By Jacob G. Hornberger
Donald Trump is obviously a smart man. One cannot build up a billion-dollar financial empire without being smart.
Unfortunately, however, Trump is not so smart when it comes to some things, like the drug war. He thinks that simply by cracking down in the drug war and becoming more ruthless than previous presidents, he’s going to be the one who finally wins the war on drugs.
It’s not going to happen. No matter how smart he is in business affairs or even politics, Donald Trump will not win the drug war. That’s because no matter how hard he tries and no matter how much support he receives from Congress and the judiciary, no one can repeal the natural laws of supply and demand.
At the top of his list of things Trump intends to do to win the drug war is his much-vaunted wall along the U.S.-Mexico border, the one he thinks is going to keep out drugs (and illegal immigrants).
Here is why Trump’s wall and drug-war crackdown will never enable him to win the drug war.
At best, Trump’s measures will reduce the supply of drugs. What does that mean? Under the laws of supply and demand, that means a higher price.
What does a higher price mean? It means higher profits for those doing the supplying.
What do higher profits mean? They mean that more suppliers are going to be drawn into supplying drugs.
Like it or not, many, if not most, people like money. And most of the people who like money like more money as compared to less. More money enables them to do more things, such as pay for their children’s education, buy their spouse a new car, and go on nicer vacations.
When drug-war prices are soaring through the roof, people who would never seriously consider committing a felony drug offense are suddenly tempted to do so. For example, an ordinary law-abiding person would be much more likely to smuggle a package of cocaine into the country if he stands to make $250,000 than if he can only make $5,000. The risk of getting caught might be worth the higher amount but not worth the lower amount.
The Washington Post reported this week that 12 former and current TSA members and airport workers have just been indicted by a federal grand jury for conspiracy to smuggle cocaine into the country.
Why would federal law-enforcement personnel and airline employees engage in cocaine smuggling? Because of the money. Big money. One hundred million dollars to be exact. The Post article details how those 12 people allegedly smuggled tons of cocaine into the country.
How is Trump’s Wall going to prevent that? If his wall succeeds in reducing supply, that will only mean higher prices and profits, which will induce more TSA agents and airport personnel to take the chance at making a big score.
After all, what are the chances that a drug smuggler is going to get caught? Given the large amount of drugs that get through, I’d venture to say that the number of people who get caught is miniscule. Just think about the big financial reward for just one successful smuggling operation, and it’s not difficult to see why ordinary people take the chance.
Those 12 TSA workers and airline workers are not the only ones. There are also the government officials who take bribes to look the other way when drugs are being crossed over the border.
Notice something important here: All that the foreign drug sellers need is one border guard who is willing to take a bribe. The reason is obvious: If only one guard looks the other way, unlimited amounts of drugs can be smuggled at that border crossing.
Last December the New York Times carried an article on the bribery phenomenon. The article focused primarily on bribes to facilitate the smuggling of illegal immigrants, but obviously if border guards are willing to take money to look the other way on immigrant smuggling, there is a good chance they will also take money to look the other way on drug smuggling, especially if the amount of the money is extremely large.
Last month, for example, Johnny Acosta, a Customs and Border Protection officer in Douglas, Arizona, received an 8-year jail sentence for taking $70,000 in bribes for helping smuggle a ton of marijuana into the country. A TSA airport screener in Puerto Rico was recently accused of accepting $215,000 in bribes to facilitate the smuggling of drugs.
According to the NYT article, dozens of Customs and Border Protection officials have been charged with bribery. In 2016, 15 officials in the Department of Homeland Security were charged with bribery. A study of agency and court records “showed that over the last 10 years almost 200 employees and contract workers of the Department of Homeland Security have taken nearly $15 million in bribes while being paid to protect the nation’s borders and enforce immigration laws.”
How will Trump’s wall prevent bribery? It won’t and it can’t. The more his wall constricts supply, the higher will be the prices and profits, which will enable drug smugglers to pay even higher bribes, which will attract more officials to accept them in return for looking the other way.
