|
|
Post by Cyrellys on Feb 1, 2012 12:03:12 GMT -7
Secrecy News -- 02/01/12fromSteven Aftergood saftergood@fas.org reply-tosaftergood@fas.org tocyrellys@dishmail.net dateWed, Feb 1, 2012 at 10:27 AM subjectSecrecy News -- 02/01/12 hide details 10:27 AM (1 hour ago) Format Note: If you cannot easily read the text below, or you prefer to receive Secrecy News in another format, please reply to this email to let us know. SECRECY NEWS from the FAS Project on Government Secrecy Volume 2012, Issue No. 8 February 1, 2012 Secrecy News Blog: www.fas.org/blog/secrecy/** AN OVERVIEW OF SPECIAL OPERATIONS FORCES, AND MORE FROM CRS ** SOME HISTORICAL INTELLIGENCE SATELLITE IMAGERY DECLASSIFIED ** RAVEN ROCK AND CONTINUITY OF GOVERNMENT AN OVERVIEW OF SPECIAL OPERATIONS FORCES, AND MORE FROM CRS Over the past decade, the number of U.S. special operations forces (SOF) personnel has nearly doubled, while budgets for special operations have nearly tripled, and overseas deployments have quadrupled, according to a newly updated report from the Congressional Research Service. "Special Operations Forces are elite military units with special training and equipment that can infiltrate into hostile territory through land, sea, or air to conduct a variety of operations, many of them classified," the CRS report explains. "SOF personnel undergo rigorous selection and lengthy specialized training. The U.S. Special Operations Command (USSOCOM) oversees the training, doctrine, and equipping of all U.S. SOF units." Following an overview of the structure of U.S. special operations forces, the CRS report discusses the implications for special operations of recent legislation including the 2012 defense authorization act. See "U.S. Special Operations Forces (SOF): Background and Issues for Congress," January 11, 2012: www.fas.org/sgp/crs/natsec/RS21048.pdfA copy of the new "U.S. Special Operations Command Fact Book 2012," prepared by USSOCOM Public Affairs, is available here: www.fas.org/irp/agency/dod/socom/factbook-2012.pdfOther noteworthy new reports from the Congressional Research Service that have not been made readily available to the public include the following: "Arms Sales: Congressional Review Process," February 1, 2012: www.fas.org/sgp/crs/weapons/RL31675.pdf"The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress," January 31, 2011: www.fas.org/sgp/crs/natsec/R41293.pdf"Immigration-Related Detention: Current Legislative Issues," January 12, 2012: www.fas.org/sgp/crs/homesec/RL32369.pdfSOME HISTORICAL INTELLIGENCE SATELLITE IMAGERY DECLASSIFIED A handful of historical intelligence satellite images were declassified last month to coincide with a new display of the GAMBIT and HEXAGON spy satellites at the National Air Force Museum at Wright-Patterson Air Force Base. www.nationalmuseum.af.mil/news/story.asp?id=123287508The GAMBIT and HEXAGON satellites were formally declassified last September on the occasion of the fiftieth anniversary of the National Reconnaissance Office. At that time, the NRO released voluminous documentation on the development of those satellites. But the associated imagery, which is held by the National Geospatial-Intelligence Agency, was not released. Now a small number of satellite images have been made public. However, the newly disclosed images are not originals, but are embedded in "posters" published by the NRO. As such, they do not lend themselves to detailed analysis, complained Charles P. Vick of GlobalSecurity.org. Nor are the original negatives of the declassified photos available for public inspection. www.nro.gov/foia/declass/GAMBHEX%20Posters.htmlThere is an annotation on the released images indicating that they were declassified on January 13, 2012 by the Director of National Intelligence, which would be consistent with the provisions of the 1995 executive order 12951. "The images have undoubtedly been degraded, because GAMBIT and HEXAGON’s best imagery capabilities remain classified," wrote Dwayne Day in The Space Review. "These photographs are hopefully the first in many yet to come, and will help us better understand the battles in the shadows of the Cold War." www.thespacereview.com/article/2013/1Among other things, the NRO also released a new edition of the 1973 histories of GAMBIT and HEXAGON written by Robert L. Perry. www.nro.gov/whatsnew.html"Perry's histories... serve as exemplars of the art and craft of historians. They are rich in detail, well-sourced, and written with engaging prose," according to an informative introduction by James D. Outzen of the Center for the Study of National Reconnaissance. Unfortunately, the new edition, while handsome, is not exemplary because it obscures the redaction of material that is still considered classified: "With respect to redacted material, we have edited the volumes to smooth the flow of language in the volume, rather than indicate where material was redacted." This was a mistake. Remarkably, the NRO initiative to declassify GAMBIT and HEXAGON program information, including imagery, dates back to 1997. At that time, a seven-month implementation schedule was optimistically anticipated. "I would like to hiqhliqht this declassification effort with a National Reconnaissance Office (NRO) ceremony (including the release of selected declassified imagery from both systems) in October 1997," wrote NRO Deputy Director Keith R. Hall in a March 1997 memorandum that was obtained by Jeffrey Richelson of the National Security Archive. www.fas.org/irp/nro/hex-declass.pdfAs it turned out, the declassification process took 14 years, not seven months. RAVEN ROCK AND CONTINUITY OF GOVERNMENT A newly revised U.S. Air Force directive on continuity of operations under emergency circumstances refers matter-of-factly to Raven Rock Mountain Complex, a largely restricted U.S. government facility in Pennsylvania. See "Air Force Continuity of Operations (COOP) Program," Air Force Instruction 10-208, 15 December 2011: www.fas.org/irp/doddir/usaf/afi10-208.pdfRaven Rock, also known as Site R, has been operational since 1953 for purposes of emergency communications, disaster relocation and recovery. But most operations at the facility have been classified, and the facility itself was rarely mentioned in official publications during most of the past half century. A previous edition of the new Air Force Instruction that was issued in 2005 made no reference to Raven Rock. www.fas.org/nuke/guide/usa/c3i/raven_rock.htm_______________________________________________ Secrecy News is written by Steven Aftergood and published by the Federation of American Scientists. The Secrecy News Blog is at: www.fas.org/blog/secrecy/To SUBSCRIBE to Secrecy News, go to: www.fas.org/sgp/news/secrecy/subscribe.htmlTo UNSUBSCRIBE, go to www.fas.org/sgp/news/secrecy/unsubscribe.htmlOR email your request to saftergood@fas.org Secrecy News is archived at: www.fas.org/sgp/news/secrecy/index.htmlSupport the FAS Project on Government Secrecy with a donation: www.fas.org/member/donate_today.html_______________________ Steven Aftergood Project on Government Secrecy Federation of American Scientists web: www.fas.org/sgp/index.htmlemail: saftergood@fas.org voice: (202) 454-4691 twitter: @saftergood
|
|
|
|
Post by Cyrellys on Feb 15, 2012 8:38:57 GMT -7
What Is a Dollar?
