GOVERNMENT POLICIES HURT LOW-WAGE WORKERS by RON PAUL

Fast-food workers across the county have recently held a number of high profile protests to agitate for higher wages. These protests have been accompanied by efforts to increase the wages mandated by state and local minimum wage laws, as well as a renewed push in some states and localities to pass “living wage” laws. President Obama has proposed raising the federal minimum wage to ten dollars an hour.

Raising minimum wages by government decree appeals to those who do not understand economics. This appeal is especially strong during times of stagnant wages and increased economic inequality. But raising the minimum wage actually harms those at the bottom of the income ladder. Basic economic theory teaches that when the price of a good increases, demand for that good decreases. Raising the minimum wage increases the price of labor, thus decreasing the demand for labor. So an increased minimum wage will lead to hiring freezes and layoffs. Unskilled and inexperienced workers are the ones most often deprived of employment opportunities by increases in the minimum wage.

Minimum wage laws are not the only example of government policies that hurt those at the bottom of the income scale. Many regulations that are promoted as necessary to “rein in” large corporations actually hurt small businesses. Because these small businesses operate on a much narrower profit margin, they cannot as easily absorb the costs of complying with the regulations as large corporations. These regulations can also inhibit lower income individuals from starting their own businesses. Thus, government regulations can reduce the demand for wage-labor, while increasing the supply of labor, which further reduces wages.

Perhaps the most significant harm to low-wage earners is caused by the inflationist polices of the Federal Reserve. Since its creation one hundred years ago this month, the Federal Reserve’s policies have caused the dollar to lose over 95 percent of its purchasing power—that’s right, today you need $23.70 to buy what one dollar bought in 1913! Who do you think suffers the most from this loss of purchasing power—Warren Buffet or his secretary?

It is not just that higher incomes can afford the higher prices caused by Federal Reserve. The system is set up in a way that disadvantages those at the bottom of the income scale. When the Federal Reserve creates money, those well-connected with the political and financial elites receive the newly-created money first, before general price increases have spread through the economy. And most fast-food employees do not number among the well-connected.

It is not a coincidence that economic inequality has increased in recent years, as the Federal Reserve has engaged in unprecedented money creation and bailouts of big banks and Wall Street financial firms. As billionaire investor Donald Trump has said, the Federal Reserve’s quantitative easing policies are a great deal for “people like me.” And former Federal Reserve official Andrew Huszar has called QE "the greatest backdoor Wall Street bailout of all time.”

Many so-called champions of economic equality and fairness for the working class are preparing to confirm Janet Yellen as next Chairman of the Federal Reserve. Yet Yellen is committed to continuing and even expanding, the upward redistributionist polices of her predecessors. Washington could use more sound economic thinking and less demagoguery.

By increasing unemployment, government policies like minimum wage laws only worsen inequality. Those who are genuinely concerned about increasing the well-being of all Americans should support repeal of all laws, regulations, and taxes that inhibit job creation and economic mobility. Congress should also end the most regressive of all taxes, the inflation tax, by ending the Federal Reserve.

PROGRESS TOWARD PEACE IN 2013, BUT DARK CLOUDS REMAIN by RON PAUL

It is the time of year we feel a sense of joy and optimism. We are preparing for the holidays and looking to spend time with our families and friends. This year as we look back we see several developments that leave us feeling optimistic.

A US attack on Syria was averted to a large degree because the American people did not want another Middle Eastern war. Public pressure was so strong that President Obama was forced to back down from his threats to launch missiles at Syria over an alleged Syrian government chemical attack. We have just recently discovered that US claims at the time were based on highly manipulated “intelligence.” The president narrowly avoided another Iraq debacle, where the US went to war based on lies and fabrications. This time the American people were much more skeptical. That is good news!

A US attack on Syria would have brought us one step closer to the neocons’ ultimate goal of an attack on Iran. The administration’s decision to step back from the brink with Syria has consequently opened the door to an historic US diplomatic engagement with Iran.

Yes, the neocons have suffered a number of defeats this year for which we have great reason to be thankful and optimistic. However, it would be foolish to believe that a couple of defeats will end their obsession with American exceptionalism, war, and the US global empire. Though the neocons have had several set-backs, they will continue their efforts. And there are some dark clouds on the horizon that we should closely watch.

The Senate, for example, seems intent on ruining the Christmas spirit – a time when Christians celebrate the birth of the Prince of Peace -- with new threats against Iran, even as diplomacy has achieved what decades of sanctions could not.

While US Senate efforts to include new Iran sanctions language in the National Defense Authorization Act for 2014 (NDAA) were unsuccessful, those pushing for more sanctions on Iran even in the midst of a diplomatic thaw have not given up. Last week 26 Senators – drawn equally from each party -- introduced the Nuclear Weapons Free Iran Act, which would impose severe new sanctions on Iran and on countries who do business with Iran.

