The Consent of the Governed

88
Mon, Nov 25, 2013 - 2:12pm

“Government has become a paramecium, an amoeba whose prime directive is to grow and consume and multiply without knowledge of what it is supposed to be doing other than expanding. Or maybe the better metaphor is the zombie. The groping State smells those still alive and then plods and claws itself toward the few remaining living, in a mindless effort to incorporate or devour them. The zombie likes best the scent of the pizza franchiser or masonry contractor, not the welfare recipient or the Facebook executive.” (Link)

*

I have a neighbor who is a small farmer, and in addition to growing feed corn and raising beef cattle, he raises healthy, free-range chickens and sells a few hundred fresh eggs a week at farmers markets and “buy local” Co-ops. That is, he used to. He quit last year when new regulations for food safety (instituted at the behest of factory egg farms) required all sorts of new certifications, inspections, and expensive equipment to comply with the laws. Paying for all the things the new laws will require was only cost-effective for a large operation (thus driving small farmers out of the market, which was precisely why the large operations lobbied for the bill). Rather than do all that work for virtually no gain, he butchered his flock and just stopped producing.

*

Healthy young people, finally waking up to the fact that they are the financial pack-mules for Obamacare, have refused to sign up for the program in numbers that come anywhere close to balancing those they are supposed to subsidize. One wonders what they will do if they ever take a good, hard look at Social Security and Medicare: A double-earner couple (making the US median wage) who retired in 2010 will receive $310,000 more in benefits than they paid in to the system over the rest of their lives. The same couple, if the household was a single-earner married couple, will receive nearly half a million dollars more ($446,000) in benefits than they paid in during their lifetimes (Link). Just like Obamacare, the young are expected to produce in order to subsidize these costs. It will be interesting to see what happens if they ever figure this out.

*

Taxpayers, particularly successful middle and upper-middle class business owners, are deliberately managing their income levels by working less and precisely calculating how much they need to give to charity in order to fall below Federal tax thresholds. Many have simply decided that, given increasing taxation and regulatory burdens, it is no longer in their interests to run a business at all and have closed-up shop entirely (Link).

*

There is a property I particularly admire that I pass on my drive to work- beautiful fields, groves of woods along the property boundaries, and the whole thing gently sloping to the banks of a bend in the river. It used to be a working farm, but the family that bought it a few years ago realized that if they registered with the state as a farm and rented out the acreage, they would be subject to all sorts of restrictions and laws. Worse, the new “Food Safety Act” which is set to become law next year has granted unelected bureaucrats in numerous Federal agencies (from the FDA to the Department of Agriculture to the EPA) unprecedented control over privately held farmland, in particular the ability to force landowners to comply with expensive restrictions without recourse or appeal (Link). The choice was easy for the folks who own that farm- don’t farm anything, and don’t get on the watch list of half a dozen federal agencies. I think about how much that prime land could have produced as I drive past it. But I suppose there is a silver lining: eighty tillable acres that have been left fallow look quite pretty when the weedy grasses turn a golden tan in the fall.

*

California’s productive middle class, realizing that the social compact constructed by Sacramento over the last few decades is one where they have enormous financial obligations and regulatory burdens and receive precious little in return aside the privilege of contributing even more, have left the state in droves: you could literally populate the state of Montana three times over with the number of middle-class earners who have left the People’s Republic of CA over the last 20 years (Link).

*

Tri-City Herald, Kennewick WA: It took Bob Bertsch 25 years to build his construction business and just a day for it all to go away. Bertsch’s Ashley-Bertsch Group went on the auction block Friday at 9 a.m. By 4 p.m., Booker Auctions had sold off almost two dozen vehicles and trailers, tons of power tools and supplies, even the gas-fired fireplace in the office. Bertsch, 65, said he is down-sizing because the tax burden got too expensive to stay in business.