SETH LIPSKY
When the House committee on financial services met in March to hear testimony from the chairman of the Federal Reserve Board, all eyes were on Congressman Ron Paul of Texas. After Republicans won control of the House last year, Paul acceded to the chairmanship of the subcommittee on monetary policy, which has direct oversight of the Fed. A physician by trade and a libertarian by conviction, Paul had emerged over a long career in Congress as the leading proponent of sound money; for more than 30 years, he had been waiting to play a central role in the nation's monetary debate. So eager was Paul to open up the topic that it took him some 670 words to get his question out.
The congressman noted the Fed's legal responsibility to strive for stable prices and full employment, and offered a review that illuminated the instability on both fronts since the early 1970s. He discoursed on the symbiotic relationship through which the Fed and the Congress have been facilitating government spending. He spoke about the importance of a "measurement of value," and asserted that the value of the stocks in the Dow Jones Industrial Average had plunged to eight ounces of gold from 44 in 2000. He reported that he was unable to find a definition of the dollar in the United States Code and wondered how the Fed could manage its task without a definition of the national unit of account. He therefore concluded his remarks with a simple question: "[W]hat is your definition of a dollar?"
The Fed chairman, Ben Bernanke, sat through Paul's verbal torrent with a look of professorial politeness — resting his chin in his hand and extending two fingers to his left ear. When it was time for him to reply, he said that the congressman had raised "important points," and answered Paul's question with a familiar tautology: "My definition of the dollar is what it can buy." Consumers, Bernanke argued, "don't want to buy gold" but rather "want to buy food and gasoline and clothes and all the other things that are in the consumer basket."
Bernanke's answer may have represented the prevailing view of the United States government regarding the definition of its currency. But it also made Congressman Paul's point. For the answer indicated that the central bank that issues Federal Reserve notes has no definition of a dollar that lasts longer than the instant it takes prices to change or that makes any reference to the Constitution (or any other law, for that matter).
The view in Washington is that Americans will accept this state of affairs — in which our currency is defined purely in terms of purchasing power, which can be readily and frequently manipulated by the Federal Reserve through its control of the money supply — as an intrinsic facet of our complex global economic system. But it has not always been so, and in recent years, as the value of a dollar has collapsed to below a 1,500th of an ounce of gold, a growing chorus has begun to wonder if it always should be.
Monetary-reform ideas floated in the wake of the Great Recession have covered a wide range — from the introduction of a formal gold standard, to the restoration of a role for gold in the international monetary system (proposed in an op-ed in the Financial Times last year by World Bank president Robert Zoellick), to the elimination of the Fed's mandate to pursue full employment as a policy goal, to the adoption of a formal "price rule" by which the Federal Reserve would use the price of gold as a marker in setting interest rates. Some states are even considering making gold and silver coins legal tender along with the dollar, and Utah has recently enacted a law to do so.
These proposals, motivated by the financial crisis and the fallen dollar, may seem startling or eccentric. They certainly tend to be treated that way by many mainstream economists. But they actually draw on a profound and long-running American debate about precisely the question that Congressman Paul asked of Chairman Bernanke — a debate rooted in the Constitution itself, shaped by revolutionary experience and two centuries of economic-policy judgments and Supreme Court decisions, and worthy of fresh reconsideration in our time.
THE POWER TO COIN
Article I, Section 8, of the U.S. Constitution plainly grants Congress the power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." That the power to coin was granted together with the power to fix the standard of weights and measures reflects the fact that the framers understood money as a measurement of value.
The dollar itself, however, was created by neither the Constitution nor the Congress. Although the framers used the word "dollars" twice in the Constitution — in permitting a tax on the slave trade in Article I, and in securing the right to trial by jury in the Seventh Amendment (which applies in cases where at least $20 are at issue) — the document itself contains no definition of the dollar. That fact suggests that the meaning was so widely understood that the framers felt no need to define it in the Constitution itself.
When the Second Congress of the United States — to which a number of the authors of the Constitution belonged — did define the dollar, it did so not by creating a new unit but by adopting the already existing one, to which it is clear that the Constitution's framers were referring when they used the word in the first place. Namely, it adopted as the national unit of account one of the most widely used coins in the world, the Spanish milled dollar, in which the notes that financed the American Revolution had been denominated.
The Congress did this in Section 9 of the Coinage Act of 1792, which created the United States Mint and required that there should be from time to time "struck and coined" at the mint "coins of gold, silver, and copper." The law established several denominations. In the case of dollars, each was "to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver." The law went on to fix the relative value of gold by weight at 15 times that of silver. For debasing a dollar, the pain the law established was death.
This definition of the dollar lasted until 1834, when both the gold and silver content of American coins was lowered and the ratio of silver to gold was changed to 16-to-1 by legislation. The Coinage Act of 1857 then took foreign coins out of circulation, requiring that they be melted down at the United States Mint and re-coined as American money. Once that was accomplished, gold emerged as the standard of money in America. As Arthur Nussbaum put it in a 1937 article, "The Law of the Dollar": "Only American gold coin remained unlimited legal tender."