Perhaps worse, the Act states that it is the sense of the Congress that if Israel attacks Iran, the US Congress should:

“[A]uthorize the use of military force, diplomatic, military, and economic support to the Government of Israel in its defense of its territory, people, and existence.”

Even though a “sense of Congress” has no force of law, these are the kinds of blank checks that lead to world wars. Though not binding, language like this is meant to establish US policy over time, so that if Israel does attack Iran, enough Senators will be on record supporting US involvement that they feel compelled to vote for war. This is the game they played for more than a decade with Iraq legislation.

The Senate bill is unlikely to ever become law, but even if it did, it would not succeed. Its demand that the rest of the world stop doing business with Iran just as Iran has shown such diplomatic flexibility would likely be ignored.

Congress – under the influence of the Israeli and Saudi lobbies -- is seeking to derail the Obama Administration’s diplomatic efforts with Iran. We can be optimistic over the steps toward peace this past year, but we should remain vigilant. The war lobby will not give up so easily.

RON PAUL AND LEW ROCKWELL

http://www.youtube.com/watch?feature=player_embedded&v=o2kwzmnJum4

AFTER 100 YEARS OF FAILURE, IT'S TIME TO END THE FED by RON PAUL

A week from now, the Federal Reserve System will celebrate the 100th anniversary of its founding. Resulting from secret negotiations between bankers and politicians at Jekyll Island, the Fed's creation established a banking cartel and a board of government overseers that has grown ever stronger through the years. One would think this anniversary would elicit some sort of public recognition of the Fed’s growth from a quasi-agent of the Treasury Department intended to provide an elastic currency, to a de facto independent institution that has taken complete control of the economy through its central monetary planning. But just like the Fed's creation, its 100th anniversary may come and go with only a few passing mentions.

Like many other horrible and unconstitutional pieces of legislation, the bill which created the Fed, the Federal Reserve Act, was passed under great pressure on December 23, 1913, in the waning moments before Congress recessed for Christmas with many Members already absent from those final votes. This underhanded method of pressuring Congress with such a deadline to pass the Federal Reserve Act would provide a foreshadowing of the Fed's insidious effects on the US economy—with actions performed without transparency.

Ostensibly formed with the goal of preventing financial crises such as the Panic of 1907, the Fed has become increasingly powerful over the years. Rather than preventing financial crises, however, the Fed has constantly caused new ones. Barely a few years after its inception, the Fed's inflationary monetary policy to help fund World War I led to the Depression of 1920. After the economy bounced back from that episode, a further injection of easy money and credit by the Fed led to the Roaring Twenties and to the Great Depression, the worst economic crisis in American history.

But even though the Fed continued to make the same mistakes over and over again, no one in Washington ever questioned the wisdom of having a central bank. Instead, after each episode the Fed was given more and more power over the economy. Even though the Fed had brought about the stagflation of the 1970s, Congress decided to formally task the Federal Reserve in 1978 with maintaining full employment and stable prices, combined with constantly adding horrendously harmful regulations. Talk about putting the inmates in charge of the asylum!

Now we are reaping the noxious effects of a century of loose monetary policy, as our economy remains mired in mediocrity and utterly dependent on a stream of easy money from the central bank. A century ago, politicians failed to understand that the financial panics of the 19th century were caused by collusion between government and the banking sector. The government's growing monopoly on money creation, high barriers to entry into banking to protect politically favored incumbents, and favored treatment for government debt combined to create a rickety, panic-prone banking system. Had legislators known then what we know now, we could hope that they never would have established the Federal Reserve System.

Today, however, we do know better. We know that the Federal Reserve continues to strengthen the collusion between banks and politicians. We know that the Fed's inflationary monetary policy continues to reap profits for Wall Street while impoverishing Main Street. And we know that the current monetary regime is teetering on a precipice. One hundred years is long enough. End the Fed.

HOBBY LOBBY CASE IS ABOUT RIGHTS, NOT CONTRACEPTIVES by RON PAUL

        

One of the most important cases the US Supreme Court will consider this term is Hobby Lobby’s lawsuit challenging the Obamacare mandate that employer-provided health care plans must cover abortion and contraceptives. Hobby Lobby, a corporation owned and managed by a traditional Christian family, argues that the mandate violates their First Amendment rights.

Much of the discussion has focused on whether a corporation such as Hobby Lobby can even have First Amendment rights. But the issue of “corporate personhood” is a smokescreen. Hobby Lobby’s corporate status has no bearing on whether under Obamacare, Hobby Lobby’s owners, about whose personhood there is no doubt, have a right to run their business in a manner consistent with their moral beliefs. If the form by which Hobby Lobby did business was relevant to its right to operate free of federal interference, then Hobby Lobby could avoid the Obamacare mandate by simply reorganizing itself as a partnership or sole proprietorship.

