By Paul-Martin Foss
Those who have been following the presidential campaign in the United States are undoubtedly familiar with the proposal by Democratic candidate Sen. Bernie Sanders to allow the United States Postal Service to offer banking services at its post office branches. What many are not familiar with is that this idea was already tried in the past and failed miserably, ending in 1967. As an independent federal agency that no longer receives appropriated funds and therefore tries to pretend that it is a private corporation. Yet it is run by a Presidentially-appointed board of governors that is responsible for all business decisions. The results are predictable. Costs are high, revenues are low, Post Offices are understaffed, customer service is lacking, and lines and wait times are often long. Ask anyone who has ever had to do business with both a bank and a Post Office which they would rather deal with and you’ll almost universally hear that it’s the bank.
Sanders and others who propose postal banking claim that they want to serve the unbanked and underbanked. But there is a reason so many people are unbanked or underbanked. For many, it is a conscious choice. They would rather hold their money themselves than trust the banking system. For others, especially immigrants, the crackdown on financial privacy in the wake of 9/11 in the form of enhanced Know Your Customer laws makes it difficult for them to get bank accounts even if they want to. Unless postal banks were granted an exemption from compliance with those laws (highly unlikely), it is difficult to see how those individuals would be aided by postal banking. Then there are others who are unable to manage money, overdraw their accounts on a regular basis, and therefore impose a cost on the banking system. Forcing Post Offices to serve those people will impose even more costs on an already-unprofitable Postal Service while not providing any new revenue. The only way to make up for that would be for the government to subsidize those accounts, which isn’t a viable long-term solution. Then you have the fact that the Postal Service is run by a Board of Governors that sets policy but is responsible to the President and Congress, not to the profit and loss motivations of the market, and you have a recipe for banking services policies that will prove to be disadvantageous to consumers and inflexible in changing to meet consumer demands.
The ultimate solution to providing banking services to the unbanked and underbanked is to free up banking competition by lowering barriers to entry and eliminating burdensome anti-privacy laws and regulations that increase costs to banks and make it more difficult for low-income people to open bank accounts. People like Sen. Sanders and Sen. Elizabeth Warren (D-MA) complain that too many people lack access to banking services, while at the same time they endorse laws such as Dodd-Frank that continue to centralize banking services among a handful of large banks, and anti-terrorism and anti-money laundering laws that make it more costly to banks to maintain accounts and more burdensome for people to open bank accounts. The policies they support (with the aim of attacking the rich) are directly responsible for the problem of poor people being unable to open bank accounts. There is a market out there for banking services to those people, and the reason they are not being served isn’t due to a market failure but rather to government policies that restrict consumer choice. Rather than returning to an already-failed system of postal banking, let’s open up the banking market to allow more companies to offer more services to the unbanked and underbanked.
This article was originally published at The Mises Institute.
By Chris Rossini
There's a HUGE difference between a society based on non-aggression and liberty, and a society that Bernie Sanders and his something-for-nothing followers advocate.
Jeff Deist, President of The Mises Institute, perfectly describes this difference:
In Ron Paul’s America...voluntary “socialist” arrangements would be perfectly allowable and legal. But libertarian communities are never permitted in statist societies.
In other words, in a society rooted in liberty and non-aggression, all Sanders fanboys would be free to form their own "socialist" communities. As long as these individuals don't use violent force or fraud against others, they can knock themselves out! They would be left alone.
But the same is not permitted to libertarians who want to live in Bernie's America. Under that scenario, Bernie must have his hand in everyone's pocket. There is no opting out. There is no escaping the violent force.
Deist elaborates further:
So thousands or even millions of people could come together in areas like San Francisco and voluntarily create single-payer health schemes, “dues” based on income, free schools, collective child-raising, etc.-- the whole panoply of progressive programs.
If that doesn't explain the nature of the two competing ideas, nothing does. Liberty is rooted in peace and voluntary interactions, while Sanders' dusty old ideas are rooted in conformity and violence.
The choice should be obvious to those who seek civilization over barbarism.
By Ron Paul
I'm not a short-term trader of the stock market, so I have no opinion on daily fluctuations. But long-term I'm not confident in the current upward trend. The reason being that the Fed's ability to prop the market up is not perpetual. Another major downturn is inevitable and I suspect it will be bigger than the downturn of 2008. Interest rates must be set by the market, and not central planners at the Fed. That lesson will unfortunately have to be learned the hard way. I discuss on CNBC below:
By Daniel McAdams
The day began with a Zero Hedge piece reporting that President Obama would veto the bill currently in the Senate to hold the Saudi government legally responsible if proven it had a hand in planning and/or supporting the attacks of 9/11. According to the Administration, signing such a bill to lift Saudi Arabia's sovereign immunity would place the US "at risk" if other countries passed similar laws against us.
Also in he Zero Hedge piece was news that one Senator had placed a "hold" on the bill, effectively preventing it from coming to the Floor for a vote. But no one knew who that mysterious Senator was. What Senator would prevent the families of the 9/11 victims from seeking justice if the 28 redacted pages from the 9/11 Report demonstrate significant Saudi government involvement in the plot, as is expected?
That Senator turns out to be Lindsey Graham (R-SC), a steadfast member of Washington's neocon warhawk faction. While Senator Graham shares Saudi Arabia's desire to annihilate the Iranians, his motivation in blocking the Senate bill -- as bad as it seems -- is not necessarily a product of the legendary Saudi PR largesse spread throughout Capital Hill. He's no enemy of Riyadh, but Graham has other worries about the bill.
If the US lifts Saudi immunity for its participation in the murder of 3,000 people on American soil on 9/11/2001, this would set a "dangerous" precedent where other countries or individuals might be able to sue the United States for all those its government murders overseas. That sort of thing just cannot be tolerated by the neocon interventionists, as they must be able to bomb and attack with impunity. To them that is what it means to be exceptional.
