When Time-Warner announced it planned to merge with another major communications firm, many feared the new company would exercise near-total monopoly power. These concerns led some to call for government action to block the merger in order to protect both Time-Warner's competitors and consumers.
No, I am not talking about Time-Warner’s recent announced plan to merge with AT&T, but the reaction to Time-Warner’s merger with (then) Internet giant AOL in 2000. Far from creating an untouchable leviathan crushing all competitors, the AOL-Time-Warner merger fell apart in under a decade.
The failure of AOL-Time-Warner demonstrates that even the biggest companies are vulnerable to competition if there is open entry into the marketplace. AOL-Time-Warner failed because consumers left them for competitors offering lower prices and/or better quality.
Corporate mergers and “hostile” takeovers can promote economic efficiency by removing inefficient management and boards of directors. These managers and board members often work together to promote their own interests instead of generating maximum returns for investors by providing consumers with affordable, quality products. Thus, laws making it difficult to launch a "hostile" takeover promote inefficient use of resources and harm investors, workers, and consumers.
Monopolies and cartels are creations of government, not markets. For example, the reason the media is dominated by a few large companies is that no one can operate a television or radio station unless they obtain federal approval and pay federal licensing fees. Similarly, anyone wishing to operate a cable company must not only comply with federal regulations, they must sign a “franchise” agreement with their local government. Fortunately, the Internet has given Americans greater access to news and ideas shut out by the government-licensed lapdogs of the "mainstream" media. This may be why so many politicians are anxious to regulate the web.
Government taxes and regulations are effective means of limiting competition in an industry. Large companies can afford the costs of complying with government regulations, costs which cripple their smaller competitors. Big business can also afford to hire lobbyists to ensure that new laws and regulations favor big business.
Examples of regulations that benefit large corporations include the Food and Drug Administration’s (FDA) regulations that raise costs of developing a new drug, as well as limit consumers ability to learn about natural alternatives to pharmaceuticals. Another example is the Dodd-Frank legislation, which has strengthened large financial intuitions while harming their weaker competitors.
Legislation forcing consumers to pay out-of-state sales tax on their online purchases is a classic case of business seeking to use government to harm less politically-powerful competitors. This legislation is being pushed by large brick-and-mortar stores and Internet retailers who are seeking a government-granted advantage over smaller competitors.
Many failed mergers and acquisitions result from the distorted signals sent to business and investors by the Federal Reserve’s inflationary monetary policy. Perhaps the most famous example of this is the AOL-Time-Warner fiasco, which was a direct result of the Fed-created dot.com bubble.
In a free market, mergers between businesses enable consumers to benefit from new products and reduced prices. Any businesses that charge high prices or offer substandard products will soon face competition from businesses offering consumers lower prices and/or higher quality. Monopolies only exist when government tilts the playing field in favor of well-connected crony capitalists. Therefore those concerned about excessive corporate power should join supporters of the free market in repudiating the regulations, taxes, and subsides that benefit politically-powerful businesses. The most important step is to end the boom-bust business cycle by ending the Federal Reserve.
Monday
OBAMA'S PIVOT TO ASIA HITS A ROADBLOCK IN THE PHILIPPINES by RON PAUL
While the mainstream media continues its obsessive reporting on the mud-slinging campaign for the White House, a dramatic development in China last week brought President Obama’s “pivot to Asia” to a sudden halt. Philippine president Rodrigo Duterte, while in Beijing, announced his country’s “separation” from the United States. He told his Chinese audience, “Your honors, in this venue, I announce my separation from the United States … both in military, but also economics.’’
The State Department was stunned and asked for a clarification. The Philippines has been a virtual US protectorate since 1898, when it became US property after the Spanish-American war. Even after gaining independence after World War II it remained a close Cold War ally, hosting US military bases until 1992. Just this spring, as US tensions with China were heating up over a Chinese reclamation project in the South China Sea, the US signed a deal to open five military bases on Philippine territory. The deal was considered of major importance in an increasingly confrontational US approach to the region.
Suddenly it appeared the deal was off. Was the Philippines about to sever diplomatic relations with the United States?
Shortly after making the statement, the Philippine president walked back slightly from what appeared a break with the United States. He did not mean total separation, he said, but rather a desire to loosen his country from the firm grip of US foreign policy. But the point had been made. The Philippines was not happy in its current relationship with Washington.
President Obama’s “pivot to Asia” has turned out not to mean improved trade and diplomatic ties with the region, but an aggressive stance toward China over, among other issues, the South China Sea. The US has concluded military agreements with Vietnam and the Philippines, and maintains strong military ties with Japan and South Korea.