The period during which dollars were backed by gold or silver was interrupted by the Civil War. By December 1861, Abraham Lincoln's administration was unable to repay specie (that is, gold or silver) for the paper money America had already issued. But Lincoln and the Congress concluded that the Union's cause was worth risking all. On February 25, 1862 — in what the Supreme Court later called "an exigent crisis of the nation in which the government was engaged in putting down an armed rebellion of vast magnitude" — Congress passed the Legal Tender Act. The legislation authorized the issuance of $150 million in paper notes and established that, with some exceptions (mainly for foreign trade), the notes "should be receivable in payment of all taxes, internal duties, excises, debts, and demands of every kind due to the United States...and should also be lawful money and a legal tender in payment of all debts, public and private, within the United States."
It was Lincoln's Treasury secretary, Salmon Chase, who helped design and introduce the notes, which came to be called "greenbacks" for their faded green coloring. Chase, however, had a fractious relationship with Lincoln, who eventually accepted his resignation from the cabinet and nominated him to be chief justice of the United States. A few years after Chase landed on the Court, he found himself having to rule on the validity of the very paper money he had put into use.
The case involved a man named Henry Griswold, who had lent money to a woman the Supreme Court called a "certain Mrs. Hepburn." On June 20, 1860, Mrs. Hepburn, as the Court described it, had "promised to pay to Henry Griswold on the 20th of February, 1862, eleven thousand two hundred and fifty ‘dollars.'" Note the quotation marks the Court put around the word "dollars." The Court observed that, because the note came due five days before Congress authorized the issuance of those $150 million in paper money, there was throughout the term of the loan "confessedly no lawful money of the United States, or money which could lawfully be tendered in payment of private debts, but gold and silver coin." But Mrs. Hepburn did not pay her loan on time; when she tried, two years later, to finally repay her debt, she did so in greenbacks.
Griswold gruffly refused to accept the notes, and the two of them ended up before the high bench in 1867. The Court was forced to confront the question of the government's authority to make paper notes the equivalent of gold and silver by fiat. Mrs. Hepburn lost her case in a 4-3 decision handed down in 1870, and it was Chief Justice Chase himself who laid out the salient points, writing:
It is not doubted that the power to establish a standard of value by which all other values may be measured — or in other words, to determine what shall be lawful money and a legal tender — is in its nature, and of necessity, a governmental power. It is in all countries exercised by the government. In the United States, so far as it relates to the precious metals, it is vested in Congress by the grant of the power to coin money. But can a power to impart these qualities to notes, or promises to pay money, when offered in discharge of preexisting debts, be derived from the coinage power, or from any other power expressly given?
It is certainly not the same power as the power to coin money. Nor is it in any reasonable or satisfactory sense an appropriate or plainly adapted means to the exercise of that power. Nor is there more reason for saying that it is implied in, or incidental to, the power to regulate the value of coined money of the United States, or of foreign coins. This power of regulation is a power to determine the weight, purity, form, impression, and denomination of the several coins and their relation to each other, and the relations of foreign coins to the monetary unit of the United States.
The Court went on to mark the point that "the power to make notes a legal tender" was not the same as "the power to issue notes to be used as currency." Chase noted that the Articles of Confederation, unlike the Constitution, gave the national government the power to emit bills of credit, which, the Court said, "are in fact notes for circulation as currency." The Supreme Court, he argued, had already reckoned that the U.S. Congress had the same power. But the Court's precedent "concluded nothing" on the question of legal tender. "Indeed," Chase wrote,
we are not aware that it has ever been claimed that the power to issue bills or notes has any identity with the power to make them a legal tender. On the contrary, the whole history of the country refutes that notion. The states have always been held to possess the power to authorize and regulate the issue of bills for circulation by banks or individuals, subject, as has been lately determined, to the control of Congress, for the purpose of establishing and securing a national currency; and yet the states are expressly prohibited by the Constitution from making anything but gold and silver coin a legal tender. This seems decisive on the point that the power to issue notes and the power to make them a legal tender are not the same power, and that they have no necessary connection with each other.
Thus the Court insisted that the government did not have the power to simply declare the greenback legal tender. In order to be grounded in the Constitution, the value of a dollar needed to somehow be grounded in specie. This decision in Griswold stands as the last time a majority of the Supreme Court came down on the side of so-called constitutional money. From then on, based on an evolving series of arguments, the judiciary empowered the Congress to build a regime of paper notes that had to be accepted in payment of debts.
EMERGENCY POWERS
The first prominent judicial argument in favor of making greenbacks legal tender can be found in Griswold itself, in a powerfully written dissent by Justice Samuel Miller. Justice Miller made much of the fact that the Constitution does not place on the federal government the same prohibition it places on the states against emitting bills of credit or making anything other than gold and silver coins legal tender. He reasoned that, since the federal government is not prohibited from taking such actions, it has the power to undertake them pursuant to the "necessary and proper" clause.
But for the carrying out of what enumerated power could the Court deem it necessary and proper to make the greenback legal tender? Miller's answer was the power to declare war and suppress insurrection. He noted that Congress had already used all of its enumerated powers to try to win the Civil War, but "with the spirit of the rebellion unbroken, with large armies in the field unpaid, with a current expenditure of over a million of dollars per day, the credit of the government nearly exhausted, and the resources of taxation inadequate to pay even the interest on the public debt, Congress was called on to devise some new means of borrowing money on the credit of the nation, for the result of the war was conceded by all thoughtful men to depend on the capacity of the government to raise money in amounts previously unknown." He went on:
The banks had already loaned their means to the Treasury. They had been compelled to suspend the payment of specie on their own notes. The coin in the country, if it could all have been placed within the control of the Secretary of the Treasury, would not have made a circulation sufficient to answer army purchases and army payments, to say nothing of the ordinary business of the country. A general collapse of credit, of payment, and of business seemed inevitable, in which faith in the ability of the government would have been destroyed, the rebellion would have triumphed, the states would have been left divided, and the people impoverished. The national government would have perished, and with it the Constitution which we are now called upon to construe with such nice and critical accuracy.
That the legal tender act prevented these disastrous results, and that the tender clause was necessary to prevent them, I entertain no doubt.