Senator Graham admits this fact openly. He cites US sponsorship of terrorist factions in Syria as evidence of the danger of US liability for their actions.
Some of our allies are a bit dubious. I want to make sure that because we find common ground in one area, we don’t own these people forever because of whatever they do.
So he wants the US to be able to continue to sponsor terrorists in Syria (and elsewhere) without any liability for their actions.
Never would it occur to someone of such low moral character as Senator Graham that perhaps the real solution would be for the United States to stop sponsoring terrorists -- or anyone else for that matter. Perhaps the answer would be to stop bombing hospitals and creating tens of thousands of "collateral damage" deaths.
The bloodthirsty Graham wants to continue the neocon rampage through the Middle East and beyond without the least bit of inconvenience. His bloodlust places all of us in ever greater danger. He is far more a threat to the United States than ISIS, as his policies corrode the American soul.
This article was originally published at The Ron Paul Institute.
By Chris Rossini
The fall of the Soviet Union was a learning experience for the entire world. Despite all the fear-mongering propaganda (especially from American pundits at the time) the great bastion of socialism was nothing but a castle built on quicksand.
The Soviet Union was not a powerhouse, but a parasite that completely sucked the life out of its host. Despite all the foreign aid (again, especially from the U.S.) the socialist boogeyman would collapse without the shedding of a single drop of blood.
No shots had to be fired. No militias. No need for a Paul Revere. Truth merely burst through the human desire to deny it, and was (as always) unstoppable.
There were truth-tellers in America well before the collapse. Predictably, they were shunned like lepers for proving that socialism was a basket-case and completely unworkable.
Heroic figures like Ludwig von Mises and Murray Rothbard put the logic into black and white for everyone to read. Without private property, market prices, and profits & loses there is no way for a socialist state (i.e. a single-property owner) to know how scarce resources should be allocated. Socialist planners were perpetually in the dark, with no clue as to what they were doing.
Mises and Rothbard, much like prominent libertarian figures of the modern day, were cast aside for telling the truth. There was just too much money and power at stake during the Cold War to ponder reality. Fear of the Soviets was milked to the last possible second.
The only thing that the Soviets had going for them was the natural tendency of people wanting something-for-nothing. It's an easy sale, and they sold it for sure. But they were peddling nothing but snake oil, and the truth could not be avoided any longer when the Soviet state collapsed. When it collapsed, the truth was laid bare, and even the best paid and highest skilled spin-meisters couldn't come up with a yarn sufficient enough to keep people believing.
Today, on a global scale, the idea of socialism is dead. There are but North Korea and Cuba who still hang on. No one is rushing to live in either place. No one is rushing to copy them.
Even in America, we find faux-socialist Bernie Sanders trying to win an election by appealing to something-for-nothing Americans. But despite the moniker, Bernie is no socialist. He's just another hyper-interventionist looking to capitalize on economic ignorance. But Bernie or no Bernie, the idea of socialism is as dead as a doornail. The Soviet tombstone is remembered by everyone.
Central Banking is next, and its death will also provide a learning experience for all the world to see.
As of today, our planet is littered with monetary central planners who adopted the crackpot ideas of John Maynard Keynes. Central bankers are printing money, manipulating interest rates, and attempting to micromanage domestic economies on a worldwide scale. They're also failing miserably on a worldwide scale.
Once again, we have truth-tellers in our midst and they are cast aside as fringe individuals. There's just too much money and power at stake to ponder reality. And central bankers will milk their temporary monetary powers until the very last second. They will not voluntarily give up their printing presses.
So be it.
We do not need a Paul Revere, or gangs of libertarian militias. We have the luxury to just sit back and watch as the central bankers scurry, scamper, and slither around to try to keep their system alive.
Whether it's QE, negative interest rates, bailouts, or banning cash....they'll try them all. Excuses for their constant downward spiral will always accompany their decisions.
But just as with the Soviets, time is limited. The central bankers do not have forever. The last grain of sand will drop in their hourglass.
Once that happens, the entire world will see that central banking was nothing but snake oil. Central bankers never knew what they were doing. They never knew what interest rates should be, and they never had a chance.
Perhaps a few countries will cling to the dead ideas of government-controlled money. There will probably be Bernie Sanders-like politicians who will try to go back to the past. But there will be no going back.
The idea of central banking will someday be, on a worldwide scale, as dead as socialism.
They'll both be dead as doornails.
By Ron Paul
Editor's Note: Watch Dr. Paul deliver the following speech here.
THE MIDDLE – CLASS RAGE, FEAR AND ANGER
The middle class, which as defined by politicians now includes almost everyone, is angry, fearful, and filled with rage. When politicians address this group it’s frequently defined as “populism,” of which there are many varieties. Whether liberals, conservatives, libertarians, socialists, or authoritarians, when the people become restless and angry, demanding change, the politicians pay attention. This reflects a need to appeal to the masses, and a populist message is well received. But there is never real agreement on the analysis and suggested solutions to the problems. Instead, scapegoats are easily found. Economic understanding is not of high priority, and demagoguery is a useful tool for politically mobilizing the “victims.” Since there are real reasons given for the conditions that exist, competition arises among those who want to take charge of the crisis and benefit politically. This only increases the anxiety and anger of the people, who see themselves as victims of an unfair system.
Until the political economic crisis became readily apparent, most politicians were unaware of the rapidly increasing distortions in wealth distribution. The dangers are conveniently ignored because most people live for the short term. If one is doing well financially, even though the system is financed with the whole country living beyond its means, worrying about preparing for a rainy day seems like wasted energy. However the payment is now coming due, and because few plan or understand it, any threat to benefits – both earned and unearned – creates great anxiety. Fear of being squeezed out of a share of the benefits that come with government intervention becomes the driving force for the whole country. The one group that seems the least worried about current conditions is the “one percent” who are financially secure by living off the special interest financial system. This does not include the wealthy who are financially rewarded for providing products and services that consumers choose to buy.