The Philippines has been used as a US cat’s paw in South China Sea dispute and Duterte’s surprise statement signaled that he felt the relationship was too one-sided.
But the tension has been rising and the mood souring for some time. The US State Department has been critical of President Duterte’s admittedly brutal crackdown on illegal drugs, which has cost perhaps 2,000 or more lives. In August, Secretary of State John Kerry conveyed the US government’s concerns. As elsewhere, such condemnation by the US likely seemed hypocritical to the Philippine president, as the US leads the world in prison population with a large percentage serving long terms for non-violent drug crimes.
Last week a large protest was held in front of the US embassy in Manila in support of the president’s move toward a foreign policy independent from Washington. Demonstrators burned American flags and demanded the departure of US troops from their country.
Will US-Philippine relations continue to spiral downward? Or will Washington begin to see that its aggressive foreign policy, in Asia and elsewhere, is beginning to alienate allies? Or perhaps the next US administration will decide that a CIA “regime change” is in order for the independent-minded Philippine president. A US pivot away from confrontation with China would go a long way toward repairing strained relations with the Philippines and beyond. Let’s hope that’s Washington’s next move.
The State Department was stunned and asked for a clarification. The Philippines has been a virtual US protectorate since 1898, when it became US property after the Spanish-American war. Even after gaining independence after World War II it remained a close Cold War ally, hosting US military bases until 1992. Just this spring, as US tensions with China were heating up over a Chinese reclamation project in the South China Sea, the US signed a deal to open five military bases on Philippine territory. The deal was considered of major importance in an increasingly confrontational US approach to the region.
Suddenly it appeared the deal was off. Was the Philippines about to sever diplomatic relations with the United States?
Shortly after making the statement, the Philippine president walked back slightly from what appeared a break with the United States. He did not mean total separation, he said, but rather a desire to loosen his country from the firm grip of US foreign policy. But the point had been made. The Philippines was not happy in its current relationship with Washington.
President Obama’s “pivot to Asia” has turned out not to mean improved trade and diplomatic ties with the region, but an aggressive stance toward China over, among other issues, the South China Sea. The US has concluded military agreements with Vietnam and the Philippines, and maintains strong military ties with Japan and South Korea.
The Philippines has been used as a US cat’s paw in South China Sea dispute and Duterte’s surprise statement signaled that he felt the relationship was too one-sided.
But the tension has been rising and the mood souring for some time. The US State Department has been critical of President Duterte’s admittedly brutal crackdown on illegal drugs, which has cost perhaps 2,000 or more lives. In August, Secretary of State John Kerry conveyed the US government’s concerns. As elsewhere, such condemnation by the US likely seemed hypocritical to the Philippine president, as the US leads the world in prison population with a large percentage serving long terms for non-violent drug crimes.
Last week a large protest was held in front of the US embassy in Manila in support of the president’s move toward a foreign policy independent from Washington. Demonstrators burned American flags and demanded the departure of US troops from their country.
Will US-Philippine relations continue to spiral downward? Or will Washington begin to see that its aggressive foreign policy, in Asia and elsewhere, is beginning to alienate allies? Or perhaps the next US administration will decide that a CIA “regime change” is in order for the independent-minded Philippine president. A US pivot away from confrontation with China would go a long way toward repairing strained relations with the Philippines and beyond. Let’s hope that’s Washington’s next move.
Tuesday
ICELAND TODAY, THE U.S. TOMORROW?
During the 2008 economic crisis, Iceland’s government froze offshore accounts held by foreign investors in that country’s currency, the krona. Recently, the government of Iceland announced it would unfreeze the accounts if the account holders paid a voluntary “departure tax,” which could be as high as 58 percent. Investors who choose not to pay the departure tax would have their investment “segregated” into special funds that only invest in CDs issued by Iceland’s central bank. These CDs are expected to only provide a rate of return of at most 0.5 percent a year. So investors in offshore accounts can thus choose between having their money directly seized via the departure tax or indirectly seized via the inflation tax.
Iceland’s freezing of offshore krona accounts was part of a “stabilization and recovery” program implemented under the guidance of the International Monetary Fund (IMF), which also provided Iceland with a $1 billion loan. So US taxpayers not only helped the IMF bail out Iceland’s government, they may have helped the IMF advise Iceland on how best to steal property from American investors!
