Our “Seditious" Words, Four Years Later

Posted On Dec 31, 2019 By Dave Gonigam

  • The tax protest that today would be labeled a terrorist act…
  • … And inspires The 5 to test the First Amendment’s boundaries
  • Mideast war drums beat louder: U.S. attacks Iran in 2020?
  • Happy New Year: Champagne taxes, state by state
  • Reader writes: Virginia gun control as a test case for tyranny?
  • No socialism for me, says one “lower-middle-class American."

Four years ago today, we published what might still be the most subversive — nay, even seditious — episode of The 5.

It was the last day of 2015, and thus our last opportunity to note the 250th anniversary of a world-changing tax revolt, made in America.

Four years later, it’s worth revisiting the themes we took up that day. We’ll recount the history… recall why it was so relevant in late 2015… and look with trepidation at why it’s even more relevant now.

It was in 1765 the British government tried — and failed — to enforce the Stamp Act on the American Colonists.

Passed by Parliament in March, the Stamp Act imposed a tax on every piece of printed paper — from newspapers to legal documents to playing cards.

The Colonists were accustomed to paying modest taxes (certainly modest by today’s standards), and the tax imposed by the Stamp Act was likewise modest. But the stamp tax was the first aimed at raising revenue and not just regulating trade. And it was the first imposed directly from London, with no input from the Colonial legislatures.

The Colonists were alarmed. “We're talking about people with enormous sensitivity to the dangers of power,” historian Pauline Maier explained in the 1990s PBS series Liberty! “If you conceded the right to Parliament to tax and if there was no check on it, no limit, it could go on indefinitely. You could be bled white. The power to tax was the power to destroy."

The Colonists’ acts of resistance to the Stamp Act were of the sort modern-day politicians would surely label “terrorism.”

In Boston on Aug. 14, they vandalized the home of a stamp distributor — tax collector — named Andrew Oliver. He resigned his post the next day. By the 26th, Colonists trashed the home of Thomas Hutchinson, lieutenant governor of Massachusetts Bay Province. Hutchinson estimated his losses at nearly $250,000 in today’s currency.

The movement spread. In Philadelphia, publisher William Bradford made an addition to the masthead of his Pennsylvania Journal and Weekly Advertiser. Surely someone in the present day would interpret it as a “terroristic threat.”

Stamp

“An emblem of the effects of the STAMP – O! the fatal Stamp”

The Stamp Act was set to take effect on Nov. 1. But by that time, there wasn’t a single stamp distributor left in the Colonies to collect the tax. Parliament bowed to the inevitable and repealed the law in March 1766. But in a fit of pique, Parliament simultaneously passed the Declaratory Act — asserting London’s authority to pass any Colonial legislation it saw fit.

Which it did. The rest, as they say, is history… culminating a decade later in the Declaration of Independence.

At year-end 2015, we speculated the day might come when merely describing this history might be considered incitement to a terrorist act.

For one thing, we said there’s precedent from World War I. Under the 1917 Espionage Act — still on the books today — movie producer Robert Goldstein did three years in prison for a silent film called The Spirit of ’76. Because the film depicted British atrocities during the Revolution, prosecutors thought it undermined public support for the Allied Powers.

Then there was a New York Times article around the time of our musings, with the headline, “ISIS Influence on Web Prompts Second Thoughts on First Amendment.”

Among the people quoted were the Democrats’ eventual nominee for president in 2016: “… we have to deny [ISIS] online space. And this is complicated. You’re going to hear all of the usual complaints, you know, freedom of speech, etc.”

And the Republicans’ eventual nominee: “We have to talk to [internet CEOs] about, maybe in certain areas, closing that internet up in some way. Somebody will say, 'Oh freedom of speech, freedom of speech.' These are foolish people.”

Hillary Trump

As Hillary said in a different context, what difference does it make? [Creepy Photoshoppery posted by Twitter user David Deeble.]

As it happened, the politicos were handed intellectual ammo from the likes of University of Chicago law professor Eric Posner and veteran Obama adviser Cass Sunstein. Both published articles at the time saying it should be OK to curb freedom of speech even when speech does not pose a “clear and present danger.”

