In 1839 Abraham Lincoln, a young twenty-eight year old lawyer, was asked by the Young Men’s Lyceum of Springfield, Illinois to address the group on “The Perpetuation of Our Political Institutions”. The result elevated Lincoln’s stature in the growing community and, according to his future law partner William Herndon, made him known for the first time in a much wider area. Lincoln scholars generally consider it to be Lincoln’s first “great” speech. Lincoln’s warning is appropriate to our times of unprecedented powers assumed by different levels of government in the US, especially state governments, in addressing the coronavirus crisis.
In his opening remarks, Lincoln charged his generation with transmitting to the next the civil and religious liberties bequeathed to them by the Founding Fathers. His generation inherited liberties hard won by others. The same can be said of our current generation; i.e., we inherited the benefits of liberty; we did not secure them ourselves. Therefore, Lincoln’s warning of threats to our liberties is as apt today as it was almost two hundred years ago.
In an early stirring paragraph Lincoln said that America could not be conquered militarily in a thousand years. The threat to our political institutions would come, if it did come, from within ourselves. There are two potential sources of this threat. One is mob rule; i.e., the people resorting to acts of violence to redress what they believe to be threats too great to be remedied by the slowly grinding process of legal procedure.
The second threat, and one which Lincoln considered to be a successor to mob rule, was that ambitious men would seize the weakened respect for law as a platform for satisfying their outsized egos. Not content with the daily process of protecting what has already been bequeathed by others, they would promise to make the country anew. According to Lincoln, there is no place in government for the overly ambitious man who desires that his name be transmitted to future generations as were those of the Founding Fathers. America’s political institutions had been gained at huge cost, and all honor should naturally be accorded those who gained them. The maintenance of that hard won and costly legacy afforded no such honors to future generations. Their task was one of maintenance of our liberties. But mob rule weakened respect for the law and opened the door for such dangerous men.
Thus we arrive at America in the year of the coronavirus. Ambitious men seem little bothered and probably are mightily thrilled by the prospect of “combating” the virus and going down in history as heroes. Thus, they have grasped upon the wildly suspect predictions of experts that millions will die worldwide and many hundreds of thousands in the US alone unless our civil liberties are suspended. Ah, what ambitious man could not feel the hand of fate upon his shoulder, beckoning him to assume sweeping powers to close private businesses, restrict public gatherings, prohibit travel, even forbidding citizens from venturing from their own homes? Hang the Constitution! Hang the Bill of Rights! Hand me my special pen to assume sweeping powers over others!
Sadly the people have accepted this infringement of their liberties with few complaints, leading to the conclusion that the US has passed Lincoln’s first stage on the road to permanent loss of our freedoms–disrespect for the law. One cannot point to outbreaks of mob rule, so what has happened to weaken the public’s respect for liberty and due process?
Fifty years ago the US went off the final, weakened link of the dollar to gold, which had limited government’s ability to spend. New projects could be funded only by increasing taxes, cutting some current spending, or increasing borrowing. All three methods had adverse consequences for the public. No one wants his taxes increased. No one wants his current federal boon to end. And increasing debt must always lead to higher interest rates, which would ultimately have a recessionary effect on the economy.
Ending the link to gold appeared to remove these natural barriers to government overspending. Now the government could print dollars out of thin air. The adverse consequences of doing so, higher prices and robbing savers of their retirement dollars’ purchasing power, are masked for some time. When these consequences can no longer be ignored, government lackeys blame others–greedy capitalists, foreign governments, etc.–and government spending continues to grow. Over the years the federal government’s role in the economy has increased immensely both in terms of spending and in terms of regulation. The public, especially the young, has grown to believe that government, and not their own personal efforts, has responsibility and capability for providing a certain quality of life, from universal healthcare to free higher education. The link between personal responsibility and the achievement of one’s goals and dreams has been weakened year by year. In the past several months we have witnessed one presidential candidate after another making outlandish promises to shower the electorate with free (fill in the blank) and even a guaranteed annual income.
The public, especially the so-called millennial generation, fails to understand that money is a medium of exchange that links hard work to economic rewards. Production must precede consumption. Consumption cannot continue for very long without prior production. What appear to be free goods can only be consumption of previously saved production that now forms the capital base of the economy or robbing some of the fruits of their current labors. Do not for one minute believe that any economy can function efficiently for long by following this model, which has grown like a cancer after delinking money to gold.
Last week the government passed a $2.2 trillion “stimulus” bill, which will shower helicopter money on American citizens and certain businesses. As of the end of February 2020, the monetary base was $3.5 trillion. So this massive spending bill will increase the monetary base by sixty-three percent to $5.7 trillion. No one in government understands that printed money does NOT represent real goods and services. Millions of Americans are coercively prevented from working. Allowing them to go back to work is the only stimulus that America needs or that will work. The loss suffered by the coercively mandated shutdowns is a dead weight loss, meaning that it can never be regained. It especially cannot be regained by printing money, which will only cause higher prices and complete disruption of the structure of production within our very complex economy. It may cause our trading partners, who currently hold $5.5 trillion of long term treasury debt to shed themselves of all treasury debt, which could cause hyperinflation along the lines of post WWI Germany.
My friends, Lincoln’s prediction has come true. I end with an exact quote from early in Lincoln’s speech. The emphasis on the last three words is mine.
“As a nation of freemen, we must live through all time, or die by suicide.”
The Goodnight Vienna Audio file