President-elect Trump's choice of Gen. James Mattis to be Defense Secretary has raised more than a few eyebrows. Not only as a military officer in a traditionally civilian position, but also as an executive at a leading defense contractor. His views on Iran are also considered extreme and not grounded in reality. Will the mad dog be leashed?
By Chris Rossini
Once again President-Elect Trump grabs some good optics. The businessman goes to Washington to save taxpayer money.
Trump tweeted today:
Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!
As reporters scramble to find out if the $4 billion dollar figure is accurate, it probably doesn't matter. Trump capitalizes on good politics right now. Numbers are boring details.
While it would be great for a Trump Administration to actually cut the size and scope of government overall, that's not likely to happen. Trump's not a limited government guy and actually wants to "rebuild" the world's biggest military empire, that ironically admitted today to wasting $125 billion. (Not so fun fact: They waste way more than that. Think TRILLIONS! But again, those are just boring details).
What's important to Trump is that his tweet gives the impression that he's coming in to crack some skulls, and that's what counts from a PR perspective.
At the very least, Trump is shining a light on one of America's biggest corporate welfare queens and prominent member of the military-industrial complex: Boeing.
Air Force One costs are merely the tip of the iceberg.
The U.S. government has a corporate welfare "bank" known as The Export-Import Bank. It subsidizes Boeing to the tune of so many billions that it's often referred to as "The Boeing Bank". Even President Obama admitted that the Export-Import Bank is “little more than a fund for corporate welfare." That didn't stop Obama from re-authorizing it, of course.
The Export-Import bank is where the real action is. If Trump wants to save our hard-earned money from being flushed away on corporate welfare, he'd go after that.
Air Force One is pennies compared to the government's corporate welfare "bank".
As Ron Paul has written:
Government programs that take funds from the private sector and use them to fund projects that cannot get market funding reduce economic efficiency and lower living standards. Yet Ex-Im actually brags about its support for projects rejected by the market!
We have the biggest and most expensive government on the planet. Slashing pennies won't save us. Even the massive F-35 boondoggle makes Air Force One look like child's play.
Trump should call for the immediate dissolution of FDR's unconstitutional creation known as the Export-Import Bank. Let's put real money back in the working man's pockets.
Tweet that out President Trump!
By Chris Rossini
President-Elect Trump has nominated Dr. Ben Carson to lead the Department of Housing and Urban Development (HUD), one Washington's biggest boondoggles, creator of "the projects," and unconstitutional piece of the welfare state cornucopia.
Incoming Senate minority leader Senator Chuck Schumer laments: “I have serious concerns about Dr. Carson’s lack of expertise and experience in dealing with housing issues..."
Carson's inexperience, in this case, can actually be an asset. He's untarnished and not a part of the inherent corruption that has had a free ride on American indifference.
What an opportunity for an outsider to come in and clean house (no pun intended).
HUD, which was formed as part of LBJ's "Great Society," has been destroying neighborhoods for decades, while simultaneously lining the pockets of politically-connected contractors. The department's creation is yet another example of government fixing problems (that it creates) with an even bigger problem:
Jim Ostrowski explains:
Government creates its own demand here as in other areas. First, it inflates the cost of housing through regulation, taxes and zoning. Then, it reduces the income of the poor through taxes, fees, occupational licensure, compulsory schooling and many other regulations. Having manufactured large numbers of poor people and created a shortage of affordable housing for them, it then created HUD in an attempt to solve the problem.
As with everything, government solutions only make things worse. HUD has not been an exception to the rule. Even former HUD Secretary Henry Cisneros admitted to Congress in June 1993: "HUD has in many cases exacerbated the declining quality of life in America."
What kind of "experience" does Senator Schumer think Carson needs? The ability to waste tens of billions in taxpayer dollars? Or should Carson have "expertise" in destroying neighborhoods and lining the pockets of fat cats?
Carson needs to rein in this monstrosity. No experience needed.
The only caveat is that Carson needs to understand how destructive HUD really is to America.
Carson has displayed malleability in the past. As Robert Wenzel points out: Carson "appeared to change his view on minimum wages once it was explained to him by an economist how horrific they are."
Dr. Carson, please "drain the swamp" and get government out of housing as much as you possibly can. You'll set off a building boom in cheap, private, and cared for places to live.
President-elect Trump made waves with a recent telephone conversation with the president of Taiwan. It was the highest level conversation in some 25 years. Is this a foretaste of a more aggressive US policy toward China?
By Ron Paul
President-elect Donald Trump told a Cincinnati audience this week that he intends to make some big changes in US foreign policy. During his “thank you” tour in the midwest, Trump had this to say:
We will pursue a new foreign policy that finally learns from the mistakes of the past. We will stop looking to topple regimes and overthrow governments. …In our dealings with other countries we will seek shared interests wherever possible...”
