Exclusive Interviews
Dr. Edwin Vieira, Jr. on the Failure of the Public Sector, the Coming Military Crackdown and How to Stop It
By Anthony Wile - January 10, 2010

Introduction: Dr. Vieira holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School). For over thirty-six years he has been a practicing attorney, specializing in cases that raise issues of constitutional law. He has presented numerous cases of import before the Supreme Court and written numerous monographs and articles in scholarly journals. His latest scholarly works are Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2d rev. ed. 2002), a comprehensive study of American monetary law and history viewed from a constitutional perspective, and How to Dethrone the Imperial Judiciary (2004), a study of the problems of irresponsible "judicial supremacy", and how to deal with them. With well known libertarian trader Victor Sperandeo, he is also the co-author (under a nom de plume) of the political novel CRA$HMAKER: A Federal Affaire (2000), a not-so-fictional story of an engineered "crash" of the Federal Reserve System, and the political revolution it causes. He is now working on an extensive project concerned with the constitutional "Militia of the Several States" and "the right of the people to keep and bear Arms."

Daily Bell: Thanks for sitting down with us. Let's get right to it. In your view, what are the most critical domestic problems facing America?

Edwin Vieira Jr.: Two stand out. The foremost problem-because it is the source of, or contributes significantly to, almost every economic difficulty now plaguing this country-is the inherent and ineradicable instability of the present monetary and banking systems centered around the Federal Reserve System.

The second problem derives from the first. It is the ever-accelerating development of a first-class para-militarized police-state apparatus centered around the United States Department of Homeland Security, with its tentacles reaching down into every police force throughout the States and localities. Fundamentally, this apparatus is not, and never was, designed to deal with international "terrorism". If that were its goal, its first task would be absolutely to secure the southern border of the United States, which it has never seriously attempted to do. Rather, it is being set up to deal with what the political-cum-financial Establishment anticipates (and I believe rightly so) will be massive social and political unrest bordering on chaos throughout America when the monetary and banking systems finally implode in the not-so-distant future-surely in hyperinflation, and probably in hyperinflation coupled with a gut-wrenching depression.

Of these two problems, the second is actually the more dangerous. For if (on whatever pretext) this police-state apparatus does succeed in clamping down on America, the likelihood of effecting basic reforms in money, banking, or anything else favorable to the American people will be reduced to something approaching nil, absent a veritable political uprising in this country.

Daily Bell: How can these two problems be solved?

Edwin Vieira Jr.: The problem of money and banking breaks down into two interrelated parts: one economic, the other political.

Economically, the problem lies in the commonly accepted fallacy that debt-whether the private debt of banks or the public debt of governmental treasuries-can function as sound currency over the long term. "Money" is supposed to be the most liquid of all assets-which is why the best moneys have always proven to be the precious metals, silver and gold. "Debt", conversely, is not an asset at all, but is someone's liability, the value of which is contingent upon the debtor's ability and willingness to pay, and often the creditor's ability to force the debtor to pay. The attempt to put into practice the self-contradictory notion that a liability payable in money can be an asset that functions as money-and that the ultimate debtor or surety in this scheme can be a governmental treasury, which usually cannot be compelled to pay in any event-has been tried again and again, in country after country, and failed again and again. For Heaven's sake, it was tried in this country with the Federal Reserve Act of 1913, and only about twenty years later utterly failed with the banking collapse of 1932, Franklin Roosevelt's seizure of the American people's gold, and the ensuing Great Depression that lasted throughout the 1930s! Right now, we are witnessing what will soon prove to be a more catastrophic failure of that same false idea embodied in that same pernicious institution. Apparently, as the old saw has it, "No one ever learns anything from history except that no one ever learns anything from history." Obviously, massive efforts in public education will be necessary to overcome this deplorable level of ignorance.

In our particular case, the problem also appears in a political form, actually dating from well before 1913: namely, the coupling of bank and state, whereby the government empowers private special-interests groups by statute to "manage" the monetary and banking systems-primarily for the economic benefit of those groups, but as well to the political advantage of the public officials, politicians, and political parties that support the system and receive support from it. The Federal Reserve System is such a coupling: the hermaphroditic creature of private enterprise and statute, at once both quasi-private and quasi-public in source, form, and functions.