“I am tired of carrying all the tax load,” Bertsch said. “I renew 13 licenses here every year just so I can spend money in this city.” Bertsch makes no attempt to conceal his frustration with the costs government imposes on small businesses like his. “Government is killing small business. We used to have 24 employees at our peak. Now, all of those people who used to work here are in unemployment lines,” he said. (Link)

__________________________________________________

What does any of this have to do with precious metals investing? I am of the opinion that it has quite a bit to do with it, actually. In each of the above cases, you see a two-part dynamic at work. Part 1 is a political system and its allied bureaucracies treating the earnings, property, and labor of the citizenry as its piggy bank and plaything- a government/state which bases its very existence on successfully conducting a continual process of plunder in order to fund a continuous expansion of its own power. Part 2 is the response of individuals to the particulars of this process, the quiet refusal to play the role of serf to the feudal lords of the state. In each case, from closing a business to working/earning less to letting productive farmland lie fallow, the dynamic is the same. The state says “Your productivity is mine” and the individual quietly responds “No, it isn’t” and changes their behavior accordingly. These people are, in a very practical way, refusing to aid and abet this process. They are withholding their consent.

The ‘consent of the governed’ isn’t created simply because a political party manages to make enough promises to enough special interest groups to bring in enough campaign cash to buy enough political ads to deceive enough people to squeak out a narrow electoral victory. It doesn’t result from the ability of unelected bureaucrats to use the coercive power of government and law to enforce their will. At the core of it, the ‘consent of the governed’ rests on each individual citizen consenting (or not) to go along with the demands being placed on them. Refusing to consent doesn’t require armed resistance, or showy protests and signs, or loud confrontations. It doesn’t require breaking the law or going to jail. All it takes is a refusal to participate in the activity being controlled.

At this moment, western central banks are engaged in a process of funding massive expenditures through monetizing (directly or indirectly) government debt. They create more Euros or Yen, or Pounds, or Dollars out of thin air and each time they do, they devalue your paycheck, pension, retirement account, and the change in your pocket. I understand they have the legal right to do this. I understand they are appointed by the elected representatives of the people and that this supposedly gives them the moral and practical authority to do so. But I have not been asked and did not give my approval to this process. My money is nothing more than a marker for my productivity and saved value, my efforts and risks, and indeed a significant portion of my life – and these things are mine. I do not consent to them being plundered in this way. So I remove my money from their system, as much as I am able. I buy gold and silver.

More regimes have been brought, piecemeal, to their knees by what was once called “Irish Democracy,” the silent, dogged resistance, withdrawal, and truculence of millions of ordinary people, than by revolutionary vanguards or rioting mobs. –James Scott, Two Cheers for Anarchism (Princeton University Press, 2013)

Dogged resistance, withdrawal, and truculence.

Sounds good… I’m in.

About the Author

  88 Comments

dgstage
Nov 25, 2013 - 4:29pm

IMO

We all need to go Gault. I am 95% there.

ag1969
Nov 25, 2013 - 4:30pm

dgstage

I was forced out, took a licking! Just no desire to get back in. Sometimes I miss the game, but the only way to win is to not play. I have learned how little we need in the way of consumer goods in order to live a very fulfilling life. I have learned how to protect the fruits of my labor from the parasites. I have learned to do more with less and more importantly that less is more. I have learned how to not want what I can't have. My relationship with the dollar was all an illusion. I have learned to cherish the relationships in my life.

transplanted baby
Nov 25, 2013 - 4:42pm

Pining, how did you feel

Pining, just curious. How did you feel when you saw the video clip a few posts back regarding "The Natural Man" who defended himself in court?-assuming you saw that. As you have taken a step toward being a natural man (I saw your chickens, months ago-here, not in person), could you relate to the man- or did you think he was off his rocker? (And what say you Mr Fix? ) That man was ahead of our (the turdville)curve- I mean it seemed to me that for him the end of this keynesian experiment has already happened-again for him and in his mind. Comments?

For everyone else, Flee to the fields or at least read the book.