It is hard to deny the force of the war argument. It has always been the case that war trumps property, a point Lincoln himself made when, in claiming authority to enunciate the Emancipation Proclamation, he cited only the commander-in-chief clause. Certainly the war in which he led the United States was a just war, and certainly he had felt that the Legal Tender Act was essential to victory. Still, insofar as the act had fulfilled its important purpose, it had done so long before the Court reviewed the law. Griswold was, after all, decided five years after the war had ended. So although Miller's argument may have been right during wartime, perhaps Chase's logic — and the Court decision that rested on it — could have endured throughout peacetime.
In the event, this was not to be. Few precedents have lasted a shorter time than Griswold. The same day that the Court handed down its decision denying Mrs. Hepburn the right to use greenbacks to repay her debt, Lincoln's erstwhile general, Ulysses S. Grant, by that time serving as president, nominated two new justices to the high bench. Within a matter of months, the question of legal tender came yet again before the Court, and it soon became evident that the Court's reasoning in Griswold would not hold.
The two cases that raised the issue, Knox v. Lee and Parker v. Davis, came to be known as the Legal Tender cases. Knox was the clearer of the two, and so was the focus of the Court's reasoning and ruling in the case. Mrs. Lee was a Pennsylvanian, loyal to the Union, who owned a flock of 608 sheep in Texas. During the war, her flock was seized by the Confederate Army (which considered her an "alien enemy") and eventually sold to Mr. Knox. When, after the war, Mrs. Lee demanded restitution, Knox offered to pay her in greenbacks, and the matter landed in court. The lower court, as the Supreme Court later put it, "excluded all evidence as to the difference in value between specie and legal tender notes of the United States, and no evidence was allowed to go to the jury on this point."
The issue in contention on appeal, therefore, was the lower court's jury instruction, which, as the Supreme Court characterized it, went as follows: "In assessing damages, the jury will recollect that whatever amount they may give by their verdict can be discharged by the payment of such amount in legal tender notes of the United States." Mr. Knox alleged that this had led the jury, as the Supreme Court put it, "improperly to increase the damages" because of the jurors' sense that greenbacks were not worth as much as gold.
If the main issue had been whether a jury could adjust damages in a case based on its own sense of the shoddy nature of the paper currency, one could see how the Court might have stuck with the precedent laid down in Griswold. After all, what simpler way to exclude the vagaries of estimation by juries than to measure transactions in specie? This was the argument Chief Justice Chase made in his dissent in Knox. But for the justice who wrote the 5-4 majority opinion, William Strong, the issue turned out not to be how to measure the value of the sheep — or even the question of whether Mr. Knox had been overcharged or Mrs. Lee shortchanged — but rather one of making sure that Congress had the power to avert economic and political disaster.
"It would be difficult," Strong wrote, "to overestimate the consequences which must follow our decision. They will affect the entire business of the country, and take hold of the possible continued existence of the government. If it be held by this court that Congress has no constitutional power, under any circumstances, or in any emergency, to make treasury notes a legal tender for the payment of all debts (a power confessedly possessed by every independent sovereignty other than the United States), the government is without those means of self-preservation which, all must admit, may, in certain contingencies, become indispensable, even if they were not when the acts of Congress now called in question were enacted."
This is the way the greenback was first ratified by the Supreme Court. Several years after the Civil War, the justification for paper money was still articulated in the context of war, where not only property but life itself could be taken by the government in its campaign for victory. Because the Congress had acted in the midst of a grave emergency, the Court could not subsequently rule the Legal Tender Act unconstitutional without denying Congress the power to similarly take unavoidable emergency steps in a future war or other calamity. The phrase "under any circumstances, or in any emergency" suggests that the desire to empower Congress to act in a crisis must govern the Court's actions in a time of peace as well. Even the great honest-money advocate Edwin Vieira, writing in his seminal work Pieces of Eight, reckons that Justice Strong's "emphasis on the ‘salvation of government' [was]...perhaps understandable, in the historical context." One does not want, after all, an instinct for sound money to lead to national paralysis in the face of treason.
FIAT MONEY
The emergency justification for the greenback remained the governing precedent for just over a decade. But in 1884, the Court adopted a far broader justification for paper legal tender and, at least in principle, began pointing toward the era of fiat money. The case involved a New York cotton dealer named Juilliard, who went to court to gain payment of $5,100 for 100 bales of cotton that he had sold to a Connecticut man, Greenman, for $5,122.90. The buyer had paid him $22.90 in gold and silver coins, but had tried to foist off on Juilliard federal legal-tender notes of $5,000 and $100 for the rest. Juilliard had refused them.
Two decades after the end of the Civil War, the Court could no longer simply rest on emergency powers. Its 8-1 decision in Juilliard v. Greenman focused instead on the necessary and proper clause. Although the Constitution does not specifically grant Congress the power to emit bills of credit and make them legal tender, the power is implied, the Court reasoned. And it was not implied by the power to wage war but by the power to borrow money on the credit of the United States.
The lone dissenter was Justice Stephen Field. In 1848, Field had left his brother's law practice in New York City; soon after, he joined the rush for gold in California, where he became not a miner but, eventually, a justice of the California Supreme Court before being elevated by President Lincoln to the high bench. Field's dissent in Juilliard was a classic defense of the importance in monetary matters of the specie for which they had all rushed to the West. He reviewed the unhappy experience of the founding fathers with paper money in revolutionary times, described how the notes "depreciated until they became valueless in the hands of their possessors," and then offered his famous formulation: "So it always will be; legislative declaration cannot make the promise of a thing the equivalent of the thing itself."
His colleagues disagreed, and Juilliard firmly established the principle that, as the opening words of the Court's decision boldly proclaim, "Congress has the constitutional power to make the Treasury notes of the United States a legal tender in payment of private debts, in time of peace as well as in time of war."
By that time, however, Congress had already begun to comprehend the problem with a dollar that was not convertible to precious metal. In 1875, it passed the Specie Payment Resumption Act, which began a return to sound — or sounder — money in America. For the next century, despite the Court's authorization of paper money, American dollars were (to varying degrees) redeemable in gold. Following the Specie Payment Resumption Act, the administration of President Rutherford Hayes built up the nation's gold holdings, only to discover that once people believed dollars were convertible they stopped trying to convert them.
