By ruling for the government in the case of King v. Burwell, the Supreme Court once again tied itself into rhetorical and logical knots to defend Obamacare. In King, the court disregarded Obamacare’s clear language regarding eligibility for federal health care subsides, on the grounds that enforcing the statute as written would cause havoc in the marketplace. The court found that Congress could not have intended this result and that the court needed to uphold Congress’s mythical intention and ignore Obamacare’s actual language.
While Obamacare may be safe from court challenges, its future is far from assured. As Obamacare forces more Americans to pay higher insurance premiums while causing others to lose their insurance or lose access to the physicians of their choice, opposition to Obamacare will grow. Additional Americans will turn against Obamacare as their employers reduce their hours, along with their paychecks, because of Obamacare’s mandates.
As dissatisfaction with Obamacare grows, there will be renewed efforts to pass a single-payer health care system. Single-payer advocates will point to Obamacare’s corporatist features as being responsible for its failures and claim the only solution is to get the private sector completely out of health care.
Unfortunately, many Republicans will inadvertently aid the single-payer advocates by failing to acknowledge that Obamacare is not socialist but corporatist, and that that the pre-Obamacare health care system was hobbled by government intervention. In fact, popular support for Obamacare was rooted in the desire to address problems created by prior government interference in the health care marketplace.
Republicans also help the cause of socialized medicine by pretending that Obamacare can be fixed with minor reforms. These Republicans do not understand that replacing Obamacare with “Obamacare Lite” will still leave millions of Americans with inadequate access to quality health care, and could strengthen the movement for a single-payer system.
Republicans’ failure to advocate for a free-market health care system is not just rooted in intellectual error and political cowardice. The insurance industry, the pharmaceutical industry, and the other special interests that benefit from a large government role in health care are just as — or perhaps even more — influential in the Republican Party as in the Democratic Party. The influence of these interests is one reason why, despite their free-market rhetoric, Republicans have a long history of expanding the government’s role in health care.
Those who think a Republican president and Congress will enact free-market health care should consider that the last time Republicans controlled Congress and the White House their signature health care achievement was to expand federal health care spending and entitlements. Furthermore, Richard Nixon worked with Ted Kennedy to force all health care plans to offer a health maintenance organization (HMO). Even Obamacare’s individual mandate originated in a conservative think tank and was first signed into law by a Republican governor.
Instead of Obamacare Lite, Congress should support giving individuals direct control over their health care dollars through individual health care tax credits and expanded access to health savings accounts. Other reforms like long-term group insurance could ensure that those with "pre-existing conditions" have access to care. Another good reform is negative outcomes insurance that could help resolve the medical malpractice crisis.
America’s health care system is just as unsustainable as our foreign policy and our monetary system. At some point, the financial and human costs of Obamacare will prove overwhelming and Congress will be forced to replace this system. Hopefully, before this happens, a critical mass of people will convince Congress to replace Obamacare with a truly free-market health care system.
Wednesday
TURMOIL COMING TO THE MARKETS: PREPARE FOR A BEAR MARKET IN BONDS by RON PAUL
The problems we face today come from an attitude that there is such a thing as a “free lunch.” Though the majority of the people may endorse it, rarely do those who seek a free lunch bother to ask who ends up paying for it. It is not just the poor who are looking for a free lunch, the rich do so as well. It’s called welfarism. Endorsing the use of aggression to achieve this redistribution of wealth is acceptable for those who believe they’ll benefit from it. Generally that’s the majority of people.
Some know that the principle of welfarism is a scam and that one group – the recipients of the free lunch – will benefit at the expense of another – the producers of wealth. Others believe it to be moral and the only way society can care for the poor and therefore they endorse government force to redistribute all wealth in a “free and equitable” manner. They ignore the challenging question as to who will produce the wealth to be passed out. Economists like Paul Krugman belong to this group.
If we give Krugman and his philosophic allies the benefit of doubt, the main selfish motive that drives their efforts is an intellectual need and gratification that their views must never be abandoned or it will be seen as an admission of mistaken economic and social theories.