But even the one percent who benefit from government programs and the monetary system are concerned that the current uprising will interfere with their privileged position.
The size, determination, and anger of the current populist uprising is signaling that huge changes are coming both politically and economically. This generates a competitive blame-game when politicians get involved and try to benefit from the chaos. Republicans blame the Democrats and the Democrats blame the Republicans for the problems. It’s never an issue of philosophy but rather partisanship, personalities, or simply blaming poor management. False perceptions are commonplace as a consequence of government-controlled education that steers people away from the sad realities of economic planning that the people have blindly accepted for many decades.
The fear and anger are only increased by the combination of a failed but never-questioned economic policy, and the demagogues, either ignorant or malicious, who provide magical promises to erase the injustices that are clearly visible.
Though the nature of the breakdown is an economic issue caused by excessive government, those suffering – and the politicians who claim they can restore prosperity – demand more government intervention in our lives and in the economy.
The entitlement mentality is now seen as a fundamental right even though it depends on government use of force to transfer wealth from one group to another. The liberal mantra has always been that the use of force backed up by guns is legitimate and moral. This is accepted as being morally superior to voluntarism for helping the poor. The irony is that it’s precisely this philosophy that impoverishes the middle class, increases the poverty of the poor, and provides the unearned benefits of the crony capitalists who were the recipients of the great bailout in 2009.
We are witnessing the end of an era, but since denial and ignorance prevails few are aware of it. The current special interest entitlement system is on its last legs, but the recipients and the political power brokers believe a change in leadership is all that is needed. It’s not the system that’s at fault, they argue, it’s only better management that is required. It is readily apparent that the failure of this approach is leading to more fear and anger.
Too often the anger is thought to be a partisan issue. The claim is either that it’s all President Obama’s fault or George W. Bush’s fault – yet both parties have followed the same false philosophy of interventionism in both domestic Keynesianism and international empire-building, putting them both at fault.
The people searching for answers conclude the government constantly lies to them. It’s easy to see the system rewarding those who control political power. Concern and understanding the inequities in wealth distribution are not authentic. Ignorance prevails even for the well-intentioned, which results in a deadly erosion of middle class wealth. Debt and deficits are not a serious concern, and both parties continue the endless wasteful spending that only aggravates the pervasive economic inequities that drive the people’s fears.
Most Americans, now more than ever, have become aware of the terrible conditions the Federal Reserve has caused by its policies that result in ever more distortions in the transfer of wealth to the very wealthy at the expense of the middle class. Many people remain apathetic as to the details of Federal Reserve policy, but others recognize that the Fed is the financier of the welfare state and the endless wars that consume wealth. Our ability to issue the reserve currency of the world gives us a free ride for unlimited spending, debt, and borrowing.
Middle class anger results because the evidence is now available that the system is failing and the politicians offer only vague platitudes and rash promises that few citizens believe. The factions that compete for government benefits become more competitive and angry as they see the financial pie shrinking and the ability of government to deliver on their promises failing.
When benefits, seen as entitlements, shrink, the recipients become fearful and angry and demand political action. This means more handouts, whether it’s for the rich or poor, without any understanding as to why the system is failing. The demagogues, who are aware of the problem, are quick to use this discord to gain greater political power while ignoring the true nature of the problem and the changes needed.
It’s easy for presidential candidates to respond to legitimate concerns that have prompted the anger and fear. But if there is little understanding of the true nature of the problem and the proposed solutions, this won’t help to quiet the disgruntled electorate. The groups that claim they are being mistreated more than others will continue to be varied and increasing in numbers.
Slogans and clichés, though they have been helpful to the politicians in the past, will not be believed and will only increase the anger. This leads the candidates to compete to be the most authoritarian in their promises to take care of everybody’s demands.
The problems have been developing for almost 100 years. Progressivism, which was accepted in the early part of the 20th century, cannot be reversed by any single election. Vague political promises to patch up the system currently being used will no longer suffice.
Real wages and the standard of living of the average American family have dropped in the 21st century and are almost where they were back in 1971 – the year we completely abandoned the gold standard. The ongoing crisis is deeply structural and not a management problem. Those who still spout the idea that stopping waste, fraud, and abuse in order to finance the perpetual demands of the people without a major overhaul of our political and economic system have no credibility and the people know it. Too many remain convinced that debt is not a problem and more debt and more monetary inflation is what is needed to restore economic growth. The masses have been taught and conditioned to believe that unlimited government spending and debt is the solution and not a cause of the crisis.
But, it is a problem. As long as our politicians and the American people remain in denial, the problems will get much worse, the anger will accelerate, and violence in our cities will increase.
The current ongoing destruction of the middle class and the anger it causes are the big issues we face. Economic conditions are the overriding issue, but the least understood. Most Americans are aware that the politicians are in over their heads and are not providing any sensible answers to the dilemma. Believing that a left or right wing noisy demagogue will save us is wishful thinking.
Ignorance of economics has allowed years of excessive spending, but that is coming to an end. The entitlement mentality claims it’s a strictly moral issue for the government to take care of people in need. A combination of bad economic policy and confused morality has created the conditions that are threatening us today – not only in the US but worldwide as well.
We must wake up and realize that much of the wealth the average American has enjoyed for decades has been an illusion, built on debt and a bizarre form of money. But the payment is now coming due and no one wants to accept the obvious: we are unable to pay for our extravagant spending on domestic welfare to both the rich and poor, while maintaining an unaffordable world empire. The result has only been anger. There is no understanding that market forces are now required and that the debt must be liquidated in order to restore economic growth to the system.