The principle of convertibility into gold held until 1933. The financial panic of the beginning of that year resulted in a run on banks; customers, fearful that the dollar would soon lose its value, demanded to receive the contents of their accounts in gold. As a result, both the Fed's gold reserves and the future of the dollar were seriously threatened. President Franklin Roosevelt responded with an extraordinary step: Executive Order 6102, issued on April 5, 1933, required all Americans to turn their private gold holdings in to the Federal Reserve in exchange for dollars (at the rate of $20.67 an ounce of gold), with just a few exceptions for small amounts of gold used by jewelers and artists. The convertibility of the dollar to gold was retained, but ordinary citizens could no longer treat them as truly interchangeable in practice. The private economy would have to function using paper money backed only implicitly by specie.
Congress then followed up with a law voiding the gold clauses in all private contracts — essentially making it illegal to demand or offer payment in gold — on the argument that such clauses interfered with the constitutional authority of the Congress to regulate the currency. Both of these moves were then reaffirmed in the Gold Reserve Act of 1934, and given a seal of approval by the Supreme Court in a series of "gold-clause cases" decided jointly, in a 5-4 vote, in February of 1935. The end result was that gold could no longer be used as a unit of currency or exchange in America. The prohibition on Americans' owning gold remained in effect until 1974.
The dollar did remain convertible to gold for several decades after the "gold-clause cases" — at least in principle, and for the purpose of foreign exchange. The Bretton Woods financial system, established by the major powers after World War II to help stabilize global markets, relied upon a stable value of the dollar in gold. The system required participating nations to peg the values of their currencies to the U.S. dollar (thus relying on the dollar to serve as a reserve currency, essentially playing the role that gold had played in the global economy until then), and the United States in turn agreed to link the dollar to gold at a rate of $35 per ounce and to convert dollars to gold upon the request of foreign governments. This way, the dollar was "good as gold," and the global monetary system still in essence relied on the strength of a gold exchange standard.
By the late 1960s, however, as the administration of Lyndon Johnson pursued the policy of guns in Vietnam and butter at home, the dollar was under pressure. Johnson withdrew from the London Gold Pool in 1968. The Bretton Woods system limped on until the early 1970s, when inflation in the United States caused some European nations to flee the system rather than devalue their own currencies in order to keep them pegged to the dollar. After France and Switzerland demanded to redeem more than $200 million in gold from the Federal Reserve, the Nixon administration decided the Bretton Woods arrangement was no longer viable, and declared that it would cease to make dollars convertible to gold.
By 1976, all the developed nations had floating currencies, and the age of true fiat money was inaugurated. The abrogation of Bretton Woods left nothing by way of a definition of the dollar, either in treaty or in law — a fact that was put in plain English by Federal Reserve chairman Alan Greenspan in 2001, a few years before he was succeeded by Bernanke. "In today's world of government-issued monies, the unit of currency is not, and need not be, defined," Greenspan said in Washington to the Euro50 Group Roundtable. "It circulates as legal tender under government fiat. Its value can be inferred only from the values of the present and future goods and services it can command." The transformation of the dollar's definition — from constitutionally fixed amount of specie to unmoored tautology — was complete.
THE UNAVOIDABLE QUESTION
Greenspan may have been right that today's dollar is not defined, as his successor's answer to Congressman Paul made clear. But was he also right to claim that it need not be?
The key problem with the floating fiat dollar is not, as both Greenspan's and Bernanke's comments suggested, that its value is defined by its purchasing power. The value of food and other goods and of services can rise and fall in terms of specie as well. Rather, what is different about a fiat currency is that its value can be easily manipulated by the central bank that controls the money supply. By printing more or less currency, the Fed can manage the purchasing power of each dollar. This can allow the Fed to respond to short-term economic conditions or to shocks to the system. But it is also a license to inflate and an enabler of reckless fiscal policy.
This is why, as we approach the double jubilee of the founding of the Fed, it increasingly seems that an institution created in 1913 — before the era of fiat money had been launched, or even widely imagined — has become in our time a means of promoting neither stable prices nor full employment, but rather of financing a level of federal spending that cannot be gained legislatively. And as the dollar has collapsed to a value in gold that millions of people who hold their savings in dollars would just a decade ago have thought impossible, many have also begun to think about the Fed's broad default as not only a policy failure, but a moral one.
Such alarm exists not only in America. There is also a school of thought that reckons that, if our currency is not placed on firmer footing, the role of the dollar as a reserve currency will be revoked by foreigners — like the communist Chinese regime, or even the Europeans. But it is hard to imagine either one of them stepping in to replace America. None of their currencies is a credible competitor. The European social democracies have been abject failures at managing their own currencies. Communist China, meanwhile, faces a reckoning over its enslavement of its own labor force that dwarfs the economic troubles faced by the capitalist countries as a result of their monetary errors. No other world power seems capable of challenging our economic dominance.
The problem, then, is not that our currency might be supplanted, but that America's potential for growth and prosperity might be sapped — that in feeding the endless hunger for more dollars to spend in Washington, we will leave our money ever more debased and our economy unstable and weak. Thus come signs from all over the country that people are seeking a competitor to the fiat dollar. Indeed, more than a dozen states are starting, if only that, to look at legislation aimed at making gold and silver coins legal tender.
States are prohibited by Article I, Section 10, of the Constitution from coining money of their own. They are also forbidden to make anything but gold and silver coin a tender in payment of debts. But a growing number of states — inspirited by a group called the American Principles Project — are using that sliver of daylight to explore the practicality of making gold and silver coins legal tender. One state, Utah, just enacted in March a law to do precisely that — declaring gold and silver coins legal tender in the state and exempting from the capital-gains tax any appreciation in value that might occur while persons are holding such coins in Utah. This means that if the value of the dollar drops further — that is, if there is a rise in the number of dollars that gold and silver coins will fetch — the holders of such coins will not be taxed in Utah on the gain. Instead, the coins will be regarded as money and, at least insofar as Utah is concerned, will provide a shelter from the ravages of monetary inflation. Though Utah's law may be dismissed as mere symbolism by its critics, it is an unambiguous vote of no confidence in our system of fiat money.