Now, take a look at this fascinating catapult in an article from yesterday’s USA Today. What’s a catapult have to do with Trump’s border wall? It’s currently being used to fling bundles of marijuana over the current U.S. border fence that exists between the United States and Mexico. At the risk of belaboring the obvious, if it can do that to a fence, it can to it to Trump’s wall, unless, of course, he makes it 100 feet high. (Of course, there is also the tunneling problem, unless Trump makes his wall 100 feet deep.)
The only way that Donald Trump or anyone else can possibly win the war on drugs is by turning America into a total police state, with cameras in every room in every building in the country, including homes, as well as body cameras and mandatory daily drug testing for everyone in the country.
And even that still might not do the trick. Don’t forget: They can’t even keep drugs out of prisons.
This article was originally published at The Future of Freedom Foundation.
By Jeff Deist
When Professor Hans-Hermann Hoppe made his famous argument against democracy back in 2001, the notion that voting was a lousy way to organize society was still radical even among many libertarians. Virtually everyone raised in a western country over the past century grew up hearing “democracy” used as a synonym for wonderful, good, just, and valid. It takes a great deal of unlearning to overcome this as an adult, and to question the wisdom of representative government installed via democratic mechanisms.
Fast forward to 2017, however, and the case against democracy is being made right in front of our eyes. Witness Hillary Clinton, who not long ago gushed about our “sacred” right to vote — that is until her stupendous loss to Trump. Today she clings to the specious nonsense that the Russians somehow influenced our election by planting stories and using social media, which if true would be an excellent argument against voting rights. If the natives are so easily duped by a few silly posts in their Facebook feeds, why on earth is their vote meaningful or sacred?
Other progressives like Michael Moore demand that Trump be arrested, presumably for treason. Left-leaning cable news pundits openly call for Trump to resign or be impeached. Mainstream newspapers wonder whether he’ll even finish his four-year term. The overwhelming message from the media is that Trump is a disaster, an existential threat that must be stopped.
But it’s not just progressives questioning democratic outcomes. Neoconservative Bill Kristol tweets that he’d rather be governed by an unaccountable deep state than Trump. Mild-mannered conservative moralist Dennis Prager, a reasonable and likeable right winger in my view, argues quite seriously that we are in the midst of a second civil war with those who simply reject their electoral defeat. And the libertarianish jurist Richard Epstein, writing for the somnambulant Hoover Institution, unloads a litany of grievances against Trump that would make Bill Maher blush.
We should recall that as democratic elections go, Trump’s victory was perfectly legitimate. Nobody seriously challenges his margins in the key states of Ohio, Pennsylvania, Wisconsin, and Florida. Lamentations about Clinton winning the so-called popular vote are irrelevant and blatantly partisan — the Electoral College is as much a part of the “rules” as having two senators per state.
Meanwhile in the UK, former Prime Minister Tony Blair employs the language of revolution in urging Remain forces to “rise up” against Brexit and overturn the referendum in Parliament. Never mind that Blair is no longer an elected official and holds no government office, never mind that both the referendum process and the Brexit vote were perfectly valid: he just doesn’t like the results. His argument that Leave voters had “imperfect knowledge” is both hilarious and disingenuous: voters always have imperfect knowledge about candidates and policies prior to elections; pertinent new information always comes to light after elections. If Blair thinks we can start overturning elections based on any degree of voter ignorance, then I must suggest he begin with the vote in the House of Commons that made him PM. And why does he, a democrat, imagine some right to overturn election results at all?
It’s time to call a spade a spade. All of this angst hardly comports with our supposed reverence for democracy. Again, Trump handily and fairly won a democratic election just three months ago. If he’s the devil, a wrecking ball that cannot be stopped by the other branches of government, then our entire constitutional system and its democratic mechanisms are defective. Why doesn’t the #neverTrump movement take its arguments to their logical conclusion, and insist an electorate that would install Donald Trump never be allowed to vote again or have any say in organizing society?
The reality is becoming clear, even as it remains uncomfortable for many: democracy is a sham that should be opposed by all liberty-loving people. Voting and elections confer no legitimacy whatsoever on any government, and to the extent a democratic political process replaces outright war it should be seen as only slightly less horrific.
As I stated before the election last year:
… no matter who wins, millions of people — maybe 40 percent of the country — are going to view the winner as illegitimate and irredeemable.
