GOVERNMENTrnWho Are thernFreemen?rnby Jeffrey A. TuckerrnTrapped in their Montana farm, tryingrnto fend off the feds, the worstrncrime the “Freemen” are accused of is attemptingrn”to compete with the FederalrnReserve,” according to the New YorkrnTimes. Imagine. These people thoughtrnthat private parties could, on their ownrninitiative, issue checks, print notes, andrnextend credit without monetary backing.rnThey should have known that only arngovernment-backed banking cartel canrndo that.rnIf this type of privatization continuesrnunabated, street gangs will attempt tornimpersonate tax authorities by stealingrnproperty, looting families, and drivingrnpeople to financial ruin. We can’t havernthat. A government of this size andrnfragility must retain the exclusive right tornengage in such actions as check kiting,rncounterfeiting, and large-scale theft. ButrnI wonder why street gangs don’t get similarrntreatment?rnIt is clear why Ralph Clark, the leaderrnof the Freemen, had the notion that herncould run a monetary system better thanrnthe government has. Mr. Clark is himselfrna victim of a federal money machinernand the business cycle it generated somern15 years ago. It bankrupted him, and setrnin motion the surreal and tragic eventsrnthat led to his present fame. He probablyrnassumed his private financial system,rnhowever shaky, would work better thanrnthe one that has wrecked him.rnThis is Mr. Clark’s second go-aroundrnwith the media. In the early I980’s, beforernhe was demonized as a thieving,rnright-wing wacko on the government’srndole, he was trumpeted as a prime examplernof the beleaguered family farmerrnwhom the government needs to immediatelyrnsave. He was the subject of numerousrnmoving profiles, including onernin Life magazine and another by Geraldornon ABC’s 20/20. It was Mr. Clark’s sadrnstory that inspired the “Farm Aid” concertsrnstarring Willie Nelson and JohnrnCougar Mellencamp. Nobody caredrnwhat his theology was back then.rnIn fact, neither portrayal gets it right.rnBetter to think of him as a high-profilernvictim of the business cycle. During thernfed-driven credit boom in the mid-rnI970’s, when inflation was picking uprnspeed but interest rates seemed underrncontrol, banks encouraged farmers andrnranchers to expand their holdings usingrngovernment-backed loans. In that inflationaryrnatmosphere, debtors appeared tornwin out over savers. Racking up debt appearedrnto be a way to profit from monetaryrndebauchery. The central bank wasrncontrolling the market signals, and thernsignal said borrow to the hilt.rnIn the first phase of such a fed-drivenrneconomic boom, an economy can makernimpressive gains in growth while interestrnrates and even price increases remain underrncontrol. When inflation does pickrnup, debtors do indeed do well, paying offrntheir debts in cheaper dollars. But sincernthe boom is artificial, and destined tornturn into bust, it is important to get therntiming right if you are going to play thisrngame. At some point, interest rates willrnbegin to incorporate an inflation premium,rnand then you are sunk.rnSo it was with Mr. Clark. In 1978, hernborrowed heavily to add 7,000 acres tornhis land, and about one year later interestrnrates spiked up to 21 percent. With arnnormal profit, he might have gotten by,rnbut in 1980 and 1981 he experienced arnserious drought and then a hailstormrnthat destroyed what remained of hisrncrops. A year later, the Farmers HomernAdministration called in his entire loanrnof $825,000. Land that had been in hisrnfamily since 1913 was on the verge of beingrntaken away by his supposed benefactors,rnthe federal government and its connectedrnfinancial interests.rnMr. Clark thus became a nationalrnsymbol of the declining fortunes of familyrnfarms. In reality, he was a living examplernof why you should not trust thernfederal government’s banking methods.rnThe Reagan administration, under pressurernfrom the media campaign and busyrnmaking political tradeoffs to support arnmilitary-driven Keynesian economicrnboom, vastly expanded agricultural subsidiesrnand imposed a moratorium onrnfarm foreclosures. The relief and therncash came just in time for Mr. Clark andrnhis family. He signed a ten-year contractrnin 1984 for the government to pay himrn$48,000 per year to suspend productionrnon steep slopes and eroding land.rnWith extra time on his hands, Mr.rnClark began to read into what makes therngovernment’s monetary system tick, andrnbecame self-educated on all sorts of matters,rnfrom taxes to contract law, andrntapped into the “patriot” movement ofrngovernment skeptics and dissidents.rnWhen the subsidies stopped, Mr. Clarkrnfound himself still buried in debt and inrnmore trouble than ever. That’s when hernresorted to privatizing some of the fancyrnfinancial schemes he learned from federalrnpolicy. This involved issuing “perfectedrnliens” on assets of federal agents orrnagencies charged with breaking contracts,rnwhich are then converted intorn”Certified Bank Drafts” and spent orrnheld.rnI do not understand this device anyrnbetter than I understand the fed’s ownrnMexican bailout or Robert Rubin’s financialrnshell game that kept the governmentrnrunning after Congress cut off itsrnmoney. If these actions are legal, I dornnot know why Mr. Clark’s should not be.rnIn fact. Media Bypass magazine says thatrnthe Treasury Department has acceptedrnchecks written on liens over the years,rnand has even issued refunds for overpayment.rnWhen you are $5 trillion in debt,rnI suppose, you take what you can get.rnIf the Freemen are crazy, the peoplernwho run the government and its financialrnsystem are crazier still. The governmentrnbegan issuing paper money on toprnof liens and issuing endless checks as earlyrnas the New Deal, or possibly earlier.rnLincoln financed his war against thernSouth with the same technique. So havernmost governments in world history, butrnless with respectable cover than the FederalrnReserve offers the United States government.rnThe error the Freemen madernwas not to understand that Leviathan,rnespecially when it is at war or deeply inrndebt, claims certain privileges.rnAs the government cracked down onrnthis privatized Federal Reserve system,rnand surrounded his farm with federalrnagents, Mr. Clark hung a sign outside hisrnhouse: “Freemen are NOT a part [of] thernde facto corporate prostitute a/k/a thernUnited States.” But if hanging a sign isrnall it takes to be independent, thosernwords would be on everyone’s front door.rnThe key to government—which is whyrnpeople find it so objectionable when itrnbecomes too big—is that it is above thernlaw it enforces against everyone else.rnThat’s why it can claim that the “township”rnof Justus where Mr. Clark lives doesrnnot even exist, that his wheat farm hasrnalready been repossessed and sold at anrn38/CHRONICLESrnrnrn