Russomanno For Congress

There exists a better way to govern, but your local despot isn't willing to give up his turn at the trough to make it happen. Decentralization is an institutional technology for producing better governance, and history proves it. Switzerland offers the clearest running experiment. The Swiss canton system, which predates the 1848 federal constitution by centuries, gave each canton genuine fiscal and legal autonomy. Cantons compete. Appenzell Innerrhoden ran its affairs differently from Zurich, and both had to live with the consequences of their own choices. Tax policy, spending, local regulation: all accountable to populations small enough to hold officials personally responsible. When a canton governor failed, residents noticed immediately. Exit was real and cheap. Cross the border, pay lower taxes, keep your capital. That threat disciplines governments in a way that no constitutional clause ever manages. Pre-unification Germany made the same point, often uncomfortably for German nationalists. The patchwork of hundreds of principalities, free cities, and minor kingdoms that made up the Holy Roman Empire and later the German Confederation produced fierce jurisdictional competition. Hamburg grew wealthy as a free city because it kept commercial law light and bureaucratic interference minimal. Frankfurt became the financial center of continental Europe for the same reason. Bismarck's 1871 unification consolidated power upward and, within a generation, Berlin was micromanaging what Hamburg had run perfectly well on its own. Smaller jurisdictions cannot hide fiscal failure behind monetary expansion or transfers from distant taxpayers. A canton that overspends runs visibly short. A German principality that harassed merchants watched them relocate. The feedback loop is tight and fast. Large centralized states break that loop. Washington, Brussels, and Berlin all collect taxes from populations too dispersed and too diverse to coordinate effective pushback. The spending continues, and the bureaucracy expands, insulated from consequence. You end up paying the price of centralization every time a uniform federal regulation destroys a local arrangement that worked. The canton system worked because Appenzell could not impose its preferences on Zurich. Brussels hasn't learned that lesson yet, and Europeans are paying the tuition.

Mises obliterated the entire socialist project in 1920 with one devastating insight: "Where there is no free market, there is no pricing mechanism; without a pricing mechanism, there is no economic calculation." The socialists spent the next century pretending this problem didn't exist while their economies collapsed around them. And yet here we are, watching politicians promise they can "fix" healthcare, housing, and energy markets through central planning. They can't even calculate the cost of their own programs correctly — how exactly are they going to allocate resources across an entire economy? Every Venezuelan breadline, every Soviet grain shortage, every Chinese famine was just Mises being proven right in the most brutal way possible. But sure, let's try democratic socialism this time. What could go wrong?

A short history of the current monetary system. In 1907, a liquidity panic froze New York's credit markets. J.P. Morgan personally organized a private bailout, which worked, but the banking cartel used the crisis as a prop. They needed a lender of last resort, meaning they needed someone else to absorb their losses. Congress gave them the Federal Reserve in 1913, a central bank dressed up in public interest language that was written largely by the bankers it was supposed to supervise. Then came the war. World War One gave European governments the excuse to suspend gold convertibility and print the money the fighting required. The Fed expanded credit aggressively to finance U.S. war bonds. That expansion did not vanish after the Armistice; it metastasized into the credit bubble of the 1920s. When the bubble collapsed in 1929, the Fed tightened into the contraction and turned a sharp recession into a catastrophe. By 1933, Roosevelt made it permanent, criminalizing private gold ownership under Executive Order 6102 and confiscating metal at $20.67 per ounce before revaluing it to $35. Citizens lost roughly 41% of their gold's purchasing power overnight by order of their own government. World War Two completed the centralization. At Bretton Woods in 1944, the dollar became the world's reserve currency, technically convertible to gold at $35 per ounce for foreign governments only. The U.S. now had the exorbitant privilege of printing the reserve currency, and it spent accordingly, running guns, soldiers, and welfare programs on paper promises. By the late 1960s, France noticed the gap between printed dollars and actual gold and started converting. Nixon stopped this by closing the gold window on August 15, 1971. Pure fiat with no anchor whatsoever. The last thread snapped without a vote, without a constitutional amendment, by executive press conference on a Sunday evening. The 2008 crisis showed what fiat enables at scale: the Fed created $1.3 trillion in new reserves between September and December 2008 alone to rescue institutions that had bet recklessly. In 2020, the Fed expanded its balance sheet by over $3 trillion in three months. You paid for that through every price you saw rise in 2021 and 2022. Each crisis produced new powers. Each new power survived the crisis that justified it and became the baseline for the next expansion. On and on we go; where we will stop, no one knows. The only mistake sound-money economists have ever made is underestimating banks' and the Fed's ability to kick the can down the road and come up with new, innovative ways to expand the money supply and steal from citizens.

