In an insightful article I recently posted, The Paradigm Shift Dilemma by Nelson Hultberg, the author describes an affliction which he mainly attributes to Liberals:

The dilemma is this: Those whose views are being corrected resist the correction quite vigorously because of that human foible we call ego. People do not like to admit that they have lived the bulk of their adult lives subscribing to a serious intellectual error. Thus when a great ideological correction begins, for example, in the field of political-economy, they resort to sophistry in order to defend the older way of looking at things that they have supported for most of their lives. This is because 95 percent of humans, who are past 40 years of age, are no longer seekers of truth; they are seekers of “support for their previous convictions.” This is what makes them feel content in life. Truth, therefore, takes a back seat to protecting their egos and the convictions they have held for several decades.

However, it isn't only Liberals that are no longer seekers of truth, this affliction, or dilemma, affects conservatives as well. Here are some conservative ideas whose “truth” I believe can be challenged.


The idea that 11 million immigrants disobeyed the laws of the United States and jumped illegally to the front of the line to work here is repugnant to many Americans, who feel it is a matter of justice that illegal immigrants be held responsible for breaking the law. Yet, Mitt Romney probably lost the election by declaring that all “illegals” should "self-deport" themselves, go back to their country, and apply for legal immigration status.

Romney’s statement rubbed a lot of people the wrong way, including me. Here’s why. Imagine the industrious individuals who lived in Cuba under total dictatorship. Those who escaped freed themselves from what would have amounted to a living death. They risked their lives to enter the United States and broke not just one law, they broke two. They faced death or prison for trying to escape Cuba and risked being returned to the Cuban authorities by the US. Some Cubans were given legal refugee status if they could prove they would be persecuted if returned to their homeland but many were sent back.

The stakes were very high for Cubans that fled illegally, many died trying to come to America, and many more were captured and deported by US immigration officials and punished severely when returned home. Those that made it here have over the years built lives, businesses, and strong families who treasure freedom. When we talk about giving people "amnesty" we should be talking about giving them amnesty from dictatorship.

The Mexican flight wasn't much different. Those that fled Mexico were fleeing relentless economic stagnation and a nation where murder and beheadings were commonplace. The severed heads of drug lords and their enemies, including the police, were placed on posts as you entered and left towns around the country. Human bodies littered the streets. Mass corruption is the norm there still and the government can expropriate your property and violate your rights as easily as protect them.

Most Mexican citizens illegally crossed the border hoping to find a better life. Many became farm workers, maids, gardeners, cooks, waiters, and mechanics. Others started businesses that flourished. Still, a large contingency of conservatives are livid at these individuals that just wanted to work and prosper. They declare this to be a grave injustice that cannot go without punishment. I agree.

But what crime has been committed and what penalty should be levied for line jumping and not complying with government rules? Under these circumstances, should these crimes be treated as a misdemeanor or a felony? Consider this…if individuals possess natural rights, why must they have permission from the government to work if both parties consent? Is a worker without government permission to work violating someone’s rights, or is it the government doing the violating by interfering with an individual’s natural right to peacefully pursue a living? Certainly the penalty for working, even without permission, should if anything at all be lenient. A starving man that steals bread to feed his family should not be treated the same as a man that commits assault and battery.

Yes, comprehensive immigration reform is necessary, and perhaps republican leaders like Mark Rubio will help resolve this issue in a just way. Ironically, the next big threat to this nation may be reverse immigration. There are clear signs that Cuba is opening up and Mexico’s economy is now doing better than ours, with workers and capital from all over the world now pouring in. What will happen if most of those farm workers, maids, gardeners, cooks, waiters, mechanics, and business owners decided to go home? Who would replace them, and what would happen to the standard of living in America? Who would be there to help and service all those jobs we can't or won't do? Perhaps it's time to rethink the long held view by republicans that illegal immigrants are our enemies.

God and abortion

In this nation we have established the separation of church and state as one of our most sacred institutions. Having seen firsthand what the church could do if given government power, our founding fathers decreed all men free to worship and believe as they wished—or not. They insisted that we must not impose our morality or beliefs or values and goals on others.

Today this nation is split on the subject of abortion as it has been for decades. The fact that abortion is a republican issue and women's choice is a democratic issue should not even be in the realm of politics. It should be, as our founding fathers stated, a personal matter. There is nothing wrong with trying to convince others of your views and your morality. What cannot be tolerated however is the use of force to impose your views and morality on others. That doesn't fly in a free society.

The various religions and their varied concepts of God and differing views on morality are part of the diversity that exists in this country. There is conflict, yet we live together despite our differences. Christians, Atheists, Muslims and Jews all live singularly as "Americans." No other country in the world enjoys such diversity and freedom as does the US.

Yet abortion remains perhaps the most divisive issue among us. The reason is "belief.” Our Founding Fathers believed in the sanctity of life. But they did not write any law that outlawed abortion. The sanctity of life resided with an individual. They may have considered abortion immoral, but like all other immorality, they refused to legislate their morality on others. It's time for republicans to stop telling other people what to believe in and how to live their lives. If they want to claim abortion is murder, then let them prove their claims in a court of law. Let them prove it with scientific evidence and the rules of evidence demanded by the American justice system.

In the last analysis the subject of abortion should be stricken from both democrat and republican political platforms and be debated among individuals, scientists, and theologians outside the political arena. Meanwhile it is a woman's right to decide whether to bring a fetus to term or not.

The "war on drugs"

I remember the fall of the Soviet Union. I remember an old man being freely interviewed in the new Russia. He said, "All my life I fought for communism. I believed it would bring prosperity and justice. Now that I am old I look back and realize that I have sacrificed my life. I have only seen stagnation and injustice and now my life is over."

Much the same can be said of the war on drugs. It is finally becoming blatantly obvious that after 50 years of waging a war on drugs, the war has been lost. Billions of dollars have been squandered, and billions of man hours have been wasted pursuing a dream that never came close to being realized. The drug problem is a medical problem not a legal one.

Once again government tried to legislate morality on society. The hypocrisy of alcohol being allowed while other drugs are illegal, and even criminal, is too much even for many conservatives. I remember when Bill Buckley and Milton Fiedman changed their minds and their political stance on this subject and declared that all drugs should be made legal. A paradigm shift occurred then and is still in the making on this issue and the money and effort it will save to say nothing of the cost of imprisoning people for a victimless crime and the subsequent savings to taxpayers should finally put this issue to rest.

The pledge to not raise taxes

The only pledge I suggest republicans should ever make again is a pledge to never make pledges. What if we are attacked? Would we not need to raise taxes? What if we need to withdraw money out of society quickly to prevent hyper inflation? Taxation is a means of reducing money in circulation quickly. What if a natural disaster hit more devastating than any we have ever had? What if interest rates rose steeply? If interest rates simply return to normal, the interest on the national debt will increase 500 billion dollars! That makes the present 85 billion through sequestration that president Obama says will cause “dire consequences” look like chump change. Where will the money come from to pay the higher interest which will inevitably come which ever economic road we take? By law it has to come from the taxpayer. The pledge that all debts are backed by “The Full Faith and Credit” of the United States places the US taxpayer squarely on the hook for emergency revenues.

A pledge to never raise taxes is naïve bordering on absurd. Yet, almost all republicans have taken the pledge. When you spend more than you have--someone has to pay the bill. After all, isn’t it conservatives who are fond of saying, “There’s no such thing as a free lunch?” Yet most republicans have pledged that no matter how much money they vote to spend, they will not have to pay for it. They don’t want to raise taxes and they don’t want to borrow more money and yet they continue to increase spending. Once again, here is a notion that needs to be rethought and rejected.  Sometimes raising taxes on all of society is the only way of teaching society that there is a cost for what they want.


