Ever noticed how, in this new era in which we live, that the Prison Industrial Complex just loves to “throw the book” at anyone who is found to not be “playing by the rules” as defined by our Government Overlords? It used to be that, if you were pulled over for speeding (shame on you!), Barney the cop might let you go with a warning, or s/he might give you a speeding ticket. That was it. No big deal.
But not today.
Today if you get pulled over for a speeding ticket you’re also likely to get a fix it ticket for the window that the neighbor kid cracked with a rock, for being three days late on your auto insurance, for that low tire, and that break light that’s out. And on any whim what-so-ever, your car can be searched and if so much as an old dried pot leaf is found, it’s off to jail with you!
Just a month or so ago the local sheriffs showed up at a “domestic violence” scene (that’s cop talk for what used to be known as a lover’s quarrel) and found a small marijuana grow. They destroyed it, obviously, confiscated the grow equipment and $800 in cash. Pot and money in proximity, you see, is automatic proof that the couple had been growing “with intent to sell.”
Never mind that we live in a world where the working poor and poorly educated are growing in number and being more marginalized and cut off from financial services every day. Cash in proximity to pot is automatic “intent to sell.” Never mind that the girl had a minimum wage job but no bank account, that the house was run down, the car was twenty years old—it was as obvious as the nose on the cop’s face that these people weren’t exactly rolling in drug cartel money. Yeah. Never mind all that. Just take the money and throw the book at them!
And that’s what they did. Because they also cut the power, so the couple’s food would spoil, because they found “code violations” in the electrical wiring. (They always do unless you’ve got an old contract showing the wiring was done by a licensed electrician, and even then it’s chancy.) So add a fine for the automatic guilt of supposedly doing electrical work without a permit (no proof that they actually did the work is required). There were small children in the house. They, of course, were immediately taken away from their parents and handed over to Child Protective Services, adding the charge of “child endangerment” to the list, even though there was no evidence of mistreatment, abuse, malnutrition, or even tardiness in school. Doesn’t matter. Hall the kids off to CPS where they can be taught how to deal drugs for real! (The success rate for children turned over to CPS and then foster care is abysmally low.) We’re going to teach these miscreants a lesson so they never step out of line again. Throw the book at them!
Except, of course. It never works. In the long course of human history it never has worked. You’d think we’d finally evolve enough to learn.
Did continual persecution of Christians by Rome for two hundred years get rid of them? They were tortured, stuck in the arena and made fun of, fed to lions, crucified, and who knows what else.
Did it kill Christianity? Obviously not.
During the inquisition thousands were tortured into confession, some were burned, others were drowned. A lucky few were simply excommunicated, though that rather came to a stop when Rome discovered that excommunicating those who don’t like you anyway does more to hurt you (in the wallet) than it does them. (They get to keep their tithe money.)
Did all those atrocities prevent the growth of science over Church dogma and belief? Nope.
Did all those atrocities prevent England from splitting with Rome? Nope.
Did all those atrocities prevent the Protestant Reformation? Nope.
The Soviet Union spent seventy years trying to keep it’s people under control. It erected walls to pen them in. It brutalized those who dared speak the truth about the regime or the true state of things in the USSR. It hunted down dissidents and banished them to live in conditions under which civilized people wouldn’t keep their own dog.
Did it prevent the truth from spreading and the walls from coming down? Nope.
You’d think we’d learn: “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one,” Thomas Paine once said.
But then, I keep forgetting: We live in an age where the wisdom of our forefathers is now considered but a fad of college youth that most (real) adults soon grow out of. Then the sagacity of true tyranny teaches them the folly of Thomas Paine’s wisdom and they soon come to believe that those who rebel against reason are not the real rebels, as Paine claimed. But he that in defense of reason rebels against tyranny, he is the real rebel, and he must, at all costs, be stopped. Or so our Government Overlords would have us believe.
I’d like you to meet someone. Let’s call this person “Charlie.” Not a real person, of course. Charlie represents millions of people. You probably know someone just like him or her: S/he was doing fine, until the Great Recession. Not rich, but then s/he never wanted to be rich. S/he’s right in the middle of his or her working life, and is now middle aged. S/he’s married, but the kids are now grown and on their own. The parents are now elderly and getting on to that time when they’ll replace the children in needing regular time and attention.