Great libertarians like Thomas Jefferson have long warned against democracy, even as they uneasily accepted it as a necessary evil. Both Ludwig von Mises and Friedrich Hayek were democrats, men who championed both the virtues of an intellectual elite and the necessity of having that elite gain legitimacy for its ideas through public acceptance. Mises termed democracy a “method for the peaceful adjustment of government to the will of the majority.” Hayek viewed democracy as potentially wise if tempered by built-in safeguards to protect individual liberty.
But these men lived in very different times, coming as they did from pre-war Old Europe. We can’t know what they would think of modern social democratic welfare states, or Trump, or Brexit. I suspect they would find democracy quite wanting, in terms of producing what either would consider a liberal society. Both were utilitarians (of a sort) in their economic thinking, and it’s not hard to imagine they would take a consequentialist view of a society gone awry via democracy.
Things are getting strange in America when Michael Moore and Dennis Prager start to sound the same, and that’s arguably a very good development. We are close to a time when the democracy illusion will be shattered, for good and all. Democracy was always a bad idea, one that encourages mindless majoritarianism, political pandering, theft, redistribution, war, and an entitlement mentality among supposedly noble voters. It’s an idea whose time has passed, both on a national and international scale. The future of liberty is decentralized, and will be led by smaller breakaway nations and regions where real self-determination and real consensus is not an illusion. Jefferson and Hoppe were right about democracy, but it took Trump and Brexit to show the world how quickly elites abandon it when they don’t prevail.
This article was originally published at The Mises Institute.
By Everett Numbers
A fresh release of classified documents shows the CIA permeated France’s 2012 presidential election, according to Wikileaks. The agency targeted every major party, as well as the current and former president and other prominent candidates.
Wikileaks has been teasing its upcoming “CIA Vault 7” document dump. Thursday’s release of seven pages containing three CIA tasking orders regarding France’s 2012 election is the first such promotion to offer something of substance.
The documents show CIA spies working in human intelligence (HUMINT) and electronic, or signal, intelligence (SIGINT) were directed to infiltrate each major French political party and several leaders from November 21, 2011 to September 29, 2012. Elections took place between April and May of 2012, meaning the operation began about six months before the vote and lasted around four months afterward.
The operation targeted the French Socialist Party, the National Front, and the Union for a Popular Movement, along with current leading presidential candidate Marine Le Pen, current President Francois Hollande, then-President Nicolas Sarkozy, and former candidates Martine Aubry and Dominique Strauss-Kahn.
Assessing that President Sarkozy’s Union for a Popular Movement was “not assured of winning the presidential election,” the CIA issued the espionage order, entitled “Non-Ruling Political Parties and Candidates Strategic Election Plans,” in order to better inform U.S.-France policy, according to the documents.
Among the specific instructions for spies were orders to obtain Sarkozy’s private talks “on the other candidates” as well as his own advisors. The agency valued information pertaining to changes in the party’s “perceived vulnerabilities to maintaining power” and its ideological direction, as well as Sarkozy’s interest in “the continuation of the party’s dominance,” the documents show.
Wikileaks cites a previous 2012 espionage order calling for the discovery of details on any potential French export contract or deal valued at $200 million or more as seeming to be connected to specific CIA tasks under the “Strategic Election Plans” order. Those tasks asked the questions: “What policies do they promote to help boost France’s economic growth prospects?” and “What are their opinions on the German model of export-led growth?”
Additionally, the CIA wanted to know the candidates’ positions on the Greek debt crisis and the roles of France and Germany in its management, along with information regarding the “specific proposals and recommendations” for and consequences of a Greek default on France’s government and banks.
The leaked documents were classified and for U.S. eyes only, marked “NOFORN” because they contained “Friends-on-Friends sensitivities.”
Wikileaks claims this most recent release will serve as “context” for its anticipated Vault 7 series.
It comes at a time of relentless speculation over Russia’s influence over the Trump administration and the November presidential election, as well as reported divisions in the White House since controversial leaks led to the resignation of General Michael Flynn as national security advisor to President Donald Trump.
This article was originally published at AntiMedia.
