Wednesday, August 31, 2011
Perry Is Right about Social Security
Not surprisingly, Governor Rick Perry is catching flack from mainstream statists over his calling Social Security “a Ponzi scheme.” For statists, Social Security, as the crown jewel of the welfare state, is sacrosanct. Any challenge to the program or even an accurate description of how it works is, well, close to treason. Every red-blooded, patriotic American is expected to hew to the official line: People voluntary put their money into a federal trust fund and they have a right to get it out upon retirement.
So, for statists Perry has committed treason and even heresy by pointing out that Social Security is really nothing more than a Ponzi scheme, the type of scheme that federal officials criminally prosecute people for when they do this sort of thing in the private sector.
What exactly is a Ponzi scheme? How does it work? Who was Charles Ponzi? What ended up happening to him?
The answers to those questions are contained in a great article entitled “Yes, It Is a Ponzi Scheme” by Michael D. Tanner, senior fellow at the Cato Institute. The article appears on the website of the conservative publication National Review.
Tanner carefully documents the nature of Ponzi’s scheme and why he was convicted of fraud and sent to prison.
Ponzi would accept money from investors with the promise of paying high returns on the money. But Ponzi didn’t invest the money. Instead, he would use money taken from later investors to pay high returns to early investors. The scheme went on until he was unable to find enough new investors to cover the payments that needed to be made to early investors. At that point, the system collapsed and Ponzi’s massive fraud became apparent.
Social Security is based on the same fraudulent principles as Ponzi’s scheme. Money that is taken from later taxpayers is used to pay off early taxpayers. As Tanner points out, over the decades the number of people from whom the money is being taken has sharply decreased compared to the number of people receiving Social Security. Tanner observes that “in 1950, for instance, there were 16 workers supporting every retiree. Today, there are just over three. By around 2030, we will be down to just two.”
Tanner relates the fascinating story of Ida Mae Fuller, the first Social Security recipient. She paid $44 in Social Security taxes and ended up receiving $20,993 in benefits. How did she do that? In the same way that Ponzi’s early investors received their high returns — by being paid money from later taxpayers.
So, Perry is right to describe Social Security as a rotten, fraudulent system. But the obvious question arises: What is Perry’s solution? He didn’t say, but I think he’ll soon realize that he’s boxed himself in.
Like any other conservative politician, Perry is not about to call for repealing Social Security. He’s too afraid of losing votes to do that. Yet, where does that leave him? It leaves him in the position of continuing to support a system that he himself knows is immoral, rotten, and fraudulent. How can the continued embrace of an immoral, rotten, fraudulent system be reconciled with Perry’s deep commitment to moral and religious principles?
Of course, we libertarians don’t face that problem. We hold that Social Security should be repealed, immediately and completely. It’s a no-good, immoral, rotten, fraudulent system that should never have been enacted. It’s based on taking money from people to whom it belongs in order to give the loot to people to whom it does not belong. It’s the most anti-family program that’s ever been conceived. And as most everyone now knows, it’s one of the major causes of the federal government’s out-of-control spending, debt, taxation, inflation, and impending bankruptcy.
Thus, there is only one solution to Social Security that is consistent with moral and religious principles. Get rid of it, fully and immediately.
We libertarians also have a firm belief in freedom. We believe that God’s gift of free will and the principles of a free society entitle people to reject their parents and others if that’s their choice. By the same token, however, we place unwavering faith in ourselves, in the free market, and in other people. We have no doubts that most children honor their mother and father on a purely voluntary basis when the need arises. The same holds true for brothers, sisters, friends, neighbors, and people who believe in helping out people in need with their own money.
That is the distinguishing characteristic between libertarianism and statism. We believe in freedom of choice and voluntary action. Statists believe in force and coercion. There is no better example of this difference than with the Ponzi scheme known as Social Security.
Tuesday, August 30, 2011
Stop Obama from Managing the Economy
As the presidential campaign season gets into full swing, be prepared to hear the standard arguments as to which candidate and which party is better at managing the economy. The debate surfaces every four years.
Republicans will cry, “President Obama and the Democrats have made a mess of the economy. Elect us because we’re able to do a better job at managing the economy.”
It was the same thing four years ago, only then it was the Democrats exclaiming, “President Bush and the Republicans have made a mess of the economy. Elect us because we’re able to do a better job at managing the economy.”
From the standpoint of libertarians, the debate is a silly one. Why? Because neither the president nor the government should be managing the economy. A system in which government officials are managing the economy is inevitably going to be one big messed-up system.
It really goes to show that when it comes to economic principles, there isn’t any difference between Republicans and Democrats. They both believe that the president and the federal government should be managing the economy. Their differences arises with respect to which party should be doing the managing and which reform plan is going to be adopted to manage the economy.
Operating within this statist paradigm, Republicans and Democrats are unable to recognize that the nation’s economic woes are rooted in the fact that the government is managing the economy. For them, the economic woes are always rooted in the areas of the economy that are still relatively free of government control. That’s why they inevitably call for more government intervention to solve the nation’s economic woes.
Why does managing the economy cause economic woes? When the president, with the support of his myriad departments and agencies, manages the economy, he is engaging in central planning, the same type of central planning that make big economic messes in socialist countries. As the Nobel Prize winning libertarian economist Friedrich Hayek pointed out, central planning is an inherently defective paradigm because government officials lack the knowledge and ability to plan the economic activity of hundreds of millions of people.
So, what is the libertarian approach to the managing-the-economy debate? Contrary to what statists might think, we don’t say that the solution is to get a libertarian into power in order to be a better manager of the economy. Instead, we propose a completely different paradigm to replace the current one — a paradigm that prohibits the president and the federal government from managing the economy.
Under the libertarian paradigm, there would be a total separation of economy and state, in the way our American ancestors separated church and state. Rather than having the president and the government managing the economy, people would be free to manage their own individual lives.
Under the libertarian paradigm, people would be free to keep everything they earn (that is, no income taxation and IRS) and manage their own lives with their own money, including retirement (no Social Security), healthcare (no Medicare), education (no government schooling), charity (no welfare), and everything else.
Libertarianism is the key not only to restoring prosperity, education, healthcare, and a spirit of voluntary charity to our land, it’s also the key to restoring economic freedom to the American people.
Monday, August 29, 2011
Leave the Hurricane Price-Gougers Alone
Well, if it’s hurricane season, it must be anti-price-gouging season. It’s bad enough for people to be hit by a hurricane. You’d think that statists would show some mercy and spare people some economic idiocy during difficult times.
Alas, it is not to be. North Carolina Attorney General Roy Cooper announced that he would prosecute anybody engaging in price-gouging during Hurricane Irene. Cooper declared, “We’re warning price gougers that you can’t use a crisis as an excuse to make an unfair profit off of consumers. If you think that someone is trying to use Hurricane Irene to justify ripping you off, let my office know about it.”
It’s enough to make you wish that American law schools offered courses in Austrian economics.
What people like Cooper fail to understand is that the price system is simply the free-market’s method of communication. Prices impart valuable information to both producers and consumers that enable them to make rational economic decisions. When the government tampers with the price system by setting maximum prices or prosecuting “price gougers,” it mucks up the communication system on which people are relying.
Let’s take a hypothetical example. Let’s say that a hurricane hits the Outer Banks in North Carolina and that people are desperately in need of ice on the islands. One store has 50 bags of ice on hand. Immediately, it raises its price from $5 a bag to $25 a bag.
Now, we all know what Attorney General Cooper would do. He’d start screaming like a banshee and sending out state troopers to make an arrest.
Actually, however, that’s the worst thing that Cooper could do.
When the price of ice soars, it communicates valuable information to consumers on the island. The new, higher price says to them: You need to conserve your use of ice.
At the same time, the new, higher price imparts valuable information to producers on the mainland: You need to produce more.
And it also sends a message to entrepreneurs: Here is an opportunity to make a nice, hefty profit in a very short period of time. Entrepreneurs buy ice on the mainland at $3 a bag, rent boats, take the ice to the island, and sell it for $20 a bag,
Gradually, as the supply of ice increases on the island, the price starts to decrease, which sends messages to everyone: Consumers learn that the need to be over-cautious on the use of ice is diminishing, and producers and entrepreneurs learn that there is less urgency in getting ice to the islands.
What people like Cooper fail to understand is that there is only a limited supply of ice and everything else during an emergency. All the laws and pronouncements in the world can’t change that fact. The issues are: How are those particular items are going to be allocated and how best to alleviate the situation?
That’s what the price system does. It allocates scarce resources through the price system. When the price system is interfered with through the setting of a maximum price, the wrong message is sent to consumers and producers. It tells them that they should continue consuming just like before and that there is no need to bring new supplies into the emergency area. Supplies quickly disappear and are not replenished owing to the elimination of big-profit opportunities for entrepreneurs.
Most important of all are the concepts of economic liberty and private property. When a person owns things, they belong to him, not to Attorney General Cooper or the state. As the owner, he is free to sell what belongs to him at whatever prices he wishes, just as consumers are free not to buy it.
For the state to order a person not to sell what belongs to him at whatever price he wishes and then punish him for violating the order is the type of economic tyranny that exists in places like Cuba, China, and North Korea, where such laws and decrees are commonplace.
What should the state do about prices during hurricanes? The French gave us the answer: “Laissez faire, laissez passer.” Let it be, leave it alone.” Leave people free to charge whatever they want for their goods and services. It’s the best thing that the state can do for people in an emergency.
Friday, August 26, 2011
Doubling Down in the Drug War
Why can’t the U.S. government ever learn lessons from any of its failed programs? The biggest lesson it fails to learn is the importance of ending programs that are obvious failures, especially ones that are inherently incapable of succeeding. Instead, in its usually bullheaded, headstrong fashion, the government maintains the program and, even worse, actually expands it.
There is no better example of this phenomenon than the drug war. We’ve suffered some 40 years of drug warfare. What better example of failure than that? After all, if the war on drugs had succeeded after those 40 years of warfare, wouldn’t federal officials be saying, “Time to end the successful war on drugs“? Instead, they’re saying that it’s more urgent than ever that the war continue indefinitely into the future. Isn’t the need to continue a 40-year program prima facie evidence that it’s failed to achieve its purported end?
In a new example of federal drug-war inanity, the feds are now expanding their drug-war efforts in Mexico. How are they doing that? One way is that they’re sending CIA, DEA, and retired military officials into Mexico to help the Mexican government with its violent 5-year drug-war crackdown, a crackdown that has produced — believe it or not — some 35,000 deaths. How’s that for a failure story?
But that’s not all. The New York Times is reporting today that the U.S. government is now permitting Mexican commandos to use the United States as a staging area for drug raids into Mexico. The DEA is providing logistical and intelligence support for the operations.
Every time you think that U.S. officials cannot possibly do something more idiotic, they do it.
What happens if a drug cartel retaliates by, say, bombing a federal building in El Paso, Laredo, or San Diego. We all know what happens: the same thing that happened after 9/11. U.S. officials will exclaim, “We’ve been attacked! We’ve been attacked! We’re innocent. We were just minding our own business. It’s time to crack down in the war on drugs.“
And we’ll see a whole new panoply of violations of civil liberties, more bashing down of doors, more searches of vehicles, more assaults on privacy, more money spent, more debt, more inflation, and more big government.
For decades, statists have argued that the reason the drug war has failed is because U.S. officials haven’t really enforced it. That of course is nonsense. They’ve enforced it big time with such things as asset-forfeiture laws, mandatory-minimum sentences, and long jail sentences for drug users and drug sellers.
But nothing has worked. People continue to ingest drugs and people continue to sell drugs. All the increasing harshness has accomplished is an increase in the price of drugs, which in turn has attracted more people into getting into the drug-selling business.
Meanwhile, the police continue to arrest, grand juries continue to indict, prosecutors continue to prosecute, and judges continue to sentence. It’s all just a mindless, rote exercise in inanity. None of these people ask, “What’s the point of all this? What’s the point of sending one more drug user or seller to jail? What good will it do?“ Their statist minds are simply stuck in a drug-war rut.
Nonetheless, through 40 years of war, the statists have continued repeating their mantra: “If only they would really crack down, then we could finally win our war on drugs.“ Well, they got their wish in Mexico. The Mexican government really cracked down. They even got the military involved. The result? Some 35,000 dead people along with massive infringements on civil liberties and privacy at the hands of the Mexican military.
And now the U.S. government is involving our country even more into this never-ending cycle of violence. You’d have a hard time finding a dumber move than that.