Unfortunately, Charlie happens to be in one of those industries hit hardest by the Great Recession. Now unemployed, and pretty much unemployable, Charlie decides to do what a lot of people in mid-life are having to do: Go back to school. Charlie wants to retrain into a field that decades of life experience has proven s/he loves. S/he wants to become a scientist. A researcher like the ones you see on PBS’s Nature, or Secrets of the Dead, or Nova. That means, s/he needs a Ph.D.
Charlie has had some college, but never finished. So s/he knows that s/he’ll have to start at the beginning. That realization soon leads to some shocking truths about the American post-secondary education system. Truths that can be summed up as: Everybody wants their cut. They don’t put it that way, of course. Like all bureaucracies, the system is too well oiled a money making machine for that. It’s always couched in the flowery and self important language of “a well rounded education” and “a requirement” or a “prerequisite.”
The first thing s/he learns is that s/he may as well be eighteen again, not in mid-life. In the American college world, thirty years of life experience means nothing—even when it comes to a test like the SAT or ACT. A test designed for, as one testing expert put it, seeing how well high school graduates can process information. Charlie, as this expert explained to me, has been processing information for thirty years. S/he’s still alive and functional in the world, that means s/he passed. At Charlie’s age, the SAT is pointless—except for the money the College Board makes from their defacto monopoly that requires every would be college student take the test regardless of age or background.
The second thing s/he learns is that the “liberal arts” approach to education dominates the accredited college system. An approach that requires every student to take more general education classes in history, literature, philosophy, music, art, and so on than it does classes in their major. All for your own good, of course. That nobody else on the planet wastes everyone’s time and money on such nonsense is of course, to the arrogant American academic elite, nonsense! In Europe, for instance, with few exceptions, the liberal arts is, itself, a degree track. But America, as always, knows best. And as a quick web search will prove, much ink is spilled in defending the benefits of the liberal arts approach to higher education. That it makes a degree from an American college cost twice as much and take twice as long; that there’s no way out, even for older students who are already “well rounded— ” yes, Charlie could CLEP the general ed, but that would still costs as much as taking the class—well we don’t talk bout that.
With the average time to receive an undergraduate degree in the U.S. closer to six years than four (thanks to the liberal arts mandate), it was quickly becoming obvious to Charlie that s/he couldn’t go to school in the U.S. S/he’d be sixty five before s/he had a Ph.D! And a sixty five year old was a liability, not an asset, to an employer. So s/he began looking overseas, where college is treated as tertiary (career-directed post high school) education, not an opportunity to milk families of their hard earned money in the name of creating “well rounded individuals.” In the EU, s/he could earn the degrees in half the time and, because valuable time and money wasn’t being wasted on “music appreciation” and “critical thinking”, s/he would actually end up with twice as many credits in the major as s/he would in the U.S. liberal arts system. In other words, s/he would learn twice as much about the major, albeit at the expense of learning about “underwater basket weaving.” Even more exiting, s/he discovered a school in the UK that was accredited both internationally and in the U.S. that had a distance learning program. S/he could take care of mom and dad, work part time (if s/he could find a job) and still go to school full time.
Under this plan, if s/he hustled, Charlie could have a fully accredited, internationally recognized Ph.D in as little as six years! All other things being equal, that left twenty useful years to work in the new field and earn a retirement pension. This was exiting.
Then dropped the other shoe: While the school s/he’d chosen, and had been accepted by (without an SAT score, thank you very much!), was fully accredited, and entitled to U.S. Federal Financial Aid if s/he attended classes at the school, the U.S. Congress refused to fund those same classes when taught remotely by “a foreign institution.” For funding, s/he was on her own.