The question of who must pay is a major political and economic one. Currently the middle class is aware of a major problem, but doesn’t have the foggiest understanding as to the causes or the solutions. So far the penalty has fallen on the shoulders of the middle class with a loss of good jobs, inflation, and a lot lower standard of living – something the government is unwilling to acknowledge. The fact that there’s a lack of understanding of economic policy contributes to the growing socio-economic crisis and the fear and anger that continue to worsen.
The politicians are scurrying around searching for those they can blame for the crisis. Actual answers from the candidates are secondary to who achieves the political power to distribute a shrinking economic pie.
WHO’S TO BLAME?
Who gets blamed depends solely on the political persuasion of the accuser. If it comes from a leftist politician it’s always free markets, profits, not enough government transfer payments to the poor, not enough government spending, and of course, greed – regardless of how one’s money was earned. The solution is always to raise taxes.
If it comes from a right or populist politicians, it’s immigrants, China’s unfair trade and currency policies, threats of terrorism, Mexico border policies, and an urgent need to sacrifice liberty for safety, xenophobia, or not enough militarism. Too often the blame is couched only in partisan terms – it’s the Democrats fault; it’s the Republicans fault; or it’s all Obama’s fault or George W. Bush’s fault. Philosophic views are not important, only effective demagoguery is.
Too often it leads to a desire for a tyrannical type of government, coming from both the far left and the far right, that makes rash promises as to the ease with which the problems will be solved. We’re constantly being told that what we need is a new tougher boss who will get things done, without knowing exactly what policies will be pursued.
It’s easy to find scapegoats – either racially motivated or based on faulty economic thinking. Little blame is placed at the door of the Federal Reserve’s ridiculous monetary policy, which has been so destructive. Negative interest rates are not topics in the presidential debates or the campaigns. Simply, one side blames economic downturn on the free market and another side blames the lack of tariffs and too much labor competition. Political changes are much easier to bring about by placing blame than by getting people to understand the true cause of our economic problems. The sad part is, it’s the economic explanation of poverty and the unfair distribution of wealth that is the issue that drives all political rhetoric while searching for scapegoats. The answers are out there, but we have a long way to go to convince the citizens and the leadership in this country who claim that more government is the solution.
The fear of ISIS is used to justify the dangerous foreign policy we follow – a policy that has significantly contributed to the economic crisis, with trillions of dollars spent in recent decades on unwise militarism. Blaming foreign terrorism for our economic and debt crisis may have been a goal of Osama bin Laden, but only we can take the responsibility for the spending excesses for which we are now being forced to pay.
There’s been little disagreement among the candidates that sacrificing personal liberty under today’s circumstances is required to provide security. It’s easy for the politicians to blame too much liberty – both economic and civil – as the problem. There should be little doubt that our crisis does not come from too much freedom, yet this issue is of no concern for the candidates.
Some blame the crisis on inefficiency in government management and claim that ridding the system of waste, fraud, and abuse will be enough to solve our fiscal problems and control the deficits. Therefore nothing needs to be cut, or so they say. There’s no recognition that government by its very nature is based on theft, threat of violence, and control by the privileged few.
Blaming various social groups instead of flawed policies is a frequent exercise. Racial distinctions are convenient for gaining a special benefit and are the source of social and economic friction. There’s no incentive to objectively see cause-and-effect in the problems that generate fear and anger. This makes it very difficult to unemotionally solve the injustices that our system of government planning has generated.
Equal justice under the law is constantly being abused. It’s easy to blame racism for all the problems while ignoring the war on drugs and true causes of poverty, which are the major contributing factors to our dilemma.
The authoritarians cannot resist blaming free markets and sound money for our economic ills and they never make an effort to distinguish between free markets and crony capitalism in their accusations. Ignorance and a desire to increase the role of government in our everyday life provide a convenient argument for a bigger and more intrusive government. Today even declared socialists are well received with their promises of unlimited “free stuff.”
The defenders of central economic planning, a powerful central bank, sacrificing liberty for security, and foreign interventionism to maintain an empire will never blame themselves for their contributions to the crisis. Therefore, expect anger and fear to accelerate. Do not expect the 2016 election to enlighten the people or the politicians.
Big government enthusiasts are always looking outward and for others to blame. But without some introspection it is guaranteed that the social friction now building will get worse. False blame creates bad solutions.
Terrorism is a real threat. The consensus of both Republicans and Democrats is that the only cause is “radical Islam.” Any other suggestion elicits charges of un-Americanism and a willingness to ignore danger. It is suggested that any support for those who seek a peaceful resolution to international problems are unpatriotic and endangering our country. Claiming our foreign policy of occupation and preemptive war significantly contributes to the danger of terrorism is unthinkable, but suggesting that we carpet bomb countries in the Middle East draws loud cheers. This is hardly a setting for making our country safe from terrorism. Blaming others for our failed policy of maintaining a world empire while never looking at our own shortcomings is acceptable to most Republicans and Democrats.
Not only do the demagogues blame others for our foreign policy failings, they also blame others for our weak economy. The threat of terrorism, that we helped to create, is also used to justify our government’s attack on civil liberties here at home. The politicians never assume responsibility for our out-of-control budgets since neither party truly believes that deficits are a serious problem. In fact, both sides cooperate in spending and ignoring the deficits because both sides want to increase spending. Sometimes it’s for domestic welfare and other times the spending is for “rebuilding” the military; most of the time they want both.
The most significant economic problems we face today – the $210 trillion of unfunded liabilities, the $19 trillion national debt, along with our overblown foreign debt – are dealt with by ignoring them as the platitudes and excuses flow.