And here just for a holiday chuckle, is an anecdote. I have a story about Independence Day that I read to my students and then have them answer some questions. I tried this with my young kids. In the story, there are repeated references to "the colonists". Anyway, the last question is, "Who won the war?" My young daughter blurted out....."the communists"! Her grandmother fell off her chair laughing, but if you think about it....

dgstage
Nov 25, 2013 - 4:44pm

AG

Your response gave me goose bumps. I have found less is more as well, and like you I think about the game, but when I talked to friends who are still it, I feel ahead of it. It is much more peace full living. We might just survive because of our knowledge.

abguy4
Nov 25, 2013 - 5:22pm

@ pining4

Obviously you struck a nerve - or better yet - put in words what many here are thinking/doing. You have vocalized the (probably) predominate mind frame set here on the forum. Great word-smithing chum.

Thanks a bunch, from us all.

AlienEyes
Nov 25, 2013 - 5:45pm

Great Piece, Pining !

I wonder if opting out is enough. We are still subject to sales tax and real estate tax and if you take the easy way out, they tax what you had because "you can't take it with you". They seem to have all of the bases well covered. In my view, the "State" has but one rule, that being : "We win and you lose." To make matters worse, there is more than one state. There are big, middle size and small.

My wife and I are giving serious consideration to taking a one way vacation to a warmer climate. It's somewhat strange but it's not just the cold but the heat as well. Where we live, it gets way hotter in the summer than it does in Puerto Vallarta or Cancun. Even Panama can be cooler in summer if you are willing to go up two or three thousand feet in elevation. Same for Cartagena, Colombia. Good health care is available at a fraction of US cost. Puerto Vallarta has a thriving medical and dental tourism market. We owned property in Cancun but sold it when the shooting started to close in on the tourist areas. (Acapulco is now a total loss.)

We still haven't made up our minds but every time big brother comes up with more crap, the closer we get. At the rate it's going, Bumfook, Egypt is starting to look better all the time.

dgstage
Nov 25, 2013 - 6:07pm

AlienEyes

I have visited Panama, Belize and Costa Rica. I thought CR was much better choice then the first two. Panama to me had Erie feeling and Belize government is as corrupt as ours.

dgstage
Nov 25, 2013 - 6:20pm
abguy4
Nov 25, 2013 - 6:29pm

just to follow-up on small business taxes

“I am tired of carrying all the tax load,” Bertsch said. “I renew 13 licenses here every year just so I can spend money in this city.” Bertsch makes no attempt to conceal his frustration with the costs government imposes on small businesses like his. “Government is killing small business...''

If yah really want to know how hard they hit an entrepreneur......................

Back in a previous life-time, during the mid '70's, I was a car dealer in NYS. I paid Twenty-Three taxes and licenses yearly. And we had to estimate our taxes quarterly, and pre-pay them. There was a fine for missing on the estimate.

I recall attending a NYS dealer convention in Syracuse, NY in '75, where our financial statements were reviewed (as a group) by a major NYC accounting firm. As a group were were averaging less than 2% net profit after taxes. I recall that the Chief accountant opened his remarks to the group by saying;

"I must be addressing the most egotistical bunch of people in the world. You guys must just like to see your name in neon lights. As a group, You are getting 2% return on your money. Furchissakes guys, NYC Bonds are paying 8% right now."

Mr. Fix
Nov 25, 2013 - 6:56pm

Have We Reached 'Peak Gold'?

Have We Reached 'Peak Gold'?

Submitted by Tyler Durden on 11/25/2013 - 18:39

Led by countries such as Russia and China, central banks have recently become net buyers of gold. Meanwhile, ETF gold outflows have been a temporary source of supply this year, but obviously this cannot persist. It’s also unreasonable to assume that recycling will make up a significantly greater piece of supply without the price of gold increasing substantially. With the grade of current producing gold mines being 32.6% higher than undeveloped deposits, it makes the supply scenario even more clear. Not only is the current yearly mine supply difficult to sustain, but future mines coming online will be challenged by grade and margins to be economical at today’s prices. Mathematically, unless we have high-grade, high ounce deposits that are being fast tracked online, it will be very difficult to find a way to get supply to match demand. Have we reached peak gold?

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