And, thanks to the recession, s/he was also bankrupt. Private loans were out of the question. They all required at least a moderately good credit score, which the recession had destroyed. Further complicating things, s/he was Caucasian, married, middle aged, both parents were college graduates, and s/he was enrolled at a “foreign” institution but was not “studying abroad.” Cumulatively, those facts disqualified Charlie from ninety nine percent of all grants and scholarships. In point of fact, after weeks of looking, s/he found only one real scholarship. And, though it didn’t explicitly say so, the application was so focused on high school seniors and recent graduates s/he doubted s/he’d be selected. S/he applied anyway, and while s/he was at it s/he also applied for two tiny lottery style grants, though s/he doubted whether it was worth the time.
The game, it appears, had been rigged by College Inc. It was beginning to look like Charlie might be stuck in a no win situation: S/he could either find a way to game the system and go on welfare and disability, like many people s/he knew had already done, or settle for a lesser goal in a field s/he wasn’t really interested in and endure the drudgery until retirement. Maybe. Statistically, time servers see their health fail long before those who work at jobs they love. S/he doubted that, by following the latter course, s/he’d survive twenty years in the new “career.” More likely, s/he’d end up being a drain on society anyway.
In today’s economy, Charlie’s isn’t alone. Roughly twenty percent of the U.S. population is Charlie’s age and hundreds of thousands, maybe millions, worked in the construction industry and related fields. The hardest hit sector of the economy. (19.6% of the U.S. population will be 65 by 2030. Statistically, that population is “Charlie” today.) They are an overlooked demographic that is not only under-served by the current post secondary education system, but that is dis-served.
Readers of this blog know that in my view the best thing that could happen would be for the government to butt out of higher education—or at least limit its involvement to the roll of fairness and guidance to ensure American post secondary degrees are comparable with those in the rest of the world. For the rest, the only thing Federal Student Aid has proven to provide is a ready cash cow for universities both public and private to milk at will. In the private sector the money goes to stock holders and investors, in the public sector it pays for platoons of bureaucrats who feed uselessly at the public trough. Private financing through corporate sponsors, scholarship and grant programs through foundations, and other creative methods such as human capital contracts would soon eliminate all patience for such fat and force universities to get back to the business of serving their customers, the students, rather than their investors or bureaucracies.
Unfortunately, such radical change is unlikely. The only thing the Charlies in America can hope for is that either Obama or Obama II (Mitt Romney) will address the inequities of the system so that older Americans don’t get left behind in the political, money grubbing dust that is College Inc. Because if they do, they will only add to America’s already out of control financial problems.
But in today’s crony capitalist system, I wouldn’t hold my breath.
Maybe you have a dozen credit cards in your wallet. Maybe you have none. But if you owe the government money, and especially if you’re a small business, I’ll be you didn’t know you have one labeled IRS. It’s true. No, it’s not a physical card, but thanks to our wonderful legislature, the IRS uses the same usurious practices that credit card companies do in order to generate even more revenue than the tax code originally authorized them to collect. Even more troubling is the massive increase in the IRS’s uncompromising use of collections tools at a time when tax payers can least afford it.
According to testimony in April 2011 by National Taxpayer Advocate Nina Olson, before the House Committee on Small Business, from FY 2006 to 2010 (i.e. the heart of the Great Recession) IRS Notices of Federal Tax Liens increased 55%. Actual liens increased a whopping 172%! (Footnote 74, page 21—pdf) The scary part is, once taxes become delinquent, the IRS is authorized by Congress to charge A) late fees, B) interest, and C) for every ‘breech of agreement’, a penalty. Tactics eerily familiar to those who’ve had to deal with credit card companies.
Is this fair? Is it right?
Is it right that even though unemployment is higher that at any time since the Great Depression; even though home foreclosures are higher than they’ve ever been in our nation’s history; even though construction related unemployment, many of whom are self employed small business (contractors), is at 34%; that according to Reuters, in FY 2010 the IRS accepted only 13,886 offers in compromise and “just 95,000 installment agreements on business-related tax delinquencies, which typically involve small-business taxpayers?” Is it right that “less than 4 percent of the delinquent accounts were reported [by the IRS] as noncollectable due to economic hardship?”