Daily Bell: We call it mercantilism.

Edwin Vieira Jr.: Strictly speaking, it is a classic example of a corporative-state arrangement in the particular field of banking, exactly parallel to what Benito Mussolini set up throughout the economy of Fascist Italy, and to what Franklin Roosevelt established for all other American industries in the National Industrial Recovery Act of 1933 (until the Supreme Court declared that act unconstitutional in 1935).

The reason for this unholy alliance between bank and state lies in the operation of "debt as currency": namely, that using "debt as currency"-and particularly "debt as currency" that can be paid through the emission of new "debt as currency"-allows for the essentially unlimited redistribution of real wealth from society to the issuers of the currency and their immediate clients.

When the redistribution favors bankers and their clients among private businessmen, it is called "forced savings"-the average America being compelled by the system to lose real wealth so that the bankers and businessmen can employ that wealth in their own speculative ventures. When the redistribution favors bankers and their clients among public officials, it is called "hidden taxation"-the average America being compelled by the system to lose real wealth so that public officials can buy more votes with more governmental spending (with the bankers taking a cut of the proceeds). In both cases, by the system's very design, the financial and political classes always benefit, the masses are always looted.

The truly vicious nature of this scheme, though, is now appearing in all its ugly nakedness in the multi-trillion-dollar bailouts that the financial Establishment is extorting, and will continue to extort, ultimately from the taxpayers and the victims of inflation, on the threat that, without such payoffs, the entire economy will melt down into irremediable chaos.

So, here we see the ultimate practical truth of the matter: Private financial special-interest groups buy politicians; in public office these politicians empower the special-interest groups by statute to manipulate the monetary and banking systems; to the extent that these manipulations succeed, the profits are largely privatized; and to the extent that the manipulations fail, the losses are almost entirely socialized. In either case, the general public is held hostage to the racket, and foots the gargantuan bill for its operation. And the guilty parties escape scot free to steal again, and again, and again.

Daily Bell: So what is to be done?

Edwin Vieira Jr.: In principle, this problem can be solved, if America enforces her Constitution. In practice, implementing such a solution will take no little time and effort, though, because: (i) the Federal Reserve System cannot simply be "abolished" at one fell swoop without generating massive dislocations throughout the markets; and (ii) the necessary reforms cannot arise out of the snake pit of Congress in the foreseeable future. Instead, Americans need to create an alternative constitutional and sound currency-actually consisting of, not simply "backed by", silver and gold-to compete with Federal Reserve Notes in the marketplace.

This step must be taken at the State level, for several reasons. First, it cannot be done through Congress, because Congress is thoroughly in the vampiric embrace of the financial Establishment. Second, the States enjoy the legal authority to adopt an alternative currency-indeed, as the Constitution declares, "No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts". Third, the States' exercise of their legal authority to adopt an alternative currency is constitutionally immune from interference by Congress, as even the Supreme Court has held on more than one occasion. Fourth, the States have a political and legal responsibility to their own citizens to protect the public health, safety, and welfare-which necessitates adopting a sound currency to replace the collapsing Federal Reserve Note before it is too late. And fifth, among the fifty States there must be at least a few in which the political and economic climate is such that State legislators can be convinced to take appropriate action.

Once the experiment has been tried and proven workable in one State, it will quickly spread to others, because no alternative exists, other than supine and stupid acquiescence in the collapse of the Federal Reserve System, with all the dire consequences that will entail.

Daily Bell: We at the Daily Bell are of a free-banking caste, and we often have discussions with what we call Brownians – those who, like Ellen Brown herself, believe that money is the province of the state and that gold and silver are merely commodities until the state stamps them with its authorized mark. We disagree. What do you say?

Edwin Vieira Jr.: The people who believe in "the state theory of money" need to study what the Austrian School of Economics teaches about money, and in particular "the regression theorem" that explains the origin of money. Gold and silver did not become money because some "state" first authorized them as such. Various states throughout history adopted gold and silver as money because markets (particularly in interregional or international trade) were using the precious metals for that purpose. Indeed, that is the explanation for the adoption of the "dollar" (actually, the silver Spanish milled dollar) as the unit of American currency, both under the Articles of Confederation and then explicitly in the Constitution.