It is this intellectual stubbornness to prove they are right, regardless, that has driven our economy, and much of the rest of the world’s as well, since the 1930s Great Depression. The current fragility of the world’s economy is a consequence of that policy. Understanding the cause and effect of central economic planning, especially with the emphasis on central banking and fiat money, is required. If sound economic growth is to be restored, certain principles must be understood and followed.
One of the most important economic items to contend with is the need for a market rate of interest. This must replace the silly notion that the Federal Open Market Committee or even the Chairman of the Federal Reserve alone is so all wise that they can know what the rate of interest should be to regulate an economy. This one policy, of manipulating interest rates to a lower-than-market level, has caused great harm to the economy, and the full effects of pretending our money managers have the wisdom to know what the proper rate should be – especially since the 2008 — has not yet been felt.
The consequences will not be minor. Surprises will be many since we are in uncharted waters and the world has never faced the gross misallocation of capital that exists today. The process is self-limiting. It will come to an end. And it’s not going to be far into the future.
Interest rates, which are the cost of borrowing money, when set by economic authoritarians, are literally price-fixing. Fixing prices fouls up the machinery of a smooth running economy. Interest rates have a pervasive influence on all economic transactions. Fictitious interest rates assure that accurate economic calculation is impossible. While it may seem to work for significant periods of time, the results are fragile and vulnerable, requiring corrections to restore true economic growth.
Capital in a free market comes from savings, not from a central bank creating credit out of thin air. This in itself is inflation regardless of what government optimistic reports of the CPI claim.
The Central Bank’s ability to plan the economy in this manner is a fiction and only leads to problems that overwhelm the markets, eventually wiping out the middle class.
The credit and new money when created by a central bank is delivered to the market in a political fashion for which the 1% receives special benefits. It allows the pyramiding of debt through fractional reserve banking, which compounds the long-term problems. It may be fun while it lasts but it always ends with a crash.
The system enables the politicians to be totally irresponsible in fiscal affairs with no restraints on deficits, as the Federal Reserve monetizes all debt as the crisis worsens. This involves excesses in domestic, foreign, private, and sovereign debt.
The planners deliberately deceive the people while others truly believe that rigged price measurements, such as the CPI, assure them that no crisis is pending. Besides if the CPI rises higher than they think is desirable, the solution is simply and foolishly to bring on an economic slump to lower prices. A deliberate economic slowdown as practiced by central bankers is never required in a free market economy. If the rate of inflation is too low, according to their theories — say less than 2% — the solution is easy for the planners. Everybody including the government officials are told to spend more, borrow more, print more, and bailout all those entities that are “too big to fail” — and anyone else in need. There’s only one problem. This nutty solution hasn’t worked over the past six years. Yet from the planner’s view, the 2009 crash was curtailed for the big banks and the large corporations, while the 93 million underemployed sank deeper into economic malaise. We now have a labor participant rate of lower than 63%.
Keeping afloat a flawed economic system such as ours occurs for several reasons. We have been and still are, compared to others, a very rich nation. It takes a long time to squander huge wealth.
Confidence in the markets is a major factor, even though manipulated. Compared to others around the world we still look good. Being able to issue the reserve currency of the world has allowed the United States to export many of the ill effects of inflation.
Our military might allows us to intimidate others and force them to obey our commands. When they do, we just print up more money and reward them with financial assistance. If they disobey, we freeze their financial assets, place economic sanctions on them, and threaten them with military force. If our interfering in their elections fails to succeed in placing “our guy” in charge, we merely support regime change and look for another puppet.
Our policies are carried out in the name of American “exceptionalism” and a supposed need for a “good” world superpower to police the world against the international evildoers.
This process and today’s circumstances have allowed the United States sovereign debt and private debt to exceed all rational expectations of any period in history. This is about to end.
We have enjoyed tremendous benefits from being able to issue the reserve currency of the world. But today there is much talk of an alternative currency replacing the dollar. Already we see the Chinese paying Russia for oil purchases with the Chinese yuan. It could very well be the ushering in of the petro-yuan which will replace the petro-dollar.