Utah's is not the only example of Americans' turning to seemingly obscure provisions of the Constitution to protect themselves as the dollar's value slips. Another recent instance directs our attention back to the courts, where the question of the value of the dollar was for so long fought out. It involves the Constitution's prohibition on lowering the pay of federal judges while they are in office; this prohibition was a response to one of the grievances against the British crown that were enumerated in the Declaration of Independence — that George III had made "Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries."
Since federal judges serve for life, many remain on the bench for decades. Consequently, even though the dollar amount of their pay cannot be reduced, its purchasing power can be cut dramatically as the dollar's value declines. This problem grew so serious over time that Congress, in 1989, instituted an automatic cost-of-living adjustment for judges. But then Congress, being Congress, rescinded the adjustment — preventing it from taking effect in the budgets enacted for 1996, '97, '99, 2007, and 2010. Last year, in an astonishing move, a group of the most distinguished judges on the federal bench appealed to the Supreme Court in pursuit of back pay and restitution, as well as a declaration that the suspension of previously enacted cost-of-living adjustments amounted to an unconstitutional diminution of judicial compensation.
The case, Beer v. United States, inevitably raises the question of the value of judicial salaries, and therefore of the dollars in which they are paid. By my calculation, the pay of a federal appeals-court judge whose term is similar to that of one of the plaintiffs in Beer — Judge Laurence Silberman of the United States Court of Appeals for the District of Columbia Circuit — has been diminished to the equivalent of 120 ounces of gold a year, from the 255 ounces that was the value of the salary for a typical federal appeals-court judge who began serving when Silberman did in the mid-1980s. This reduction in purchasing power has occurred even as the nominal pay of such a judge soared over the same period, from $83,200 to $184,500 a year.
It happens that the judges suing in Beer are not asking the Supreme Court to overturn the Legal Tender cases. They are asking it merely to prohibit the Congress from rescinding a previously enacted cost-of-living adjustment. But if the case is carried to its logical conclusion, it is hard to see how the larger question — whether legal tender is constitutional — can be avoided. Or, to get back to the beginning, what, exactly, is a dollar?
RECOVERING SOUND MONEY
The history of the American debate over this question — the definition of the dollar — offers rich soil in which to plant a campaign for sound money. Reformers have looked at all kinds of ways to limit the freedom of action of our central bankers, from tying the dollar to a basket of goods (with specie merely one among them), to narrowing the Fed's legislated mandate to battling inflation rather than increasing employment, to moving to a system of private money, to moving toward a classical gold standard. It is hard, in any event, to think of a moment when the logic of reform has been more clear.
It is possible, of course, that the dollar will be rescued without the courts or the states entering the fray, and without a profound reconsideration of the role of our central bank. This is what happened in the wake of the inflation that erupted in the 1970s, after President Nixon brought the era of Bretton Woods to an end. President Jimmy Carter appointed Paul Volcker to chair the Federal Reserve Board, and Volcker turned out to be a chairman with the vision and mettle to stick to the kind of tight-money policy that the crisis required. The American people, meanwhile, handed up, in President Ronald Reagan, a politician with the experience and principles from which to craft complementary pro-growth fiscal and regulatory reforms. The result was that a generation of growth was begun and value began flowing back into the dollar.
At first blush, it is hard to imagine such a convergence of personalities today. But the 2012 presidential election season is young, and in recent months the monetary question has been raised in the Republican presidential scrum by several of the potential or announced contenders. A bipartisan majority in the Congress is seeking an audit of the Federal Reserve, and the courts and the states are wrestling with the question. It's hard to recall a moment that seemed more ripe for a reform that would address the question of the dollar's definition in terms of the principles of honest currency that seemed so obvious to our nation's founders.
Seth Lipsky, editor of The New York Sun, is the author most recently of The Citizen's Constitution.
|
|
|
|
Post by Cyrellys on Mar 5, 2012 18:08:14 GMT -7
David Swanson: Virginia Says No to Lawless ImprisonmentGlobal Research E-Newsletter newsletter@globalresearch.ca via globalresearch.ccsend.com to me show details 5:03 AM (13 hours ago) Images are not displayed. Display images below - Always display images from newsletter@globalresearch.ca Having trouble viewing this email? Click here Virginia Says No to Lawless ImprisonmentBy David Swanson Global Research, February 29, 2012 War Is A Crime - 2012-02-28 URL of this article: www.globalresearch.ca/index.php?context=va&aid=29546Good things do come out of the Virginia state legislature. That normally reprehensible body has just stood up to the federal outrage that has come to be known as the NDAA. The letters stand for the National Defense Authorization Act, but at issue here is not the bulk of that bill. Virginia's state government has no objection to dumping our grandchildren's unearned pay into the pockets of war profiteers while our schools lack funding. At issue is the presidential power to lock people up without a trial, which was slipped into the latest military funding bill late last year and signed into law by President Barack Obama on New Year's Eve. In fact, Virginia's legislature does not object to that abuse except in one particular circumstance, namely when the victim of it is a U.S. citizen. But in that circumstance, Virginia says Hell No. Locally in Charlottesville, we rallied at Republican Congressman Robert Hurt's office. charlottesvillepeace.org/node/2629 We urged him to vote No, and he did so, saying: "After studying the controversial provisions and after hearing from many in the Fifth District, I concluded that the detainee provisions in the bill did not provide clear and unambiguous protection of the constitutional rights of American citizens. For this reason, I opposed the bill on final passage." charlottesvillepeace.org/node/2635Groups from across the political spectrum, including the Bill of Rights Defense Committee, urged passage of a bill in Virginia's state legislature to nullify the new provisions. charlottesvillepeace.org/node/2692 Both houses have now passed the bill by veto-proof margins. leg1.state.va.us/cgi-bin/legp504.exe?121+sum+HB1160 Here's what the bill (House bill 1160) says: Be it enacted by the General Assembly of Virginia: 1. § 1. Notwithstanding any contrary provision of law, no agency of the Commonwealth as defined in § 8.01-385 of the Code of Virginia, political subdivision of the Commonwealth as defined in § 8.01-385 of the Code of Virginia, employee of either acting in his official capacity, or member of the Virginia National Guard or Virginia Defense Force, when such a member is serving in the Virginia National Guard or the Virginia Defense Force on official state duty, shall aid an agency of the armed forces of the United States in the conduct of the investigation, prosecution, or detention of any citizen pursuant to 50 U.S.C. § 1541 as provided by the National Defense Authorization Act for Fiscal Year 2012 (P.L. 112-18, § 1021) if such aid would place any state