More recently, of course, various states, including rogue public officials in the United States, have tried to "demonetize" and then demonize gold and silver in vain attempts to compel free markets to comply with officialdom's generally uneconomic and often blatantly tyrannical political policies. Roosevelt's gold seizure of the 1930s is the pre-eminent example in recent American history.

If gold and silver could function as money only because some state authorized such use, though, there would be no need for states to expend such efforts to "demonetize" the precious metals. Simply withdrawing a state's formal authorization would suffice. So, the veritable war that many states have felt it necessary to wage against specie money, and particularly gold, during most of the Twentieth Century renders rather implausible "the state theory of money".

Daily Bell: Do you believe the current push to audit the Fed will result in success? What would be the result of such an audit in your opinion?

Edwin Vieira Jr.: The Establishment doubtlessly will put up tremendous resistance to a comprehensive audit of the Federal Reserve System, if that audit includes a thoroughgoing investigation and public exposition of the ulterior motives for and untoward consequences of the System's twists and turns in "monetary policy" over the years. I wonder, however, what such an audit would accomplish, and whether it is really necessary. If ten economists examined the System's decisions, they would probably give a dozen different opinions as to what motivated those decisions, and whether the results were good, bad, or indifferent. So the upshot of an audit could be nothing more than confusion twice confounded.

For all the journalistic shortcomings of its aggressively "liberal" perspective, the old expose by William Greider, The Secrets of the Temple: How the Federal Reserve Runs the Country (1987), tells us enough about the motivations and performance of the banking cartel, even without a formal audit, to justify the conclusion that it must be disestablished post haste. Actually, anyone who studies the Federal Reserve Act of 1913-particularly in the context of earlier banking and monetary legislation-should conclude that it always was and remains unworkable and doomed to failure, besides being utterly unconstitutional. So an audit is superfluous. On the other hand, if the results of, or the even demands for, an audit would galvanize public opinion into doing something positive in the area of monetary reform-such as supporting adoption of an alternative currency in the States-it probably would be worth the effort. But that is a very large "if".

Daily Bell: Ugh, that was a terrible book. He catalogues what's wrong for hundreds of pages and then decides having the Fed around is better than the alternative. We think it's central banking in large part that has given the elite the funds to take America down the wrong path, and that the velocity is accelerating – given the creation of Homeland Security, etc.

Edwin Vieira Jr.: In my estimation, dealing with the domestic-police-state-in-the-making is an even more critical concern than dealing with the problems engendered by the Federal Reserve System. This, because the present monetary and banking regime, being nothing more than a confidence game, could implode at any moment, and certainly could collapse before an alternative currency were in operation, thereby plunging the country into the sort of economic, political, and social chaos which would serve as the pretext for the imposition of all-round police-state repression. Therefore, if Americans do not have a plan in place, and very soon, for preventing that repression, everything could be lost.

That is not all. Even the Establishment could be hoist with its own petard. The police state now being elaborated from Washington, D.C., does not consist solely of civilian law-enforcement agencies. Rather, the deep thinkers in the "homeland-security" business are working feverishly to insinuate the Armed Forces into their schemes for nationwide domestic oppression. As a practical matter, this is probably necessary (from their point of view), inasmuch as a general economic, political, and social breakdown would set off eruptions of violent unrest beyond the capabilities of most if not all State and local police departments to put down.

Daily Bell: So you believe that the Establishment realizes how large a divide is growing between "average Joes" and America's elitists?

Edwin Vieira Jr.: Of course. Anyone even randomly surfing the Internet will stumble upon massive evidence of the irreconcilable antagonism and rancor rising at a fever pitch among common Americans against the economic and political "leaders" who have sold them and their country down the river. (Which is one of the main reasons the Establishment is desperate to come up with some rationalization and means to censor the Internet.) The Establishment knows that it stands on shaky ground-and that if it can no longer depend on the good will of the people, it must hope to be able to suppress collective manifestations of their ill will. This will require vast numbers of "boots on the ground". Thus, the ever-mounting emphasis by officials in "homeland-security" agencies on involvement of the Armed Forces in domestic "peacekeeping".