How we got here and where we are going:
The motivating factor has been the acceptance of welfare transfers to both rich and poor. Modern day Keynesian economics has taught several generations that paying for this transfer system should be of no concern. Their belief is that debt and monetary inflation can handle the problem with smart money managers without inflicting a cost on the people. Those who know this is a lie support the policy for selfish reasons.
To their great dismay the economic planners have run into multiple unintended consequences. They build an economy on sand and destroy the foundation on which a free market system is built. All the markets have been distorted. Bubbles have come and gone yet continue to develop. Excessive government growth is an obvious consequence of such a system. And as has happened so many times throughout history, liberty is diminished in the process. This type of system, built without concern about productivity and free markets requires corrections called recessions and depressions to erase the mistakes that are characteristic of all central economic planning. The planners, who never admit a mistake, will not change policy but instead will place all the blame for the downturns on too much freedom and not enough government regulations and spending.
The tragedy of course is that when the corrections come, they are very painful and injure some groups much more than others. The middle class gets wiped out as the poor demand more benefits while the rich reap the rewards of a monetary system designed to protect those who claim they are too big to fail. This includes special interests like the military-industrial complex, which could not exist without a system of debt, financial bubbles, inflation, and an aggressive foreign policy.
There are many signs on the horizon today that a correction much bigger than that of 2009 is on the horizon. The size of the world debt is unbelievably huge. Despite the government reports, the economy remains very weak worldwide. Inflation, though denied by the government, is significant both as measured by the money supply as well as by the cost of many products. There’s little doubt that this process has motivated many to anticipate the serious changes coming.
The reports that are worth paying specific attention to are: interest rates, the dollar price of gold, stock markets, but most importantly the bond market. There are many warning signs of the danger lurking in this market that Washington politicians and central bankers refuse to see as a problem.
For the most part in the last 100 years recessions and depressions were brought on by the Fed deliberately raising interest rates. Markets however can force interest rates up even if the central bank tries to hold interest rates at 1%. Today were seeing signs that the 35 year bond bull market has ended. If this is true it will prove to be a huge event, not only for the US economy, but for the world economy as well.
This bull market in bonds started in September 1981 when the 10 year bond interest rate reached slightly over 15%. Ironically at that time nobody wanted them. At the beginning of the bull market in bonds in 1981, short-term rates reached 21% and mortgages were as high as 16%.
But under today’s circumstances how much higher can bond prices go since the government and the Federal Reserve have manipulated interest rates down to barely more than 1%? When inflation is taken into consideration, it’s less than 1%. But there have been signs in the past couple years that the exuberant bond market is coming to an end. Just possibly the beginning of the bear market in bonds occurred on June 1, 2012, when 10 year treasury bills reached 1.44%. Since that time they have been lingering and trying to show that the bull market is over and a bear market has started. Interestingly now when these bonds are not much of a bargain everybody seems to be wanting them. Even a year after the rates hit 1.44% by April 2013 they were still as low as 1.67%, and almost 2 years later in February 2015 they were still under 2% at 1.68%. Demand has remained high as one would expect in a bubble.
Obviously individuals who buy 10 and 30 year government bonds aren’t actually “investing” in them but merely parking their cash for hours or maybe a few weeks. Government bonds are not seen as a wise investment to provide a nest egg for your children or to send them to college at a later date.
Today however, the interest rate for the 10 year bond is 2.4% and the odds are that we are more likely to see a 4% rate than a rate below 2% again. Though the Federal Reserve has tremendous power and influence over the markets, there is a limit and the market can overwhelm the Fed’s plans. Just as our government has in the past tried to fix the ratio between dollars and gold and print as many dollars as they pleased, eventually the market took over and assured that the ratio reflected a market value. This was obvious when the Bretton Woods agreement broke down and gold went from $35 an ounce on its way to $100 and even $1200 and higher.