The IMF's role in Iceland’s seizure of the property of foreign investors shows the hypocrisy of IMF officials, who recently expressed concerns about the increasing support for protectionism supposedly exemplified by the Brexit vote. However, freezing of assets held by foreign investors is a particularly harmful form of protectionism, while Brexit was more about rejecting the European Union’s bureaucracy than rejecting free trade. Perhaps what the IMF and its supporters are really worried about is losing their power to use taxpayers’ money to force other countries to adopt IMF bureaucrats’ favored economic policies.
Iceland is not the only government to turn to a departure tax to raise revenue. Just last year, in order to raise revenue for federal transportation programs, Congress gave the IRS the power to revoke the passport of any American accused of owing more than $50,000 in back taxes.
As an increasingly desperate Congress looks for new ways to squeeze money out of the American people to fund the welfare-warfare state, it is likely that more Americans will have their liberties limited because the IRS accuses them of not paying their fair share of taxes. It also is likely that the Federal Reserve will follow the example of its counterpart in Iceland and devalue the holdings of anyone who dares to resist the IRS’s demands.
Those hoping that the presidential election will result in real changes are bound to be disappointed. While Donald Trump seems to appreciate how current Fed policies help the incumbent administration while harming the people, he does not appear to understand that the problem is not with certain Fed policies, but with the Fed's very existence. While Mr. Trump does support tax cuts, he also supports increasing government spending on infrastructure at home, militarism abroad, protectionism, and an economic cold war with China.
Hillary Clinton has actually said it is inappropriate for candidates to criticize the Fed. Sectary Clinton has also called for massive increases in government spending and taxes. Hillary Clinton may be more hawkish than Donald Trump, since Mr. Trump has rejected Secretary Clinton's calls for a new cold war with Russia.
Instead of looking to politicians to save us, those of us who understand the dangers of our current course must continue to spread the ideas of liberty among our fellow citizens. Politicians will only change course when a critical mass of people stops falling for the war party’s propaganda, stops demanding entitlements, and starts demanding liberty.
Iceland’s freezing of offshore krona accounts was part of a “stabilization and recovery” program implemented under the guidance of the International Monetary Fund (IMF), which also provided Iceland with a $1 billion loan. So US taxpayers not only helped the IMF bail out Iceland’s government, they may have helped the IMF advise Iceland on how best to steal property from American investors!
The IMF's role in Iceland’s seizure of the property of foreign investors shows the hypocrisy of IMF officials, who recently expressed concerns about the increasing support for protectionism supposedly exemplified by the Brexit vote. However, freezing of assets held by foreign investors is a particularly harmful form of protectionism, while Brexit was more about rejecting the European Union’s bureaucracy than rejecting free trade. Perhaps what the IMF and its supporters are really worried about is losing their power to use taxpayers’ money to force other countries to adopt IMF bureaucrats’ favored economic policies.
Iceland is not the only government to turn to a departure tax to raise revenue. Just last year, in order to raise revenue for federal transportation programs, Congress gave the IRS the power to revoke the passport of any American accused of owing more than $50,000 in back taxes.
As an increasingly desperate Congress looks for new ways to squeeze money out of the American people to fund the welfare-warfare state, it is likely that more Americans will have their liberties limited because the IRS accuses them of not paying their fair share of taxes. It also is likely that the Federal Reserve will follow the example of its counterpart in Iceland and devalue the holdings of anyone who dares to resist the IRS’s demands.
Those hoping that the presidential election will result in real changes are bound to be disappointed. While Donald Trump seems to appreciate how current Fed policies help the incumbent administration while harming the people, he does not appear to understand that the problem is not with certain Fed policies, but with the Fed's very existence. While Mr. Trump does support tax cuts, he also supports increasing government spending on infrastructure at home, militarism abroad, protectionism, and an economic cold war with China.
Hillary Clinton has actually said it is inappropriate for candidates to criticize the Fed. Sectary Clinton has also called for massive increases in government spending and taxes. Hillary Clinton may be more hawkish than Donald Trump, since Mr. Trump has rejected Secretary Clinton's calls for a new cold war with Russia.
Instead of looking to politicians to save us, those of us who understand the dangers of our current course must continue to spread the ideas of liberty among our fellow citizens. Politicians will only change course when a critical mass of people stops falling for the war party’s propaganda, stops demanding entitlements, and starts demanding liberty.
Monday
FIFTEEN YEARS INTO THE AFGHAN WAR, DO AMERICANS KNOW THE TRUTH? by RON PAUL
Last week marked the fifteenth anniversary of the US invasion of Afghanistan, the longest war in US history. There weren’t any victory parades or photo-ops with Afghanistan’s post-liberation leaders. That is because the war is ongoing. In fact, 15 years after launching a war against Afghanistan’s Taliban government in retaliation for an attack by Saudi-backed al-Qaeda, the US-backed forces are steadily losing territory back to the Taliban.