Income tax is theft. The Sixteenth Amendment passed in 1913 as a wartime revenue measure, sold to Americans as a modest levy on the very wealthy. The top rate sat at 7 percent. Wilson's government promised restraint. That restraint didn't even last a decade. By 1944, the top marginal rate hit 94 percent. Today the federal income tax alone reaches 37 percent at the top bracket, and that figure ignores payroll taxes, state income taxes, and the inflation tax the Federal Reserve quietly runs in parallel. You hand over, depending on your state, somewhere between 40 and 55 cents of every marginal dollar earned. The mechanism is simple: governments never surrender revenue streams voluntarily. What legislators frame as temporary always calcifies into permanent infrastructure, complete with its own bureaucracy (the IRS now employs 90,000 people) and its own enforcement apparatus. Your labor is property. Compulsory extraction of that property at gunpoint is confiscation. Who receives the payment does not change the nature of the transaction.

Keynes gave governments the intellectual permission slip they had always wanted: Spend during recessions, stimulate demand, prime the pump, and prosperity follows. It doesn't work. Ludwig von Mises explained exactly why before the ink on the General Theory dried. The core Keynesian error is treating consumption as the engine of wealth. Keynes fixated on aggregate demand, the total spending flowing through an economy, as the variable governments must manage. Boost it artificially, and you rescue the economy. Production precedes consumption. You cannot spend your way to wealth any more than you can eat your way to a full refrigerator. Government stimulus spending doesn't create resources. It redirects them. When Washington borrows a billion dollars and injects it into infrastructure or green energy, it pulls that capital away from whatever private actors would have funded. The seen benefit (the bridge, the solar panel factory) obscures the unseen cost: the businesses never launched, the technologies never developed, because the capital was conscripted first. Keynes also treated interest rates as a policy lever rather than a price signal. Central banks suppress rates below what the market would set, and businesses respond by launching long-term projects that the actual pool of savings cannot support. Mises called this the business cycle. Cheap credit manufactures a boom built on false signals. When the central bank eventually tightens, the malinvestments collapse. The 2008 housing crash followed this script precisely: a decade of Federal Reserve rate suppression funded mortgages the underlying economy could never sustain. The Keynesian model endures politically because it flatters the powerful. Every recession becomes a reason to spend more, hire more bureaucrats, and expand government reach. Mises simply followed the incentives and found the fraud.

Before the welfare state existed, working-class Americans built their own safety nets, and those nets caught people. Fraternal mutual aid societies like the Odd Fellows, the Sons of Italy, and hundreds of smaller ethnic lodges ran insurance programs throughout the 19th and early 20th centuries. By 1920, roughly one in three adult American males belonged to one. Members paid modest dues, typically $1 to $2 monthly in 1900 dollars, and received sickness benefits, death payments, and access to lodge doctors who charged $1 to $2 per year per family. The Foresters of America covered 900,000 members by 1908. These institutions ran on mutual contracts between people who knew each other; it wasn't charity. Accountability created alignment of incentives. Lodge members had every incentive to verify that sick claims were genuine, because fraudulent payouts drained their own pool. Government bureaucrats face no such incentive. Someone else bears the cost of fraud in their system. The lodge doctor system collapsed because the American Medical Association lobbied state legislatures throughout the 1910s and 1920s to ban contract medicine. Doctors working for lodges earned less than AMA members preferred. The state obliged, eliminated the competition, and left citizens with the fee-for-service monopoly that still strips your paycheck today. Voluntary cooperation built welfare that worked. Politicians dismantled it.