Inflation, i.e. the increase in the supply of money and credit by the Federal Reserve, will inevitably lead to higher interest rates. Though inflation of the money supply is unbelievably high, the markets have avoided an inflation premium under today’s conditions since many investors believe the Fed is capable of increasing the price of a bond for an indefinite period of time. Likewise the same sentiment is recognized in the stock market. They believe the Federal Reserve along with the Plunge Protection Team can indefinitely prop up the stock market as well. But knowledgeable people realize that these bubbles are never permanent and eventually they will burst. And it just may be that that day is not far off. A race to the exits by both bonds and stocks holders will be a gigantic event.
Most likely it will be the breaking out of interest rates on US sovereign debt, in spite of what the Fed says or does, that will convince the government optimists that their policies have been a total failure.
At the present time most of these economic planners have convinced themselves that they are a lot smarter than their critics claim. They point to the “success” of their efforts to contain the debt crisis of 2009. Instead of providing a solution, the money managers have only delayed the inevitable correction that must come if we’re ever to see true economic growth again.
My suggestions are these: Keep an eye on the price of gold. Watch for a spike in interest rates, especially for the 10 year U.S. Treasury bond. Anticipate the beginning of a sharp correction in the stock market. Look for a sharp fall in bond prices associated with panic selling. Another QE may be tried but will not restore confidence the next go-around. The money lost in the coming bear market in bonds will far exceed the very big losses that will occur in the stock market. Turmoil will surely come to Wall Street and beyond.
My assessment:
The 35 year bond bubble has ended. No more 10 year treasury yields below 2%. A bear market in bonds will last for a long period with inexorable increases in all interest rates. This will lead to stock market chaos along with exacerbating the current great recession in an environment of a very fragile economy. The Federal Reserve will lose control. The dollar will remain under attack and will eventually be replaced as the reserve currency of the world, a process that has already begun. The great fiction that the creation of debt is equivalent to money will no longer remain credible.
Federal Reserve policy removed gold and silver as the monetary reserve and replaced it with a promissory note issued by our government to pay in another promissory note of less value. The fractional reserve system and the pyramiding of debt that has been a driving force during this 35 year bull market in bonds, with abnormally low interest rates, will be reversed. It will then be necessary for the current monetary system to be replaced by a new monetary order based on honest commodity money and elimination of the fraudulent system forced upon us in 1913. Defining this replacement in a positive manner should occupy our attention in order to promote peace and prosperity.
Monday
WILL SEIZURE OF RUSSIAN ASSETS HASTEN THE DOLLAR DECLINE? by RON PAUL
While much of the world focused last week on whether or not the Federal Reserve was going to raise interest rates, or whether the Greek debt crisis would bring Europe to a crisis, the Permanent Court of Arbitration in The Hague awarded a $50 billion judgment to shareholders of the former oil company Yukos in their case against the Russian government. The governments of Belgium and France moved immediately to freeze Russian state assets in their countries, naturally provoking the anger of the Russian government.
The timing of these actions is quite curious, coming as the Greek crisis in the EU seems to be reaching a tipping point and Greece, having perhaps abandoned the possibility of rapprochement with Europe, has been making overtures to Russia to help bail it out of its mess. And with the IMF's recent statement pledging its full and unconditional support to Ukraine, it has become even more clear that the IMF and other major multilateral institutions are not blindly technical organizations, but rather are totally subservient lackeys to the foreign policy agenda emanating from Washington. Toe the DC party line and the internationalists will bail you out regardless of how badly you mess up, but if you even think about talking to Russia you will face serious consequences.
The United States government is desperately trying to cling to the notion of a unipolar world, with the United States at its center dictating foreign affairs and monetary policy while its client states dutifully carry out instructions. But the world order is not unipolar, and the existence of Russia and China is a stark reminder of that. For decades, the United States has benefited as the creator and defender of the world's reserve currency, the dollar. This has enabled Americans to live beyond their means as foreign goods are imported to the US while increasingly-worthless dollars are sent abroad. But is it any wonder after 70-plus years of a depreciating dollar that the rest of the world is rebelling against this massive transfer of wealth?