The financial markets will eventually make it clear that the debt has become the most significant issue. It’s crucial that proper blame is placed on the spenders and Keynesian apologists who argue it’s not a problem. Without proper blame, understanding how to achieve economic growth is impossible. The people are justified in being fearful and angry because the magnitude of the crisis is becoming more evident every day, and they no longer believe what the leaders of the country have been telling them. Wishful thinking for a political savior to rise up and rescue us is just that: wishful thinking.
Lack of knowledge and understanding of the crisis has ignited hatred between the factions seeking to take charge, escape blame, and satisfy the demands of the current victims. As the truth of the seriousness of our crisis becomes more apparent, only a few are reassured that there is a politician who has an answer. It has been suggested that the description of what we’re facing is that one party is a party of “know nothings” and the other is a party that knows all the “wrong things.”
REAL ISSUES IGNORED
Since there has been a lot of blame and no understanding, no serious solutions have been offered. The big problem is that in spite of different rhetoric coming from the two parties, there’s little difference in fundamental political and economic beliefs. With the dramatic personal charges being made by the candidates, the important issues are avoided. This must be on purpose. Since no one has answers, it’s best not to draw attention to their ignorance and to the total failure of both political parties to solve the problems.
The issues avoided are numerous, including especially the debt and the $210 trillion of unfunded liabilities. And even as our as our economy steadily weakens, no serious debate occurs. When the subject comes up it’s for narrow political reasons and no solutions are offered. It’s abundantly clear that to both sides, debt is not of enough concern to actually lead them to entertain the idea that spending should be reduced. That would be bad politics. Both sides support “rebuilding the military” by increasing military spending. Though there is no real threat, we continue to spend about as much as everyone else put together. Domestic welfare spending is treated the same way. Some will continue to claim that cutting waste, fraud, and abuse will provide the funds necessary to continue our spendthrift ways. That’s been talked about for decades to appease the people, without success. There are far too many “debt danger deniers” in Washington to expect spending limitations to emerge.
The US can still borrow from foreign sources since we are the issuer of the world’s reserve currency. Reality declares that this will come to an end – and soon if we yield to the temptation of placing exorbitant tariffs on our trading partners and starting a trade war.
For us to continue our spendthrift ways, it will require the Federal Reserve to monetize the debt at an accelerating rate without loss of confidence in the dollar. In the campaign there’s no talk of getting rid of our central bank, as Andrew Jackson did in 1833. Today the authoritarian big spenders on both sides are totally dependent on the Fed in the short run to constantly create massive amounts of new money out of thin air. Yet it’s the middle class that suffers the most from this policy. No one is talking about how the Fed created the crisis, nor do they realize what lies ahead for us as a consequence.
The ignorance regarding monetary policy makes it impossible to understand the problems of recessions, depressions, inflation, huge debt, massive mal-investments, unfair distribution of wealth between rich and poor, and how the cost of excessive government gets dumped on the middle class and increases the poverty rate. A lack of desire to help is not the problem. The problem is the politicians’ ignorance of the business cycle and their obsession with resisting corrections of the mistakes that are a natural consequence of interest rate manipulation by the Fed. One can only imagine the mistakes that will evolve from negative interest rates! The only saving grace will be that market forces will eventually overwhelm and the needed correction will come, but unfortunately with a lot more pain and suffering.
So far the only solutions that are offered are more of the same policies that have created this current crisis – a crisis that has generated anger and class warfare, more spending, more debt, more taxes, more regulations, and more warfare. This will lead to a lot less freedom for everyone. Without understanding the problem, anger will continue to build and will result in greater violent confrontations.
The systematic attack on our privacy, private property rights, and other civil liberties is not an issue getting any significant attention in the 2016 election. The politicians don’t talk about it because they have chosen to ignore it. It’s just not a serious problem from their perspective. Too many people have come to accept the principle that safety and security are far more important than worrying about personal liberty. The 9/11 attacks and a hyped-up fear of ISIS have pushed this false idea that sacrificing liberty for security is necessary. The American people for a long time have been accepting this principle and have come to believe that it’s a fair trade-off.
The sad consequence of our foreign policy of interventionism, which has been supported by both Democrat and Republican politicians, has drawn no significant debate in 2016. The only argument has been over management style. No one makes the case for rejecting the notion that we have a moral duty to be the policeman of the world. Our military presence in over 130 countries is of little concern to the candidates. The burden of a $1 trillion per year military budget has elicited no warning that this spending is excessive and a tremendous economic burden to our economy.
The contest unfortunately is to see who can sound the toughest and most jingoistic regarding dealing with the al-Qaeda and ISIS. This has led to the xenophobic targeting of Islam and refusing to even consider that our bipartisan foreign policy of preemptive war, occupation, and sanctions is a contributing factor in stirring the hatred that indeed makes us all less safe.
Logic should tell us that continuing the same policy that has stirred up hate and retaliation, that serves as a recruiting tool for the radical jihadists, will only put us in greater danger. The financial burden, the attacks by our own government on our civil liberties, and the greater threat to our national security are all related to our radical interventionist foreign policy, which has been endorsed by both Republican and Democrats for decades.
There’s been no concern expressed about the collapse of the current Keynesian economic system. This huge financial and social event will significantly increase the fear and anger the American people are already experiencing. Therefore there is no reason to expect any positive changes as a consequence of this year’s election, regardless of who wins the presidency. Unrealistic promises and blaming various scapegoats for our problems will only result in more anger and violence. A better understanding of the problems we face is vital if we expect to preserve both liberty and prosperity.
Failing to recognize the significance of a major era ending is compounded by the lack of concern and ignorance regarding the “deep state” or the shadow government. This is the unidentifiable special interest groups and individuals who are actually in control of our government – regardless of whether the Republicans or Democrats are nominally in charge. If the American people understood this, they would realize that elections mean little more than pacifying the electorate with the false belief that the people actually have a say in the affairs of state.