agency, political subdivision, employee of such state agency or political subdivision, or aforementioned member of the Virginia National Guard or the Virginia Defense Force in violation of the United States Constitution, the Constitution of Virginia, and provision of the Code of Virginia, any act of the General Assembly, or any regulation of the Virginia Administrative Code. leg1.state.va.us/cgi-bin/legp504.exe?121+ful+HB1160H1 The bill’s primary sponsor, Delegate Bob Marshall, said: "During World War II, the federal government incarcerated tens of thousands of loyal Japanese Americans in the name of national security. By this bill, Virginia declares that it will not participate in similar modern-day efforts. Even President Obama had questions about the bill, when he promised the American people that he would not use the unrestrained powers it granted him — but why should we trust any President with such powers? There are moments in our history when our liberties hang in the balance. This is one of those moments. I urge the Senate...to lead the way in the nation to ensure that Virginia will not cooperate when the Federal Government strays off the reservation with laws that take away the civil liberties of our citizens." tenthamendmentcenter.com/2012/02/28/ndaa-nullification-passes-virginia-senate-by-a-veto-proof-39-1-vote/ Presumably the phrase "strays off the reservation" was used with intended irony. In any event, Delegate Marshall got this one right. Obama had insisted on being given these powers and then bizarrely promised not to use them, or at least not to use them in certain ways. According to Obama's promise in his signing statement, he will choose not to imprison us through the military. Our lawless imprisonments, if non-military, will comply with his promise and his law, but not with the U.S. Constitution. And Virginia will not assist. I can't recall the last time a state or federal government claiming to represent me did something that made me feel more, rather than less, safe. Predictably, this surprise came from Virginia's normally medieval legislature before anything of the sort has emerged from war-warped Washington. Here's some background on where this issue came from, last December: davidswanson.org/node/3508 These were among the complaints registered the last time this nation had a king: "He has refused his Assent to Laws, the most wholesome and necessary for the public good. "He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them. "He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers. "He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance. "He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures. "He has affected to render the Military independent of and superior to the Civil power. "He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: "For Quartering large bodies of armed troops among us: "For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States: "For depriving us in many cases, of the benefits of Trial by Jury: "For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments: "He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation." To prevent the U.S. government from behaving like a king, the drafters of the U.S. Constitution empowered an elected legislature to write every law, to declare every war, and to remove its executive from office. To further prevent the abuse of individuals' rights, those authors wrote into the Constitution, even prior to the Bill of Rights, the right to habeas corpus and the right never to be punished for treason unless convicted in an open court on the testimony of at least two witnesses to an overt act of war or assistance of an enemy. President Barack Obama waited until New Year's Eve to take an action that I suspect he wanted his willfully deluded followers to have a good excuse not to notice. On that day, Obama issued an unconstitutional signing statement rewriting a law as he signed it into law, a practice that candidate Obama had rightly condemned. The law that Obama was signing was the most direct assault yet seen on the basic structure of self-governance and human rights that once made all the endless U.S. shouting of "We're number one!" significantly less ludicrous. The National Defense Authorization Act is not a leap from democracy to tyranny, but it is another major step on a steady and accelerating decade-long march toward a police-and-war state. President Obama has claimed the power to imprison people without a trial since his earliest months in office. He spoke in front of the Constitution in the National Archives while gutting our founding document in 2009. President Obama has claimed the power to torture "if needed," issued an executive order claiming the power of imprisonment without trial, exercised that power on a massive scale at Bagram, and claimed and exercised the power to assassinate U.S. citizens. Obama routinely kills people with unmanned drones. The bill just signed into law, as sent to the President, said this: "Nothing in this section is intended to limit or expand the authority of the President or the scope of the Authorization for Use of Military Force." In other words, Congress was giving its stamp of approval to the unconstitutional outrages already claimed by the President. But then, why create a new law at all? Well, because some outrages are more equal than others, and Congress had chosen to specify some of those and in fact to expand some of them. For example: "Congress affirms that the authority of the President to use all necessary and appropriate force pursuant to the Authorization for Use of Military Force (Public Law 107-40) includes the authority for the Armed Forces of the United States to detain covered persons (as defined in subsection (b)) pending disposition under the law of war." And this: "The disposition of a person under the law of war as described in subsection (a) may include the following: (1) Detention under the law of war without trial until the end of the hostilities authorized by the Authorization for Use of Military Force." Jon Stewart explained when those detained without trial under the law might be released: "So when the war on terror ends, and terror surrenders and is no longer available as a human emotion, you are free to go." An exception for U.S. legal residents and citizens was kept out of the bill at President Obama's request. So why did Obama threaten to veto the bill initially and again after it passed the Senate? Well, one change made by the conference committee was this (note the crossed-through text): "The Secretary of Defense President may, in consultation with the Secretary of State and the Director of National Intelligence, waive the requirement of paragraph (1) if the Secretary President submits to Congress a certification in writing that such a waiver is in the national security interests of the United States." The reference here is to military tribunals. The President — that is, the current one and future ones — need not hand someone over even to a military tribunal if . . . well, if he (or she) chooses not to. That was the most power Obama could have transferred to the White House in this bill. But it was not absolute power, and was therefore not good enough. Hence the signing statement, the relevant portion of which begins: "Moving forward, my Administration will interpret and implement the provisions described below in a manner that best preserves the flexibility on which our safety depends and upholds the values on which this country was founded." This is Bush-Cheneyspeak for "I will not comply with the following sections of this law despite signing it into law." After having persuaded the Congress to remove an exception for U.S. legal residents, Obama has the nerve in the signing statement to assert, not that the law makes any such exception, but that he personally will choose to do so, at least for U.S. citizens. Future presidents may lock U.S. citizens up without