The Europeans tried to form their own competitor to the dollar, and the resulting euro is collapsing around them as you read this. But the European Union was never considered much of a threat by the United States, existing as it does within Washington's orbit. Russia and China, on the other hand, pose a far more credible threat to the dollar, as they have both the means and the motivation to form a gold-backed alternative monetary system to compete against the dollar. That is what the US government fears, and that is why President Obama and his Western allies are risking a cataclysmic war by goading Russia with these politically-motivated asset seizures. Having run out of carrots, the US is resorting to the stick.
The US government knows that Russia will not blithely accept Washington's dictates, yet it still reacts like a petulant child flying into a tantrum whenever Russia dares to exert its sovereignty. The existence of a country that won't kowtow to Washington's demands is an unforgivable sin, to be punished with economic sanctions, attempting to freeze Russia out of world financial markets; veiled threats to strip Russia's hosting of the 2018 World Cup; and now the seizure of Russian state assets.
Thus far the Russian response has been incredibly restrained, but that may not last forever. Continued economic pressure from the West may very well necessitate a Sino-Russian monetary arrangement that will eventually dethrone the dollar. The end result of this needless bullying by the United States will hasten the one thing Washington fears the most: a world monetary system in which the US has no say and the dollar is relegated to playing second fiddle.
Friday
RON PAUL / LEW ROCKWELL / DANIEL McADAMS
https://www.lewrockwell.com/assets/2015/06/20150617_Liberty-Report.mp3 (PLEASE COPY AND PASTE)
Monday
DEATH PENALTY: THE ULTIMATE CORRUPT, BIG GOVERNMENT PROGRAM by RON PAUL
Nebraska’s legislature recently made headlines when it ended the state’s death penalty. Many found it odd that a conservatives-dominated legislature would support ending capital punishment, since conservative politicians have traditionally supported the death penalty. However, an increasing number of conservatives are realizing that the death penalty is inconsistent with both fiscal and social conservatism. These conservatives are joining with libertarians and liberals in a growing anti-death penalty coalition.
It is hard to find a more wasteful and inefficient government program than the death penalty. New Hampshire recently spent over $4 million dollars prosecuting just two death penalty cases, while Jasper County in Texas raised property taxes by seven percent in order to pay for one death penalty case! A Duke University study found that replacing North Carolina’s death penalty would save taxpayers approximately $22 million dollars in just two years.
Death penalty cases are expensive because sentencing someone to death requires two trials. The first trial determines the accused person’s guilt, while the second trial determines if the convicted individual “deserves” the death penalty. A death sentence is typically followed by years of appeals, and sometimes the entire case is retried.
Despite all the time and money spent to ensure that no one is wrongly executed, the system is hardly foolproof. Since 1973, one out of every ten individuals sentenced to death has been released from death row because of evidence discovered after conviction.
The increased use of DNA evidence has made it easier to clear the innocent and identify the guilty. However, DNA evidence is not a 100 percent guarantee of an accurate verdict. DNA evidence is often mishandled or even falsified. Furthermore, DNA evidence is available in only five to 10 percent of criminal cases.
It is not surprising that the government wastes so much time and money on such a flawed system. After all, corruption, waste, and incompetence are common features of government programs ranging from Obamacare to the TSA to public schools to the post office. Given the long history of government failures, why should anyone, especially conservatives who claim to be the biggest skeptics of government, think it is a good idea to entrust government with the power over life and death?
Death penalty supporters try to claim the moral high ground by claiming that the death penalty deters crime. But, if the death penalty is an effective deterrent, why do jurisdictions without the death penalty have a lower crime rate than jurisdictions with the death penalty? And why did a 2009 survey find that the majority of American police chiefs consider the death penalty the least effective way to reduce violent crime?
As strong as the practical arguments against the death penalty are, the moral case is much stronger. Since it is impossible to develop an error-free death penalty system, those who support the death penalty are embracing the idea that the government should be able to execute innocent people for the “greater good.” The idea that the government should be able to force individuals to sacrifice their right to life for imaginary gains in personal safety is even more dangerous to liberty than the idea that the government should be able to force individuals to sacrifice their property rights for imaginary gains in economic security.