Great concerns about the threat of al-Qaeda and ISIS help direct attention away from the real crimes committed within our borders, like the ill-conceived war on drugs and a justice system out of control. Asset forfeiture is ignored as a serious problem and is strongly supported by law enforcement agencies.
The original Constitution listed essentially six federal crimes. Today there are 4500 federal crimes on the books and over 400,000 regulations – most written illegally by the executive branch – and we hear nothing about this horrendous legal problem. Our courts do not provide equal justice, which justly infuriates the victims of this system of injustice. Militarization of the police and police brutality are out-of-control, yet the recipients of stolen goods known as “government benefits” have no compunction in demanding the use of violence to get what they have been taught they have a right to have. The result is that inner city violence is not going to be reduced with this election.
As the economic crisis worsens and the cities explode, with different factions competing for the handouts, there will be calls for military force and initiating martial law. This is a non-issue in the current political debate and without understanding the significance of this problem will not be recognized. It will only get worse. Most of the candidates have indicated that they would use whatever military force is needed to quell domestic unrest regardless of the Constitution.
If there’s a discussion of danger within the United States, the demagogues will say the threat comes from ISIS and is the reason they demand an increase in military spending. They remain in denial that our presence in the Middle East is precisely why there’s a threat here. Unfortunately the worse the conditions get here at home, the greater will be the demand for a more authoritarian leader to take charge and solve the problems they don’t understand. The campaign of 2016 will not bring about any significant improvement in the problems that precipitated the anger and generated our political and financial crisis that they have ignored.
A philosophic revolution is required. The American electorate is very angry and is demanding changes. Though the anger is justified, the exact cause and correction for it is poorly understood. Economic conditions are a driving force but are not recognized as such. There is no realization that the cataclysmic events that will be associated with an end to the current era require revolutionary changes in our economic and political thinking.
Since the problems are poorly understood it was guaranteed that a blame game by all concerned – the politicians, the voters, the victims, and the political parties – would result. Scapegoats are found and blamed – guilty or not. All this prompts a variety of answers with wild promises made by socialists and crony capitalists. Demagogues with magic solutions are everywhere to be found.
Ignorance, along with a struggle for power by those who claim they have the answers, ignores the actual causes of the social divide that are not readily apparent in the current election. Some are pleased with this lack of discussion since it could identify those responsible for the mess and the failed ideas that need to be rejected.
A serious discussion about the role of government is needed in order to redirect the failed course upon which we find ourselves. Different types of governments reflect the degree to which the people choose to live in a free society. The form of government that was proposed by the Founders is no longer recognizable. This fact explains the conditions that have generated the anger and fear that is prevalent today. Nobody likes to hear it, but the answers are not available to us unless we change the people’s attitudes about the role the government should play in our lives, the economy, and in the world.
The only real answer to a failed interventionist/authoritarian system is to replace it with a system of nonintervention and voluntarism. It has to be based on the moral principle of liberty and non-aggression permitting all things peaceful. The false moral principle of government-directed “humanitarianism” must be intellectually refuted as a false God.
Utilitarianism and pragmatism are code words for avoiding all viewpoints held by those who love liberty and only want to be left alone. Unregulated non-violent voluntarism is rejected as not being beneficial to the “common good.” It is argued that government-mandated equality is superior to any desire for individualism and self-reliance.
Utilitarianism, pragmatism, and economic planning go together, which always leads to dependency and corruption of economic and political power. Sadly the result is that only the powerful and wealthy special interests thrive. A society that condones even a small amount of authoritarianism is compromised by rejecting the basic tenants of liberty. The system then grows like a cancer until that society is destroyed, which we are now in the process of doing to ourselves.
When virtue becomes a government mandate, it makes it impossible for individuals to achieve it, which further destroys the social and economic order. Instead the result is: taxes to force people to be charitable; torture to protect the state; drug wars to improve behavior; elimination of privacy to protect government secrecy; thousands of laws and regulations to monitor our every action, all of which are performed in a non-virtuous manner. Only when efforts to improve oneself and others are done in a voluntary and nonviolent manner does it represent virtue. Government efforts, whether it’s to improve one’s personal behavior, legislate economic fairness, or direct the affairs of other countries only serves to inhibit virtue. This leads to society’s collapse, along with war and poverty. For liberty to work society must have a virtuous people who reject the use of all aggressive force, especially when it’s used by government in the name of humanitarianism.
Even the 400,000 federal regulations and the 4500 federal laws cannot save a system of mandates that violates the moral standards that are vital to a moral society. Free markets are superior to government economic planning. Government rules on personal behavior cannot instill moral standards. Bombs, sanctions, and occupations of other countries cannot make the world safe or more prosperous.
All these efforts result in the loss of liberty. Under these conditions a republic cannot exist. The system will always fail and the people will suffer. The solution will then have to be in the form of a revolution, hopefully peaceful, and with the insistence on recognizing the natural right to life and liberty.
The worse the conditions get the louder the demagogues’ promises become. Competition between demagogues produces sharp rebuttals, and supporters of different candidates become overtly competitive and violence is threatened. With no understanding of the cause of the problems, arguments over solutions will vary. Since real evaluations and authentic solutions are absent it only incites more anger.
Since the 2016 election distracts from the real issues, the correct solutions will not be believable. The system is broken and not fixable. Attempts to do so only lead to frustration that further divides the people. Under these conditions the guilty don’t want to hear the truth and deny it if they do.
Whistleblowers like Edward Snowden and John Kariakou are despised for telling the truth and are more likely to be punished than those who were criminally negligent.
H.L. Mencken had it right: “The most dangerous man to any government is the man who is able to think things out for himself,” and come to recognize that, “the government he lives under is dishonest, insane, and intolerable.” But will the campaign of 2016 answer these concerns? Remember that while living in an empire of lies, pursuing truth is considered treasonous.
