Gresham's Law of Politicians

Those who believe that government can help the unfortunate are mistaken. With the passage of time, socialism gradually undermines any short term humane benefits that occur. Eventually, through its erosion of the incentives to self-improvement and through its erosion of the incentive to be productive as well as through its displacement and corruption of genuine enlightened charity, socialism ends up doing the most harm to the very people it was intended to help. And because socialism fosters consumption at the expense of savings and investment, over very long periods of time, the reduction in compounding progressively diminishes the wealth of every individual in an economy, progressively diminishes the annual income of every individual in the economy, and progressively lowers the rate of growth of the economy itself. Although the alleged goal may be to make the poor better off, the inevitable end result of socialism is that everybody, including the poorest of the poor, will be worse off than they would have been had the redistribution never occurred.

If power corrupts, it is logical to assume that the longer an elected official remains in power, the more likely they are to become corrupt. And in spite of the number of public spirited citizens who believe they have a contribution or reform to make, it is also logical or at least reasonable to assume that the very existence of power, like the flame to the moth, is a magnet that attracts the corrupt seeking to hold power or exercise it. Further, honest people with principles and good character pose threats to the corrupt. In the absence of term limits, not only do incumbents have an advantage over challengers, but also career oriented politicians have a campaign financing competitive advantage over principled opponents. Politicians committed to staying in office or a party committed to staying in power will invariably resort to using the treasury to buy the votes of their constituents. This is the fundamental element that forms the foundation of socialism and is the temptation to which almost all career motivated political leaders from prime ministers to princes eventually succumb in order to maintain their power. Bread and circuses are as old as government.

Once socialism is introduced into an economy, capital formation is inhibited and capital will be consumed. It is the combination of limited capital formation coupled with the destruction of capital that increases the demand for fractional reserve banking. Career political leaders whether elected or self-appointed with a continuing need for socialism and faced with an expanding debt burden invariably yield to the temptation of corrupting the currency with or without the creation of a central bank. Central banks are the primary instruments for creating inflation. In addition to money printing, they create the potential for unlimited government borrowing and facilitate fractional reserve banking. As a result, socialism becomes the economic equivalent of cancer and career-minded political leaders are the only cause and the sole means of spread. It can be argued in the final analysis that career-minded politicians drive out statesmen and discourage good men from seeking office as well as unfairly limiting the opportunities for good men to successfully win public office.

It is Gresham's Law of Politicians that leads to ever widening and deepening economic poverty because socialism destroys capital thereby creating the necessity for governments to resort to deficit financing and currency debasement. Gresham's Law of Money is actually the observed effects of the more basic principle of Gresham's Law of Politicians. This is why John Adams and Thomas Jefferson believed that in the end all democracies murder themselves ultimately ending in either bankruptcy or hyperinflation. Ludwig von Mises, the preeminent Austrian economist explained the economics behind Adams and Jefferson with these words, "There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved." Only those that are the problem or part of the problem will refuse to acknowledge that this is soon to be the inevitable fate of the United States unless socialism is abandoned and the Constitution restored. If freedom is to be preserved and the American republic saved, it is going to require the election of statesmen exactly analogous to Ronald Reagan and the Founders. Unfortunately, time is running out and if this political "Hail Mary" is not successfully implemented fairly quickly, America's economic hourglass will simply be drained.

Politicians are always willing to promise to spend more than they can tax. Governments are almost always the largest borrowers in any economy. This makes bankers and politicians natural allies. Power corrupts. Over time almost all politicians are corrupted. Once corrupted, honest people pose a threat to the corrupt. Hence politicians prefer to deal with bankers who "understand".

The patriarch of central banking, Mayer Amschel Rothschild, said, "Permit me to issue and control the money of a nation, and I care not who makes its laws."

In the spirit of history repeating and there is nothing new since the Greeks, here are some lines from The Frogs by Aristopanes (405BC):

Often has it crossed my fancy, that the city loves to deal
With the very best and noblest members of her commonweal, just as with our ancient coinage, and the newly-minted gold.
Yea for these, our sterling pieces, all of pure Athenian mould,
All of perfect die and metal, all the fairest of the fair,
All of workmanship unequalled, proved and valued everywhere
Both amongst our own Hellenes and Barbarians far away,
These we use not: but the worthles pinchbeck coins of yesterday,

Vilest die and basest metal, now we always use instead.
Even so, our sterling townsmen, nobly born and nobly bred,
Men of worth and rank and mettle, men of honourable fame,
Trained in every liberal science, choral dance and manly game,
These we treat with scorn and insult, but the strangers newliest come,
Worthless sons of worthless fathers, pinchbeck townsmen, yellowy scum,
Whom in earlier days the city hardly would have stooped to use
Even for her scapegoat victims, these for every task we choose.
O unwise and foolish people, yet to mend your ways begin;

Use again the good and useful: so hereafter, if ye win
'Twill be due to this your wisdom: if ye fall, at least 'twill be
Not a fall that brings dishonour, falling from a worthy tree.

I am not a libertarian. I do not beleive in the imposition of Marxist atheism on the public square and government(s) and culture by the power of money and government.

I am an American-American constitution woman who belives the government has no right to impose atheism on the public square in the name of a false, socialist “separation of church and state” on the public. Whether in the name of Rand and Marx, I beleive in individual freedom.

I think the Judeo-Christian Western ethics of our culture (prior to be cleansed by Marxists) is central to the rest of the constitution. People who only see materialism of value (libertarians and Marxists)and have no morals nor honor are soon criminals unless you have a Marxist police state keeping track of their amoral shysterism. Marxist social ideals and American constitutional economic ideals are incompatible. Freedom requires Western ethics being expected and respected among the elite. Humanism goes with communism.

You might not find me helpful on your libertarian ping list.

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