Opposition to allowing the government to take life is also part of a consistent pro-life position. Thus, those of any ideology who oppose abortion or preemptive war should also oppose the death penalty. Until the death penalty is abolished, we will have neither a free nor a moral society.
SOROS PUSHES U.S. BAILOUTS AND WEAPONS FOR THE UKRAINE by RON PAUL
If you look at the track record of the interventionists you might think they would pause before taking on more projects. Each of their past projects has ended in disaster yet still they press on. Last week the website Zero Hedge posted a report about hacked emails between billionaire George Soros and Ukrainian President Poroshenko.
Soros is very close to the Ukrainian president, who was put in power after a US-backed coup deposed the elected leader of Ukraine last year. In the email correspondence, Soros tells the Ukrainian leadership that the US should provide Ukraine “with same level of sophistication in defense weapons to match the level of opposing force." In other words, despite the February ceasefire, Soros is pushing behind the scenes to make sure Ukraine receives top-of-the-line lethal weapons from the United States. Of course it will be up to us to pay the bill because Ukraine is broke.
But Soros seems to have the money part covered as well. In an email to Ukrainian leaders, he wrote that Ukraine’s "first priority must be to regain control of financial markets." Soros told Poroshenko that the IMF would need to come through with a $15 billion package, which was confident would lead the Fed to also come through with more money. He wrote: “the Federal Reserve could be asked to extend a $15 billion three months swap arrangement with the National Bank of Ukraine. That would reassure the markets and avoid a panic.”
How would the Fed be convinced to do that? Soros assured Poroshenko: “I am ready to call Jack Lew of the US Treasury to sound him out about the swap agreement.”
So George Soros will use his influence in the US government to put the American people on the hook for a bankrupt Ukraine -- forcing us to pay for weapons, more military training, and Ukraine’s crippling debt.
Who is thrilled with Soros’ drawing the US government into more intervention in the region? The military-industrial complex for one is happy at the prospect of big weapons “sales” to Ukraine. The bankers are thrilled. Washington power-brokers are thrilled. There is something in this for everyone who is politically well-connected. The only losers are the people who will be forced to pay for it, the American taxpayers.
No one seems to ask why we are involved in Ukraine at all. Is it really any of our business if the east wants to break away from the west? Is it a vital US interest which flag the people wish to hang in Donetsk?
One thing we should be sure of is that Ukraine’s debt will not be paid. As in other bailouts, much of it will be transferred to the US taxpayer through the IMF and the Federal Reserve. All of this is only possible because of the perception that the dollar is still the world’s reserve currency. But this too is coming to an end. US military and financial interventionism worldwide are only speeding up the process.
Tuesday
WHAT I THINK........LEW ROCKWELL
Students in the state’s official propaganda institutions learn about the wonders of the democratic process, so called, throughout their years of formal study. But the truth is on full display during a presidential election season. These are not wise statesmen, discussing matters of importance from a disinterested, platonic summit, but narcissistic power-seekers shoveling ill-gotten gains to favored constituencies.
Elections have sometimes been compared to markets: just as firms compete for consumer dollars, political candidates compete for citizens’ votes. But the comparison is a superficial one.
When the consumer spends his dollar, he is guaranteed to receive what he purchases. So he researches that big-screen television, or automobile, or tablet, or smartphone. He considers his options and decides which one best suits his needs. He perceives the benefits that accrue to him from his purchase, and he is also aware of their cost. He immediately reaps the benefits of a wise purchase, and immediately suffers the loss associated with an unwise purchase.
When the citizen casts his vote, he gets what he votes for only if 50 percent of the rest of the population votes for the same candidate he does. So he may not in fact suffer any adverse consequences from a poorly cast vote. Likewise, the politician he chooses may win but not carry through on his promises. Again, there is no direct feedback mechanism for the voter the way there is for the buyer on the market, who immediately reaps the benefits of an informed decision and suffers the consequences of a decision made from ignorance. And although he perceives the alleged benefits bestowed by the state, he has no idea what their cost is.