What President Obama called “the good war” before took office in 2008, has become the “forgotten war” some eight years later. How many Americans know that we still have nearly 10,000 US troops in Afghanistan? Do any Americans know that the Taliban was never defeated, but now holds more ground in Afghanistan than at any point since 2001? Do they know the Taliban overran the provincial capital of Kunduz last week for a second time in a year and they threaten several other provincial capitals?
Do Americans know that we are still wasting billions on “reconstruction” and other projects in Afghanistan that are, at best, boondoggles? According to a recent audit by the independent US government body overseeing Afghan reconstruction, half a billion dollars was wasted on a contract for a US company to maintain Afghan military vehicles. The contractor “fail[ed] to meet program objectives,” the audit found. Of course they still got paid, like thousands of others getting rich off of this failed war.
Do Americans know that their government has spent at least $60 billion to train and equip Afghan security forces, yet these forces are still not capable of fighting on their own against the Taliban? We recently learned that an unknown but not insignificant number of those troops brought to the US for training have deserted and are living illegally somewhere in the US. In the recent Taliban attack on Kunduz, it was reported that thousands of Afghan security personnel fled without firing a shot.
According to a recent study by Brown University, the direct costs of the Iraq and Afghanistan wars thus far are nearly five trillion dollars. The indirect costs are virtually incalculable.
Perhaps Afghanistan is the “forgotten war” because to mention it would reveal how schizophrenic is US foreign policy. After all, we have been fighting for 15 years in Afghanistan in the name of defeating al-Qaeda, while we are directly and indirectly assisting a franchise of al-Qaeda to overthrow the Syrian government. How many Americans would applaud such a foreign policy? If they only knew, but thanks to a media only interested in promoting Washington’s propaganda, far too many Americans don’t know.
I have written several of these columns on the various anniversaries of the Afghan (and Iraq) wars, pointing out that the wars are ongoing and that the result of the wars has been less stable countries, a less stable region, a devastated local population, and an increasing probability of more blowback. I would be very happy to never have to write one of these again. We should just march home.
What President Obama called “the good war” before took office in 2008, has become the “forgotten war” some eight years later. How many Americans know that we still have nearly 10,000 US troops in Afghanistan? Do any Americans know that the Taliban was never defeated, but now holds more ground in Afghanistan than at any point since 2001? Do they know the Taliban overran the provincial capital of Kunduz last week for a second time in a year and they threaten several other provincial capitals?
Do Americans know that we are still wasting billions on “reconstruction” and other projects in Afghanistan that are, at best, boondoggles? According to a recent audit by the independent US government body overseeing Afghan reconstruction, half a billion dollars was wasted on a contract for a US company to maintain Afghan military vehicles. The contractor “fail[ed] to meet program objectives,” the audit found. Of course they still got paid, like thousands of others getting rich off of this failed war.
Do Americans know that their government has spent at least $60 billion to train and equip Afghan security forces, yet these forces are still not capable of fighting on their own against the Taliban? We recently learned that an unknown but not insignificant number of those troops brought to the US for training have deserted and are living illegally somewhere in the US. In the recent Taliban attack on Kunduz, it was reported that thousands of Afghan security personnel fled without firing a shot.
According to a recent study by Brown University, the direct costs of the Iraq and Afghanistan wars thus far are nearly five trillion dollars. The indirect costs are virtually incalculable.
Perhaps Afghanistan is the “forgotten war” because to mention it would reveal how schizophrenic is US foreign policy. After all, we have been fighting for 15 years in Afghanistan in the name of defeating al-Qaeda, while we are directly and indirectly assisting a franchise of al-Qaeda to overthrow the Syrian government. How many Americans would applaud such a foreign policy? If they only knew, but thanks to a media only interested in promoting Washington’s propaganda, far too many Americans don’t know.
I have written several of these columns on the various anniversaries of the Afghan (and Iraq) wars, pointing out that the wars are ongoing and that the result of the wars has been less stable countries, a less stable region, a devastated local population, and an increasing probability of more blowback. I would be very happy to never have to write one of these again. We should just march home.
Tuesday
AFTER PERES, IS PEACE POSSIBLE IN THE MIDDLE EAST? by RON PAUL
The death of former Israeli president and prime minister Shimon Peres last week marks the last of the Zionist “old guard” who successfully fought for a UN mandate to establish the state of Israel in what was formerly British Palestine. Much has been written about Peres since his death. He was a peacemaker. He was a warrior. He was brutal. He was complex. It is possible for all of them to be accurate at the same time.