It may be difficult for some people to believe, but not too long ago, gold was the international medium of exchange. It facilitated economic growth like the world has never seen. Contrary to government propaganda, gold did not fail as money. It was government itself that systematically separated Americans from sound money. We discuss today on Myth-Busters!
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We are joined by special guest Phil Giraldi, a career intelligence officer, to take a look at the bizarre standoff between President Trump and the US intelligence community.
By Simon Black
In a scathing editorial published in the Wall Street Journal today, the president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, blasted US banks, saying that they still lacked sufficient capital to withstand a major crisis.
Kashkari makes a great analogy.
When you’re applying for a mortgage or business loan, sensible banks are supposed to demand a 20% down payment from their borrowers.
If you want to buy a $500,000 home, a conservative bank will loan creditworthy borrowers $400,000. The borrower must be able to scratch together a $100,000 down payment.
But when banks make investments and buy assets, they aren’t required to do the same thing.
Remember that when you deposit money at a bank, you’re essentially loaning them your savings.
As a bank depositor, you’re the lender. The bank is the borrower.
Banks pool together their deposits and make various loans and investments.
They buy government bonds, financial commercial trade, and fund real estate purchases.
Some of their investment decisions make sense. Others are completely idiotic, as we saw in the 2008 financial meltdown.
But the larger point is that banks don’t use their own money to make these investments. They use other people’s money. Your money.
A bank’s investment portfolio is almost entirely funded with its customers’ savings. Very little of the bank’s own money is at risk.
You can see the stark contrast here.
If you as an individual want to borrow money to invest in something, you’re obliged to put down 20%, perhaps even much more depending on the asset.
Your down payment provides a substantial cushion for the bank; if you stop paying the loan, the value of the property could decline 20% before the bank loses any money.
But if a bank wants to make an investment, they typically don’t have to put down a single penny.
The bank’s lenders, i.e. its depositors, put up all the money for the investment.
If the investment does well, the bank keeps all the profits.
But if the investment does poorly, the bank hasn’t risked any of its own money.
The bank’s lenders (i.e. the depositors) are taking on all the risk.
This seems pretty one-sided, especially considering that in exchange for assuming all the risk of a bank’s investment decisions, you are rewarded with a miniscule interest rate that fails to keep up with inflation.
(After which the government taxes you on the interest that you receive.)
It hardly seems worth it.
Back in 2008-2009, the entire financial system was on the brink of collapse because banks had been making wild bets without having sufficient capital.
In other words, the banks hadn’t made a sufficient “down payment” on the toxic investments they had purchased.
All those assets and idiotic loans were made almost exclusively with their customers’ savings.
Lehman Brothers, a now-defunct investment bank, infamously had about 3% capital at the time of its collapse, meaning that Lehman used just 3% of its own money to buy toxic assets.
Eventually the values of those toxic assets collapsed.
And not only was the bank wiped out, but investors who had loaned the bank money took a giant loss.
This happened across the entire financial system because banks had made idiotic investment decisions and failed to maintain sufficient capital to absorb the losses.
Nearly a decade later, Kashkari says that banks still aren’t sufficiently capitalized.
(He also points out that banks today are obsessed with pointless documentation and seem “unable to exercise judgment or use common sense.”)
The banks themselves obviously don’t agree.
As Kashkari states, banks feel that they currently have TOO MUCH capital.
Bizarre. They’re basically saying that they want to be LESS safe, like a stunt pilot complaining that his helmet is too sturdy.
I’ve written about this many times– the decision for where to hold your savings matters. It’s important.
In addition to solvency and liquidity concerns, there are a multitude of other issues, like routine violations of the public trust, collusion to fix interest and exchange rates, manipulation of asset prices, and all-out fraud.
(I personally got so fed up with our deceitful financial system that I started my own bank in 2015 to handle my companies’ financial transactions. More on that another time…)
Yet despite these obvious risks, most people simply assume away the safety of their bank.
They’ll spend more time thinking about what to watch on Netflix than which bank is the most responsible custodian of their life’s savings.
There are countless ways to figure this out, but here’s a short-cut: much much “capital” or “equity” does the bank have as a percentage of its total assets?
These are easy numbers to find. Just Google “XYZ bank balance sheet”.