Some Obamacare supporters cast this case as a conflict between Hobby Lobby’s First Amendment rights and the rights of its employees to contraception and abortion. Hobby Lobby is not trying to stop its employees from obtaining contraceptives and abortions; it is simply asking that the government not force it to pay for them.

Forcing Hobby Lobby to pay for abortion services is especially offensive because Hobby Lobby’s owners consider abortion a form of murder. Those who, like me, agree that abortion is an act of violence against an innocent person, will side with Hobby Lobby. However, this case is not about the legality of abortion. It is about whether someone can have a “right” to force someone else to provide him with a good or service.  Therefore, even those who support legal abortion should at least support a business’s right to choose to not subsidize it.

Supporters of the mandate claim Congress has the power to create rights to privately-provided goods and services. They also say that Congress has the power to legislatively override the rights of religious liberty, property, and contract. It is fair to ask what is the source of Congress’s power to create new rights. It certainly does not originate in the Declaration of Independence, which expressly denies that rights come from the government; or from the United Stares Constitution, which nowhere granted government the power to redistribute or create artificial rights.

The principle that Government can force businesses to violate their religious principals even if those principles conflict with civil law could be applied in ways some Obamacare supporters may find objectionable. For example, what if the government argued that the Pentagon’s need for some products produced by a Quaker-owned business trumped the Quaker owner’s objections to war?

The hypothetical example above shows just how radical and dangerous are arguments in support of the Obamacare abortion and contraception mandate. If Hobby Lobby loses, the US Supreme Court will have endorsed the idea that the federal government can force individuals to violate their most sacred religious principles to satisfy any government demands. The central question of the Hobby Lobby case, then, is whether religious liberty will continue to be meaningful in this country. For what good is a religious liberty that protects your rights to attend a worship service, but allows the government to force you to live in opposition to the values preached at those services? This is why all supporters of liberty and limited government—regardless of their views on the morality of contraception—should be on the side of Hobby Lobby.

YOU CANNOT NEGOTIATE WITH IRAN by RON PAUL

You cannot negotiate with Iran. That is what they told us for years. The Iranian leadership is too fanatical, they are not rational actors, they are “not like us.” One US official even recently said that deception is part of the Iranian DNA. But just over a week ago negotiations between the five permanent UN Security Council Members plus Germany and the Iranians produced an historic agreement that may be first step toward a new era in US relations with the Middle East.

As Middle East expert Eric Margolis pointed out this week, for Iran’s major concessions it will only receive “$7 billion – of its own money, which has been frozen abroad by US-led sanctions.” That sounds like quite a bit of compromise for such a “fanatical” country.

Earlier this summer the same people made the same arguments about Syria. You cannot negotiate with Syrian President Assad, they said. He is insane; he is another Hitler. But not only was it possible, a deal was signed ending the threat of a US strike in exchange for Syria agreeing to give up its chemical weapons and the ability to manufacture new ones. Syria upheld its end of the agreement and the chemicals were all accounted for on schedule.

Why have the interventionists, the neocons, and the special interest groups claimed for so long that negotiation and diplomacy was tantamount to surrender; that countries such as Iran and Syria “only understand force”? It is because these groups are afraid of diplomacy. They do not want a peaceful resolution to these conflicts. They see US foreign relations only in the starkest terms: do what we say and we will give you aid, disobey us and we will bomb you.

Now the warmongers who call themselves “foreign policy experts” have been exposed. The whole world sees that they are wrong. Their advice is bad. Their limited vision of how foreign affairs should be conducted is actually dangerous to the United States. It is now clear that there are workable alternatives.

As with the US threats against Syria, public opinion polls on talks with Iran demonstrate that the American people are solidly behind diplomacy and opposed to another war. According to one recent poll, Americans support the deal reached with Iran by a margin of two-to-one.

Congress, however, is once again far behind the American people. Even as US negotiators were reaching agreement with their Iranian counterparts, US representatives and Senators were drafting legislation to increase sanctions on Iran. Instead of listening to the American people, many in Congress seem attached to special interests like the Israel and Saudi lobbies, which oppose anything less than full Iranian capitulation. Israel refuses to join the Non-Proliferation Treaty yet it seeks to dictate the rules of the treaty to those who have signed it. Saudi Arabia is desperate to control the region politically and economically, and it views an Iran that is free to sell oil and other products on the open market as a threat to Saudi power.

For too long both Israel and the Saudis have benefited from a US military guarantee. It has created “moral hazard” that only encourages more belligerent behavior on both of their parts. It remains to be seen whether this six month trial period will develop into a permanent move toward normalization of relations with Iran. What if Congress refuses to give Iran its own money back? But we are moving in the right direction and we should be optimistic.

A better US relationship with Iran may signal the beginning of the end of US meddling in the region and serve as an incentive for Saudi Arabia, Israel, and the Gulf States to solve their problems themselves. This would be a great boost to US national security, just as an Iran open to US business and trade would be a great boost to our economic security. Is peace finally breaking out? Let’s hope so.