That was a sea change: For most of American history — apart from WWI — government has been forbidden to suppress speech even if it advocates violence.

The Supreme Court affirmed this value in a 1969 decision, Brandenburg v. Ohio. Brandenburg was a Ku Klux Klan leader who gave a speech threatening violence against certain government officials. That earned him a conviction under Ohio’s “criminal syndicalism” law. The justices overturned it unanimously.

Explained Glenn Greenwald in a 2011 Salon article: “The Court ruled that ‘except where such advocacy is directed to inciting or producing imminent lawless action’ — meaning conduct such as standing outside someone’s house with an angry mob and urging them to burn the house down that moment — ‘the constitutional guarantees of free speech and free press do not permit a State to forbid or proscribe advocacy of the use of force’ [Greenwald’s emphasis added].”

Key point: While Trump and Hillary and the law professors say they’re concerned about a foreign threat, the means of fighting that threat can always be turned inward. Again, WWI is instructive.

And then, on this day four years ago, we painted this seditious scenario.

Say the Obamacare protests had taken the same trajectory as the Stamp Act protests. (Hey, if the Supreme Court says a fine for failing to buy health insurance is a “tax,” then we’re talking about a tax revolt, right?)

As part of those protests, an email chain starts going around, or maybe a message board thread, suggesting that the homes of certain midlevel IRS bureaucrats in charge of enforcement be vandalized. The emails and messages are scrupulous in saying no one should face bodily harm — that only property destruction is fair game, and only the property of those IRS officials responsible for enforcing the Obamacare penalty/tax.

In addition, the organizers of the campaign decide to put those midlevel IRS agents on notice — if they resign, their property will be spared. (Which was a choice denied to Andrew Oliver in Boston in 1765.)

Under Brandenburg, all of that would be legitimate speech. But for how much longer?

Certainly, given everything that’s happened in the four years since we painted that scenario, it would be enough to get you “de-platformed” from Facebook and Twitter.

But would it be grounds for criminal prosecution?

Depending on the level of political tension in the country next year or the year after that… would it even be safe for me to pose the above as a hypothetical, as I’ve done here today?

Something to think about as we head into 2020 and this “new American civil war” rhetoric gets amped up…

Barring something unusual before day’s end, the major U.S. stock indexes will not close the year at record highs.

At last check… the Dow, the S&P 500 and the Nasdaq are all slightly in the red, adding to yesterday’s losses. But gold is inching up again, the bid now $1,521.

Crude has pulled back to $61.22 despite the renewed beating of Middle East war drums.

We should back up a bit: On Friday, an Iraqi base where U.S. troops are stationed came under attack, and an American contractor was killed. Washington quickly blamed an “Iranian-backed militia” for the attack and carried out airstrikes on Sunday against that militia’s base.

The problem is that whatever support the militia might get from Iran, it’s an integral part of the Iraqi government’s security forces. So Iraq’s majority Shia Muslim population is united in outrage against the U.S. attack, which they see as undermining Iraqi sovereignty.

Today, protesters stormed the compound surrounding the U.S. embassy in Baghdad, burning U.S. flags and shouting, “Death to America!”

Faced with this situation, Donald Trump could have responded one of two ways.

He could have given in to his best impulses, deciding the “ungrateful” Iraqis aren’t worth one more drop of U.S. blood and declaring the 5,000 U.S. troops in Iraq are coming home for good.

Or he could have given in to his worst impulses, blaming everything on Iran. Guess which response he chose…

Donald Trump Tweet

[Long sigh…]

It’s tempting to predict that if the economy goes meaningfully south during the 2020 campaign — unlikely, but certainly possible — Trump will wag the dog and start a war with Iran. But a war would likely shut down the Straits of Hormuz and quickly bring about $4 gasoline. How many fence-sitting voters would line up behind him for that kind of wartime sacrifice?

One more “taxing” matter today — the costs imposed by state governments as you raise a toast to ring in the new year.

