, look at those creeps on Constitution Avenue in Washington, D.C. at the Federal Reserve.
They are responsible.
Now, Goldman Sachs and JPMorgan Chase and Bank of America and go down the list of all the big banks that are in cahoots with the federal government and the Fed.
Of course, they're bad guys too.
The military-industrial complex, the pentagram, I mean, all evil.
They're all bad, but the gigantic apparatus of compulsion and coercion that towers over us and over the whole world is basically made possible by the Federal Reserve and by the fact they can finagle with the money system and why they don't want gold or anything else that's independent in value of what politicians say.
They want the paper dollar, the digital equivalent of the paper dollar, so they can just print them up.
Bernanke and company, they can just engage in counterfeiting like it's never been seen in the history of the world, and I'm afraid we're going to have trouble like it's never been seen in the history of the world.
A worldwide depression that's just going to be horrific, and they're going to try to blame business people, they're going to try to blame consumers, they're going to try to blame, I don't know, Osama Bin Laden, they're going to try to blame everybody, but the Fed and all the people cooperating with the Fed, whether it's in the Congress, the Presidency, Supreme Court, the creepy Supreme Court, the big banks, they're all parasites on our back, and we need to toss them off.
Well, you know, I just think you couldn't emphasize enough the importance of the part about the business cycle.
I remember Ron Paul gave a speech about central banking somewhere, and a kid in the audience asked him a question based from, I guess, the Chicago school kind of point of view, saying, well, but what if we just had inflation that was like a 2% or 3% every year, and that's how the government paid a lot of its taxes, a lot of its expenses, instead of such invasive IRS persecution of people all the time, wouldn't that be okay?
And Ron Paul said, yeah, but there's no such thing as that.
That's sort of, at least if there was such a thing, where everyone could anticipate that, okay, it's always going to be 2% or 3% every year, whatever, and work that out, that would be fine.
But instead what happens is we have these massive booms and busts because of the allocation of resources.
It doesn't just work 2% or 3% across the board.
It's, you know, 10% in the housing sector in Florida, Las Vegas, and California, and that's enough to turn the world upside down.
And, of course, Milton Friedman was actually wrong about that.
It's not a good, it would be a terrible thing, even though that's better than, that might be better than some other systems.
It still depreciates the money at a tremendous rate over time, and it also brings on the business cycle.
So the only legitimate monetary system is one where there's no inflation.
And, in fact, as I argue, deflation where the, again, where a capitalist society is producing so many goods and services and superabundance, and money is not being depreciated, money becomes more valuable every year.
That's the way, and tomatoes less valuable, and clothing, and cars, and everything.
People can buy more.
So that's the way it's supposed to be.
We're supposed, this would be so much more.
We can't even conceive of how prosperous we would be if we didn't have a central bank.
Of course, there are many other things.
It seems like they make it, it's almost a crime to try to save money at this point.
And, in fact, since nobody has a decent pension plan anymore or anything like that, everybody's forced to become either a speculator in real estate or in the stock market somewhere, even if they're just, you know, Jane who just is trying to retire and doesn't know anything about financial markets or how to speculate in them, but she can't open a savings account or she's just throwing money down the drain.
No, because this is what Keynes argued.
He thought that savings were wrong, savings were bad, and he wanted to get rid of savers and savings and just have everybody spend every dime constantly.
That was the path to prosperity.
Well, of course, it's not the path to individual prosperity.
It's not the path to societal prosperity.
It's just the reverse.
But Keynes, of course, is the dominant figure, not because his economics makes any sense, but because, as Joe Salerno points out, Keynesianism is the economics of state power.
That's why it triumphs right now, because the state is triumphant.
Yeah.
Well, amazing, right, that they would pick economists who tell them.
You know, I was just joking with my friend before the show, Zoe here, a sidekick, about how my community college economist economics professor taught us that when government spends money, it's worth five times as much to the economy as when anybody else spends it.
And when I asked him why, he didn't even have a why.
Never mind a right or wrong one, or a good argument, or a bad one.
He just didn't even have an argument.
That's just the truth.
That's just the way it is.
Everybody knows that.
That's it.
No, it's all a fraud.
It's just a pack of lies.
Keynes was a brilliant liar, and there's a reason that, in the introduction to The General Theory, if I can call it his great book, his most significant book, that was published in Germany under the Nazis, he said, well, really, my system is much better designed for a totalitarian system than for a free market system.
And Hitler was a Keynesian, and we have Keynesian economics and fascism, really, ever since in our own country, FDR.
The U.S. system is not a free market system.
It has free market aspects to it, but basically it's a partnership of big government and big business against the rest of us.
Only certain big businesses, of course, the ones that the government likes.
And this is, again, the key to all this, to keeping this whole thing in operation, is the constant monetary theft that goes on through the central bank.
And these guys are all a bunch of thieves.
When you see Bernanke on the screen, just think thief, thief.
In fact, when you see anybody from the government on the screen, that's a good thing to think.
Yeah, that's probably the nicest thing you could say about a lot of these people.
All right.
Well, look, I better let you go.
We're over time here, but I really appreciate your time, as always, Lou.
Scott, it's great to be on your show.
Thank you.
Everybody, that's Lou Rockwell.
He's the chairman of the Ludwig von Mises Institute, and that website is mises.org.
Also, check out his own website, lourockwell.com, Great Libertarian Writings, from a whole incredible stable of writers there, and also the great blog, lourockwell.com/blog.
Again, the book is The Left, The Right, and The State, and we'll be right back.