Look at the bottom where it says “capital” or “equity”. That’s your numerator.
Then look above that number to find total assets. That’s your denominator.
Divide the two. The higher the percentage, the safer the bank.
Kashkari thinks the answer should be at least 20%, especially among mega-banks in the US.
This article was originally published at Sovereign Man.
By Chris Rossini
Politics is a fool's game. The House always wins, and taxpayers always lose. As comedian George Carlin said: "It's a big club, and you ain't in it."
Why does The House always win? Well, politicians can lie as much as they want. In the real world, that's called fraud. In politics, it's known as "campaigning," or "campaign rhetoric."
Politicians can say one thing and do the polar opposite. In the real world, that's known as breaking a contract. But in politics there are no contracts between politicians and voters.
For politicians, the truth and lies are interchangeable. One has no more value than the other. They go with whatever works.
Great deal for them. Horrible deal for us.
Let's zoom in on President Trump's slippery position on Ukraine and Crimea as an example. Putting aside the fact that the U.S. has no business even being involved with these far away lands, we'll see how useless it is to take a politician's word on anything.
At first, Trump had Ukraine and Crimea totally wrong. Here he at a 2014 speech at CPAC:
“The day after the Olympics, he [Putin] starts with Ukraine...And you know, when he goes in and takes Crimea, he’s taking the heart and soul because that’s where all the money is. I was surprised. I heard that the other day. They were saying, most of the wealth comes right from that area.”
You'll notice no mention of Senator John McCain in Ukraine rallying the people who would overthrow the democratically elected government. Nor any mention of Victoria (F**k The EU) Nuland handing out cookies.
After the Olympics, Putin just "starts" with Ukraine.
Trump's opinion changed for the better though and we heard it over and over during his presidential campaign:
I would love to have a good relationship where Russia and ... instead of fighting each other we got along. It would be wonderful if we had good relationships with Russia so that we don’t have to go through all of the drama.
Trump even seemed to grasp the truth about Ukraine and Crimea:
He's not going into Ukraine, OK? Just so you understand. He's not going to go into Ukraine, all right?You can mark it down and you can put it down, you can take it anywhere you want. But, you know, the people of Crimea, from what I've heard, would rather be with Russia than where they were. And you have to look at that, also.
This is the stuff that American voters loved to hear. Why on earth would we want a war with a nuclear power like Russia? Hillary Clinton took a very belligerent tone against Russia, and Trump did not. That was a critical issue in voters minds.
But was Trump just "campaigning?"
Was it just "campaign rhetoric?" Wouldn't be the first time. Woodrow Wilson, FDR, George W. Bush, Barack Obama...all elected as the peace candidate. We know what happened.
With Trump, we're going to find out. But like those other presidents, Trump has no binding agreements to keep his word. If he breaks his promise, we can't appeal to anyone. Once war fever gets going, previous campaign promises are like dust in the wind.
The campaign is over and Trump swore to uphold the Constitution (every politician's first official lie).
And now the tune on Russia is changing.
Earlier this month U.S. Ambassador Nikki Haley said to the UN:
"The United States continues to condemn and call for an immediate end to the Russian occupation of Crimea. Crimea is a part of Ukraine. Our Crimea-related sanctions will remain in place until Russia returns control over the peninsula to Ukraine."
Yesterday, Trump's Press Secretary, Sean Spicer said:
"President Trump has made it very clear that he expects the Russian government to de-escalate violence in the Ukraine and return Crimea,"
Also yesterday, General Michael Flynn resigned, and despite his many erroneous foreign policy views, he did actually want to work with Russia.
Do you see the downward spiral taking form here?
This morning President Trump himself tweeted the following:
Crimea was TAKEN by Russia during the Obama Administration. Was Obama too soft on Russia?
Is Trump going really start trouble with a country that has more nuclear weapons than we do?
And that's the problem.
Regardless of what ends up happening, it should be obvious that politics really is a fool's game. What we think, what we feel, and how we vote really means nothing.
But our money does mean something to the "big club" that we're not in.
Now let's get back to work.
We have taxes to pay.
The stock market is soaring and the jobs report gives a rosy outlook. Are we in for good times...or are the hard times just around the corner?