As Richard Weaver observed, though, "ideas have consequences"-and, one might add, particularly stupid ideas very often have extremely bad, albeit unintended consequences. The lesson that history teaches, but that the big brains in Washington apparently have not absorbed, is that once politicians (in any country) have turned to the Armed Forces to control domestic dissent arising out of failed economic and social policies, the Armed Forces quickly conclude that they are able and even entitled to become political powers in their own right. After all, why should the Armed Forces not exercise control over the policies and other decisions civilian officials make concerning the deployment of the Armed Forces, particularly when those officials' incompetence or corruption has brought about the domestic disturbances the Armed Forces are expected to risk their lives to quell? And then why should the Armed Forces themselves not promulgate, or at least oversee, policies on all economic and social matters in the first place? Could they fail any more miserably than have the civilian officials?

Furthermore, here in America, if the Armed Forces are deployed to suppress widespread civil unrest emanating from a major breakdown of the economy that threatens the continued viability of the military-industrial complex, the Brass Hats will have a particularly compelling institutional incentive to maintain themselves in positions of political leadership: namely, securing their reason for being and the source of their importance, power, and benefits. In addition, thoroughly politicized Armed Forces will likely feel the need to justify the expensive existence of the military-industrial complex by inserting themselves into, if not instigating outright, ever-expanding overseas military adventures. Thus, "the war on terror"-in addition to whatever other forms of aggressive imperialism can be fomented, ostensibly to "defend our freedoms" in a "homeland" no longer free-will drag on forever, at untold costs in lives and treasure.

Of course, as has proven true everywhere else, politicized Armed Forces in this country will be unable to solve the underlying economic and social problems that rationalized their politicization in the first place. So America will be wracked with chronic political chaos: token civilian regimes staffed with incompetent puppets and "yes men", followed by new bouts of military string-pulling or outright intervention aimed at cleaning up the last crisis, and so on, along the sorry lines South American republics such as Argentina have followed for generations.

For that reason, people worried simply about the likelihood of hyperinflation, depression, or hyperinflation coupled with depression-and about how they might be able to protect their incomes and accumulated wealth under such circumstances-are viewing their world through rather ill-fitting rose-colored glasses. When hyperinflation or other economic calamities strike, and the Armed Forces are politicized as instruments of domestic repression, merely maintaining his income and securing his accumulated wealth will become matters of very low priority for anyone with high economic, social, or political visibility who has or might run afoul of the regime. So those myopic people who are trying to figure out how they can personally profit from the coming collapse of America's economy had better start thinking instead of how they can contribute to the effort to prevent that collapse, to fend off a police state that collapse will engender, and to return this country to the rule of constitutional law-right now, before time runs out.

Daily Bell: How can a police state be fended off?

Edwin Vieira Jr.: Actually, the constitutional solution for dealing with the emerging police state is even simpler than the solution for dealing with the collapsing Federal Reserve System. Now, I do not believe that, at the present time, the upper echelons of the Officer Corps in America's Armed Forces contain significant numbers of potential Bonapartists. The patriotic sense of "duty, honor, country" doubtlessly still prevails. But this circumstance could change. It has changed in other countries. As the Second Amendment to the Constitution declares, "[a] well regulated Militia" is "necessary to the security of a free State". Not the regular Armed Forces, but "[a] well regulated Militia".

"A well regulated Militia" is the only thing the Constitution identifies as "necessary" for any purpose, and the only thing it identifies as serving the specific purpose of "security". So, if Americans want a stable and prosperous economy, they want a free economy (that is, one based on the free market). If Americans want a free economy, they want "a free State", that being the only kind of political system that will support and defend the free market. And if Americans want "a free State", they want "[a] well regulated Militia" in every State. And what is "[a] well regulated Militia"? As Article 13 of Virginia's Declaration of Rights (1776) so aptly put it, "[a] well regulated militia, composed of the body of the people, trained to arms, is the proper, natural, and safe defence of a free state". That is, "[a] well regulated Militia" consists of We the People ourselves-in the final analysis, the only possible guarantors of freedom in a self-governing society.

Moreover, for all of these reasons, the members of the Armed Forces-all of whom take an oath to support the Constitution-should want "[a] well regulated Militia" in every State, too. Unfortunately, "[a] well regulated Militia", fully formed and operated according to proper constitutional principles, does not exist in even a single State today. (No, Virginia, the National Guard is not, never was, and cannot be the Militia.) So a great deal of work remains to be done in this area, as well.