One would think that, given the historic nature of the hard times in which we find ourselves, and given that both the Congress and the President want to see more jobs created, that both the Executive and the Legislature would suspend the fines and penalties and other usurious practices they have authorized the IRS to engage in. One would think they would be instructing the IRS to be as flexible as possible in working with citizens who wish to do their part for their country, but find themselves on hard times. As Olson said: “The government needs to offer a taxpayer who cannot pay in full realistic options to pay what he or she can, so that voluntary compliance is practical.”
Unfortunately, practical and greed don’t mix, and our government’s appetite for money is nothing if not insatiable. Apparently that means damn the little people who get hurt along the way.
Ah yes, here we go again some more. The Minnesota State government is still shut down and the masses are whining that their government won’t plunder the ‘rich’ and give them their money, while the rich complain that they’re being unfairly targeted and should be allowed to go their way, protecting their monopolies so they can soak the masses unimpeded. Meanwhile, in an oh so typical move, New York City is actually rationing toilet paper, claiming it “is so hard up for cash that it’s rationing toilet paper in women’s public restrooms—to the point where bathroom attendants are doling out a few measly squares per patron—along the world-famous Coney Island boardwalk.”
Okay, so if I’ve got this straight, it’s cheaper to pay City employees to ration toilet paper than it is to buy the cheap, single ply crap, governments always buy?
The logic there kind of strains credulity, don’t you think? On the other hand, political analysts are well aware that women, as a group, are more liberal than men. So from that point of view, rationing toilet paper to women, and women only, makes a great deal of political sense even though it’s fiscally stupid. It’s guaranteed to put enormous pressure on those trying to deal seriously with New York City’s financial problems.
And of course, neither the finger pointing in Minnesota nor the toilet paper rationing in New York City has or does diddly to address the real problem: When everybody plunders everybody else, only the politicians win—and then only for a short time. Because plunder adds no value to an economy, no matter where the money was plundered from. You, me, the rich—it doesn’t matter. No redistribution of wealth, no government project creates real wealth. Until the masses understand that basic fact (and don’t hold your breath) there is little hope for New York City, Minnesota, America, or the European Union.
It actually started back in 2008 when a hacker named Satoshi Nakamoto (which is believed to be a pseudonym) got a crazy idea. Given the success and complete inability of the world’s governments to make a dent in bit torrent file sharing, why not have a bit coin: A digital currency that, like bit torrent, is traded peer to peer, buyer to seller, exactly like you trade paper money today. It became known as Bitcoin, an anonymous digital currency that is securely exchanged using encrypted keys. No third parties are involved: No banks or credit card companies taking their cut and recording your deposits and withdrawals, no “Fed” manipulating the money supply; just the “currency” that two parties agree to use as compensation for the exchange of goods and services.
The number of Bitcoins in circulation is always known, and following the Austrian School of economic thought, and the work of famed economist Milton Friedman, will slowly increase to some 21 million, where it will be capped. A fact that, as Bitcoin has increased in popularity, has led to its rise against all the major currencies.
Until recently, the only form of the e-currency was virtual. Your Bitcoins were kept in your “ewallet” on your computer, or in a third party ewallet, or both. But there was nothing physical to hold on to. No handbills were available that you could walk into a store with. But in mid 2011 a new site launched offering BitBills. “With Bitbills,” the site claims, “you can transfer bitcoins in person, just like cash!” As of this writing, the site was taking preorders for the bills.
So, just how important is Bitcoin? What difference does/can it make in our increasingly well policed and regulated world? Up until this week most people would have probably said very little. As MIT’s Technology Today put it back in May:
“It might have a niche as a way to pay for certain technical services,” says Roberts, adding that even limited success could allow Bitcoin to change the fate of more established currencies. “Competition is good, even between currencies—perhaps the example of Bitcoin could influence the behavior of the Federal Reserve.” —Technology Today, May 25, 2011
Others have larger visions of what the digital currency is capable of:
The governments of the world are on the brink of losing the ability to look into the economy of their citizens. They stand to lose the ability to seize assets, they stand to lose the ability to collect debts. No application of force in the world is going to help: everything is encrypted, and destroying a computer with any amount of police firepower will accomplish zilch.
