The archive.

A man may mourn his neighbor's death and then approve the estate taxes that fall on the widow and children; he may love his own children and still support the public debt and inflation that shift burdens onto the next generation. Around such contradictions Sennholz builds a moral indictment of democratic interest politics. People honor one standard in private life, condemning theft, fraud, and coercion, and quietly suspend it in the voting booth, where the same acts acquire legal form through taxation, privilege, and majority rule. His ethical rule is one of consistency: what one may not rightly do as an individual does not become righteous because done collectively, legally, or by vote. Liberty, bounded by the equal freedom of others, is not permission to invade another person's life, labor, or property.

Politics is strife of interests masquerading as a contest of principles.

The early-1990s downturn was no temporary relapse, Sennholz argues, but a crisis of profit, capital, and investment concealed beneath financial inflation. He refuses the reassurance of Keynesian stimulus and Federal Reserve ease: business profitability is the mainspring of a private-enterprise order, and its savage contraction, sharpest in manufacturing, makes stagnation and unemployment predictable. Cheap money cures none of it; it drives savers out of deposits and into equities, inflating bubbles of value even as thrifts and banks fail by the thousands. Sennholz compares the moment to the 1920s, when price stability masked deep capital-market distortion, and warns that the real danger is not a 1970s-style inflationary outbreak but hidden malinvestment and depleted profitability. His conclusion is guarded rather than apocalyptic: no exact repeat of the Depression, if trade barriers and business taxes fall.

An old error is always more popular than a new truth.

To most people inflation means rising prices in the shops, but this 1997 commentary insists the word has escaped that definition. The financial boom of the mid-1990s, Sennholz argues, is itself an inflation, one lodged in stocks and real estate rather than consumer goods and therefore invisible to journalists who read stable price indexes as proof of a Fed under control. What makes it different is its mechanism: the money stock has stayed relatively stable, while low rates, brokerage cash-management accounts, money-market funds, credit cards, and global dollar holdings accelerate the velocity and leverage of existing balances, leaving the system awash in liquidity. Sennholz sets the episode beside America in the 1920s and Japan in the 1980s, calm consumer prices over overextended speculation, and warns that the credit structure beneath such a boom must eventually break.

The Fed has not significantly increased the stock of money but managed to accelerate its use.

Stepping down in May 1997 after a decade as president of the Foundation for Economic Education, Sennholz turns his farewell into an unsentimental study of how a think tank survives. The libertarian educator, he insists, cannot live by doctrine alone: the chief executive wears two hats, scholar and businessman, and a charitable foundation is healthiest when it competes not only for the donor dollar but for the customer dollar. He reports the rejuvenation of his tenure, seventy-nine new books in five years, computerization, and a broadened Freeman carried worldwide after Soviet communism fell, and marks the 1996 Golden Jubilee with Margaret Thatcher as its high point. His succession agenda dwells on a stubborn obstacle: academic credentials function as licenses, and liberty-minded teachers are too often kept from the classroom. Mary Sennholz's counsel supplies the memoir's moral center.

"Honor can only be purchased by your deeds. You cannot quit with honor."

Long before the diploma, Sennholz argues, comes the real work of education: moral formation, the apprenticeship for life. This short essay names five marks of the well-formed person, precise language, gentle manners, sound morals, reflective reason, and the capacity for work, treating each as a sign of inward character rather than technical skill. From that standard he mounts a libertarian-conservative indictment of state schooling. Good morals, he holds, are the basis of republican government and the private-property order; compulsory public education, resting on coercion and political control, usurps parental authority and displaces Judeo-Christian morality with a political religion. By its own civilizational measures the public school fails, as language decays, reflection hardens into political correctness, and work yields to entitlement, and only freedom, he concludes, opens the pathway to genuine education.

Language denotes the person. A refined character finds expression in refined language, a coarse character in coarse talk. Language shows the person; it springs from his or her innermost parts. Speak so that you may be seen!

When the dollar slid against the mark and yen in the mid-1990s, the political reflex was to blame the Bundesbank, Japan, and speculators. Sennholz redirects the causality homeward: a weak dollar, he argues, is the endogenous product of Treasury deficits and Federal Reserve credit creation, its central mechanism the monetization of federal debt. Bond purchases supply banks with reserves, deficits crowd out productive investment, and present political consumption is charged to future generations as capital erodes. Rejecting the Keynesian case for monetary ease and distrusting official inflation figures produced by the very authorities inflating, this compact monetary polemic reframes a currency-market event as a crisis of the American fiscal-monetary nexus—one that electoral pressure for low rates makes unlikely to correct.

The dollar weakness is no foreign phenomenon; it is an American calamity with its roots in Washington.