trials, but Obama won't do so. He promises: "I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens. Indeed, I believe that doing so would break with our most important traditions and values as a Nation. My Administration will interpret section 1021 in a manner that ensures that any detention it authorizes complies with the Constitution, the laws of war, and all other applicable law." The first two sentences above are highly unusual if not unprecedented. Most, if not all, of Bush and Obama's law-altering signing statements up to this point have not sought to clarify what a particular administration would choose to do. Rather, they have focused on declaring parts of the laws invalid. Usually this is done in a manner misleadingly similar to the third sentence above. By claiming the power to interpret a law in line with the Constitution, Bush and Obama have each on numerous occasions asserted the view that the Constitution grants presidents far-reaching powers that cannot be restricted by legislation. If Obama had wanted to deny that this law could be applied to U.S. citizens (or legal residents), the above paragraph would look very different, although equally unusual in that it would then be rejecting power rather than claiming it. Also note, as Marcy Wheeler has already pointed out, Section 1021 applies to any detention, and Obama promises only not to subject U.S. citizens to indefinite military detention. While locked away forever without a trial you'll be able to take comfort that yours is a non-military imprisonment. Also, remember that Obama claims and exercises the power to kill U.S. citizens or anyone else (arguably at least as serious a violation of rights as imprisonment!), and for that he will use the military if he sees fit, or even allow the military to operate freely. Also notice that legal residents are not included in the category of citizens. Next, Obama declares Section 1022 on military custody "ill-conceived." His personal right to a waiver, won through the conference committee, was not enough. Obama insists on also erasing this section of law: "I reject," he writes, "any approach that would mandate military custody where law enforcement provides the best method of incapacitating a terrorist threat. While section 1022 is unnecessary and has the potential to create uncertainty, I have signed the bill because I believe that this section can be interpreted and applied in a manner that avoids undue harm to our current operations. I have concluded that section 1022 provides the minimally acceptable amount of flexibility to protect national security. Specifically, I have signed this bill on the understanding that section 1022 provides the executive branch with broad authority to determine how best to implement it, and with the full and unencumbered ability to waive any military custody requirement, including the option of waiving appropriate categories of cases when doing so is in the national security interests of the United States. ... I will therefore interpret and implement section 1022 in the manner that best preserves the same flexible approach that has served us so well for the past 3 years and that protects the ability of law enforcement professionals to obtain the evidence and cooperation they need to protect the Nation." Obama goes on to reject several other sections of the law, including restrictions on his unlimited power to rendition prisoners to other countries. Among the notable rejections is this: "Sections 1023-1025 needlessly interfere with the executive branch's processes for reviewing the status of detainees. Going forward, consistent with congressional intent as detailed in the Conference Report, my Administration will interpret section 1024 as granting the Secretary of Defense broad discretion to determine what detainee status determinations in Afghanistan are subject to the requirements of this section." In other words, U.S. prisoners held in Afghanistan will not be given even any formal pretense of a legalistic review of their status unless Obama and his Secretary of "Defense" see fit. I've just been editing a forthcoming book in which one of the contributors writes: "In 1971, Congress passed the Anti-Detention Act, 18 U.S.C. § 4001(a), which states that "no person shall be imprisoned or otherwise detained by the United States except pursuant to an Act of Congress." Fred Koramatsu, who had brought the unsuccessful case before the Supreme Court, was eventually awarded the Medal of Freedom. Congress apologized and provided for limited reparations for this heinous act." The author is referring to the unconstitutional indefinite detention of Japanese and Japanese-Americans during World War II. This type of criminal abuse for which Congress had to apologize and pay reparations, and for which there is a misleadingly pro-war-looking memorial hidden between the U.S. Capitol and Union Station, has now been effectively sanctioned by our Constitutional Scholar in Chief. My chief regret is that we have not seen the major resistance we could have, and without any doubt would have, seen to this if only Obama were a Republican. URL of this article: www.globalresearch.ca/index.php?context=va&aid=29546
|
|
|
|
Post by pman35 on Apr 17, 2012 17:10:15 GMT -7
Book Download Portal Taken Down
Added: Tuesday, April 17th, 2012
Category: Recent Headlines Involving File Sharing > Current Events
Tags:ET, p2p, Torrent, Piracy, Peer To Peer, Network, Hackers, Internet, BitTorrent, Google, utorrent, bitcomet, extratorrent, 2010,
Library.nu, a real knowledge “Mecca” for millions of Internet users, was taken offline under the copyright protection shield. This event made industry observers to take an extensive view on the file-sharing phenomenon.
Library.nu-Taken-Down.-Debates-Over-File-Sharing-Combust.png
Nishant Shah has recently published an article to discuss the effect anti-piracy legislation can have on the frivolous organism of the web. It was the story about the shut-down of Library.nu, a real “Mecca” for people thriving on reading books. This non-commercial online service used to allow people download digital copies of books without adverts or anything else to people who need it.
Indeed, for students across the globe, Library.nu was the place to find books that would otherwise be unavailable in their local shops. However, the website is now closed with an R.I.P. sign on the main page. In fact, this chain of events has started long ago with Napster, and continued to the present day with the pertinacious efforts of closing down the world’s biggest public torrent tracker The Pirate Bay.
The problem is that such terms as intellectual property and copyright violation are sometimes too distorted by some circles, which makes the piracy problem seem more complicated than it really is. For example, Nishant believes that the act of sharing is at the very core of a digital network like Facebook or Twitter, i.e., social network medias working on interaction between users, who share things between each other. In other words, the networks occupied by the users are virtually living organisms, which are sustained with the ability of the members to act within them. Meanwhile, the act of sharing includes various activities: the users can share information about their personal life, relationships, activities, political views, and so on. In addition, people tend to share books that they have read, music and films that made them laugh. As Nishant Shah rightly pointed out, back in the 90’s the musicians used to make money from live performances, not from the albums, because music brings people together.
The Swedish Pirate Party even declared file-sharing a religion, and Nishant Shah seems to share their views. Although many people try to stay away from such words as “religion”, they can’t deny that this has a point. Sharing is a natural thing people do, and the worldwide web is an open “market” for everyone, so why would we change it?
|
|