There is one and only one way to combat drug-war cartels, and it doesn’t involve waging war against them. The way to put these cartels out of business — immediately — is by ending the drug war by completely legalizing drugs. That’s how we got rid of the booze lords — by legalizing alcohol.
There really is no other way. Doubling down on a hand that is incapable of succeeding is idiotic. The only ones who stand to benefit from such a crackdown are those who are in the business of selling drugs and those in the business of waging war against them. From the standpoint of those groups of people — drug lords and government officials — the drug war has been a tremendous success.
Thursday, August 25, 2011
Shades of FDR! Socialist Chavez Nationalizes Gold
Venezuelan President Hugh Chavez has announced that he’s nationalizing the country’s gold industry. He also announced that he’s bringing Venezuelan gold reserves held in the American and European banks to Venezuela.
There’s no doubt as to why Chavez is bringing the gold reserves to Venezuela: He fears that the U.S. government will do to Venezuela what it’s been doing to Middle East dictatorships with the imposition of sanctions — seizing their money and refusing to send it to them. He doesn’t think that his gold is safe from the U.S. government as long as it sits within the United States. I personally think he’s smart to get his gold out of the country for the very reason he’s doing it.
Chavez’s nationalization of gold, of course, brings to mind President Franklin Roosevelt, who did the same thing to the American people.
Having revolutionized America’s economic system from one based on economic liberty to one based on the welfare state, FDR wanted no restraints on federal spending. Of course, the gold standard was the big restraint.
Since gold was the official money for the country — and had been for more than 100 years — federal officials were restrained from issuing too many bills and notes promising payment in gold. If they over-issued, people might show up all at once demanding that their notes be redeemed in gold.
In one of the most extraordinary acts in U.S. history, federal officials ordered Americans to turn in their gold coins to the government in return for irredeemable bills and notes. FDR also made it a felony offense to Americans to possess gold.
That, of course, opened the floodgates to the printing of federal paper money. As federal officials continued printing the money to help fund ever-growing welfare-state expenses — and later warfare-state expenses — they didn’t need to worry about people demanding that the paper be redeemed in gold. They could just keep printing money to their heart’s content.
That’s why the paper dollar (which is actually an irredeemable note — a Federal Reserve Note) is worth only about 5 percent of what it was worth in 1913, when the Federal Reserve was established. That’s what comes with continuous debasement of the currency, decade after decade after decade.
I think most everyone would acknowledge that Hugo Chavez is a socialist. After all, he calls himself a socialist.
What’s funny is how upset the mainstream pundits get when one refers to FDR (or Obama) as a socialist. In their minds, anything an American president does cannot be socialistic because he’s an American. It’s only foreign rulers who embrace socialism. American rulers are always, by definition, free enterprise.
Yet, look at what FDR did — he confiscated everyone’s gold by ordering people to send their gold holdings to the government, on pain of a felony conviction. How is that different in principle from what Chavez and a host of other Latin American socialist dictators have done, including Fidel Castro?
FDR also established cartels for the major industries in America, permitting them to establish their own prices and set them into law. That’s what the NIRA was all about, along with its fascistic Blue Eagle campaign, a campaign of propaganda and intimidation similar to the ones that Chavez has implemented in Venezuela.
Don’t forget Social Security, which today is the crown jewel of the welfare state. It was begun by Roosevelt, but he got the idea from Otto von Bismarck, the “iron chancellor of Germany,” who himself got the idea from German socialists.
In fact, it shouldn’t surprise anyone that Adolf Hitler, who embraced Social Security, public works, government-business partnerships, and vast military-industrial complex, public ownership or control over the means of production, greatly admired Roosevelt’s New Deal. Here’s what John Toland wrote in his biography Adolf Hitler:
Hitler had genuine admiration for the decisive manner in which the President had taken over the reins of government. “I have sympathy for Mr. Roosevelt,” he told a correspondent for the New York Times two months later, “because he marches straight toward his objectives over Congress, lobbies and bureaucracy.” Hitler went on to note that he was the sole leader in Europe who expressed “understanding of the methods and motives of President Roosevelt.”
Will President Obama follow in the footsteps of Chavez and FDR and renationalize gold? I think anything is possible. As everyone knows, federal spending and debt are out of control. The Fed is now cranking up the printing press, as it has done for decades, and federal officials know that the people are turning to gold to protect the value of their savings from the Fed’s inflation. The rising gold price tells people what the Federal Reserve is doing to their money. Thus, big spenders like Obama, Chavez, and FDR hate gold even more than they do speculators, bond-rating agencies, leakers, and other people who communicate what the government is up to.
The federal government’s appetite is voracious. Welfare-state and warfare-state expenditures continue soaring out of control. They need money — big money — to fund the dole recipients in both sectors. I wouldn’t be surprised to see Obama turning to Chavez and FDR for guidance.
Wednesday, August 24, 2011
Military Welfare for Libya
Needless to say, U.S. officials will claim that but for the U.S. intervention in Libya, the revolution would never have succeeded. It’s just part of a long tradition of demeaning treatment that comes with welfare.
And make no mistake about it — such interventions are welfare. Although military welfare comes in the form of cash, bombs, bullets, invasions, occupations, and drones, it is, in principle, no different from any other kind of welfare.
What the Empire essentially did with its intervention was tell the Libyan rebels, “You are too dumb, too ignorant, too incompetent to achieve a successful revolution all on your own. You need our help, much as a child needs the help of his parents. We have lots of burdens in the world but we will come to your assistance.”
As with any welfare, the intervention will come with strings. The Empire won’t expect to be repaid in money, but it will expect loyalty and gratitude to the United States and perhaps even some favorable oil concessions to Western oil companies.
Of course, opposition to the United States will be highly unlikely, given that the U.S. government will soon be pouring millions of dollars of U.S.-taxpayer money into the new regime’s coffers. Like any other welfare, that foreign aid will make the regime even more dependent on the Empire and even more grateful. Of course, most of the money will end up in the private accounts of public officials, and they’re not likely to bite the hand that feeds them.
It won’t matter how much tyranny takes hold in the aftermath of the revolution. In fact, no matter how much the citizenry are mistreated — no matter how much civil liberties are infringed — no matter how many kangaroo trials and executions are conducted for former government officials — no matter how many people are incarcerated without trial — no matter how much socialism pervades the country — no matter how many people are tortured — no matter how much corruption there is in the government — and no matter that the nation is now governed under Islamic law, the new regime won’t be considered tyrannical at all. It will be considered “free and democratic” because it is a friend of the United States. Just look at Iraq and Afghanistan.
The Libyan people, like people everywhere, were entitled to the dignity of achieving their own revolution without the assistance of the U.S. Empire. They had the right to try on their own, even if they failed. If private Americans had wanted to donate their resources, time, and even lives to the Libyan cause, so be it. But it was no business of the U.S. government to come to the assistance of the Libyan people.
We should remind ourselves what John Quincy Adams told succeeding generations of Americans: that the United States has no business going abroad “in search of monsters to destroy” and that if America were ever to assume that role, she would become “the dictatress of the world.” Little did he know that America would also become the welfare provider for the world.
Tuesday, August 23, 2011
Which Dictatorships Are We Supposed to Like?
Don’t you sometimes wish that someone in authority in the U.S. government would explain how they determine which dictators we’re supposed to like and which ones we’re supposed to dislike?
Consider, for example, Syria. Right now, Syria is our enemy because it’s a brutal dictatorship, one that is oppressing its own people. President Obama is demanding that Syrian dictator Bashar al-Assad leave office. Obama has also imposed sanctions on the Syrian regime.
But wait a minute! I thought Assad was our friend. Isn’t he the dictator whose brutal henchmen tortured Canadian citizen Maher Arar at the specific request of the CIA? Isn’t the CIA an agency of the U.S. government?
I don’t get it. How did Assad go from being our friend who tortures people on our request to our enemy who needs to be sanctioned until he relinquishes power?
After all, it’s not as though Assad just recently became a brutal dictator. He assumed office in 2000, after his father had ruled the country for 29 years. That’s a long-term dictatorship!
Assad’s brutal torture of Arar took place in 2002. When U.S. officials delivered Arar into the hands of Assad’s torture henchmen, U.S. officials had to know that they were turning the man over to a dictatorship. And they also had to know that it was a brutal dictatorship. Why else would they have chosen this particular dictatorship to torture Arar?
How did the torture partnership get arranged? We don’t know because it’s still all hush-hush. We don’t know who negotiated the deal. We don’t know what the terms of the deal were. We don’t know whether President Bush or other high U.S. officials approved of the deal.
What we do know is that Arar was simply changing planes here in the United States on his way back to his home in Canada. U.S. officials waylaid him and refused to permit him to continue on his way to Canada. The CIA flew him to Europe and delivered him into the clutches of Assad’s brutal dictatorial regime — yes, the same regime that U.S. officials now say is our enemy and that must be ended due to its brutality.
The CIA says that it thought that Arar was a terrorist. But they didn’t get a warrant for his arrest from a federal magistrate. They didn’t ask a federal grand jury to indict him. They didn’t bring him to trial. They simply struck a deal with the Assad dictatorship to torture the man.
Don’t forget that Arar wasn’t kidnapped in some faraway land. He was kidnapped right here on American soil.
At the risk of asking a dumb question: If the Assad regime is so brutal now that it must be ended, why didn’t U.S. officials consider it sufficiently brutal to have wanted it ended back in 2002? Indeed, it would seem that the brutal nature of the regime was precisely what attracted it to them when they asked it to torture Arar.
Has Congress held investigatory hearings into the torture partnership between the U.S. government and the Syrian government? Nope. Hey, this is the CIA we’re talking about. No committee chairman in Congress is going to jack with the CIA, not even to ask questions on how the torture partnership between the U.S. government and the brutal Syrian dictatorship got arranged.
How about the federal courts? Aren’t they available for people who are the victims of torture or conspiracy to torture at the hands of U.S. officials? Well, theoretically, yes — that’s one of the legitimate roles of government — to provide a forum in which people who are victimized by government officials can seek relief.
But not in this case. Again, we’re dealing with the CIA, and federal judges seem to be more scared of the CIA than congressional committee chairman are. All that the CIA has to do is say to the presiding judge, “State secrets, national security, and war on terrorism, your honor,” and the presiding judge immediately starts quaking, dismisses the case, bangs down his gavel, adjourns court, and scurries back to his chambers shivering.
Thus, it’s no surprise that the federal courts threw Arar’s claim out of court without even hearing any evidence. It didn’t even make any difference to those federal judges that Arar turned out to be a totally innocent man who was brutally tortured by the Syrian dictatorship at the specific request of the U.S. government, the Syrian dictatorship’s torture co-conspirator.
Of course, back in 2002 we Americans were expected to cheer the CIA’s kidnapping and rendition of Maher Arar. We were expected to express gratitude to Syria for torturing people on our behalf as part of our “war on terrorism.”
If we objected, we were called unpatriotic, even traitors or at least people who didn’t understand that national security and our rights and freedom depended on torture partnerships with brutal dictatorships.
Little did we know at the time that we would later be expected to convert Syria from friend to enemy, and pray for the ouster of the dictator who had brutally tortured a man as part of the torture partnership that he had with our government.
Perhaps if U.S. officials would just explain the standards by which they determine these shifting alliances, we would be able to better understand how the U.S. government arrives at other such determinations, such as its support of brutal dictatorships in Egypt, Jordan, Bahrain, Yemen, Pakistan, Iraq, Afghanistan, and Saudi Arabia while opposing brutal dictatorships in places like Libya and Syria.
Monday, August 22, 2011
Libertarians and Austrians in the Washington Post
Amazingly, two separate articles in Sunday’s Washington Post mentioned such libertarian luminaries as Ludwig von Mises, Friedrich Hayek, Ayn Rand, Walter Williams, and John T. Flynn. For names such as these to be mentioned in the mainstream press — and some twice in one day — reflects the tremendous strides that libertarianism has made in the past 20 years.
The first article, “What Books Are the GOP 2012 Contenders Reading?”, includes Ron Paul and Michelle Bachmann and lists books that are important to them.
The article mentions three books on foreign policy that Paul recommends in his book The Revolution: A Manifesto: Dying to Win by Robert Pape, Blowback by Chalmers Johnson, and Imperial Hubris by Michael Scheuer. While such authors are not libertarians, their perspectives on foreign policy are generally libertarian.
My personal favorite among the three is Chalmers Johnson, who was a liberal. There are fewer people who have a better grasp on the problems facing our country in foreign affairs than Johnson did. The book mentioned, Blowback,was written before 9/11 and accurately predicted that U.S. foreign policy in the Middle East would ultimately produce terrorist retaliation on American soil. Johnson’s next three books were equally good — The Sorrows of Empire, Nemesis, and Dismantling the Empire. I can’t recommend all four books enough. In fact, there are many great articles online by Johnson — just Google his name. In my opinion, all articles by Chalmers Johnson are worth reading.