Government first distorts markets and injures vulnerable groups, then expands its own power by claiming to repair the damage—so runs Sennholz's reading of affirmative action as a case study in self-defeating intervention. Tracing the program from the Civil Rights Act of 1964 and the EEOC through comparable-worth doctrine and ERISA pension mandates, he argues that hiring by ethnicity rather than productivity drove business from the inner cities, that comparable worth revives a discredited just-price theory, and that pension rules meant to protect the elderly instead closed private plans. The market, he insists, rewards services valued by consumers, not academic degrees or occupational dignity. The verdict is severe: the minorities, women, and elderly the program names as beneficiaries become its primary victims.

Affirmative Action does both; it inflicts economic harm and then seeks to alleviate it.

Americans condemn federal deficits in principle while resisting nearly every specific cut that would touch their own families' benefits—and that contradiction, not the venality of politicians, is where Sennholz locates the roots of the entitlement state. Broadening the category of beneficiary far beyond formal recipients—Social Security relieves children of supporting parents, Medicare relieves families, student subsidies help spouses—he argues that visible benefits obscure hidden costs to character, productivity, and republican institutions. Invoking Jefferson on public debt and Madison on majority tyranny, the essay reframes fiscal imbalance as a moral rather than budgetary problem: majority rule cannot legitimate taking from minorities, and a republic dependent on forced redistribution drifts toward despotism unless the majority voluntarily limits its own numerical power.

Although most people readily support reduction in federal spending, they balk at virtually every proposal of specific cuts.

What exactly counts as money? Rothbard's answer refuses the Chicago school's habit of choosing a monetary aggregate because it correlates with national income—statistical fit, he argues, evades the prior question of what money is. Returning to Mises's definition of money as the generally accepted medium of exchange, he counts demand deposits and other claims the public treats as redeemable at par in standard money, while excluding stocks, bonds, and real estate that are merely liquid and must first be sold. The functional test yields his aggregate Ma: cash plus fixed-rate redeemable claims. A second measure, Mb, isolates newly created bank money entering business credit—the channel that, in Austrian cycle theory, distorts the structure of production toward higher-order capital goods, distinct from deficit finance or consumer lending.

Furthermore, the approach overlooks the fact that statistical correlation cannot establish causal connections; this can only be done by a genuine theory that works with definable and defined concepts.

A budget declared balanced while the national debt keeps climbing is not fiscal discipline but disguised borrowing—the deception Sennholz sets out to expose in this March 1997 commentary. The trick, he argues, lies in spending Social Security and other trust-fund surpluses to finance current outlays, leaving future claimants government IOUs rather than assets; the Balanced Budget Amendment then before Congress would only legitimate the practice. His larger target is the transfer state itself, with Social Security as its institutional center and model. Against it he sets concrete exits: privatizing welfare functions, freezing transfer spending to shrink the system over time, and granting the young and conscientious objectors a right to withdraw—for a transfer scheme that permits its victims to leave ceases to redistribute by force at all.

They want us to believe that the annual budget deficits are declining although the national debt continues to soar.

Output rising, unemployment and inflation falling, stock prices soaring, politicians claiming credit—the late-1990s expansion had economists reaching for superlatives. Sennholz reads it instead as a credit-driven bubble in the lineage of the 1920s United States, 1980s Japan, and the 1997 Asian crisis, its danger masked precisely because consumer prices stayed stable. Conventional aggregates like M1 and M2, he contends, miss the real fuel: bank credit expansion, loan securitization, derivatives, offshore banking, the yen carry trade, and foreign central banks recycling current-account dollars into U.S. Treasuries. Rising equity values signal mergers and buybacks, not capital formation. Written in December 1997, the essay anticipates later debates over asset inflation and global imbalances, and predicts that when the bubble bursts officials will blame speculators and foreigners rather than the monetary order.

All these symptoms do not make a “new era economy” but rather a highly vulnerable “bubble economy.”

Government debt, Sennholz insists, is not stimulus but consumed capital—a distinction that anchors this April 1995 essay written as the U.S. debt neared five trillion dollars. Private borrowing can finance production and raise output per worker; public borrowing merely absorbs savings that would otherwise become productive investment, redirecting scarce resources toward political uses that voters see as costless benefits and never as the goods forgone. Behind the marble temples of politics he reads hidden deprivation, and behind the debt a moral outrage: one generation has no right to mortgage the labor of the next. Legal restraints alone, he concludes, cannot break the spending habit; only a change in economic ideas can, beginning with visible sacrifice—salary cuts for the president and legislators—before citizens are asked to accept restraint.

The federal debt is a pyramid of IOUs for income and wealth consumed in the past.