Was Peres a warrior? That is without question. Israel was established in bloodshed and Peres played an important role in that fight. Also, the brutal Israeli attack on a Palestinian refugee camp at Qana in 1996 took place under Peres’s command. In that attack more than 100 women and children were killed.
But history, and especially Middle East history, can be quite complex. Shimon Peres was above all in favor of trying to find a way for Israelis and Palestinians to live side-by-side. He was right there in spirit when Israeli Prime Minister Yitzhak Rabin had a famous 1993 handshake with Palestinian leader Yassir Arafat. Rabin paid for his efforts with his life, as a right-wing radical assassinated him in 1995.
Shimon Peres was in favor of real negotiations with the Palestinians and he several times inserted himself into the process to urge the hawkish Benjamin Netanyahu to start talking rather than saber rattling. In 2012, for example, Peres made it known again that he favored a two-state solution and that Palestinian leader Mahmoud Abbas was a suitable negotiating partner. He also urged Netanyahu to open up direct talks with Hamas if certain agreements could be made beforehand.
But perhaps his greatest move to avert war only came known with his passing. Former Jerusalem Post editor Steve Linde wrote a fascinating article last week in his old newspaper detailing a meeting he and the Post’s managing editor had with Shimon Peres in 2014. According to Linde, Peres was asked what he thought was his greatest legacy. He replied that he had personally intervened to stop Netanyahu from ordering a preemptive strike on Iran’s nuclear sites. Asked by the journalists when they could report this revelation, Peres responded, “when I’m dead.” So it came to pass last week.
How much for the worse things have become in Israeli-Palestinian relations with the passing on of anyone preferring negotiations to violence. There is little interest among current Israeli leadership to take steps toward negotiation or peace. Innocent Israelis and Palestinians will continue to be killed and injured as long as no compromises are considered. Sadly this position is reinforced in Washington, where the Obama administration just agreed to grant Israel the largest military aid package in US history.
There is much to admire in those who work for peace, even those with stains on their record. I remain convinced that Israeli-Palestinian peace efforts would be much closer to bearing fruit if the US government would stop inserting itself into the process and subsidizing either side. Left alone, both sides would likely produce more leaders interested in ending bloodshed and conflict.
Was Peres a warrior? That is without question. Israel was established in bloodshed and Peres played an important role in that fight. Also, the brutal Israeli attack on a Palestinian refugee camp at Qana in 1996 took place under Peres’s command. In that attack more than 100 women and children were killed.
But history, and especially Middle East history, can be quite complex. Shimon Peres was above all in favor of trying to find a way for Israelis and Palestinians to live side-by-side. He was right there in spirit when Israeli Prime Minister Yitzhak Rabin had a famous 1993 handshake with Palestinian leader Yassir Arafat. Rabin paid for his efforts with his life, as a right-wing radical assassinated him in 1995.
Shimon Peres was in favor of real negotiations with the Palestinians and he several times inserted himself into the process to urge the hawkish Benjamin Netanyahu to start talking rather than saber rattling. In 2012, for example, Peres made it known again that he favored a two-state solution and that Palestinian leader Mahmoud Abbas was a suitable negotiating partner. He also urged Netanyahu to open up direct talks with Hamas if certain agreements could be made beforehand.
But perhaps his greatest move to avert war only came known with his passing. Former Jerusalem Post editor Steve Linde wrote a fascinating article last week in his old newspaper detailing a meeting he and the Post’s managing editor had with Shimon Peres in 2014. According to Linde, Peres was asked what he thought was his greatest legacy. He replied that he had personally intervened to stop Netanyahu from ordering a preemptive strike on Iran’s nuclear sites. Asked by the journalists when they could report this revelation, Peres responded, “when I’m dead.” So it came to pass last week.
How much for the worse things have become in Israeli-Palestinian relations with the passing on of anyone preferring negotiations to violence. There is little interest among current Israeli leadership to take steps toward negotiation or peace. Innocent Israelis and Palestinians will continue to be killed and injured as long as no compromises are considered. Sadly this position is reinforced in Washington, where the Obama administration just agreed to grant Israel the largest military aid package in US history.
There is much to admire in those who work for peace, even those with stains on their record. I remain convinced that Israeli-Palestinian peace efforts would be much closer to bearing fruit if the US government would stop inserting itself into the process and subsidizing either side. Left alone, both sides would likely produce more leaders interested in ending bloodshed and conflict.
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