The article also mentions Paul’s recommendation of John T. Flynn as well as Ayn Rand’s novels. Most everyone is familiar with Rand but not so with Flynn. He was a conservative who battled against Franklin Roosevelt’s socialist-fascist New Deal, even while many other conservatives were throwing in the towel and joining up with the statists after 1937, when the Supreme Court made it clear that economic liberty was gone from America for the foreseeable future.
The author of the Post article, Tevi Troy, seems to express some skepticism regarding Flynn’s urgent warning about fascism reaching American soil. Perhaps Troy is unfamiliar with Roosevelt’s National Industrial Recovery Act, which, with its cartelization of American industry and its infamous Blue Eagle campaign, was a mirror image of what Mussolini and the fascists were doing in Italy. In fact, I’d recommend to Troy the book Three New Deals by Wolfgang Schivelbusch, which shows the similarities between Roosevelt’s New Deal and what Hitler and Mussolini were doing in their respective countries.
Even though Troy doesn’t mention how important Mises and the Austrian school are to Ron Paul, everyone familiar with Paul’s economic philosophy knows that Mises and the Austrian school are the foundation of his thinking on economic and monetary issues.
According to Troy, Bachmann reads Mises, Walter Williams, Milton Friedman, and Arthur Laffer. My observation about Bachmann’s reading Mises? Perhaps Mises will lead her to Hayek’s great essay, “Why I Am Not a Conservative.”
The other Post article, “The Republicans’ New Voodoo Economics” by Greg Ip, criticizes Austrian economics and praises Keynesian economics. That of course is not surprising given that the article is published in the liberalWashington Post.
But what’s good about the article is that it describes the big intellectual battle that was waged during the 1930s between Mises, Hayek, and the Austrians, on one side, and the Keynesians on the other. Many Americans have no idea that such a battle even took place and that its outcome has had an enormous impact on the lives of the American people. They simply think that America has always had the same basic economic system and monetary system, with minor reforms along the way.
Ip clarifies that such is not the case.
On the one side of the battle were the Austrians, who advocated economic liberty and sound money. On the other side were the Keynesians, who advocated socialism and fiat money. Of course, as we all know the statists ended up winning the battle, but all the things that Mises and Hayek predicted have followed: out of control spending, massive debt, inflation, high taxes, continual debasement of the currency, and, of course, ever-greater loss of economic liberty.
But the battle isn’t over yet, as reflected by the fact that articles are now increasingly appearing in the mainstream press mentioning Mises, Hayek, the Austrians, and libertarian economic principles. Succeeding generations of libertarians and Austrians are carrying the battle forward, and our ideas are becoming more popular and influential every day. Just check out Sunday’sWashington Post for confirmation. Why, the paper doesn’t even feel the need to explain who Mises, Hayek, Friedman, Williams, Flynn, and Rand are. That’s a good sign.
Friday, August 19, 2011
Ron Paul’s Exchange with Santorum Says It All
The exchange over Iran between Ron Paul and Rick Santorum in the recent Republican presidential debate goes a long way in explaining why the mainstream statists, including those in the Republican Party and the mainstream media, wish that libertarians would just go away.
Santorum pointed to 1979, the year of the Iranian revolution, when the Iranian people took U.S. diplomats hostage and held them in captivity for about a year. Santorum pointed to that pivotal event to show that the United States has been at war with Iran ever since.
For statists, Santorum’s point is the end of the discussion. The U.S. government is good. It is innocent. It was just minding its own business when Iranian revolutionaries attacked our country without any reason whatsoever.
We saw the same phenomenon after the 9/11 attacks. “They just hate us for our freedom and values,” U.S. officials cried. We were just minding our own business when the terrorists decided to kill Americans. The sentiment was the mindset of American statists.
And what happens if a libertarian says, “Wait a minute. The story isn’t that simple. Let’s look at what motivated these foreigners to do these things. Let’s examine what the U.S. government has been doing in foreign affairs”?
Well, we all know what happens. The statists go ballistic, both in politics and in mainstream newspapers across the land. “Oh, you’re blaming America! You hate our country! You must be a terrorist yourself. America, love our government or leave our country!”
In fact, Paul’s exchange with Santorum wasn’t the first time this has happened. Recall that famous debate exchange between Paul and Rudy Guliani four years ago. Paul pointed out that the terrorists came here on 9/11 to kill us because our government had been over there for years killing them.
Guliani went ballistic, as did his fellow statists on the stage. Their fellow statists in the mainstream media went crazy too. No one, and certainly not a presidential candidate, is supposed to say such things. It’s considered beyond the pale. Everyone knows that our government is good, wise, and benevolent, believes in freedom and democracy, and would never do anything bad to foreigners.
Yet, that’s actually when Ron Paul’s 2008 presidential campaign took off. Tens of thousands of ordinary Americans instinctively knew that here was a man who wasn’t feeding them pabulum. Here was a man who had the courage to speak the truth about U.S. foreign policy. He was willing to observe openly that the emperor wore no clothes.
And that’s why the statists wish that Ron Paul would just go away. It’s why they wish libertarians would just go away. That’s why they resent us. We cause people to confront reality, which is sometimes not a comfortable thing to do. In a sense, we libertarians are therapists, people who help their patients confront realities that are oftentimes quite painful to face.
Look at the drug war. The statists just want to keep doing what they’ve been doing for 40 years — busting drug sellers, busting drug users, and locking people up for the rest of their lives. Along come libertarians and point out the utter inanity of the whole thing. The never-ending deaths, destruction, corruption, violence, gang wars, and infringements on privacy and liberty. Libertarians say: End this idiocy by legalizing drugs.
But that’s considered outside the pale for the statists. It’s okay to call for reform of such programs. But abolition? “Oh my gosh! I wish those libertarians would just shut up and go away. Everything is working out so fine without them.”
Look at how Ron Paul responded to Santorum. He explained to Santorum that the history of bad relations between Iran and the United States did not begin in 1979 but rather in 1953. That was the year that the CIA, the U.S. government’s secret intelligence force, entered into Iran and ousted the democratically elected prime minister of the country, Mohammed Mossadegh, a man who had been named Time Magazine’s “Man of the Year.”
Why did the CIA do that? No, not for freedom and democracy, as the statists would like to believe. Instead, the CIA interfered with the internal affairs of Iran to retaliate for Mossadegh’s nationalization of British oil concessions. Yes, the CIA’s anti-democracy coup was about oil, not freedom and democracy.
In fact, having ousted a democratically elected prime minister, the CIA proceeded to install a non-elected brutal dictator, the Shah of Iran, into power. The CIA then proceeded to train and work closely with the Shah’s counterpart to the CIA, his brutal and tortuous Savak intelligence force. The Shah then proceeded to impose one of the harshest dictatorial regimes in the world on the Iranian people, with the full support of the CIA and the rest of the U.S. government.
Of course, U.S. officials didn’t care one whit what the Shah was doing to the Iranian people. All that mattered was that he was “our friend.”
Imagine if Savak had assassinated John Kennedy in order to get Lyndon Johnson into power. How would the American people feel about that some 50 years later? I’ll tell you: the deep anger and rage would still be palpable.
Well, that’s how the Iranian people felt about the U.S. government in 1979. That’s why they took the U.S. officials hostage. They were still angry about the CIA’s ouster of their democratically elected prime minister. They were still angry about the Iranian people who had been brutalized, incarcerated, and tortured by the Shah and his goons, with the full support and cooperation of the CIA.
That’s what Santorum and his fellow statist cohorts don’t want to confront. They want to continue living their blissful little lives of delusion. For them, the federal government is god. It is all-good. It is all-knowing. It is all-powerful. It doesn’t support dictatorships. It believes in freedom and democracy. It never does bad things to people, not even conduct syphilis experiments on them.
That’s the myth that is inculcated in every public school across America and in most government-licensed private schools. That’s the mindset that is produced in people like Santorum and the other statist candidates on that stage.
It’s also the mindset of the mainstream news media reporters asking the questions. That’s why they feel so comfortable with the statists on stage. That’s why they feel so uncomfortable whenever Ron Paul is answering their questions.
Let’s face it: the statists wish that libertarians had never been born and are extremely concerned about the rising popularity of libertarianism among the American people. That’s why they’ve done their best to lock the Libertarian Party out of the political process with their inane ballot-restriction barriers. That’s why they kept Ron Paul, a long-serving congressman, out of the early presidential debates four years ago. That’s why they are keeping Gary Johnson, a popular two-term governor of New Mexico, out of the current round of debates. After all, Johnson, another libertarian, is also calling for ending the drug war and bringing the troops home. Why should it surprise us that they’re locking him out of the presidential debates, as they tried to do four years ago with Ron Paul?
They think that if they can just keep hewing to their little myths and delusions and keep teaching them to their children in their government-approved schools, everything will be fine. If they could only shut out those pesky libertarians who confront people with truth and reality, everything would be hunky dory.
But truth will out, which is why so many people are gravitating to Ron Paul. They instinctively know that he’s speaking truth to power, and they can see that power doesn’t like it.
Ron Paul summed up the problem most eloquently when, in response to Rick Santorum, he stated, “We just plain don’t mind our own business. That’s our problem.”
Of course, that’s the problem with statists. They mind everyone else’s business but their own.
Thursday, August 18, 2011
What Is Unseen about FDR’s New Deal
It’s funny to see liberals harkening back to Franklin Roosevelt’s New Deal as a model for how the federal government should deal with the nation’s current economic woes. Liberals just don’t get it: It’s because of the socialist revolution wrought by FDR’s New Deal that America is suffering its current economic distress.
A recent example of New Deal nostalgia is an op-ed in the August 12 issue of the Washington Post entitled, “Imagining a World Without the New Deal” by David F. Weiman, where the author points out all the things that Americans would not have had but for the New Deal. Weiman mentions such things as Social Security, cheap electricity, increases in federal jobs, and roads, bridges, dams, and water-and-sewage treatment plants.
In pointing out the things that FDR brought into existence, Weiman is guilty of a fundamental fallacy, one pointed out long ago by the French free-market advocate Frederic Bastiat and later by American 20th-century economist Henry Hazlitt. The fallacy is what Bastiat described as “that which is seen and that which is unseen.”
Consider a simple example. Suppose the federal government builds a new community center in, say, Newton, Iowa, the state where the presidential caucuses will be held next January. On the day of the grand opening of the center, President Obama arrives with his entourage and gives a glorious speech, pointing people’s attention to their new center.
“Look at this beautiful center I have brought you,” the president declares. “I am pleased that not only did I create jobs for your community, I also have provided you with a nice place to have your community events.”
Residents in Newton break out in wild applause. “Thank you, Mr. President. Thank you for giving us this center and for creating jobs in our community.” Newspaper editors and reporters provide glowing news reports and commentaries on the president’s ingeniousness, generosity, and benevolence. The president immediately soars in election polls.
What everyone (except libertarians) misses, however, are the unseen consequences of the community center. You see, what most liberals overlook is that the federal government is not a fountain of wealth. Why, it’s not even like a private business, which gets its money by providing goods and services to people who are willing to pay for them.
The government gets it money by force, through the process of taxation. It confiscates wealth, and it imposes fines and imprisonments for anyone who refuses to permit his money to be confiscated.
Let’s say that the community center cost $10 million to build. So, to build the center, federal officials must have first taken the $10 million from people in the private sector who earned it. That means, obviously, that the people from whom the money was taken no longer have it. If they had the $10 million, they would spend it, save it, invest it, donate it, or some combination thereof. They would do something with their own money.
Suppose, for example, the people from whom the $10 million was taken were going to purchase new cars and new suits, remodel their homes, and donate to their churches. That would have meant increased revenues for people in those sectors. The car company might have built a new showroom and hired new salesmen. The clothing manufacturers would have expanded staff and inventory. The construction industry would have hired new workers. The churches would have installed new pews.
But none of that happens, obviously. The reason? The $10 million never gets saved, spent, or donated by the people from whom it is taken. The people in the car, clothing, construction, and church sectors never see it. Those sectors never experience the expansion the money would have brought them because the consumers had their money taken away from them so that it could be used to buy that community center.
Thus, obviously it’s much easier for President Obama to point people’s attention to the community center and say, “Look what I have brought you” than it is for people in the automobile, clothing, and church sectors to say, “Look at what he deprived us of.”
