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In 1839 Abraham Lincoln, a young
twenty-eight year old lawyer, was asked by the Young Men's Lyceum of
Springfield, Illinois to address the group on "The Perpetuation of Our Political
Institutions". The result
elevated Lincoln's stature in the growing community and, according to his
future law partner William Herndon, made him known for the first time in a much
wider area. Lincoln scholars generally consider it to be Lincoln's first
"great" speech. Lincoln's warning is appropriate to our times of
unprecedented powers assumed by different levels of government in the US,
especially state governments, in addressing the coronavirus crisis.
In his opening remarks, Lincoln charged
his generation with transmitting to the next the civil and religious liberties
bequeathed to them by the Founding Fathers. His generation inherited liberties
hard won by others. The same can be said of our current generation; i.e., we
inherited the benefits of liberty; we did not secure them ourselves. Therefore,
Lincoln's warning of threats to our liberties is as apt today as it was almost
two hundred years ago.
In an early stirring paragraph Lincoln
said that America could not be conquered militarily in a thousand years. The
threat to our political institutions would come, if it did come, from within
ourselves. There are two potential sources of this threat. One is mob rule;
i.e., the people resorting to acts of violence to redress what they believe to
be threats too great to be remedied by the slowly grinding process of legal
procedure.
The second threat, and one which Lincoln
considered to be a successor to mob rule, was that ambitious men would seize
the weakened respect for law as a platform for satisfying their outsized egos.
Not content with the daily process of protecting what has already been
bequeathed by others, they would promise to make the country anew. According to
Lincoln, there is no place in government for the overly ambitious man who
desires that his name be transmitted to future generations as were those of the
Founding Fathers. America's political institutions had been gained at huge cost,
and all honor should naturally be accorded those who gained them. The
maintenance of that hard won and costly legacy afforded no such honors to
future generations. Their task was one of maintenance of our liberties. But mob
rule weakened respect for the law and opened the door for such dangerous men.
Thus we arrive at America in the year of
the coronavirus. Ambitious men seem little bothered and probably are mightily
thrilled by the prospect of "combating" the virus and going down in
history as heroes. Thus, they have grasped upon the wildly suspect predictions
of experts that millions will died worldwide and many hundreds of thousands in
the US alone unless our civil liberties are suspended. Ah, what ambitious man
could not feel the hand of fate upon his shoulder, beckoning him to assume
sweeping powers to close private businesses, restrict public gatherings,
prohibit travel, even forbidding citizens from venturing from their own homes?
Hang the Constitution! Hang the Bill of Rights! Hand me my special pen to
assume sweeping powers over others!
Sadly the people have accepted this
infringement of their liberties with few complaints, leading to the conclusion
that the US has passed Lincoln's first stage on the road to permanent loss of
our freedoms--disrespect for the law. One cannot point to outbreaks of mob
rule, so what has happened to weaken the public's respect for liberty and due
process?
Fifty years ago the US went off the
final, weakened link of the dollar to gold, which had limited government's
ability to spend. New projects could be funded only by increasing taxes,
cutting some current spending, or increasing borrowing. All three methods had
adverse consequences for the public. No one wants his taxes increased. No one
wants his current federal boon to end. And increasing debt must always lead to
higher interest rates, which would ultimately have a recessionary effect on the
economy.
Ending the link to gold appeared to
remove these natural barriers to government overspending. Now the government could
print dollars out of thin air. The adverse consequences of doing so, higher
prices and robbing savers of their retirement dollars' purchasing power, are
masked for some time. When these consequences can no longer be ignored,
government lackeys blame others--greedy capitalists, foreign governments, etc.--and
government spending continues to grow. Over the years the federal government's
role in the economy has increased immensely both in terms of spending and in
terms of regulation. The public, especially the young, has grown to believe
that government, and not their own personal efforts, has responsibility and
capability for providing a certain quality of life, from universal healthcare
to free higher education. The link between personal responsibility and the
achievement of one's goals and dreams has been weakened year by year. In the
past several months we have witnessed one presidential candidate after another
making outlandish promises to shower the electorate with free (fill in the blank)
and even a guaranteed annual income.
The public, especially the so-called
millennial generation, fails to understand that money is a medium of exchange
that links hard work to economic rewards. Production must precede consumption.
Consumption cannot continue for very long without prior production. What
appears to be free goods can only be consumption of previously saved production
that now forms the capital base of the economy or robbing some of the fruits of
their current labors. Do not for one minute believe that any economy can
function efficiently for long by following this model, which has grown like a
cancer after delinking money to gold.
Last week the government passed a $2.2 trillion
"stimulus" bill, which will
shower helicopter money on American citizens and certain businesses. As of the
end of February 2020, the monetary base was $3.5 trillion. So this massive spending bill will
increase the monetary base by sixty-three percent to $5.7 trillion. No one in
government understands that printed money does NOT represent real goods and
services. Millions of Americans are coercively prevented from working. Allowing
them to go back to work is the only stimulus that America needs or that will
work. The loss suffered by the coercively mandated shutdowns is a dead weight
loss, meaning that it can never be regained. It especially cannot be regained
by printing money, which will only cause higher prices and complete disruption
of the structure of production within our very complex economy. It may cause
our trading partners, who currently hold $5.5 trillion
of long term treasury debt to shed
themselves of all treasury debt, which could cause hyperinflation along the lines
of post WWI Germany.
My friends, Lincoln's prediction has
come true. I end with an exact quote from early in Lincoln's speech. The
emphasis on the last three words is mine.
"As a nation of freemen, we
must live through all time, or die by suicide."