The Tax Foundation has put together one of its fine maps after crunching data from the Wine Institute and the Distilled Spirits Council of the United States. The numbers you see here are dollars per gallon…

Tax Foundation Map

Florida is tops at $3.50 per gallon. Lowest in the country is Wisconsin, at just 25 cents. (Drink Wisconsinably!)

“Most states use the same excise tax rates for Champagne and table wine,” says the Tax Foundation’s Janelle Cammenga, “but 14 have higher, alternate rates for sparkling wine.”

Bottoms up…

To the mailbag and a reader’s brief word of warning: “Keep a weather eye on the state of tyranny in the U.S. by following the next month or so in the land of the tyrannical, Virginia.

“This may well portend the future for many.”

The 5: The reader refers to a gun-control showdown that for reasons we can’t quite figure out isn’t huge national news.

In brief: Democrats won control of the Virginia governor’s office and both houses of the legislature last month. They’re wasting no time with new gun-control proposals, including a ban on so-called assault weapons and large-capacity magazines.

In response, more than 100 counties and localities have declared themselves “Second Amendment sanctuaries” — where the local cops theoretically won’t enforce such measures.

In response to that, one state lawmaker says, “The governor may have to nationalize the National Guard to enforce the law.”

In the past, we’ve observed that by and large, contemporary American political leaders know just how far they can push the envelope and still retain the consent of the governed. Virginia could be a dramatic test case as 2020 unfolds, yes…

“I don't like the idea of 'spreading the wealth,’” a reader writes after our recent musings about socialism.

“I am a lower-middle-class American who wishes I would have gotten more education, better jobs for higher pay. I wish I would have been more prudent in how I invested and spent my money. I wish someone would give me a million dollars. In fact, I wish someone would give me $100!

“BUT I DO NOT advocate overly taxing the wealthy. They worked for their money. They made the right choices and they deserve the fruits of their labors. They should never be forced to give any of their money to anyone, including me.

“I have learned to accept the consequences of all the decisions and actions I have taken over the years. Others of lowly circumstances should learn to do the same. I am where I am today as a result of every decision I have ever made and every action I have ever taken. In fact, that's true of everyone.

“I have family members who think I am relatively 'rich' because I can afford to pay my rent, buy nice clothes and travel the world. They can't because of their decisions and actions over their lifetime(s). I help them when I can but I do not feel obligated to do so. I would highly RESENT anyone telling me I had to give them some of my hard-earned money. I suspect the truly wealthy would also RESENT anyone telling them they had to subsidize other people.

“We live in a free country. We can each make our own decisions. Why can't we also learn to live with the consequences of our decisions?

“For the truly needy (through no fault/decision of their own) we have charities and good-hearted people who will willingly share what they have without being forced into it by a socialist-minded government. Socialism will damn us all to poverty — except for the corrupt government officials who will make sure the laws of socialism won't apply to them.

“What we really need in this country is Democracy With Integrity.”

The 5: Hear, hear. But we daresay you’re being a little hard on yourself and at least some of your peers.

What cost a dollar in 1971 — when Nixon cut the dollar’s last tie to gold — now costs $6.32. And that’s using the official government numbers, which are surely understated. Incomes have not kept pace with that rising cost of living.

The “three Hs” as we called them a decade ago — housing, health care and higher education — have grown staggeringly unaffordable compared with 50 years ago. And it’s government involvement in each of those sectors that’s driven these wild distortions.

The new money the Federal Reserve showered down on the economy after 2008 fell mostly on the wealthiest 0.1% — concentrated on Washington, Wall Street and Silicon Valley. (Please don’t try to tell us WeWork’s Adam Neumann “earned” his $1.7 billion payday.)

None of that is your responsibility. But you’re surely dealing with the effects, whether you realize it or not…

Happy New Year,

David Gonigam

Dave Gonigam
The 5 Min. Forecast

P.S. With the markets closed tomorrow for New Year’s Day, The 5 will take the day off. We’re back on Thursday to start rolling out the Agora Financial team’s 2020 predictions!


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