Liberals need to understand that the federal government cannot create wealth out of thin air. With its socialist projects, the most that the federal government can do is confiscate and redirect the use of people’s money and other resources into what are usually unproductive, dependency-producing, dead-end types of projects. The principle was true for the New Deal. It was true during for Lyndon Johnson’s Great Society. It holds true today under Barack Obama.
Wednesday, August 17, 2011
Statist Fear over Ron Paul
What’s amazing is that the mainstream media doesn’t even appear embarrassed at the way they’ve been treating Ron Paul. I suppose they think that since they’ve treated libertarians with such disdain for so long, no one will notice that they’re doing it some more to Ron Paul.
Not this time, MSM! As you no doubt know, people are noticing, especially on the Internet!
The best critique of the MSM’s treatment of Paul came from social critic and comedian Jon Stewart, who absolutely skewered the MSM on his television show. What better way to expose these people than by ridicule? Stewart’s critique has gone viral on the Internet. If you haven’t seen it, here’s the link. You will absolutely die laughing.
As I have repeatedly pointed out for the past several months, the MSM is in a quandary with respect to Ron Paul, especially if he continues to do well. They’ve got two choices, which I am confident are being debated in editorial rooms and among reporters in mainstream newspapers and television networks all across America.
One choice is to go on the attack against libertarianism. But the reporters and editorial writers know that that strategy bears a big risk — that it will cause people to explore libertarianism and think to themselves, “Wow! I’m a libertarian too. I’m joining the libertarian cause.”
The other option is to simply ignore Paul and his campaign, but that too bears a risk — that it will make the editorial writers and reporters look like idiots.
Why not simply treat Paul like any other candidate?
Because most MSM reporters and television commentators are statists, meaning that they love socialism, interventionism, and imperialism.
As statists, they love the welfare-state programs, the regulatory programs, and the warfare-state programs.
They adore the federal government and look upon it as their savior, their provider, and their protector.
They cannot imagine life without the welfare state and they’re convinced that without the warfare state, America would be conquered by the terrorists, Muslims, illegal aliens, drug dealers, communists, and other boogeymen.
They love the drug war and firmly believe that the federal government should incarcerate people who ingest drugs without permission.
They love the big spending, big debt, and big inflation.
They love the invasions, occupations, bombings, torture, drone attacks, war on terrorism, Patriot Act, airport fondling, kidnappings, torture, and assassinations.
Thus, not surprisingly, the statists within the MSM feel perfectly comfortable with statist mainstream political candidates, whom they always treat with great admiration and respect. After all, since they’re statists, such candidates do not challenge at a fundamental level the welfare-warfare state paradigm. They’ll call for reforming the welfare-warfare system, but that’s okay with the mainstream media because they’re not challenging the principles of the system.
Not so with libertarians, however. Libertarians challenge the statist paradigm. We want to dismantle the paradigm. We want to end, not reform, the socialism, interventionism, and imperialism, and the statists know it. We want to restore economic liberty, free markets, free trade, and a constitutionally limited republic to our land.
That’s why Paul, as he himself emphasizes, is the only presidential candidate who talks about the importance of individual liberty.
Statists, both in the media and in politics, know that libertarianism is an alternative paradigm to statism. That is, it doesn’t purport to reform statism. It is a replacement for it.
That’s what the statists are terrified about. That’s why they’re doing contortions to avoid giving any undue publicity to Paul’s campaign. They know that more and more people every week are gravitating toward libertarianism. They know that if the libertarian movement arrives at a critical mass of people, the entire country could quickly shift from socialism, interventionism, and empire to liberty, free markets, and a constitutional republic.
Take a look at this recent article in Science Daily. It’s not about libertarianism but it will give you an idea as to why statists are terrified of Ron Paul and the entire libertarian movement. The articles states, “Scientists at Rensselaer Polytechnic Institute have found that when just 10 percent of the population holds an unshakable belief, their belief will always be adopted by the majority of the society.”
Can you see why the statists are so frightened? Can you see why they’re increasingly going on the attack against libertarianism? Or can you see why they’re doing their best to avoid talking about libertarianism.
They’re in a real quandary, these statists. When they attack us, people are drawn to the attack. When they ignore us, they look like idiots.
What to do? After all, at the risk of frightening the statists a bit more, we libertarians just might be a lot closer to that critical mass than anyone thinks. And just to put a bit more fear into the statists, let’s not forget how suddenly and quickly the statist Berlin Wall came crashing down.
Tuesday, August 16, 2011
The Gold Window and the Federal Spending Spree
Given the 40th anniversary of President’s Nixon’s “closing of the gold window,” we shouldn’t forget the role that such action had in enabling the federal spending spree that has been going on for decades.
Let’s go back, first of all, to the first 140 years or so of American history, when the official money of the American people consisted of gold coins and silver coins.
What was the reason that Americans chose precious metals, rather than paper money, as their official money? To protect themselves from government officials who would debase the value of paper money by printing and issuing too much of it to pay for their ever-growing government programs.
The Framers were well-versed in history and, therefore, knew how governments used inflation to plunder and loot the people. Just recently, they had experienced the Continental Congress’ over-issuance of the Continental currency. The over-issuance of that paper money gave rise to the phrase, “Not worth a Continental.”
Thus, when Americans used the Constitution to call into existence the federal government, it was with the clear understanding that the federal government’s powers were limited to making gold and silver coins the official money of the nation. There was no power delegated to the federal government to issue paper money or to make paper money legal tender.
Thus, from 1787 to 1933, gold coins and silver coins were what the American people used as money. That’s what was meant by “the gold standard.”
At the same time, the federal government was borrowing money, meaning that the government was borrowing gold coins and silver coins. To evidence the debt, the government issued promissory notes, or bills (short-term promissory notes), or bonds (long-term promissory notes).
Whenever a note, bill, or bond came due, the government would pay off the debt in gold or silver. Everyone understood that the notes, bills, and bonds, were not money but instead promises to pay money (i.e., gold and silver). Everyone understood under the Constitution the federal government lacked the power to “emit bills of credit,” which meant issuing paper money.
Over time, the government figured out that it could issue more notes, bills, and bonds without concern that everyone would show up at the same time and demand their gold. But federal officials knew that there was a limit to this. As people began sensing that the over-issuance of debt was excessive, they’d start demanding gold as the notes, bills, and bonds became due. If the government couldn’t honor all its debts, it would have to default, which obviously would mean big problems trying to borrow money in the future. Thus, the gold standard constrained would-be big spenders in government, which is precisely what the Framers intended. Government couldn’t overspend because it couldn’t over-borrow and over-inflate. If it tried to over-inflate to cover over-borrowing, it lacked the money (gold) to pay off its debts.
Then, along came Franklin Roosevelt, the original big spender of America’s welfare state. What was his solution to the Great Depression that the Federal Reserve, America’s central bank, had caused? To transform America’s economic system from one based on the principles of economic liberty and free enterprise to one of socialism, regulation, and interventionism.
The socialist part meant the welfare state, which consisted of the federal government’s being transformed into a massive welfare provider for the American people. Here were the roots of America’s modern-day, big-spending welfare state. Here was the start of the crown jewel of the welfare state, Social Security.
But Roosevelt obviously had a problem. Standing in his way of making the federal government people’s welfare provider was the gold standard. Sure, Roosevelt could raise the taxes needed to cover his welfare programs. But he was a big, big spender. He wanted to spend much more than what taxes were bringing in. He wanted to tax and borrow and inflate.
To overcome the problem, FDR did one of the most amazing things in history. He just confiscated everyone’s gold and made it illegal to own it. Imagine: what had been the people’s official money for more than a century was now illegal to own — a felony.
That meant that the federal government could now convert its paper debts into paper money. That is, it could now do what governments all over the world were doing and had been doing for centuries — spending, borrowing, and inflating — and plundering and looting the people in the process.
But there was still one check on the big spenders. Foreign central banks were still permitted to redeem their U.S. debts for gold. But the spending, borrowing, and inflating continued growing into the 1940s, 1950s, and 1960s, especially with the growth of warfare-state spending. Thus, as the foreign banks began redeeming their debts for gold, the federal government knew that it could never honor them all.
So, that’s why Nixon “closed the gold window.” He knew the federal government couldn’t pay its debts and so it just defaulted. It refused to honor its contracts with foreign holders of U.S. debt, as it has done back in 1933 when it defaulted on its debt obligations to the citizenry.
Ever since 1971, the year that Nixon closed the gold window, there have been no constraints on Washington’s big spenders. Decade after decades, they have spent and borrowed, and the Federal Reserve has inflated and inflated. That’s why the dollar has a value of about 5 percent compared to when the Federal Reserve was established in 1913.
Through it all, people have been looted and plundered through the continuous debasement of the currency, with the inflationary burden oftentimes falling most heavily on the poor and middle class.
There is only one solution to this monetary debauchery and, not surprisingly, it is a libertarian one: Abolish the central bank, paper money, and legal-tender laws, and separate money and the state.
Monday, August 15, 2011
Liberal Solutions for the Economy Are Statist Nonsense
It is so funny watching liberals coming up with all sorts of weird solutions to America’s economic woes. Every one of the solutions involves more of the same things that have caused the woes, but liberals just won’t let themselves see that. In their minds, the possibility that America’s economic woes are a direct consequence of the welfare state (and warfare state) just doesn’t occur to them. In their minds, the welfare state is a permanent feature of American life and represents all that is good with America and, therefore, could not possibly be the source of the bad things that are occurring.
So, all the liberal solutions involve big-spending, big-regulation proposals, the very things that are the root of the welfare state (and warfare state).
Many of the liberals, for example, are harkening back to the New Deal, FDR’s socialist-fascist program that transformed American society from one based on economic liberty to one based on the welfare-state, regulated-economy way of life.
Some liberals are saying, “Look at all the great things that FDR did — at the highways, the dams, and other big socialist projects. He put people to work!” And then the liberals cry, “This is what we need in America today: big public-works projects that bring growth and full employment to our land.”
Other liberals are saying, “The Federal Reserve should inflate the currency. This is the key to priming the pump and getting the economy humming again. This will bring growth and full employment.”
Others are exclaiming, “Go to the malls and spend your money so that we can have growth and full employment”
Other liberals are crying, “Tax the rich so that we can continue to fund our welfare-warfare state.”
Still others are calling for laws that mandate full employment, as a way to bring growth to the economy.
Have you ever seen so much statist nonsense in all your life?
Consider Cuba, for example. There is a reason that liberals consider Cuba to be paradise. It represents every liberal solution that is now being prescribed for our country.
In Cuba, full employment is mandated. In fact, there is no unemployment in the country because everyone works for the government. Imagine: full employment guaranteed.
There is also Social Security and Medicare in Cuba. And free education. Just like the statists have brought here to the United States.
Cuba also has big public (i.e., government) projects, sort of like a permanent New Deal.
Cuba also has irredeemable paper money that its Federal Reserve prints up on demand, to get the economy humming and bring growth to the economy.
And Cuba long ago taxed the rich to give their money to the poor. In fact, everything was taken from the rich and given to the poor, a liberal dream-come-true.
Today, everyone in Cuba has free Social Security, Medicare, and education, everyone has a guaranteed job, and there are no Bill Gates-type rich people.
Do you see why liberals love Cuba so much? Like I say, a liberal paradise.
Oh, did I mention that most everyone is desperately on the edge of starvation? Oh well, at least everyone is equal in the sense of being equally poor.
What liberals do not understand is how wealth is created in a society. They just think that wealth is a natural, permanent condition in a society. They see wealth and think they can confiscate and redistribute it and that it will continue to regenerate itself forever.
The key to a wealthy and prosperous society lies in savings, not spending — in the accumulation of capital. As savings increase, businesses are able to borrow the money to purchase tools and equipment that make workers more productive. As productivity goes up, revenues and profits increase to the firms. Workers get higher wages — higher in real purchasing power.
That’s how people become wealthy and how nations become wealthy. That’s how the United States became wealthy. Imagine: more than 100 years in American history without income taxation, inheritance taxes, and capital gains taxes. And more than a hundred years without welfare state programs, including Social Security and Medicare. More than a century without a warfare-state empire around the globe. More than 100 years of sound money — gold coins and silver coins — and no Federal Reserve.
Then along came FDR and statism. Seeing all that wealth was too much for the statists. Envy and covetousness got the best of them. They decided to take it away from the rich and give it to the poor.
In the early years, everything appeared hunky dory. There was lots of money to confiscate. As the decades went on, however — and as the warfare state was added to the welfare state — the spending grew and grew, ultimately surpassing tax revenues, causing U.S. officials to begin borrowing the money to cover the difference.