Daily Bell: If these problems could be solved by application of the Constitution, then why did the Constitution not prevent them from arising in the first place? Has not the Constitution proven itself ineffective?

Edwin Vieira Jr.: We have had the benefit of the Ten Commandments since the days of Moses; but has their mere existence prevented all, or even most, sinful behavior? No. Whose fault has that been? God's or the sinners'? And shall we now blame the Ten Commandments-or worse, jettison them entirely-because some, even many, individuals continue to murder, to steal, and so on, whether in public office or private occupation?

The same reasoning applies to the Constitution. The Constitution is a set of instructions for running a complex political machine. This machine has as workmanlike a design as political science has ever recorded throughout the ages; and the instructions for its operation are concise and clear. So if, from time to time, the operators of the machine, through incompetence or malevolence, fail or refuse to follow those instructions, with deleterious results, does the fault lie with the instructions or the operators? Now, at one level, the operators of the constitutional machine are public officials. But they are subject to control by a higher level of operators: We the People, the selfsame We the People who (as its Preamble attests) "ordained and established th[e] Constitution" in the first place. So, if compliance with the Constitution's instructions has not been had, then ultimately We the People, not the Constitution, are to blame. Which is very fortunate, because We the People are in an unique position to do something about this situation.

We the People are the voters who select legislative, executive, and some judicial officers for government at every level of the federal system. We the People are in actual physical possession of most of the valuable property in this country. We the People constitute the Militia, which imposes upon us the direct responsibility to maintain "the security of a free State". And, with a little organization pursuant to statutes enacted in the States, We the People can effectively enforce Nancy Reagan's dictum: to "just say NO!" to further economic and political incompetence, corruption, and downright oppression in this country, emanating from Washington, D.C., New York City, or anywhere else.

Daily Bell: But is not the Supreme Court the final legal authority on what the Constitution means, and therefore legally superior to the people?

Edwin Vieira Jr.: Balderdash. A judicial opinion about the Constitution is precisely that, and no more: just an opinion of some fallible human beings who happened to occupy the Bench at that time. It may be correct-or it may be incorrect. The Supreme Court does not determine what the Constitution means; rather, the Constitution determines whether a decision of the Supreme Court is right or wrong. Even the Supreme Court has recognized that "[t]he power to enact carries with it final authority to declare the meaning of the legislation". Propper v. Clark, 337 U.S. 472, 484 (1949). And We the People-not "we the judges"-enacted the Constitution. It is our supreme law, not theirs.

We are the principals, they merely our agents. So we are the ultimate interpreters of the Constitution, and the ultimate judges of whether public officials are complying with it. As Sir William Blackstone, the Founding Fathers' primary legal mentor, observed: "whenever a question arises between the society at large and any magistrate vested with powers originally delegated by that society, it must be decided by the voice of the society itself: there is not upon earth any other tribunal to resort to". Commentaries on the Laws of England (1771-1773), Volume 1, at 212. Any self-governing people should know as much without being reminded. One can only hope that the present economic crisis will focus people's minds on this basic truth to a degree sufficient to make a difference.

Daily Bell: Thank you for this interview.

Edwin Vieira Jr.: It was my pleasure.

After Thoughts

It is interesting to interview someone so honest and informed as Dr. Vieira because one is exposed to a verity of human intelligence – the smarter the individual the clearer the vision. Speak to someone who is less well versed in the history of human legislative interaction and you will get all sorts of ideas spouting forth like firecrackers – and often none of it means much. The noise is random and the thoughts sparkle and trail off like sparklers, then die. But Dr. Vieira understands the basic thrust of what is going on and has a clear idea of where it's headed and what to do about it.

The interview speaks for itself. But to summarize – reading slightly between the lines – Dr. Vieira seems fairly certain that there will be some sort of social upheaval in America as a result of the economic and military forces now in play. He seems to believe that this could, to begin with, result in some sort of Latin-American style junta (they are familiar to Europe, too) and obviously believes the only way to avoid such a catastrophe is for "the people" to take back Constitutional rights.