Simple anger is not equivalent to understanding the predictable evil of authoritarian government. It’s the fear of losing the immoral benefits along with corrupt government that stirs their anger. The failure of the current system reveals the lies, the senseless wars, and the disdain for the people’s rights to life liberty, and property that generates the anger now being expressed by the masses.
If the people continue to deny that government by its very nature throughout the ages has been notoriously inept, immoral, and corrupt, a solution is not possible. The only result will be a new government based on the same immoral principles. Nothing positive will occur. Basic moral principles of liberty, self-reliance, and strict limits on government power, are required if progress for peace and prosperity is to be achieved.
This type of government cannot exist without a philosophical revolution regarding the proper role of government in a moral society. The election of 2016 will not guide us in that direction. It doesn’t even deal with the crucial issues of our time, and certainly not with the moral principles underpinning a free society. The conflict between candidates and parties is superficial and personal – without substance. The 2016 election will change nothing. It’s a great distraction from the policies that have delivered the current crisis to us. This is done on purpose since there is general agreement in both parties on the major issues and it’s not to their advantage for the people to understand this.
The major issues that both parties and their candidates agree upon include: the central bank’s monetary policy; welfarism; federal government involvement in education and medicine; the drug war; privacy abuse; preemptive war; foreign interventionism; and the US as the policeman of the world with increased spending for the military.
The 2016 election won’t make any difference in any of these areas. The American people continue to be deceived into believing elections are serious affairs that affect our future. The Deep State will remain in charge regardless of the outcome and few will even be aware of the invisible fist that rules over us.
The whole process is a charade and no policy of substance is debated. The election will turn out like all the rest. The momentum toward bigger and more intrusive government will continue. The process distracts from what is really going on; sometimes out of ignorance and sometimes just out of wishful thinking; sometimes on purpose. The process has everyone looking in all the wrong places for the answers. The answers can only be found in an intellectual revolution that refutes the authoritarians who sanction government-directed aggression in all areas of society. What we need is to define and endorse the proper role of government in a free society. There is no serious talk in the campaign of the crucial issues that need corrected if we expect to escape from the mess we’re in.
Following are a few of those concerns that should be addressed.
The awakening will arrive when we face a total societal breakdown – once it’s realized that the accumulation of massive debt is unsustainable and the dollar suffers the consequences, which will negatively affect all Americans and many throughout the world. But it also provides an opportunity to open the door to a free society. Without the cost of war and welfare in a new system that accepts the moral principle of free markets, sound money, private property, and voluntary contracts, prosperity and peace will break out.
The limited role for government in a republic is to provide equal justice for all, including the protection of life, liberty, and property. It becomes destructive when governments overreach and instead become the greatest threat to liberty and justice - something from which we are suffering today.
Sadly these issues will not cross the minds of the leaders of either major political party at this time in our history. But they will when an upcoming generation of young people, enthusiastic about the cause of liberty and with a growing awareness of the problems, concludes that:
LIBERTY IS THE ANSWER!
By Paul-Martin Foss
The week before last marked my first time attending the Austrian Economics Research Conference, an annual meeting of economists of the Austrian school hosted by the Ludwig von Mises Institute in Auburn, AL. While many of the presentations were interesting, one that I found particularly helpful was that by Patrick Barron of the University of Iowa.
What was especially useful was how he tied together monetary and fiscal policy. The connection between the two might seem self-evident to many Austrians, but it wouldn’t seem self-evident to the man on the street. Yet by tying the two together it should be possible to bring more people to support sound money.
Wasteful government spending is something that is apparent to millions of Americans. It makes them angry to see their tax dollars misspent and wasted on costly boondoggles. It is relatively easy, therefore, to get people to support efforts to cut government spending. Yet no matter how much effort is expended in the effort to rein in government spending, it continues to grow out of control. What if you could do one thing that would do more than anything to cut government spending? Imagine how much support you could get for that. That is where Prof. Barron comes in.
Sound money, to Dr. Barron, is the most important check on government spending. If money is sound, meaning that the government cannot inflate the money supply at will, then government spending will be limited. Remember that governments can fund their operations through three methods: 1.) Taxation; 2.) Bonds, or borrowing; 3.) Inflation.
Taxation is self-limiting because at higher tax rates there will be massive tax avoidance and tax revenues will fall, or the government might be voted out or overthrown if people are angry enough. Bonds have to be repaid, which comes from future taxation, so we are back to the self-limiting aspect of tax funding. Bonds also require interest payments, and if a government isn’t creditworthy then the interest payments may make borrowing money prohibitively expensive.
This leads us to the third and preferred method, inflation. By creating more money, the government decreases the value of each monetary unit. But it normally does so in a slow enough manner as to be barely perceptible to the average person. And where does this newly-created money go? Why, to the government’s coffers, of course. There it gets spent on wars, welfare, and other boondoggles. In the meantime, the newly-created money causes the prices of goods to increase, driving up the cost of living for the average person. In this way, inflation is a stealth tax. Its effects are just as insidious as direct taxation in that it takes money from citizens and deposits it into government coffers, but it does so in such an imperceptible way that very few people realize that they are being fleeced. That allows governments to spend far more money than they otherwise would be able to by relying on taxes and borrowing alone, which is why governments prefer it.
But in order for inflation to work effectively as a government policy, governments have to exercise control over the monetary system. They have to have the ability to debase money, devaluing each unit of currency. If people can use money that is outside the government’s control then the government’s schemes are thwarted. That is why governments throughout history have tried to monopolize the issuance of money. Reining in government spending will require breaking up that monopoly, eliminating the government’s control over the monetary system, and ensuring that people have sound money and alternative currencies to use when the government tries to use inflation as a policy tool. Inflation and increased government spending are two sides of the same coin. If people are really serious about reining in government spending, they need to jump on the sound money bandwagon.