As the debts grew, the Federal Reserve was called on to pay back the debts by inflating the currency — printing the money. By this time they didn’t need to worry about people demanding gold for their notes because liberal icon FDR had made it a felony to own gold, what had been the official money of the United States since the founding of the republic. It’s not a coincidence that the dollar is worth about 5 percent of what it was worth in 1913, when the Fed was established.
And things just keep getting worse and worse. The burden of the welfare-warfare state way of life is becoming too heavy for the private sector to handle. That’s what’s caused Greece to crater. That’s where the United States is headed.
But liberals just won’t admit it. They cannot conceive that their beloved welfare state (and warfare state) is the root of the problem. They say that the problem is with the private sector. It needs to be taxed more, regulated more, controlled more. They won’t openly admit it, but Cuba is their goal.
The statists are taking us down with their statism. They’re destroying our wealth, our money, our standard of living, our economic well-being, and, most important, our freedom.
The only thing that can stop these people is libertarianism, not some reformed, warmed-over version of statism. That’s why we libertarians must continue battling against the statism that afflicts our land. We’re the only hope there is for saving our country, ourselves, and our families from these people.
Friday, August 12, 2011
Those 30 American Soldiers Died for Nothing
After those 30 American soldiers were recently killed in Afghanistan when their Chinook helicopter was downed by Afghan insurgents, the commander of the international mission in Afghanistan, Gen. John R. Allen, stated, “All of those killed in this operation were true heroes who had already given so much in the defense of freedom.”
Freedom? Does Allen really believe such nonsense, or is it just the standard pabulum that the general feels he must express in order to assuage the feelings of the families and friends of the victims?
I suppose it wouldn’t be very politic for the general to simply state the truth — that those soldiers died for nothing. Or if he felt he needed to be more specific, he could have stated that they died to protect one of the most crooked, corrupt, tortuous, theocratic, dictatorial regimes in the world, one that is somewhat a friend to the U.S. Empire.
Of course, it’s not clear whether the general was referring to freedom in Afghanistan or freedom in the United States? He didn’t say. Maybe he meant both.
If he was referring to Afghanistan, that’s scary. Why? Well, because of the possibility that they might try to bring that sort of “freedom” back to the United States.
In Afghanistan, the cops, the military, and the intelligence forces, along with the U.S. military and CIA, have unfettered authority to stop people on the streets, break down doors and search people and their homes and businesses, and take people into custody, incarcerate them indefinitely without trial, torture them, and even execute them.
And it’s all justified in the name of keeping the people safe from the terrorists.
But is it freedom? If so, then it’s the same sort of “freedom” that exists in places like communist China and Burma. And it means that the Bill of Rights, which prohibits the government from doing those sorts of things here in the United States, isn’t about freedom after all.
But maybe Allen was claiming that those 30 guys died in the defense of freedom here in the United States.
If so, then that’s just as nonsensical. The Afghan insurgents aren’t trying to invade, conquer, and occupy our country and take over and run the IRS and the Interstate Highway System. They’re instead simply trying to oust an invader and occupier from their country, the same thing that insurgents were doing when it was the Soviet Union doing the occupying of Afghanistan.
In fact, as I have long pointed out, the military occupation of Afghanistan actually provides the excuse for U.S. officials to take away our freedom here at home. The military kills people over there on a weekly basis, and then the friends and relatives of the victims are motivated to retaliate with terrorist strikes here in the United States. The U.S. government then uses that threat of terrorism to enact Patriot acts, suspend civil liberties, spy on Americans, monitor the Internet, assassinate Americans, and incarcerate and torture Americans without trial.
Those things are not freedom. They are the opposite of freedom. That’s why the Constitution and the Bill of Rights prohibit them.
I heard the freedom pabulum issued by Gen. Allen from generals and presidents (i.e., Lyndon Johnson and Richard Nixon) back during the Vietnam War. Every time a soldier came back in a body bag, they’d say he died for “freedom.”
It was a lie then, just as it is a lie now, but officials obviously felt that it wouldn’t go over very well if they told people that the soldiers were dying for nothing, which was the truth.
One of the favorite pabulums during that time, in addition to the “freedom” one, was that if the troops weren’t killing and dying in Vietnam, the dominoes would fall until finally the communists would invade, conquer, and occupy the United States.
Back then, the boogeyman was the communists instead of the terrorists, but the justification for the deaths of U.S. soldiers was the essentially the same — that they died to keep us free and safe here at home.
The communist victory in Vietnam exposed what a crock it all had been. The dominoes didn’t fall. The IRS and the Interstate Highway System remained in the hands of U.S. bureaucrats rather than communist ones. And I vaguely recall that war even broken out between communist Vietnam and communist China.
After the U.S. military was forced out of Vietnam, that was the end of it as far as the United States was concerned. No terrorist strikes here in the United States by the communists. No more fear-mongering about the dominoes falling. And ultimately, friendly relations and free trade with Vietnam.
Maybe Gen. Allen believes that if he can create a false reality for people, everything will be okay after all. If everyone is made to believe that U.S. soldiers are dying for “freedom,” then that’s all that matters.
Two big problems arise, however. One is that libertarians know it’s a lie and aren’t going to remain silent. Two, clinging to a false reality only creates psychoses whose adverse consequences ultimately surface, in the form of such things as suicide, violence, guilt, alcoholism, and abuse.
No, General Allen, those 30 men, like the several thousand other U.S. soldiers who have died in Afghanistan, did not die for freedom. Like those 58,000 American men who died in Vietnam, those 30 guys died for nothing.
Thursday, August 11, 2011
Seven Reason to Oppose Sanctions on Syria
Here are seven reasons to oppose President Obama’s imposition of sanctions on Syria:
1. The struggle for freedom and democracy in Syria is none of the U.S. government’s business. U.S. officials, from Obama on down, should just butt out of what’s happening there.
Yes, I know that one of the U.S. government’s modern-day dual missions is to police the world and to punish international malefactors who do not cater to the U.S. Empire. (The other dual mission is to take care of people with welfare.)
But the point I’m making is that Americans need to ditch that paradigm — empire, world policeman, and welfare provider — and adopt instead a paradigm of a constitutionally limited republic and a foreign policy of non-interventionism.
2. The Syrian people are entitled to the dignity of trying to achieve a free and democratic society on their own. With its sanctions, the U.S. government is effectively saying to the Syrians, “You are dumb, ignorant, incompetent people who cannot do this on your own. So, we will just have to come to your assistance, especially since our officials in our State Department, CIA, and Pentagon are so much smarter than you.”
Can you imagine what U.S. officials will say if the Assad dictatorship is ousted from power? They will take the credit. They will say, “This never would have happened without our intervention. You Syrians are now beholden to us. Your new regime must now become a loyal member of the U.S. Empire, just like the dictatorships in Egypt, Bahrain, Yemen, Saudi Arabia, Jordan, and elsewhere.”
Does that mean that nothing can be done to help the Syrian people? Of course not. Private Americans should be free to offer their money and other resources and even their lives if they wish to help the Syrian people. That’s what genuine charity and personal responsibility are all about.
Also, the U.S. government can open its borders to the free movements of goods and services, which is what our American ancestors did to help people suffering under tyranny, oppression, or starvation. At least Syrians would know that if they were willing and able to escape their country, there would be at least one nation in the world that would not forcibly repatriate them to Syria.
Of course, U.S. officials oppose the idea of open borders. They say to foreigners suffering under (non-U.S. supported) dictatorships: “We love you enough to bring sanctions, embargoes, invasions, bombs, drones, and occupations to your country. But don’t dare think of immigrating to our country. We don’t love you that much.”
3. The sanctions will hurt the Syrian people and will not succeed in ousting Assad from power.
Consider Cuba, where the U.S. Empire has maintained a brutal and cruel embargo for more than 50 years. The embargo, together with Cuba’s socialist economic system, has operated as a vise that has squeezed the lifeblood out of the Cuban people.
Nonetheless, the embargo has failed to achieve the decades-old obsessive quest of U.S. officials to oust the Castro regime from power.
Consider Iraq, where the U.S. Empire maintained 11 years of one of the most brutal and cruel sanctions in history. Those sanctions killed hundreds of thousands of Iraqi children, deaths that the Empire claimed were worth the attempt to oust Saddam Hussein from power.
Notwithstanding all those 11 years of massive deaths of innocent children, the sanctions failed to achieve their aim of ousting Saddam Hussein from power and, in fact, solidified his central control over the country. Moreover, they were a critical factor in engendering the rage that ultimately erupted in the terrorist attacks on 9/11.
Consider Iran, where sanctions have brought about plane crashes killing innocent people because the airlines have been prevented from adequately maintaining their fleets of civilian airlines owing to the sanctions. Those plane crashes have not caused the Iranian dictators to abdicate.
4. Sanctions can lead to terrorist retaliation.
What happens if Syrians are killed by the sanctions and friends and family or even government agents retaliate with terrorist strikes here in the United States?
We all know what will happen — the same thing that happened after 9/11. President Obama, like Bush before him, will go on national television and proclaim, “We’ve been attacked! We’ve been attacked! We’re innocent! We’ve done nothing to anyone except spread freedom and democracy. We now have a new official enemy to replace al-Qaeda — the Syrian terrorist network. Unfortunately, this means we need to take away even more of your freedoms with new Patriot Acts and to increase the budgets of the CIA and the military to keep you safe. But we will win — count on it, sometime within the next 50 years. God bless America.”
5. The U.S. Empire can’t afford any more foreign conflicts. It’s broke. It’s now a deadbeat international debtor that is living off of maxed-out credit cards. The Empire is already far overextended with its imperial programs of invasions, occupations, sanctions, embargoes, torture, renditions, foreign aid, and assassinations.
6. Militarism and imperialism, and foreign interventionism in general, are contrary to the founding principles of our nation. John Quincy Adams summed up America’s rightful role in the world when he told Congress that the United States doesn’t go abroad in search of monsters to destroy. By monsters, he meant dictators and tyrants.
Adams also pointed out that if America were to ever assume the role of Empire, the U.S. government would become the dictatress of the world, which of course it has. No one can deny that. In foreign affairs, there are no limits on Obama’s powers. He is not required to seek permission of Congress before invading, occupying, torturing, assassinating, sanctioning, or embargoing,
Indeed, did you see Obama seeking the permission of Congress to impose sanctions on Syria? No. While he rails against Syrian dictatorship, Obama exercises the powers of dictatorship himself.
And he exercises such powers as part of a vast military empire consisting of hundreds of military bases all over the world. It’s an empire that imposes its will on the people of the world either through the bribery known as foreign aid or through the imposition of force in the form of invasions, occupations, sanctions, embargoes, torture, indefinite incarceration, kangaroo tribunals, kidnappings, renditions, and partnerships with brutal dictatorships.
Finally, let’s not forget that the U.S. Empire is quite selective on which dictatorships to impose sanctions on. While imposing sanctions on regimes that refuse to kow-tow to the Empire, it embraces, supports, or even enters into torture partnerships with such dictatorships as those in Egypt, Bahrain, Yemen, Saudi Arabia, Kuwait, and Jordan. In fact, don’t forge the U.S. Empire even once had a torture partnership with the dictatorship in Syria itself.
7. Sanctions are an attack on the economic liberty of the American people. Private property, free trade, and freedom of travel are fundamental, natural, God-given rights with which everyone, including Americans, have been endowed. Obama has no legitimate authority to punish Americans for using their money and their economic freedom the way they want.
Everywhere you look, federal programs are in crisis. There are three reasons for this: socialism, interventionism, and imperialism. Americans thought they could abandon their principles of free enterprise, free markets, sound money, and republic without moral, political, or economic consequences.
We now know that that is false. The time has come for Americans to dismantle the statism under which we are mired and to lead the world to freedom.
Wednesday, August 10, 2011
Valuable Lessons from Federal Spending and Debt
Americans are getting some great lessons in both economics and history in the federal spending-debt crisis.
Yesterday, the Federal Reserve announced that it definitely intends to keep interest rates low for two more years. Translation: We will inflate (and debase) the currency to whatever extent necessary to get the economy rolling again.
This is precisely what has been going on for decades. Do you see now why the value of the paper dollar is worth about 5 percent compared to what it was worth in 1913, when the Federal Reserve was established? What the Fed is doing now is what it has been doing since it was established in 1913 and especially since the advent of the welfare-state way of life since the 1930s.
Here’s what has happened, in a nutshell.
Around the turn of the 19th-20th centuries, America began a dramatic turn toward statism, turning away from economic liberty and embracing the principles of socialism and regulation that were being expounding by the progressives. That movement was reflected in the adoption in 1913 of the 16th Amendment (income tax) and a central bank, the Federal Reserve.