If this is really to be President Trump’s foreign policy, it would be a welcome change from the destructive path pursued by the two previous administrations. Such a foreign policy would go a long way toward making us safer and more prosperous, as we would greatly reduce the possibility of a “blowback” attack from abroad, and we would save untold billions with a foreign policy of restraint.
However as we know with politicians, there is often a huge gap between pronouncements before entering office and actions once in office. Who can forget President George W. Bush’s foreign policy promises as a candidate 16 years ago? As a candidate he said:
I am not so sure the role of the United States is to go around the world saying ‘this is the way it’s got to be.’ … If we’re an arrogant nation they will resent us, if we’re a humble nation but strong they’ll welcome us.
Unfortunately as soon as he took office, George W. Bush pursued a completely different foreign policy, attacking countries like Iraq at the urging of the neocons he placed in positions of power in his White House and State Department.
Some people say that “personnel is policy,” and that much can be predicted about Trump’s foreign policy by the people he has appointed to serve his Administration. That is where we might have reason to be worried. Take Iran, for example. While Trump says he wants the US to stop overthrowing governments, on the issue of Iran both the candidate and his recent appointees have taken a very different view.
Trump's pick for National Security Advisor, Michael Flynn, has said the following about Iran: "I believe that Iran represents a clear and present danger to the region, and eventually to the world..." and, “…regime change in Tehran is the best way to stop the Iranian nuclear weapons program.”
Trump’s CIA choice, Mike Pompeo, has said of President Obama’s Iran deal, “The Iranian regime is intent on the destruction of our country. Why the President does not understand is unfathomable.”
And Trump’s selection for Defense Secretary, General James Mattis, was even more aggressive, saying, “The Iranian regime in my mind is the single most enduring threat to stability and peace in the Middle East. ...Iran is not an enemy of ISIS. They have a lot to gain from the turmoil in the region that ISIS creates."
Donald Trump's words in Cincinnati don't seem to match up with the views of the people that he's assigning to high places. At least when it comes to Iran.
While I hope we can take President Trump at his word when it comes to foreign policy, I also we think we should hold him to his word – especially his encouraging words last week. Will the incoming president have the ability to rein in his more bellicose cabinet members and their underlings? We can be sure about one thing: if Trump allows the neocons to capture the State Department, keeping his foreign policy promises is going to be a lot more difficult.
By Chris Rossini
President-elect Donald Trump unintentionally brought to light how warped America's foreign policy of interventionism really is. As the left and right bicker back and forth on whether a phone call will usher in the end of the world, let's take a look at how bizarre America's relationship with Taiwan really is.
Before we begin though, it's important to point out that America should be following the advice of George Washington, who said in his farewell address: "It is our true policy to steer clear of permanent alliance with any portion of the foreign world". Thomas Jefferson would continue this line of thinking in his inaugural, when he said: "Peace, commerce, and honest friendship with all nations-entangling alliances with none."
That's where we should be and need to always aspire a return to that foreign policy.
Today, the U.S. government sits a top a worldwide military empire. It views itself as the policeman of the world and has bases in over 100 nations. The U.S. is involved with the internal affairs of nations just about everywhere in the world.
The U.S. government has alliances that change faster than weather patterns. One day an ally is the source of "stability" and the next he's the next Hitler ready to invade the world.
When the sun rises, a group of bandits are labeled as "freedom fighters," but when the sun sets they're called "terrorists" who "hate us for our freedom."
Here's the scoop with Taiwan:
Massive trade takes place between Americans and the Taiwanese, which is fantastic! But the U.S. government does not recognize Taiwan's government because China sees it as a renegade province. Since 1979, the U.S. "officially" only recognizes China with its "One-China policy".
Here's where it gets really strange. The U.S. has an "unofficial" relationship with Taiwan's government and even sells them billions of dollars worth of military equipment. Yes, America's military-industrial-complex is cashing in despite the so-called "One-China policy".
This "unofficial" relationship, where the U.S. literally arms Taiwan, does not start World War III with China.
However, if you listen to the the mainstream media over the last few days, a phone call between Donald Trump and Taiwan's President is reason enough for the apocolypse to set in.
It gets crazier.
Former President George W. Bush promised to defend Taiwan. (Try to find the Constitutional authority for that one.) Yet at the same time, America is constantly telling Taiwan that it's against Taiwanese independence. This despite the fact that about two-thirds of the island’s population self-identify as “Taiwanese,” and not “Chinese.”
That's not to say that the U.S. should support Taiwan's independence. The correct position is neutrality. But one can see that this tangled policy web has the potential to create anger and resentment on all sides.