Most conservatives believe in monetarism. It is mainly because of Milton Friedman's war against the Fed during the seventies. Like millions of Americans at that time I loved the passionate defense of freedom and capitalism made by Friedman. His clear and simple way of explaining the principles of economics formed much of my writing style and passion for the subject today. Yet I must disagree with his monetary theory.

I won’t go into it again here since it is abundant in my commentaries and in my book but let me say that the misunderstanding of monetarism versus von Mises’ Subjective Theory of Value is at the root of the hatred of the Fed and misguided predictions of gloom and doom. I can’t count the times I have heard over the last many years that the dollar will crash and we will have hyper-inflation or massive deflation or that interest rates will soar and bring on a devastating depression. All of these predictions, most put forth by conservatives, have been proven wrong. Yet we continue to hear, "Just wait…” It is to no individuals interest to hold wrong ideas in their head especially when they are being contradicted by reality year after year.

The first time I bought into these arguments was in 1968 when I read "Death of the Dollar." It took me a long time to understand why what seemed so evident in that book was incorrect. The context had changed, and so had the policies from the sixties to the eighties. The economic and monetary policies of the eighties were not based on either Keynesianism or monetarism. It was based on classical economics which fostered growth through time tested free market principles. It worked. But many conservatives would just not let go of their flawed monetarist views. And to this day they claim that after five years of the most expansive monetary policy in the history of this country, it is just a matter of time for inflation to roar and bring on a collapse of the monetary system and the economy.

I say check your premises. See my many articles, including, Why Prices Are Not Skyrocketing, Bumper Sticker Economics, and In Defense of Alan Greenspan in the commentary section here. Also see my Seeking Alpha commentary, Why is the price of Gold Falling.

The Fed

Once again, let me say I have covered this subject at length, and you will find a series of articles on central banks and Fed policy in my commentary section here. But let me discuss some points I haven't covered in the past. Milton Friedman's ideas were adopted by the republican party, and are used to this day vilify the Federal Reserve System and its ability to cause inflation. However, Republicans neglect to mention that Friedman advocated just such a system. Specifically, he advocated a fiat system controlled by the Federal Reserve. Friedman did teach that the Fed is responsible for creating inflation and deflation, but what is never talked about is his teachings that they can also stop inflation and deflation. He was never more insistent than with his criticism of the deflationary policies of the Bank of Japan. Here's a quote from an article from the Cato Institute:

Friedman believed central banks are never constrained in their ability to shape nominal values. The only requirement is a desire to do so. Thus, Friedman argued that the Bank of Japan could have removed deflation and stabilized nominal income in the 1990s had it persistently stuck to a higher money growth rate.

For Friedman, worries about “pushing on a string” (because the Bank of Japan had almost reached the zero bound on its policy interest rate during this time) were a red herring. Only a commitment to a higher money growth rate was necessary.

--What Would Milton Friedman Say about Fed Policy Under Bernanke? | David Beckworth, William Ruger | Cato Institute

Does this sound familiar? It is Ben Bernanke’s monetary policy. What conservatives fail to recognize is the FRS can be a force for good or evil. The Fed has the power to cause inflation but it also has the power to prevent it – and to cause or prevent deflation. Milton Friedman's fight with the Fed was not to abolish it but to harness it. Today the hatred of the Fed by most republicans is the most dangerous idea, and if implemented the single thing that could cause a great depression brought on by republican monetary theory. While conservatives warn of monetary and economic Armageddon they advocate the very policies that could lead to it.

Indeed many conservative secretly yen for a collapse. To them such a collapse would prove them right. To them collapse is inevitable: "It has to happen." In the name of “morality” they would bring on catastrophe by withdrawing any attempt by the Fed to be a lender of last resort and mitigate a crisis as they have. To them the moral thing is to see individuals wiped out, businesses close, unemployment soar, and the monetary system fail. This is their so-called "moral" economic policy.