During the 1920s, gold was still the official money of the United States, which it had been since the founding of the Republic. The Fed inflated the quantity of bills and notes, creating a false economic prosperity during the “roaring 20’s.”
Sensing that the government could not honor its debts, people began redeeming their notes for gold. Panicking, the Federal Reserve over-contracted the supply of its notes, bringing about the 1929 stock-market crash, which statists have always blamed instead on “the failure of free enterprise.”
President Roosevelt used the crisis as an opportunity to impose an entirely new economic system on America, one based on the principles of socialism, interventionism, regulation, and fascism. (See, for example, Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany by Wolfgang Schivelbusch and this review of the book by David Boaz of the Cato Institute). FDR also used the crisis to adopt a new monetary system, one that rejected gold coins and silver coins as the official money of the United States and instead relied on irredeemable paper notes issued by the federal government.
That enabled FDR to embark on a massive federal spending spree for his new welfare state without having to worry about people demanding payment in gold for the increasing supply of paper money. Like every one of his successors after that, FDR could spend to his heart’s content. With FDR’s New Deal and adoption of a fiat money standard, the floodgates were opened for unrestrained spending for an ever-growing welfare state.
Over the decades, however, the amount of spending was not limited to the amount of taxes being collected. The number of people on the dole — and the total amount of the dole itself — continued to climb. In fact, welfare was not just limited to Americans. It was later expanded to foreigners, including dictators, in the form of “foreign aid.”
Then came the adoption of the national-security warfare state in 1945, which meant that the feds now had a double spending problem — welfare and warfare.
That meant ever-increasing spending and borrowing, much higher than the amount of money that was being raised by taxes.
No problem. Federal officials just borrowed the money to cover what the tax revenue was unable to cover. The government’s “national debt” continued climbing.
Whenever the debt got to be a problem, however, that’s when the Fed would step in, just as it is stepping in now. Its job was to pay off the debt with newly printed money. The additional supply of money would debase the value of the currency then in existence, which would be reflected by rising prices in society.
This was an ideal situation from the standpoint of government officials. They could spend and borrow to their heart’s content, and few people would suspect that it was the federal government causing the prices to rise with its inflationary policy. By this time, most people were graduates of public (i.e., government) schools and so, not surprisingly, they blamed inflation on such things as speculators, greedy people, big business, and big oil and had a well-ingrained tendency to trust the government and defer to authority.
Some people understood what was going on, however. They saw through the lies and deception. They understood the relationship between the welfare-warfare state way of life and the ever-growing spending, borrowing, and inflation. They knew that one good way to protect their assets from inflationary confiscation was by buying gold and silver.
FDR cut them off the pass. He made it a felony offense to own what had been the official money of the United States for more than 100 years. The last thing that federal officials wanted Americans to do was to be able to protect their wealth from welfare-warfare state confiscation.
Today, it is legal for Americans to own gold. Not surprisingly, the price of gold is soaring. Why? Because thanks to the Internet, there are many more people who have figured out what government is doing to them, to their assets, and to their money with its welfare-warfare spending, borrowing, and inflating. They know that government isn’t going to reduce spending but instead is going to use the Federal Reserve to inflate the debt away. And they know that owning gold and silver is a way to protect themselves from what the government is doing. That’s why they’ve been buying gold for the past several years.
But make no mistake about it: The antipathy that FDR and his statist cronies had toward gold is no different today. Federal officials hate gold, not only because it provides people with the chance of avoiding confiscatory inflationary policies but also because a soaring gold price can be signaling that government is up to no good.
Over the decades American society has become increasingly dominated by the welfare-warfare sector, which has served as an ever-heavier burden on the private sector that sustains the government sector. Periodically this dysfunctional system produces bubbles and economic crises. And each time the Fed has used inflation to prop up this dysfunctional system, sending false signals of prosperity into the marketplace. That’s what the statists are calling on the Fed to do again — print and spend in the hopes that it will work one more time.
But today, more people are aware of how the feds have played this manipulative game and aren’t falling for it. They’ve been burned one time too many with fake and false Federal Reserve induced prosperity. They’re not investing, they’re not expanding, they’re not hiring. In fact, many of them are simply closing up shop and retiring. Thus, the jury is still out as to whether the Fed will succeed, one more time, in propping up the system with another round of artificial prosperity.
Ultimately, such a system cannot last. It is fake and false and at some point the whole house of cards will come crashing down. This could be that time. We might well be witnessing the death throes of the welfare-warfare state.
But if not, it’s just a matter of time. Economic prosperity and rising standards of living can only come about through sound, solid private-sector saving and investment — through the rising accumulation of real capital, not inflationary printing of irredeemable paper money, which leads a nation into bankruptcy.
So, the bad news is that the government continues to do what it has done for decades, moving America in an increasingly bad direction. The good news is that there are now countless more people who have learned lessons about history and economics and who now realize that libertarian principles provide the means of putting our country on the right track.
Tuesday, August 9, 2011
Why Expand the Drug War?
Here we go again. Amidst all the talk about out-of-control federal spending and debt, what does the U.S. government do? It goes out and spends more money by expanding the drug war in Mexico.
Hey, when a federal program has failed to show any success after 40 years, what else would you expect federal officials to do, especially in the midst of a spending-and-borrowing crisis?
Even worse, according to an article in the New York Times, the expansion involves “sending new CIA operatives and retired military personnel to the country and considering plans to deploy private security contractors in hopes of turning around a multibillion-dollar effort that so far has shown few results.”
Does the CIA operate within the United States, monitoring the activities of the American people, either as part of the war on drugs or the war on terrorism? It might but under the law, it’s not supposed to. The American people don’t want the federal government’s intelligence agency operating domestically. That smacks of places like the Soviet Union, Cuba, and North Korea.
So then why send the CIA into Mexico to enforce the drug war? If it’s bad to have the CIA operating inside the United States as part of the war on drugs, why is it good for the Mexican people to have the CIA operating inside their country?
The principle is the same with the military. Here in the United States, the military has long been prohibited from serving as the police, including as part of the drug war. It’s called the Posse Comitatus Act, a federal law that prohibits the military from serving in a law-enforcement capacity within the United States. The idea is that the military mindset, which is suitable for warlike situations, is unsuited to law-enforcement situations.
So, why send those retired military types to Mexico? If it’s a bad idea to have the military enforcing drug laws inside the United States, why isn’t it just as bad to have the military enforcing drug laws in Mexico? After all, even though the military personnel being sent to Mexico are no longer on active duty with the U.S. government, they’re being sent to Mexico as paid agents of the U.S. government and precisely because they have military mindsets.
There’s nothing the U.S. government, especially the military and the CIA, would love more than to convert the war on drugs into a military enterprise, just as they have done with the federal crime of terrorism. By converting the drug war into a military operation, as they have done with terrorism, federal officials know that will then have the authority to treat drug-war suspects as enemy combatants.
As we have seen with the federal crime of terrorism, that would mean no more need for grand-jury indictments, jury trials, right to counsel, and due process of law. Suspects would be subjected to military tribunals, immediate punishment, torture, and indefinite incarceration, perhaps even execution.
It would obviously be a dream-come-true for longtime proponents of the drug war, who have longed for victory for some four decades and who have long viewed the protections of the Bill of Rights as nothing more than legal technicalities that allow drug suspects to go free.
For the past 6 years, at the behest of the U.S. government the Mexican government has been waging a fierce crackdown in the war on drugs, employing the Mexican military to impose the crackdown. The result has been ever-escalating violence. The death toll, as hard as it to believe, is more than 40,000 dead over the last six years.
Meanwhile, even though the government has killed or captured any number of drug lords, it has done nothing to stem the flow of drugs into the United States. In other words, the same failure as before but with tens of thousands more dead people.
I should also mention the massive civil-liberties violations that the Mexican military has been committing against the Mexican people. Things like barging down people’s doors and conducting warrantless searches, much as the U.S. military does in Iraq, Afghanistan, and other places it wages its war on terrorism.
And now the U.S. government is adding the CIA, retired military personnel, and possible private contractors into this violent mix in Mexico.
Let me sketch out a possible scenario, one that we’ve seen play out in the war on terrorism, with disastrous consequences for our country.
Some drug cartel decides to retaliate for, say, the CIA’s killing of some of its members. The cartel retaliates with a terrorist bombing of a federal building in El Paso, killing hundreds of federal employees.
How will U.S. officials respond? They’ll say, “We’ve been attacked! We’ve been attacked! We’re innocent! We’ve done nothing wrong! The drug war and the war on terrorism have now come together.”
President Obama himself will proclaim, “Our country is now at war against both the terrorists and the drug dealers, who will now be treated as one and the same. We will pull out all the stops to kill or capture the enemy. I am hereby assuming the same emergency powers in the war on drugs that I currently have in the war on terrorism. We will win. God bless America.”
The government’s unnecessary expansion of the drug war into Mexico, through the use of the CIA and military personnel, shows once again that these people don’t give a hoot for out-of-control federal spending and debt — and that would love nothing more than to expand their emergency powers to an even broader ambit of our lives.
Monday, August 8, 2011
China’s Scolding of the U.S. Government
Did you ever think you’d see the day that communist China would be lecturing the United States on fiscal responsibility? It’s just a sign of how far down American statists have taken our country.
Sure, it’s humiliating that Standard & Poors just downgraded the U.S. government’s debt rating for the first time ever. But to have the commies preaching to U.S. officials about the importance of reining in federal spending and debt? How humiliating is that?
Consider what they said. According to an article in the New York Times, China stated in a harshly worded commentary that Washington needs to “cure its addition to debt” and “live within its means.”
The commentary also stated:
“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone.”
The communists called on Washington to make major cuts to its “gigantic military expenditure” and its “bloated social welfare” programs.
Wow! That must sting U.S. officials, big time. Especially since it’s true!
Meanwhile, not surprisingly Washington officials and mainstream statists are lashing out at Standard and Poors, pointing out that S&P has made mistakes in the past and even made an error in its current analysis. Rather than focusing on the real nature of the problem — out-of-control spending and debt — it’s easier to try killing the messenger, the one who is forcing them to confront reality after they’ve been living in financial la-la land for decades.
The reaction of U.S. officials and the statists is obviously quite different when it comes to the Chinese communists, however. U.S. officials and private-sector statists are as quiet as church mice in responding to the scolding received from the commies.
Why the difference?
Because the Chinese commies are the U.S. government’s biggest foreign creditor! Hey, what debtor is stupid enough to go and pick a fight with his lender?
So, while the U.S. government and the statists can take S&P to task, not so with a regime is holding an estimated $1.1 trillion in U.S. debt instruments. After all, imagine what would happen if China decided to suddenly dump them all onto the market.
Of course, U.S. officials and American statists say that China would never do that because it would lose lots of money. Don’t be too sure, especially if an unpleasant political fight with lots of nasty words develops between the United States and China. In any event, U.S. officials and Americans statists are obviously taking the position that discretion is the better part of valor when it comes to objecting to the scolding issued by China.
How did the Chinese communists become America’s biggest foreign creditor? When the U.S. Empire decided to invade and then occupy Iraq and Afghanistan, U.S. officials were scared to raise taxes on the American people to pay the bills for their foreign escapades because they figured that taxpayers might get upset. So, they simply went out and borrowed the money from anyone who was willing to lend it, including the communist regime that helped kill some 58,000 American men during the Vietnam War. And of course, everyone knew that as soon as they conquered Iraq, they’d have all that Iraqi oil money they could use to pay back the loans.
But things didn’t work out as planned, which of course they never do with foreign military escapades, and the U.S. government ended up owing the Chinese communists — the people who helped kill all those American men in Vietnam — more than a trillion dollars.
It’s just part and parcel of the repugnant welfare-warfare state that statists have foisted upon our land, one that is not only proving shameful in the international arena but also threatening our nation with financial bankruptcy.
China is, of course, right about the U.S. government’s out-of-control spending and borrowing for welfare and warfare. Where the Chinese communist regime goes wrong is in calling for cuts in welfare and warfare.
It’s time to dismantle, not cut, America’s welfare-warfare state and restore economic liberty, free markets, sound money, and a constitutionally limited republic to our land.
In fact, if the communists were smart, they’d dismantle their socialist system too, beginning with their version of Social Security and Medicare.
Friday, August 5, 2011
America’s Socialist and Imperialist Onslaught
If the debt ceiling had not been lifted and then the stock market had plunged 700 points, administration statists and mainstream commentators would have been screaming, “The stock market has plunged because the debt ceiling wasn’t lifted!”