All the world’s weapons in all the world’s police hands are useless against the public’s ability to keep their cryptographic economy to themselves. Won’t make a scratch.
If you thought the wars over knowledge and culture were intense, I believe we’ll see much more interesting events unfold in the coming decade. The decentralized, uncontrollable economy where one lifetime employment is no longer central to every human being is something I’ve called the swarm economy, and I predict it will redefine society to an immensely larger extent than the ability to get rap music for free. Pirate Party founder Rick Falkvinge calls e-currency “the Napster of Banking” (May 11, 2011)
Tech guru Jason Calacanis at LAUNCH recently claimed:
- Bitcoin is a technologically sound project.
- Bitcoin is unstoppable without end-user prosecution.
- Bitcoin is the most dangerous open-source project ever created.
- Bitcoin may be the most dangerous technological project since the internet itself.
- Bitcoin is a political statement by technotarians (technological libertarians).
- Bitcoins will change the world unless governments ban them with harsh penalties.
He goes on to point out the benefits. Benefits governments fear:
- Your coins can’t be frozen (like a Paypal account can be)
- Your coins can’t be tracked
- Your coins can’t be taxed
- Transaction costs are extremely low (sorry credit card companies)
Others disagree, and claim Bitcoin is nothing more than an empty box (rather like all Fed driven currencies?):
A BitCoin is a highly trustworthy certificate—or at least it would be, if there were any commodity to certify. A BitCoin is a little like a very well sealed, very well documented box with nothing inside. Now, if there were a way to put something in the box, BitCoins could become a very good currency, but the current incarnation of the technology does not allow for this to occur. A good analogy for a marketplace using BitCoins would be to imagine a group that plays “catch” with an imaginary “ball” (a game I remember playing a few times back in elementary school), except that instead of playacting, the group actually believes they are playing catch. — Grant Babcock, OpenMarket.Org, June 3, 2011
Detractors not withstanding, the e-currency is starting to move in some pretty high circles. “The thing to note is that Bitcoin has real, and actual, value. Currently a Bitcoin (BTC) is trading at around $15,” Wall Street Journal blogger Ben Rooney recently wrote. “One other way you can tell that it is getting traction,” he goes on to say. ”is when politicians start to take note and then inevitably try to ban it.” Indeed, The Chicago Tribune reported this morning that “Two senators are pressing federal authorities to crack down on an online black market and ‘untraceable’ digital currency known as Bitcoins after reports that they are used to buy illegal drugs anonymously.” And the DEA, according to the same article, “is ‘absolutely” concerned about Bitcoins and other anonymous digital currencies, agency spokeswoman Dawn Dearden said when asked for a response to the senators’ concerns.” So, though at the moment it’s only a small contingent in the U.S. Government that is exorcised about “anonymous digital currencies,” it would appear that Falkvinge’s prophecies may, at least in part, come true. And, as Rooney rightly observes, there probably is something to anything a government fears.
Because even our right to buy and sell anonymously with cash has been restricted by the government. Deposit more than a few thousand dollars in cash into your bank account and it triggers red flags at the bank, who then reports the transaction, electronically, to federal authorities which, in turn, triggers an audit of all your accounts for “suspicious activity”. Proudly take those savings of yours down to the car dealer to buy a car in cash (a once proud American tradition) and the dealership, like the bank, must report you. Legal tender is, in our post 9/11 police state, only mostly legal.
So it should come as a surprise to no one that Big Brother takes a dim view of anything that might allow the masses to conduct their own lives in their own way without constant surveillance and supervision—all in the name of our “protection,” of course. True, all such unsupervised activity means, by definition, that there will be illegal activity. But it is worth noting that even after trashing our Constitution, spying on our own people, searching their cars, homes, and cell phones without warrants, and putting more people in jail than any other country on earth, little has been accomplished other than an exponential increase in government power and a massive shift in wealth to a very few, very powerful people. It has made no difference in the amount of crime.
Bitcoin may or may not be the end all and be all global currency of the future. But it is certainly easy to understand why it is finally gaining traction amongst those who believe that their right to run their own lives as they see fit, without Big Brother watching their every move.