And of course, there is zero chance that one person’s vote will decide an election. As a result, a voter has no reason to bother researching his options, nor entering the government booth to begin with. He may cast his vote on the most superficial basis, the kind of basis on which he would never rest his decision to purchase a consumer good.
Meanwhile, and by stark contrast, those pressure groups that expect and intend to extract favors and loot from the state apparatus know every last detail about the state, its personnel, and its activities.
Because it is so unlike the market economy, politics operates according to perverse principles. Instead of reason and evidence, political campaigns appeal to emotion and irrationality. Consultants labor obsessively to uncover just the right combinations of words and images to project an attractive package to the voting public. Meanwhile, when a candidate in an unguarded moment thoughtlessly utters a truthful statement, you can be sure each of his rivals will solemnly denounce it, and that it will be formally retracted within 24 hours.
This is why it was such a thrill to watch Ron Paul in the 2008 and 2012 election cycles. If you want to raise money and win votes, political consultants would say, then flatter your audience, avoid specifics, speak in platitudes, weep over your love for America, and so on. But Ron gave honest, unrehearsed answers to whatever he was asked, and paid no attention to focus groups or political fashion.
And this is precisely why Ron raised all the money he did. In the fourth quarter of 2011, remember, Ron led the entire GOP pack in fundraising.
Who else in political life was saying that the Fed, far from the savior of the economy, was the cause of the boom-bust cycle? Who else would denounce the drug war even in the most conservative states? Who else described peace and nonintervention as moral imperatives, and called the warfare state a racket through and through?
This is what got Ron noticed. These were opinions no one had ever heard in political life before. Had there ever been so principled a non-interventionist? The very idea of nonintervention as a consistent philosophy had never before found a place in the American foreign policy debate, which had always revolved around degrees and forms of intervention. And certainly no one had ever made the Fed a political issue, or opposed it vociferously and on principle.
In that way, Ron became a phenomenon without any deliberate effort on his part. In the course of ignoring the conventional wisdom on what to say and how to act during a campaign, Ron generated so much enthusiasm and fundraising that politicians started coming out of the woodwork to implore him to share his secrets. What new trick had he discovered? I just told the truth, Ron told his dejected inquirers.
He accomplished this because he was so radically unlike the other candidates – in 2012 or in any other year. He did not expect to fool people into voting for him by being coy or inconsistent in his views, or by compromising just enough, in the vain hope that the party establishment would give him a fair hearing.
Whether it’s the surveillance state, Federal Reserve inflation, or the latest chapter in the ludicrous and self-defeating “War on Terror,” the highest-ranking people in both parties can be counted on to demonize dissident voices. The official media, in turn, with anyone even slightly unorthodox now out of the picture, then pretends that the American public is faced with a grave and dramatic choice.
It never is, of course. It was Republican think-tanks, for example, that had been pushing the individual mandate, the very heart of Obamacare, years before the election of Barack Obama. Neither candidate will have a fundamental objection to the Federal Reserve, so the most important economic institution in the country, and certainly the most damaging, won’t even be discussed, much less challenged or actually abolished. And there will assuredly be no departure from the consistent, bipartisan foreign policy of war and empire.
So whatever the electoral outcome, the wars will be the same, the bailouts will be the same, the monetary policy will be the same, the surveillance will be the same, the “economic stimulus” will be the same – and by now, anyone paying attention knows it. The alleged experts who observe, handicap, and analyze our presidential races pretend not to know it, but since their job is to preserve the illusion of choice, that’s no surprise.
This is why a truth-telling political blog can do some good: it punctures the abiding myths of the American political system and the media classes that perpetuate them. For that reason, I’ve resurrected the one-man Political Theatre blog I launched in 2011. I’ll be following the race from now until the bitter end, so be sure to join me there!
Even if, per impossibile, a candidate were elected who favored slashing and abolishing everything in sight, he’d be up against the entrenched interests of millions of government employees, all of whose livelihoods depend on defeating his best efforts. One of the most preposterous of Karl Marx’s ideas was that the state has no interests of its own – it was merely an instrument by which the ruling class exploits everyone else, and nothing more.