But the debt ceiling was lifted and extended to sometime past the 2012 presidential election. Congress permitted President Obama to add another $2.7 trillion to the national debt within the next two years.
Then what happened? The stock market plunged 700 points!
So, what did the statists say about that? They’re telling us it’s all because of the debt crisis in Europe or loss of consumer confidence and has nothing to do with the lifting of the debt ceiling and the mountain of new federal debt.
Leave it to the statists to provide some comedy in times of “crisis.”
Of course, it’s always difficult to know the reasons for daily swings in the stock market, but I’ve got another possible explanation for the stock-market plunge: America’s welfare-warfare state is cracking apart, just like Europe’s welfare state is cracking apart, and that’s what people are losing confidence in.
And even if it’s not this time, it is just a matter of time. Look at Europe. They’ve been bragging about their social safety net way of life for decades. Early retirement. Free education. Free health care. And plenty of rich people to tax to fund it all.
But over time, the system started to cave in on itself. The number of people on the dole continued to expand. The number of rich began to shrink. The government couldn’t cut the dole to match the tax revenues because that would make the dole recipients upset. And confiscating everything from the rich would leave nothing to loot the next year.
So, such governments as Portugal, Italy, Greece, and Spain (the PIGS) just went out and borrowed the difference. And kept borrowing and borrowing and borrowing. And spending and spending and spending. And now, finally, they’ve hit the day of reckoning. They’re busted, broke, bankrupt. And pleading for other governments to give them money.
Why would it be any different with the United States? We’ve had a welfare state since the time of Franklin Roosevelt. That’s when the crown jewel of the welfare state — Social Security — came into existence. That’s when the primary purpose of the federal government became taking money by force from those who have it in order to give it to others.
Ever since, libertarians have warned that ultimately this immoral way of life would end in disaster. After all, the welfare state is based on socialism, an inherently defective paradigm. Throughout it all, however, statists have argued, “Don’t listen to the libertarians. As long as we say that our socialist programs are ‘saving free enterprise,’ everything will be hunky-dory. Anyway, it’s not as if it’s the Soviets or Cubans running our socialist programs. It’s Americans!”
Are libertarians the only ones who remember how Ronald Reagan supposedly brought down the Soviet Union? He made it spend its way into bankruptcy! I’ve got a discomforting question for statists: Why wouldn’t the same principle apply to other countries, including our own?
Then came the Cold War warfare state, which involved ever-growing military expenditures. Thousands of domestic military bases. Thousands of foreign military bases. Invasions, occupations, sanctions, embargoes, foreign aid, and regime-change operations, especially to dictatorial regimes.
The statists would say, “Don’t worry. Everything is fine. There are plenty of rich people that we can take the money from to pay for it all.”
But it was not all fine, as we are discovering. The number of people on the dole-receiving end has now exploded into public view, with no end in sight. The military dole recipients are fighting viciously to maintain their dole, perhaps even more viciously than the Social Security and Medicare dole recipients. And then consider the people who are dependent on food stamps, education grants, community grants, corporate subsidies, and on and on.
As expenditures have exploded, both on the welfare side and the warfare side, the feds have resorted to borrowing — just like the Europeans have. Each year they’ve just kept borrowing and borrowing and borrowing … and spending and spending and spending.
And there’s no end in sight. With the lifting of the debt ceiling, Congress has just permitted President Obama to add another $2.7 trillion to the national debt. When the next debt ceiling is reached in 2013, we’ll go through this whole charade again. In other words, there will be no effort to do what is necessary to eliminate the need for adding new debt two years from now.
Statists are undoubtedly sad over the plight of their beloved welfare-warfare state. But what do they prescribe? More spending, more debt, more taxes, and more inflation.
That’s just plain sick.
I’m not sad that the welfare-warfare state might be coming apart. I’d be sad if the whole socialist-imperialist system had worked. It goes to show that God has created a consistent universe, one in which immoral means beget bad ends.
Hopefully, as things get worse, more and more people will continue gravitating toward us libertarians and joining up with us. The solution to America’s woes lies not in trying fix or reform the welfare-warfare state. Instead, the solution requires an entire paradigm shift — one that rejects, fully and completely, both the welfare state and the warfare state.
A new paradigm is needed for our country — a libertarian paradigm, one that is based on the principles of economic liberty, free markets, voluntary charity, and a constitutionally limited republic. A way of life in which people are free to engage in economic enterprise without government interference or permission and to accumulate unlimited amounts of wealth and decide for themselves what to do with it. A way of life without coerced charity, without regulation of peaceful behavior (e.g., the drug war), and without a standing army and military industrial complex to bully, invade, and occupy foreign nations.
Libertarianism is the key to the restoration of a free, prosperous, peaceful, harmonious society to our land. Best of all, it’s based on moral principles, including the fundamental moral principle that holds that people should be free to live their lives any way they choose so long as their conduct is peaceful.
Only libertarianism provides the only way out of the socialist and imperialist morass the statists have foisted upon our land. In the meantime, sit back, watch the spectacle, and do your best to protect yourself and your assets from the statist onslaught.
Thursday, August 4, 2011
The Problem with the Tea Party
Okay, so the Tea Party is good at speaking out against out-of-control federal spending and debt, even if its members in Congress are not so good at reining in government spending and borrowing when voting on whether to permit the federal government to pile another $2.7 trillion of debt onto the backs of the American people during the next two years.
And, okay, the Tea Party is good at opposing tax increases. In fact, let’s keep giving credit where credit is due: many Tea Party members are ardently opposed to the Federal Reserve’s longtime debasement of the currency through inflation to enable federal officials to continue their big-spending, big-borrowing ways.
Yet, opposing big spending, big debt, big inflation, and even big government in the abstract really isn’t that difficult, is it? What’s difficult is to call for the abolition of the federal programs that all that spending and borrowing goes toward.
Does the Tea Party ever call for the abolition of, say, Social Security? Of course not. Like most statists, they run for the hills if anyone even hints that this socialistic program — the crown jewel of the welfare state — should be repealed immediately.
What about Medicare and Medicaid? The response is the same. Either stunned silence at any suggestion that these socialistic programs be repealed immediately or a knee-jerk rejection of the idea.
How about the occupations of Iraq and Afghanistan and the entire overseas military empire of the U.S. government, including the 700-1000 military bases in some 130 countries? Silence there too. We have to support the troops, they tell us, which always means keeping them right where they are, especially since they’re supposedly defending our “rights and freedoms” thousands of miles away.
Yet, it’s Social Security, Medicare, Medicaid, and the military that are the biggest components of the big-spending, big-borrowing, big-inflation, big-government problem. Anyone who says he wants to rein in federal spending while leaving these big socialist and imperialist programs in place is just blowing smoke.
What’s left after the biggies? How about education grants, community grants, farm subsidies, foreign aid (including to Middle East dictatorships), corporate subsidies, public housing, FDIC, and food stamps? When was the last time you heard any Tea Party member calling for the abolition (i.e., not the reform) of any of those? I certainly haven’t.
How about the Departments of Education, Commerce, Energy, Labor, Health and Human Services, HUD, EPA, and Homeland Security? Nope. I don’t know of any Tea Party members who have ever called for the abolition of any of them.
The fundamental problem with the Tea Party is it’s still wedded to the New Deal/Great Society socialist, interventionist, imperialist paradigm. In a word, they are still statists. They still believe in the welfare-warfare way of life for our country.
How do we know this? Because the most Tea Party members will ever do is call for reductions in federal spending on welfare-warfare state programs. They never call for abolishing the programs, like libertarians do.
At the risk of belaboring the obvious, reducing spending by, say, 20 percent on Social Security, Medicare, Medicaid, Iraq, Afghanistan, foreign aid, the Patriot Act, education grants, and the like leaves all those programs in existence. Obviously, that’s completely different from calling for the abolition of such programs, which is what libertarians do.
The fundamental philosophical difference between libertarians and Tea Party types is that we come up with different answers to the following question: What should be the primary role of government in a free society?
We libertarians say: to protect the inhabitants of the country from the violence of others.
Tea Party members answer differently. Like statists everywhere, they say that the primary purpose of government is to take care of people and, if it’s the U.S. government, to police the world. They’re just upset that it costs so much money and are convinced they can come up with a way to do it on the cheap.
Thus, while Tea Party types devote their efforts to figuring out how to make the welfare-warfare state more affordable, libertarians reject the welfare-warfare-state paradigm entirely and want it replaced with one based on economic liberty, free markets, free enterprise, voluntary charity, and a constitutionally limited republic.
Perhaps the best example of how Tea Party members do not wish to upset the welfare-warfare-state applecart is the drug war, which integrates elements of the welfare state, the police state, and the warfare state. What better way to rein in federal spending and borrowing than by ending the drug war? For libertarians, it’s a total no-brainer. Here’s an immoral and expensive federal program that’s been going on for 40 years, with nothing to show for it but death, destruction, crookedness, and corruption.
Yet, are Tea Party members calling for drug legalization? Nope. And the reason is that at a fundamental level Tea Party types, like statists everywhere, still love the nanny state, the police state, and the warfare state and, therefore, remain as committed to preserving them as much as any other statist.
Wednesday, August 3, 2011
Our Statist Economic Woes
Imagine that people in society own a total pool of wealth of $1 million. The group is divided into three categories — the poor ($50,000), the middle class ($250,000), and the rich ($700,000).
The entire group as a whole produces an annual income of $100,000, divided proportionately between the 3 categories.
The government decides to levy a flat tax of 3 percent on everyone’s income to cover such core government services as police and courts.
Thus, everyone — poor, middle class, and rich — are keeping 97 percent of their income. Let’s say, hypothetically, that they spend 75 percent of their income and save 25 percent of it. That 25 percent of savings then adds to the overall pool of wealth, which then produces more income (through interest, investments, etc.).
Under our hypothetical, then, the overall pool of wealth is constantly growing larger and larger. The people are earning income and are free to keep it. And each person’s portion of the overall pool of wealth is producing wealth.
Enter the statists. They see all that income and wealth and the soaring growth of the pool of wealth and exclaim, “This is horrible. There shouldn’t be disparities of wealth. It’s not fair that some have more when others have less. Take from the rich and give to the poor.”
Of course, the statists never ask the critical question: How did the pool of wealth get there in the first place? They just assume that the pool of wealth was always there, will always be there in the future, and will always get bigger.
The statists take control of the government and change the country’s economic system from one of free enterprise to one of socialism. From now on, the primary purpose of government will be to tax those who have income and wealth in order to give money to others, after deducting a certain percentage to pay the salaries of the government officials who are performing this service.
The statists impose a higher tax — say, 10 percent, on the income of the rich. At first, these are happy days for politicians and bureaucrats. The rich continue to work hard producing wealth, and everyone glorifies the politicians and bureaucrats as good, compassionate, selfless saints who are helping the poor, needy, and disadvantaged.
Over time, however, everyone among the poor figures out that the state is giving out “free” money to the poor. More and more of them line up for the largess. The politicians and bureaucrats notice how grateful the poor are for the “free” money, especially on election day.
Meanwhile, some of the rich — those whose businesses are operating on the margin — go out of business as a result of the higher taxes. Moreover, some of the rich decide that it’s just not worth it to continue working hard to produce wealth, especially since they already have enough to retire. They close their businesses and live on interest from their savings.
The closure of businesses results in many more of the poor and middle class now being unemployed. And these newly unemployed people are well aware of the “free” money that the government is doling out. They line up for their share of the largess.
Over time, the recipient class — those on the dole — continues growing while the producing segment of society — the taxpaying sector — continues to shrink.
That doesn’t dissuade the politicians and bureaucrats. They’re not about to start cutting the dole. That would upset the dole recipients who have come to believe that they’re entitled to the “free” money for as long as they live. And what politician or bureaucrat wants to upset a voter by cutting off his dole?
So, the politicians and bureaucrats expand the income taxes to the middle class, which then exacerbates the problem by running marginal middle-class companies out of business. Thus, the welfare lines continue to expand and the pool of people to tax continues to shrink.
Finally, it gets to a point that the amount of money the state needs to give to people on the dole has grown so large that, combined with expensive foreign military adventures that the statists have gotten the nation into, it becomes necessary to greatly increase income taxes on everyone.
But the politicians and the bureaucrats know how angry that’s going to make everyone, so they simply go out and borrow the money to cover the difference.
Each year, the situation gets worse and worse. More people on the dole, more foreign military expenditures, more bills and expenses, more debt.
To relieve the problem, the statists cry, “Tax the rich! Tax the rich! This is all their fault.”
