The Truth About American History: An Austro-Jeffersonian Perspective

The Alien and Sedition Acts of 1798 had criminalized excessive criticism of government. Jefferson feared it would be used in a partisan way. The Acts violated the Tenth Amendment by encroaching on a state prerogative. Jefferson's moderate response was nullification – drafted in The Kentucky Resolutions of 1798. Undelegated powers were not to be enforced. Madison's Virginia Resolutions said the states had the right and were duty bound to interpose between the federal government and the state's people. A law beyond the Constitution is no law at all. Lecture 1 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

The compact theory holds that self-governing sovereign states have rights to protect themselves, whereas the nationalist theory holds that nullification or secession would be insubordination. Nationalists view states as a single whole with no boundaries and a single aggregated people. The First Continental Congress was an advisory body only creating resolutions, not laws. In 1775 they met again and continued to do so until 1781. They had no powers of coercion. A multiplicity of colonies sent delegates occasionally. Nothing done by this Congress is inconsistent with the idea of separate and sovereign states. “We the people” was originally “We the states”. Lecture 2 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

New England was not in favor of the War of 1812 and it considered seceding, but the death of Hamilton in his duel with Burr destroyed that plan. The idea of secession was more embraced by the Northern than by the Southern states. The War of 1812 involved the harassment of American shipping and the impressment of sailors. Congress seriously considered conscription, but Daniel Webster's speech against conscription killed it. Interposition is emphasized. The Hartford Convention was opposed to the war. Secession sentiment was still alive. It was a reasonable and peaceful way of resolving differences. The issue of a national bank took up much attention in the 1830s. The Supreme Court had declared a national bank to be constitutional. The Fugitive Slave Act turned many Northerners into abolitionists. The Principles of 1798 were going strong throughout these issues. Lecture 3 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

This is a difficult issue. Most of the controversy is from Section One. What exactly does the first sentence mean? If the Fourteenth Amendment was in fact intended to bind the states to the Bill of Rights that the federal government could enforce, then it dramatically increases the police power of the federal government. Woods' instinct is that Berger, not Curtis, is right. Perhaps the 14th Amendment is merely codifying the Civil Rights Act of 1866, e.g. about contracts, travel, property, etc. This would have protected the Amendment from legal challenge. It was interpreted relatively conservatively until the Incorporation Doctrine in 1925. But, the Supreme Court does not have angels on it. Was the Fourteenth Amendment really ratified? Its passage was blemished. Forrest McDonald has concluded that the Fourteenth Amendment was not constitutionally ratified. Woods agrees. The amendment has actually been used for a federal judge to order an increase in property taxes twice. Free services were extended to illegals in California. A racial quota system was called for in universities. In the name of protecting rights, enormous discretionary power has been given to the federal government. Lecture 4 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

The 1920s had difficulties, but the depth of the Great Depression was in 1931. Any theory of boom-bust events must ask why so many entrepreneurs made terrible errors in a cluster. Why do busts hit capital goods industries harder than they do consumer goods industries? The explanatory factor that accounts for both of these empirical facts is this: higher order production is more sensitive to interest rates. Whether the rate is lowered by voluntary actions of private savings or whether it is lowered artificially by the Federal Reserve, businesses see rates coming down and they borrow more. The artificial, fed-generated boom misleads investors into directing resources into higher order goods. We can have more investment in the future by having less consumption in the present. But, the artificial signal encourages both more investment in the future and more consumption in the present, without any additional resources being made available. Furthermore, people's time preferences have not changed. Thus, resources are malinvested when the boom is based on artificial credit stimulation rather than on real private savings. This is the crux of the Austrian Theory of the Business Cycle. Hoover's policies and actions assured the deepening of the depression and were the platforms for most of FDR's New Deal disasters. Measures to prop up wages prevented any clearing of malinvestments. Subsidies and other special programs to farmers precluded normal market forces from shifting some resources out of agriculture, as should have happened. FDR was ignorant of economics. The National Industrial Recovery Act was seen as a “holy thing”. It was found to be unconstitutional. Lecture 5 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

FDR's stated New Deal purpose was to keep work weeks short and to extend minimum wages which were extremely high. But, production is what makes demand possible and what increases purchasing power, not federal mandates. FDR's policies created ceaseless tax increases, suffocating regulations and inane projects like slaughtering animals and destroying crops. WPA money seemed to be spread in areas for political reasons of getting electoral votes. The West got considerably more money. In 1937 FDR schemes to pack the Supreme Court were presented as ways to help the Court. This Court later said that a farmer growing wheat on his own property for his own consumption was part of interstate commerce and subject to federal regulation. The biggest myth is that an economy is helped by war. Did war end the Great Depression? No. War lends a stimulus to certain sectors of the economy, but it is overall destructive of things that are not seen and things that are lost opportunities to civilian producers. Lecture 6 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

The standard tale of labor history in American is largely false. Unions did not cause a rising standard of living. Employers were forbidden to encourage union membership, but they could compel union membership. Lecture 7 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

Up until the 1930s there was freedom of contract between workers and employers by which they could make, accept, or reject any offers of remuneration. With the 1930s comes the idea of exclusive bargaining agents decided upon by a majority of workers, and compulsory to all. It becomes hard to impose injunctions to stop union violence. Massive strikes, dominated by complete strangers, are permitted in this legal order. Morgan Reynolds listed seven distinct ways in which unions imposed costs upon the economy. In an unhampered market workers will tend to do better over time. That is because of business investment in capital goods. This increases the productivity of labor. Lower prices and higher quality result in an increasing standard of living without any coercion or government intervention. Lecture 8 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

No President should leave a citizen in doubt about his person or property. However, this original comforting view is contrasted with more modern theory of the Presidency in which Wilson held the President to be the “unifying force of the country”. He represents no constituency, but the “whole people”. Teddy Roosevelt's political philosophy held three planks: 1) the President uniquely represents the will of the American people; 2) the President can do anything as long as the Constitution does not say he cannot; and 3) the President could issue Executive Orders without consultation, making himself lawmaker (e.g., the Dominican Republic and the coal mine workers' strike). Congress has the power to declare war. The President in an emergency could repel a sudden attack. The President has only two foreign policy rights: the President is Commander in Chief of the armed forces and he has the power to receive foreign ambassadors. The Constitution reflects that the Executive must not be empowered to declare war. Lecture 9 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.

The Mexican War 1846-48 involved unpaid debts to Americans, a desire for West coast territory, and the issue of Texas whose independence was not recognized by Mexico. The Southern boundary was in dispute also. Polk's administration wanted to provoke a Mexican attack. Congress actually censored President Polk for that action. In the 1854, the President acted to protect American lives and property abroad in Nicaragua. American forces burned down every building in Graytown. The U.S. Government defended this action. In the 1890s many Congressmen wanted war with Cuba, but the President did not want it. President McKinley dispatched 5,000 troops to China without Congressional approval to support the Boxers in their rebellion. Under Wilson, the League of Nations caused controversy because it appeared to obligate the United States in every breakout. The President does not have broad discretion at his disposal. But, the modern view is that there are few restraints. The Korean War 1950-53 was the watershed of this idea. Truman committed American forces with no declaration of war by calling it a police action only. Lecture 10 of 10 from Thomas Woods' The Truth About American History: An Austro-Jeffersonian Perspective.