What's Wrong With This Picture?

Doughty federal agents raided over seventy jewelry stores recently, contemptuous of the dangers posed by brooch and tiara.

They weren't there to burgle the baubles, but to cop the computers and purloin the paperwork. The jewelers thus assaulted were mainly Pakistanis, and the concern was that they were funneling money to Osama bin Laden, or al Qaeda.

Most of the raids have been in the east, in Philadelphia, Atlanta, New York, and Florida, but stores in Texas, California, Alabama, Georgia and North Carolina have been invaded as well. Federal officials declared that the authority to conduct the raids was "under seal," and could not, or would not, cite the statute that authorizes such actions. About a dozen people are in detention, although an official acknowledged that there was no evidence of wrongdoing by any of the raided jewelers.

Well, it's a bit naïve to demand any statutory authorization for such government action. One of the (many) advantages to the government of being at war, even if an undeclared and thus unlawful one, is that the "war" justifies anything. Besides, the individuals being hassled have foreigner names, and who cares about them? The main thing is to keep dollars from falling into the hands of those dastardly Pakistanis, right? (Of course, our own government sent packets of cash to Pakistan, to Osama bin Laden, and the taliban, when we needed them. But that was then, and this is now.) Raiding jewelers is part of the war on terror!

Well, maybe, except that President Bush has cobbled together an aid package for Pakistan totaling several billion dollars, with about 600 million scheduled to arrive this year. This is OK, however, because money funneled into Pakistan by the government is good; that which arrives privately is bad. Government, legal; private, illegal. Isn't that obvious?

After all, Pakistan owes the U.S. about three billion, so additional aid is absolutely essential. Dollars dribbling into Pakistan from jewelers in the U.S. are not likely to be officially counted, and thus would be worthless to the financiers. Pakistan's IOUs, like those of any other borrower, are assets of the loaning banks, and if the borrower – Pakistan's government, not its people – goes belly-up, the assets evaporate. So additional loans guarantee, more or less, that Pakistan will be able to continue paying interest, which means that it is effectively "servicing" its debt, thus preserving its "asset" status. Besides collecting interest, the official infusion of credit justifies the placing of conditions upon the Pakistanis; the unofficial donations of jewelers do not. Regulation and control are synonyms for government.

Never mind the logical absurdity of trying to borrow one's way out of debt: there is no alternative, given the way our monetary system works. Like Ponzi's scheme, the system depends upon an ever-growing number of participants (borrowers) and it hardly matters if the borrowing is to repay previous borrowing. As long as someone borrows, the system can flounder on.

Never mind, also, that foreign aid is utterly unlawful, illogical, and foolish. Ignore, as well, that our government, in addition to having no authority to seize citizens' money and send it overseas to foreign governments, has no authority to prohibit Americans – even if of Pakistani descent – from doing what they want with their money. Will Uncle Sam crack down on Jews sending money "home" to Israel?

None of these lawless government activities would be necessary – or possible – if the American people had not been stripped of actual money, and forced to use borrowed bank credit in its place. Again, the government routinely does what the people are forbidden to do – issue counterfeit. To prevent the "worthlessness of the money from becoming apparent," as Keynes put it, government ultimately ends up bursting into jewelry stores and putting people into jail sans any good reason except the "war on terror," which, in turn, exists largely to enable the government to do things like bursting into jewelry stores, and arresting people without sufficient cause. It's all about the economy, and the absurd measures which must be utilized to justify the efforts to keep it afloat, at least until the next election. Government breaks laws right and left hassling private individuals who may have broken no law at all. It's routine.

Does government serve any lawful, legitimate, purpose? Does justice flourish pursuant to its activities? Are our freedom and prosperity enhanced by its existence?

Isn't it high time that we gently, but firmly, rid ourselves of it?

July 15, 2002

Dr. Hein [send him mail] is a semi-retired ophthalmologist in St. Louis, and the author of All Work & No Pay, which will soon be available at Amazon.com.