But the politicians and bureaucrats know that as they continue to raise taxes on the rich, each year there are fewer and fewer rich to tax.
Finally, faced with enormous financial commitments and buried under a mountain of debt, the politicians and bureaucrats decide to levy taxes on the overall pool of wealth. They begin with 10 percent, but soon discover that that’s not enough. The next year, in addition to income taxes and more debt, they take another 10 percent of the overall pool of wealth.
Thus, now the overall pool of wealth in society is diminishing — $900,000, $800,000, $700,000, which means a lower return on capital for the owners.
Finally, things get so bad that most everyone is trying to get in on the largess — the “free” money — seniors, sick people, poor people, farmers, students, communities, the military, foreign regimes, and countless others.
On the tax side, the number of people able and willing to pay the taxes that maintain the dole recipients continues to shrink.
The whole system starts to cave in on itself. Too much spending and debt and not enough private sector to sustain it. In the midst of the crisis, the government seizes everything and takes over complete management of the economy, giving everyone a job with the government. Full, guaranteed employment at last! And everyone is equal in the sense that everyone is equally poor.
That’s what the welfare/warfare state has produced in Cuba and North Korea. It’s where Greece is heading. It’s where the statists are taking the United States.
There is but one solution to this statist morass, and that solution is libertarianism.
Forget about trying to fix the welfare-warfare system and trying to make it work. Instead, repeal all the welfare-state programs and all the warfare-state programs, and repeal the income tax, capital-gains tax, and inheritance tax.
Leave people free to engage in economic enterprise without government interference, leave people free to accumulate unlimited amounts of wealth, and leave charity entirely to the private sector.
Only by bringing an end to statism and a restoration of economic liberty can we enjoy a free, prosperous, peaceful, and harmonious society in our land.
Tuesday, August 2, 2011
I told you so! For the past several months, I have been saying that the Republicans were going to cave on the lifting of the debt ceiling. I’ve been writing it and I’ve been proclaiming it on my weekly Internet show.
And sure enough, that’s exactly what they did. After weeks of huffing and puffing about the enormous size of the national debt and the out-of-control federal spending, they caved, once again, and voted to lift the debt ceiling.
You might ask, “Jacob, how did you know that they would cave? They’ve been saying for weeks that they would never cave — that they would never vote to lift the debt ceiling.”
Well, it was easy. I know conservatives. I have watched them for decades. They always cave. They’ve caved ever since the New Deal, when they threw in the towel and embraced the new welfare-state way of life that liberals (or progressives as many of them now like to call themselves) were foisting on American society.
After fervently opposing FDR’s Social Security, a program that originated among German socialists, conservatives ended up being one of this socialist scheme’s biggest defenders.
When LBJ, following in the statist footsteps of FDR, succeeded in getting Medicare and Medicaid enacted, conservatives caved and exuberantly accepted the program.
In fact, as I have repeatedly emphasized for the past 21 years here at The Future of Freedom Foundation, there now isn’t a dime’s worth of difference between conservatives and liberals — they both fully and completely embrace the welfare-state way of life and the warfare-state way of life that afflict our nation, along with the interventionist/regulatory system under which Americans must live.
Consider the following programs and ask yourself whether conservatives and liberals aren’t both firmly committed to their existence and continuation: Social Security, Medicare, Medicaid, public schooling, education grants, farm subsidies, foreign aid, community grants, food stamps, corporate bailouts, stimulus spending, unemployment compensation, foreign wars, undeclared wars, a standing army, the military industrial complex, a foreign military empire, invasions, occupations, wars of aggression, torture, immunity for torturers, sanctions, embargoes, Gitmo, the war on terrorism, the Patriot Act, the enemy-combatant doctrine, paper money, the Federal Reserve, and, well, you get my point.
The fact is that the federal government has become the primary caregiver for the American people, and both conservatives and liberals are fine with that. The federal government has also become the world’s policeman, intervener, interloper, invader, aggressor, sanction and embargo imposer, torturer, kidnapper, renditioner, and tribunal conductor, and both conservatives and liberals are fine with that too.
There was never any doubt that the debt ceiling would be lifted. As I have been repeatedly saying, the whole thing is one great big fraud on the American people, and unfortunately all too many Americans still permit themselves to be taken in by this fraud, thanks in large part to the deference-to-authority mindset that was drilled into them in the 12 long years they were forced to receive government schooling.
Think about it. Why do they even have a debt ceiling? What they’re saying with a ceiling is what we libertarians hold: Too much debt is a very bad thing, both for a person and for a government. The fact that they put a ceiling on the amount of debt the federal government can incur is an implicit acknowledgement of that principle.
Yet, what do they do every time the ceiling is reached? They fuss and fuss and wring their hands … and then simply raise it again, so that we can go through this entire charade two years from now, when most everyone will have already forgotten the debt-ceiling charade of 2011.
Now, do you honestly think that from now until the next time the debt ceiling is reached, they’re going to slash federal spending so that it won’t be necessary to raise the ceiling a couple of years from now?
If you actually believe that, you’re one of their public schools’ greatest success stories.
Did you see them slashing spending the last time the debt ceiling was raised a couple of years ago? Did you hear them say, “We’ve got the ceiling coming up in 2011. We’ve got to stop spending so much money”?
Of course not. In addition to all the regular welfare-warfare state spending programs, they even embarked on additional big ones, with nary a concern about the approaching debt ceiling.
Remember the bailouts? Remember the stimulus plans? Remember the bombing of Libya? These were all big spending binges, all of which sent a simple message: “We don’t give a hoot about that approaching debt ceiling. We’ll just fuss and fuss and wring our hands and then raise it again.”
It will be no different in the next two years. They will continue spending, taxing, borrowing, and inflating until the debt ceiling is reached again. It’s what they’ve done for decades. Why do you think the value of the dollar is worth 5 percent of its value in 1913, when the Federal Reserve was established? It’s because they’ve spent, borrowed, and inflated to fund their beloved welfare-warfare state for decades, raising the debt ceiling each time to accommodate it all.
Here was a grand opportunity for anyone interested in dismantling big government. If the debt ceiling had not been raised, the government would have been forced to sustain its operations with incoming tax revenues. What’s wrong with that? What’s wrong with not being able to go get a new credit card when you’re already maxed out?
Here was a grand opportunity for conservatives. They could have proposed abolishing all sorts of departments, agencies, and bureaucracies. My preference would be to start with the crown jewels — Social Security and Medicare, but if that would have scared them they could have begun with the Departments of Education, Commerce, Energy, and Labor. Didn’t even Ronald Reagan support abolishing some of them? They could have ended the drug war. They could have terminated foreign aid. They could have brought the troops home from everywhere and discharged them. They could have simply said, “The money isn’t there. We can’t afford the entire welfare-warfare state anymore.”
They could have made some serious inroads into big government. But they didn’t, because deep in their hearts, conservatives love big government. They just love to preach libertarian mantras at the same time.
I’ve said it before but it bears repeating: The real battle facing our nation is not between the federal government and the terrorists. Instead, the battle is between libertarians and the statists. With their out-of-control spending, borrowing, taxing, regulating, and bombing, the statists are taking our country down, in the same way that those same policies took down the Soviet Union.
With our firm and unwavering commitment to sound money and our fierce opposition to out-of-control spending, borrowing, taxing, inflating, welfarism, interventionism, warfarism, the drug war, and imperialism, the simple fact is that we libertarians are the only hope for the statist woes that conservatives and liberals have brought to our land.
Let me say a word about the liberal statists, who are all sad and droopy-eyed because their beloved leader, Barack Obama, let them down by refusing to raise taxes on the rich. Unlike the conservatives, who know better but simply capitulate anyway, the liberals honestly believe that the key to a wealthy and prosperous society lies in massive, ever-growing government expenditures, taxes, and inflationary debasement of the currency.
That’s one of the major dividing lines between liberals and libertarians. We libertarians know that such policies are the key to impoverishment, while liberals say they are the key to prosperity. That’s the financial and economic choice that the American people must make in this battle between statism and libertarianism.
In making that choice, people should keep in mind that liberals have never been able to show why their policies are unable to make the people of Cuba and North Korea wealthy and prosperous. After all, wouldn’t the governments in such nations simply have to inflate the money supply, debase the currency, tax the rich, and increase government spending and debt in order to produce wealth and prosperity?
Liberals are always befuddled over that one. They just never know how to answer it. The reason? Their policies are cockamamie, especially given that liberal policies are precisely why Cuba and North Korea are so poor. They’ve already done all the things that liberals prescribe — Social Security, Medicare, public schooling, central bank, paper money, federal spending, military spending, welfare, debt, taxation, etcetera, etcetera. That’s why they’re poor!
And that’s the road the statists have us on — the road to bankruptcy, the road to impoverishment and, with the inevitable economic crises, ultimately the road to dictatorship. It’s the road to the socialist paradises of Cuba and North Korea, right here in the United States, thanks to liberal economic statism.
There is only one way to get off the statist road, and that’s libertarianism. The question is: Will a sufficient number of Americans join us in our grand and glorious cause to restore a free, prosperous, peaceful, and harmonious society to our land before it’s too late?
Monday, August 1, 2011
A Society on the Dole
A good example of the power of the government dole is found in the reaction of Detroit automakers to President Obama’s demand to raise mileage requirements for automobiles.
According to an article in the New York Times, four years ago the automakers vehemently protested against the opposition of higher fuel-economy standards.
Not so today, however. Today, the auto industry is meekly and submissively going along with the president. In fact, their reaction is even mildly exuberant.
What’s the difference?
The dole! Don’t forget that President Obama “saved” the auto industry by providing it with $80 billion of taxpayer money. These people are grateful. Do you think for a moment they would react negatively to the man who “saved” their businesses?
That’s what the dole does to people. It makes them subservient and grateful to their masters, and it reinforces their role as servants within the welfare state.
As the Times put it,
It is an extraordinary shift in the relationship between the companies and Washington. But a lot has happened in the last four years, notably the $80 billion federal bailout of General Motors, Chrysler and scores of their suppliers, which removed any itch for a politically charged battle from the carmakers…. In the end, though, Detroit was faced with an undeniable political reality: there was no graceful way to say no to an administration that just two years ago came to its aid financially.
It’s really no different with any other dole within the welfare state.
Consider what Social Security, the crown jewel of the welfare state, has done to people. So many Americans are convinced that if Social Security were repealed today, there would be millions of seniors dying in the streets tomorrow. Even worse, millions of seniors remain forever grateful to the government for taking care of them in their waning years.
Or Medicare and Medicaid. People are convinced that without these two programs, countless seniors and poor people would immediately start dying from lack of medical care. They are so thankful that the government is there for them.
It’s no different with farmers, students, corporations, Wall Street investments firms, banks, foreign regimes, and countless other recipients of the dole. It’s just assumed that life would collapse without the dole.
It’s undeniable: the welfare state has horribly damaged people’s belief in freedom and free markets. It has caused them to lose faith in themselves and in others. All too many Americans now look to both Caesar and God for their sustenance. They simply cannot imagine that people would survive and prosper without the welfare state.
Look at what the dole does to people. It silences them, even when they know they’re doing something wrong. They have to show their gratitude for the dole. It would be impolite not to. Also, they might need a new infusion of the dole in the future. No need to jeopardize that possibility by opposing the wishes of the dole provider. Better to show subservience, submissiveness, meekness — and gratitude.
That’s in fact the primary reasons that statist politicians love the welfare-state way of life. No, not because they love the poor, needy, and disadvantaged or even the rich and powerful recipients of the dole but rather because the welfare state provides government officials with the means of softening the citizenry to meekly accept whatever the government does.
Politicians know that the child-adult is no more likely to challenge his dole provider at a fundamental level than a child is likely to do so with his parents. Sure, lots of complaints, whining, and temper tantrums, but never crossing the line that could mean a cut-off of paternal subsistence. They don’t call it the paternalistic state for nothing.
While he was referring to the soft despotism of a government-regulated society, the following quote by de Tocqueville also describes what happens to a society on the dole:
The sovereign, after taking individuals one by one in his powerful hands and kneading them to his liking, reaches out to embrace society as a whole. Over it he spreads a fine mesh of uniform, minute, and complex rules, through which not even the most original minds and most vigorous souls can poke their heads above the crowd. He does not break men’s wills but softens, bends, and guides them. He seldom forces anyone to act but consistently opposes action. He does not destroy things but prevents them from coming into being. Rather than tyrannize, he inhibits, represses, saps, stifles, and stultifies, and in the end he reduces each nation to nothing but a flock of timid and industrious animals, with the government as its shepherd.