This article was originally published at The Mises Institute.
By Daniel McAdams
The history of post Cold War US involvement in Iraq is the story of the enduring power of myths to drive a false foreign policy narrative and achieve the goals of a singularly-focused pressure group (the interventionist neocons). From the 1990 myth that Saddam Hussein had on his own and in opposition to stated US wishes made a land grab in Kuwait, the myth that Iraqi troops were poised to invade Saudi Arabia, the 2003 myth that Saddam had, "in fact, reconstituted nuclear weapons," to the myth that the invasion of Iraq would be a "cakewalk," to the myth that the US attack on Iraq would bring the Iraqi people "hope and progress."
But perhaps one of the most enduring myths of all, endlessly reinforced by the media, has been that after the disastrous aftermath of the 2003 invasion of Iraq, a few brilliant military philosophers in the Pentagon came up with a "surge" in tandem with a new "counterinsurgency doctrine" that snatched victory in Iraq from the jaws of a horrible, scorched earth defeat.
The "Surge" of some 20,000 additional American troops along with the cancellation of out-rotations of many others is said to have been responsible for an end to -- or at least a great reduction in -- the almost unimaginable levels of violence in Iraq, both among Iraqis and toward the US occupying army. In the words of then-President George W. Bush, the purpose of the surge was "to help Iraqis clear and secure neighborhoods, to help them protect the local population, and to help ensure that the Iraqi forces left behind are capable of providing the security."
In fact none of those goals was reached. Zero.
While it is true that violence temporarily dissipated after the "surge," one cannot automatically argue a case for causation. In fact, as Patrick Cockburnobserved, one major reason for the decrease in violence circa 2007-2008 was that the wave of sectarian violence had by then largely played itself out. In other words, with ethnic cleansing complete, there was just very little left to kill. Also, as we now know, the Surge "victory" was in fact just the calm before the storm. Emerging out of the chaos produced by the US attack on Iraq was al-Qaeda and then its breakaway, ISIS.
Popular conservative mythology is that the "Surge" of General David Petraeus and Gen. Raymond T. Odierno saved Iraq, only to have President Obama lose it again with his timidity and fecklessness. The truth is the surge produced nothing of lasting value, it only delayed the inevitable collapse and blowback set in motion in March 2002 with the US invasion. Even if the US occupation force had been able to remain in Iraq (it could not, because President Bush could not negotiate an acceptable status of forces agreement with the Iraqi government), the rise of al-Qaeda and ISIS would not have been prevented. The only difference if the US military had stayed is that more US soldiers would have been killed and maimed.
As with all myths, however, they take on a life of their own and seldom die under the weight of their own contradictions. That is certainly the case with the "Surge." In fact, Gen. Odierno, mentioned above and considered a co-architect of the Surge, was in Washington this week to argue for another, even more massive "surge." Speaking to a conference put on by the neoconservative Foundation for the Defense of Democracies (FDD), the former Army chief of staff Odierno said what is needed to defeat ISIS and save the region is a massive 50,000 strong force, led by the US but not entirely made up of US troops.
There is no question that the neocons in the room, whose lavish sinecures come to them courtesy of the military-industrial complex, were hyperventilating in anticipation of another major US invasion of Iraq (and Syria). War is the greatest DC jobs program and the hits just keep coming.
But Odierno's brain is a hammer and he only sees nails. He is wrong again. It wasn't a lack of massive overwhelming force that "lost" Iraq, but rather it was a strategy that could only ever deliver a US defeat. Destroying other functioning societies and then in a breathtaking act of hubris expecting to remake them in one's own image is a plan sure to fail. There are no numbers of soldiers who can achieve such a fool's errand. The only thing that can happen is that many of them are needlessly killed in the process -- something general officers used to care about, before making political statements and basking in the praise of the neoconservative armchair warriors became the order of the day.
General Odierno must sense that his Surge was not all it was cracked up to be. Looking at the fruits of his labor in Iraq he no doubt does not see Switzerland, but Swaziland. So he does what all politicians in Washington do when their grand plans meet stark reality: he blames someone else. This time it's the Iranians. It's all their fault, he tells the FDD crowd.
Though he once supported a unified Iraq, Odierno now finds that:
[I]t's becoming harder and harder to have a unified Iraq. And the reason is I believe the influence of Iran inside of Iraq is so great, they will never allow the Sunnis to participate in a meaningful way in the government. If that doesn't happen, you cannot have a unified Iraq.
So he had no idea that a majority Shia country next-door to Iran with historic ties to Iran, with a segment of the population that had spent time in Iran, would elect an Iran-friendly Shia government and make a strategic shift toward Iran once a popular vote was held after the destruction caused by the US invasion (and continued US hostility to Iran)? It was shocking to General Odierno that a thoroughly US-bombed Iraq, where the economy and social structures had been obliterated and sectarian fault lines had been exploded would not, in the words of Dick Cheney, welcome us as liberators?
If there were ever an argument for military officers to keep clear from politics this is it.
Odierno's speech to the FDD neocons captures the moral and intellectual bankruptcy of Washington's foreign policy. He got it completely wrong back when he was in charge of things in Iraq and he gets it completely wrong when he tells us that we need to go back in, with less troops this time and less time to get the job done (no one is going to agree to another eight or so years). What does he get for being wrong on both counts? An adoring audience of neocons and plenty of coverage in venues like Fox News. For a blessed while it was considered unfashionable to praise the Iraq war, but as time seemingly accelerates the same people who botched Iraq -- like General Odierno -- are let loose from their asylums to again screech "let loose the dogs of war!" And the worst part is that all of a sudden people no longer laugh.
This article was originally published at The Ron Paul Institute.