Wednesday, July 4, 2012
This was an odd question for the business as usual political environment in Washington DC. Logical thought patterns often produce questions that on the surface seem out of context. It is usually upon further reflection that the deeper meaning surfaces. To understand our current dilemma we must first understand what the definition of the dollar is.
The dollar, in my mind, is simply the Federal Reserve’s version of money. The Constitution does not mandate the use of the dollar; in fact the Constitution does not make any reference to the dollar at all. The Constitution empowers congress to coin money, regulate the value thereof, and of foreign Coin.
In this Constitutional context the question becomes what is money and how do you value it. My simple definition of money is an exchange medium for individual industry. The need for money is based on a person specializing in one trade or industry and then exchanging their production to another equally.
A simple example would be the roofer and the plumber. The roofer fixes the roof on the plumber’s house, but the roofer’s house doesn’t need plumbing work. How does the roofer exchange the value of his industry with the plumber? The plumber can write him an IOU for a specific value, or trade something of value that he owns, or he can fix the plumbing for someone else that has or does something the roofer needs. As you can see, this would quickly get very confusing.
This is the basic need for a community based monetary system. At the end of the day, to value the money of the monetary system of a community, one must place a value on ones time and production. This is the mark of sound money; it should be based on the skills and time of an individual and not on an item or group of items.
Now, Bernanke’s answer starts to make a little more sense. His idea is the value of the dollar should be regulated by a basket of finished products. To counter that view, it is Dr. Paul’s view that the value of the dollar should be regulated by a single commodity (gold).
Finished goods should in theory reflect the labor cost associated with their production. A single commodity will only reflect the labor required to extract, refine and transport that single commodity. In addition, a “basket” of finished goods should reflect a broader scope of labor fields.
One problem with using a basket of finished goods as the base “value” for the money in the United States is that more and more of the labor used in the production of the goods is done in other countries that base their labor prices on separate economies. This artificially suppresses the value in relation to the labor in the United States unless appropriate tariffs are placed on the goods.
The value of money in the United States must be based, at least primarily, on the current medium wage of laborers working in the United States. This is the only way that the value of our money will reflect the value of our individual industry. Wages go up, the money supply goes up. Wages go down, the money supply goes down.
This one item alone will not fix our economic system, but it is a start.
This entry was originally published March 8th, 2011 on my old blog.
I’m sure that some people may think that my focus on the oath and our Founding Fathers is merely patriotic rhetoric and may question the significance of the oath in today’s environment. I counter that it is the mark of an honorable character that makes their word their bond.
I take these oaths very seriously and it bothers me when I see others, who have taken the same oaths I have, completely disregard them. As I reflect and try to find a deeper understanding of the problem, the only conclusion that I can come up with is people don’t understand what it means to take an oath.
Webster’s defines an oath as a (1) : a solemn usually formal calling upon God or a god to witness to the truth of what one says or to witness that one sincerely intends to do what one says (2) : a solemn attestation of the truth or inviolability of one’s words.
The first law made by the first congress of the United States of America, enacted on 1 June 1789, was Statute 1, Chapter 1: an act to regulate the time and manner of administering certain oaths, which established the oath required by civil and military officials to support the Constitution.
Now, let’s look a little closer at the oath itself;
I, ________________, Do Solemnly Swear (or Affirm)
The oath begins with an option to swear or affirm. Although current common law places less religious connotation on the word swear, the term oath clearly had such a connotation in the late 1700s. In fact, the original legislation referred to an “oath or affirmation.” Recognizing that some religious groups, such as the Quakers, might object to “swearing” to a Supreme Being or that someone might not believe in a Supreme Being, Congress provided the option to affirm. This wording is also consistent with the option for the President to swear or affirm, as prescribed in Article 2 of the Constitution. Either way, the oath signifies a public statement of personal commitment and a statement of personal responsibility for their actions.
That I Will Support and Defend the Constitution of the United States
To understand the opening pledge, one should know and understand the Constitution. Few take the time to read and study the document they swear to support and defend. The oath requires one to support and defend the Constitution, not the President, Congress, political party or their agency. The preamble to the Constitution eloquently highlights the ideals represented by that document. The State Constitution is sworn to secondarily and as such is treated in the same manner as the US Constitution.
Against All Enemies, Foreign and Domestic
This phrase was added in 1862 as a direct result of the Civil War. Enemies of the Constitution include not only people from some far away foreign lands, but those who will is to destroy the foundation of our governing principals in this country.
That I Will Bear True Faith and Allegiance to the Same
The phrase faith and allegiance dates back at least to 1606, when King James required an oath of “uttermost faith and allegiance to the King’s majesty” from everyone leaving for America to work in the Virginia Company. However, the oath ensures allegiance to the Constitution as a whole, not just the president. One should pledge allegiance to the nation as a whole rather than their agency or service.
That I Take This Obligation Freely, without Any Mental Reservation or Purpose of Evasion
This passage also originated during the Civil War. Congress and President Abraham Lincoln, wanting to ensure that soldiers not defect, expanded the oath in an attempt to guarantee loyalty. In the final analysis, however, loyalty depends upon the integrity of the individual.
And That I Will Well and Faithfully Discharge the Duties of the Office on Which I Am about to Enter
This wording has its genesis in the first statute of 1789. In addition to the standard oath, the secretary of the Senate and the clerk of the House of Representatives had to take an additional oath to “solemnly swear or affirm, that I will truly and faithfully discharge the duties of my said office, to the best of my knowledge and abilities.”
So Help Me God
Controversy over the separation of church and state sometimes clouds this final phrase; nevertheless, it is the most important one in the oath. Our actions have moral and, for those who believe in a Supreme Being, even religious implications. Sometimes leaders seem hesitant to embrace their religion publicly or acknowledge the significance of divine guidance. However, American history is replete with examples of public appeals to a higher being for guidance and protection. The Declaration of Independence includes an appeal “to the Supreme Judge of the world,” and, although the Constitution does not include the phrase so help me God in the president’s oath, Washington added those words when he took the first oath.
This entry was originally published February 17th, 2011 on my old blog.