The fact is that while most conservatives have a good grasp on fiscal policy and what causes economic prosperity, many have a disastrous view of monetary policy. If what many of them advocate were ever to be implemented it could destroy this nation. What's worse is that while they advocate for these policies in the name of Milton Friedman, Ludwig von Mises and the Austrian School of Economics; they understand none of it.

Gold and the True Believer

When I wrote The New Gold Standard, I did so as an advocate of the gold standard, an investor in gold and gold stocks, and one of the few that understood that a return to a gold standard is not possible today, and in fact would be counterproductive. In no way does this undercut the case for gold as money, but it puts it into proper perspective. You simply cannot have a monetary system of integrity grafted on to an insane and irresponsible fiscal system. You must first have a sound fiscal system before a sound monetary system can follow. It is a matter of context and perspective, and the one thing that almost all gold bugs have in common is a lack of perspective. I wrote the book to offer a vision of what could be and should be, and at the same time dispute the monetary theories of most conservatives.

The main culprit in Hultberg's Paradigm Theory is the "True Believer." We find them in every walk of life, but I must admit that they are most conspicuous as gold bugs. I remember in 1980 when gold was hitting all time highs, the dollar was crashing, interest rates soaring and inflation and unemployment moving inexorably higher. Ronald Reagan was voted in as President and shortly after launched what was dubbed "Reaganomics". It was basically a compilation of classical economic and monetary policies.

As an investment advisor at that time, once I saw where we were going, I wrote a letter urging everyone I knew to sell down their gold and sell out their gold stocks. I urged them to switch their investments to the stock market and wrote that I believed that we were headed for a technological revolution that could rival the industrial revolution and that the market could triple in a decade. All of this came to pass.

But my friends in the gold camp refused to give up on gold. They were true believers. They condemned the Reagan deficits and continued to predict total collapse. Most of them were over forty years old, and as Hultberg pointed out, about 95% of them rationalized Reagonomics away, and held fast to their past theories. Even years after the world changed around them they refused to change as the facts changed. Most endured a twenty year bear market in gold and gold stocks. Investment advisors that were riding high in the seventies disappeared in the eighties. Many went broke and most everyone I knew in the gold community missed the greatest bull market of all time--the practical result of being a true believer.

In conclusion let me say that I know many who read this will disagree with some or all of the views I put forth. But I didn’t write this to convince anyone of my views. Each and every issue I listed above contains contradictions to freedom, individual rights, property rights and historic and scientific evidence. Some of the things conservatives insist on legislating against are victimless crimes; others are minor crimes carrying unjust penalties. Some conservative arguments promote mysticism above the facts of reality and others require blind faith, prejudice, and evasion to rationalize and perpetuate their case.

In my article Why Romney Lost And Where We Go From Here I wrote,

Prosecuting victimless crimes has got to end. It is expensive and it is not for government to make choices and decisions for people. Government’s role is to prevent the use of force against others and to protect individual’s rights and property. A party that seeks to impose its values on others is a party doomed to fail. The republicans of the future need to move towards becoming libertarian fiscal conservatives who respect personal freedom and choice, while demanding fiscal responsibility from their government. If they do not, republicans will become extinct as a major political party.

The Republican Party is split today between conservatives that preach their religious and social values, the Tea Party that is solely concerned with fiscal responsibility and the intrusion of big government, and libertarians who believe in reducing the role of government and protecting individual and property rights.

What is the one thing that unites all republicans? The desire to reduce the power and cost of government! If conservatives can leave their religious and social ideals outside the political spectrum and argue them as individuals to other individuals, rather than seek to legislate them, if they can accept the principle that you cannot legislate morality, and if libertarians can just leave the Fed alone unless and until we have real inflation, then perhaps we can focus on the real issue at hand—reducing the power and cost of government.

This I submit would usher in a new era of libertarian republicanism.

Paul Nathan