But what could be more obvious than the utter falsity of this claim? It was exploded in the USSR itself, where the bureaucracy was consistently looking out for its own interests, ideology be damned. In the US and elsewhere, the situation is much the same: an entrenched bureaucracy seeks ever more power and resources for the sake of perpetuating its own existence.
Meanwhile, we are solemnly assured that this preposterous display constitutes the very best political system available to man (it’s “the worst system except for all the others,” a wag famously said), which means that in following this spectacle over the next 18 months, we are observing the state at its best. If this is the state at its best, isn’t it time to make the leap to anarcho-capitalism?
Monday
EX-IM BANK IS WELFARE FOR THE ONE PERCENT by RON PAUL
This month Congress will consider whether to renew the charter of the Export-Import Bank (Ex-Im Bank). Ex-Im Bank is a New Deal-era federal program that uses taxpayer funds to subsidize the exports of American businesses. Foreign businesses, including state-owned corporations, also benefit from Ex-Im Bank. One country that has benefited from $1.5 billion of Ex-Im Bank loans is Russia. Venezuela, Pakistan, and China have also benefited from Ex-Im Bank loans.
With Ex-Im Bank’s track record of supporting countries that supposedly represent a threat to the US, one might expect neoconservatives, hawkish liberals, and other supporters of foreign intervention to be leading the effort to kill Ex-Im Bank. Yet, in an act of hypocrisy remarkable even by DC standards, many hawkish politicians, journalists, and foreign policy experts oppose ending Ex-Im Bank.
This seeming contradiction may be explained by the fact that Ex-Im Bank’s primary beneficiaries include some of America’s biggest and most politically powerful corporations. Many of Ex-Im Bank’s beneficiaries are also part of the industrial half of the military-industrial complex. These corporations are also major funders of think tanks and publications promoting an interventionist foreign policy.
Ex-Im Bank apologists claim that the bank primarily benefits small business. A look at the facts tells a different story. For example, in fiscal year 2014, 70 percent of the loans guaranteed by Ex-Im Bank’s largest program went to Caterpillar, which is hardly a small business.
Boeing, which is also no one’s idea of a small business, is the leading recipient of Ex-Im Bank aid. In fiscal year 2014 alone, Ex-Im Bank devoted 40 percent of its budget — $8.1 billion — to projects aiding Boeing. No wonder Ex-Im Bank is often called “Boeing’s bank.”
Taking money from working Americans, small businesses, and entrepreneurs to subsidize the exports of large corporations is the most indefensible form of redistribution. Yet many who criticize welfare for the poor on moral and constitutional grounds do not raise any objections to welfare for the rich.
Ex-Im Bank’s supporters claim that ending Ex-Im Bank would deprive Americans of all the jobs and economic growth created by the recipients of Ex-Im Bank aid. This claim is a version of the economic fallacy of that which is not seen. The products exported and the people employed by businesses benefiting from Ex-Im Bank are visible to all. But what is not seen are the products that would have been manufactured, the businesses that would have been started, and the jobs that would have been created had the funds given to Ex-Im Bank been left in the hands of consumers.
Another flawed justification for Ex-Im Bank is that it funds projects that could not attract private sector funding. This is true, but it is actually an argument for shutting down Ex-Im Bank. By funding projects that cannot obtain funding from private investors, Ex-Im Bank causes an inefficient allocation of scarce resources. These inefficiencies distort the market and reduce the average American's standard of living.
Some Ex-Im Bank supporters claim that Ex-Im Bank promotes free trade. Like all other defenses of Ex-Im Bank, this claim is rooted in economic fallacy. True free trade involves the peaceful, voluntary exchange of goods across borders — not forcing taxpayers to subsidize the exports of politically powerful companies.
Ex-Im Bank distorts the market and reduces the average American's standard of living in order to increase the power of government and enrich politically powerful corporations. Congress should resist pressure from the crony capitalist lobby and allow Ex-Im Bank's charter to expire at the end of the month. Shutting down Ex-Im Bank would improve our economy and benefit most Americans. It is time to kick Boeing and all other corporate welfare queens off the dole.
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