In fact, this perspective is shared by many American libertarians with greater or lesser degrees of urgency. Certainly, there has never in our experience been the level of vituperation that one now witnesses on chat boards and in feedbacks whenever government programs and policies are mentioned. George Bush with his incessant meretricious spending, endless warring and ongoing endorsement of the regulatory state ended his time in office literally unable to speak anywhere except at military graduations. President Obama is rapidly approaching a point where he will not be warmly welcomed either in most American enclaves – and will likely have to restrict his speechifying to television.

And what then? Are the Republicans going to elect another compassionate conservative like George Bush? No, after three Internet presidencies we expect a tidal wave of support for a libertarian conservative. We know Sarah Palin is being groomed to take advantage of this wave, but as a proponent of the military police state and Homeland Security, we wonder if the contradiction in terms will not prove too much for her. And even if she is elected, or some like her who pays lip service to libertarian ideals, it will not paper over the growing divide in America between those who wish for freedom and those who espouse its cause (ludicrously) within the context of an activist IRS, a central bank, a domestic surveillance apparatus and a global, warlike military.

The point is, as Vieira notes, the sociopolitical consensus holding America together is falling to pieces. The political process is gradually grinding to a halt. It offers no answers. Obama's "change" is uniting his nation, but not in a way that the power elite might hope. People are increasingly aware of sociopolitical alternatives. Of course, we attribute this directly to the Internet and also to the difficulty that the power elite has had in creating war mobilization – the usual method of dealing with social disaffection and economic crises. The situation from our perspective is analogous to the inexplicable 30-year pan-European peasant war that somehow broke out – mysteriously – when the Gutenberg press began to erode the credibility of that era's power elite.

The Internet itself and the difficulty in creating a world war without an implacable enemy and within a nuclear environment has made the power elite's task far more difficult. There is a war going on, but it is not a very satisfactory one and the enemy keeps changing, as do the battle fronts. This is giving rise to skepticism, so much so that we wonder for how long such a war can continue as a viable promotion. From a power-elite perspective, it may eventually tend to cause more problems than it solves.

Vieira proposes that there may be increased civil unrest in America and Europe, leading up to a potential military takeover. In fact, in Europe we believe it has already started. And yet … we are in favor of Vieira's alternative scenario – that civil unrest need not lead to endless martial law and South American-style banana republics.

The hallmark of a promotion is that it ignores factual reality, so we anticipate all these promotions and more will continue to progress legislatively. But as we have pointed out before, authoritarian implementation of such promotions does the power elite little good. Without a "buy in" a promotion is merely an enforcement. The populace may be cowed, but the resentment burns. It is certainly possible to keep billions cowed by fear (that's what the promotions are all about), but if the fear is merely administrative, then the danger to the power elite increases dramatically. You end up with a dictatorship. Dictators are targets.

The power elite for the most part stepped away from direct leadership hundreds of years ago. It was too dangerous. But now the Internet has exposed the leadership all over again. This is not a tolerable position for a handful of extraordinarily powerful people to be in. They will have to do something other than business as usual. Right now they are moving forward with an almost incomprehensible haste. But one might speculate they are still in denial. With acceptance will come an understanding that the timeline will have to be recalibrated.

Vieira is correct that Americans can take their Constitution back. One of the obstacles is fear, but fear erodes as the Internet educates and certain fear-mongering websites lose their grip. In fact, there are no more George Orwells for the power elite to promote. A British socialist spymaster who told us just what the power elite had in store (in order to make us cringe in fear), his narrative is beginning to seem outdated as reality overtakes prognostication.

Repetition, Internet-style, breeds familiarity – and familiarity breeds contempt. The dominant social themes and accompanying memes will not stick in such an environment. Mass martial law descending on hundreds of millions, or billions, is simply not feasible long term. Even "soft" martial law is a difficult environment to maintain long-term. The USSR's leaders found it out. The Chinese know it, and are troubled by it.

It took the Gutenberg press a full century to do its damage, but the Internet may only take 25 or 30 years. And the result may well be something entirely unexpected – not the gulags and martial suppression of the USSR (as predicted by Orwell and certain suspicious, perfervid ‘Net outlets) – but something more exciting and life-affirming.

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