The bottom line is that U.S. policy isn't just a jumbled mess in the Middle East. Interventionism is a disaster everywhere.
There's a much better way. Washington and Jefferson had it right.
It would be wise to go back to a sane foreign policy of non-interventionism.
Ron Paul delves into this week's news that Donald Trump saved 1,000 U.S. jobs with his Carrier deal. He also debunks some very common protectionist myths. Don't miss it!
By Christopher Westley
Now that the presidential election is finally over, can we talk about something that actually matters?
I’m referring of course to Tobleronegate, meaning the uproar surrounding the Swiss-based (but US-owned) chocolate company, Mondolez International. The company has widened the gaps between the segments of its iconic chocolate bar, reducing its total volume by some 10 percent. Although the reaction has something of an Old Coke-New Coke air to it, one can easily see it as a sign of the inflationary times, an effect of worldwide money creation coordinated by the leading central banks, with Toblerone being just one of many victims.
The economics of the decision shouldn’t surprise an actual student of economics. Since inflation is always and everywhere a monetary phenomenon, and since the world’s central banks have been pumping new money into the global economy at unprecedented rates for several years, we should expect an upward pressure on prices. In a Facebook post, Toblerone explained that it was forced into changing its product in response to “higher cost of numerous ingredients,” adding that
...we had to make a decision between changing the shape of the bar, and raising the price. We chose to change the shape to keep the product affordable for our customers, and it enables us to keep offering a great value product.
Statements such as this cause Toblerone to become, unwittingly, a case study for how firms in competitive markets respond when monetary inflation raises their costs of production. When that happens, firms are less able to pass the cost on to consumers in the form of higher prices because if they do, they face a strong likelihood of losing market share and revenues. Instead, these firms cut back in terms of volume, size, and portions.
We see this all the time. Have you been to a restaurant lately where the menu prices haven’t seemed to change but the portions of food on your plate has? Or opened a bag of chips that hasn’t fallen in size while the volume of chips inside has? Or consumed a product of lower quality than you remembered in less inflationary times because its producer was obligated to change ingredients to break even?
The fact is, Toblerone can’t raise its prices willy-nilly due to the many substitutes available to consumers. Critics claiming otherwise ignore this common side effect of inflation in competitive industries, a phenomenon that especially has applied to candy markets in recent years.
That said, the public’s response to the new Toblerone ranges from the funny to the bizarre. One person photoshopped a KitKat bar from four sections to two, with a large gap in-between. Others are showing that the new Toblerone gaps can be used for makeshift filing systems suitable for toast or electronics. There is even talk that Toblerone will have to change its intellectual property strategy given that its iconic shape has been changed so drastically. IP lawyers see gold in “them thar gaps.”
Then there’s a Brexit angle base, from what I can see, on the argument that (1) some people said bad would come from Brexit, (2) Brexit happened, followed by, (3) Toblerone’s new shape, which obviously then means, (4) Brexit ruined the candy bar. Or something like that. In response, Toblerone claims the change was planned well before Brexit.
We can all agree Toblerone underestimated consumer responses to its decision to reduce the volume in one of its signature candies and this, in itself, is not a big deal. One of the reasons why the free market system isn’t perfect is because the firms that comprise it often make mistakes. Just the same, what makes this system superior to the alternatives is the ability of firms to identify and act on those mistakes, whether by themselves or their competitors. New Coke didn’t last long. GM no longer produces Hummers. Meanwhile, my local post office plugs away, unchanged from what I remember it being 25 years ago.
Toblerone may announce it made a mistake and go back to the previous shaped candy, albeit at a higher price. Or it might revert to the previous shaped candy but at a smaller volume. Perhaps it will look for inferior ingredients, making it the Swiss chocolate equivalent of corn syrup soda. Yuck.
But wouldn’t it be great if, instead, Toblerone turned this incident into a teaching moment for its devoted customers? If it used its social media channels to remind them of the virtues of hard money and the costs of fiat money? If it helped Toblerone aficionados see the relationship between gaps in their candy to mainstream monetary fads that help bring them about?
It was rare but not uncommon for firms to make such arguments during the inflationary 1970s. It would be even more satisfying than good Swiss chocolate to see it again.
This article was originally publshed at The Mises Institute.
Is the globalism that seeks to concentrate power in a few unelected international bodies like the UN and IMF about to spectacularly crash? Will a new internationalism, driven by technology, replace the geographic nationalism of the 20th century? Doug Casey and Nick Giambruno join us in this very special episode of the Liberty Report...
By Ron Paul
We all want favorable changes in Washington. Of course, we're always promised favorable changes every election season. So far, Donald Trump's cabinet picks offer no reassurance that anything will be different this time around. Is 'Drain The Swamp' the new 'Hope & Change'? I discuss below: